ONE CENT OF THE GST is a 'concept' that has its roots in Toronto, and was endorsed through the Big City Mayors caucus, FCM , UBCM and the council of the city of Port Moody.

 

What is it ?  The principle is simple - rather than reducing the GST by 1 cent (from 6 to 5) , the federal government return that equivalent 1 cent to municipal infrastructure projects !

 

The federal government is declaring unheard of surpluses (14 billion now?) while decreasing funding of programs tradtionally under their pervue.  Particularly, municipal infrastructure needs - Libraries, Rec Centres, Roads, Transit, Bridges - in the past , municpalities would receive funding from senior governments for these costs , now, that money is drying up.   At the same time, municipalities are being expected to shoulder the burden of homelessness, drug additiction issues, increased crime, environmental policy changes, increased bureaucratic reporting requirements, and health issues - all areas that are the mandate of senior government.

 

Meanwhile, Canada's economy, and BC in particular, is performing better than ever, further increasing tax revenues to the federal and provincial governments, which base taxes on economic drivers - income tax, pst and gst all increase as people make and spend more.   Muncipal governments, however, have only property tax as their taxation revenue, and this has remained relatively static (with inflation) over the years.  So while the economy grows at 30%, federal taxes grow by 30%, however, municpalities are criticized for exceeding 4-5% annual increases !!

 

How much money is this ?  1 cent of the gst is about $ 5 billion dollars annually (in 2006).  If proportioned by population, this would equate to about $ 151 per person in Canada. (5 billion / 33 million)

 

Apportioning this by population then would give Greater Toronto (pop. 4.6 million) about $ 700 million per year in contributions to infrastructure renewal.

 

For Port Moody, this would be about 4.379 Million, if you based the formula purely on population base.  Currently, taxation in Port Moody is about $ 20 million per year - or in other words, this would be the equivalent to a 25% increase in annual revenues to the city (or, an optimist might say, could represent a  25% decrease in taxes, however, we know that we are on a downward slope on infrastructure renewal !!)