Mayors eye unspent federal gas tax for TransLink
The federal government could at the stroke of a pen solve TransLink's cash crunch by letting it spend a growing pile of federal gas tax money on operating costs, not just to buy buses.
That's the argument Metro Vancouver directors are making and they're asking Ottawa to make the change, freeing up about $120 million per year in gas tax that the federal government already offers but TransLink has not been fully spending.
"All of our problems would be solved – the expansion we've requested could occur," Burnaby Mayor Derek Corrigan told the Metro Vancouver board Friday.
Ottawa hands over most of the gas tax it collects to cities and in Metro Vancouver it is allocated to TransLink. It's separate from the 17 cents a litre that TransLink directly collects and can spend without restriction.
But TransLink is not allowed to spend the federal tax on anything but new transit vehicles when what it really needs is operating money to pay the drivers, fuel and maintenance bills to run more of the buses it already owns.
As a result, the unspent federal gas tax fund has ballooned to a $400-million fund that has politicians salivating.
They say it would easily allow TransLink to avoid the controversial $30 million increase in annual property taxes that mayors want to rescind, while restoring all of the promised transit upgrades that have been carved out of the latest plan.
"It seems absolutely crazy," Corrigan said. "We are mothballing buses of serviceable use because we don't have enough money to put them on the street."
Two years ago TransLink was restricted by Ottawa from using the transferred gas tax for road work or bike lanes.
Metro also wants those options restored to broaden the number of eligible capital projects.
TransLink executive vice-president Bob Paddon said Metro directors are mistaken in thinking there's some sort of surplus available to be tapped or that TransLink isn't making full use of the transferred tax.
He said all of the money will go to capital projects – replacement buses and community shuttles are on order – but the money from the restricted account won't flow until TransLink receives them, leaving a gap of a couple of years that shows on the books as unspent.
"It's not as if this is not going to be spent," Paddon said. "It's all going to be spent – when the order is complete."
He said Ottawa doesn't allow the gas tax to be used for operating expenses.
Even if it did, he said, TransLink could not treat it as a reliable ongoing source as it is subject to federal renewal and is not permanent.
Langley City Mayor Peter Fassbender also cautioned that using the gas tax fund for operating costs would leave less available down the road for capital spending, adding that might merely trade the short-time crisis for longer-term challenges.