Referendum Questions: What happens after 10 years? Does the tax go down or up?

There's no sunset clause built into the Congestion Improvement Tax, but any eventual cut or hike would be up to the province

There is no sunset clause so the 0.5 per cent sales tax increase in Metro Vancouver is expected to be permanent, if a majority of the region’s voters approve the proposal.

Although the mayors’ plan calls for nearly all improvements to be in place within 10 years (a light rail from Surrey to Langley along Fraser Highway would take 12 years), that doesn’t mean the new transportation investments are paid off at that point.

Capital financing of major projects would be spread out over 20 to 30 years, according to Port Coquitlam Mayor Greg Moore.

While much of the Congestion Improvement Tax goes to cover the region’s share of the $7.5 billion in capital spending, Moore also noted some of the tax goes to pay annual operating costs, which don’t ever stop.

Existing SkyTrain upgrades make up the biggest increase in operating costs at $53 million a year, followed by $47 million for new B-Line express bus routes, and then increased rush hour bus service, Surrey light rail and the Broadway subway, each of which add around $23 million annually. More passengers carried means more fares generated and that would offset some but not all of the higher costs.

Moore said mayors considered an expiry date for the tax but dropped the idea because their polling found voters would only be confused by a promise of the tax ending two or three decades from now after financing was paid off.

There’s no guarantee the tax won’t rise in the future but Moore insisted there’s no need to increase it – he said the $250 million per year it would generate fully funds the region’s share of the plan.

No campaign head Jordan Bateman says TransLink or the mayors may push for more improvements 15 years from now by increasing the tax above 0.5 per cent.

Yes coalition spokesman Bill Tieleman said no increases could happen without provincial government legislation.

“There’s only one body that can raise or lower sales taxes in British Columbia and that is the B.C. provincial government,” Tieleman said. “TransLink can’t do it. The mayors’ council can’t do it. The individual mayors can’t do it.”

Future provincial governments could raise or lower the PST province-wide for any number of reasons and presumably without a referendum, so the total 7.5 per cent sales tax in Metro Vancouver after a Yes vote isn’t necessarily static, even if the regional half point is.

Tieleman noted the province raised the PST to 7.5 per cent in 2002 before dropping it back down to seven per cent in 2005.

The federal GST has been cut in steps from seven per cent to five per cent.

“Governments can raise and lower their sales taxes as they decide and they’re accountable to voters for those actions,” Tieleman said.

He said it’s not impossible that the sales tax could be eliminated as part of a future long-range move to road pricing.

Bateman said the fact the provincial government ultimately controls the Congestion Improvement Tax and not just Metro mayors gives him little comfort.

“We don’t know who the government will be in the future and the NDP is very excited to give TransLink every dollar they could possibly want,” Bateman said. “There is no guarantee it stays at 0.5 per cent.”

Referendum Questions is a Black Press series exploring issues related to the Metro Vancouver transit and transportation referendum. Voters must mail in ballots by May 29 on whether they support the addition of a 0.5 per cent sales tax in the region, called the Congestion Improvement Tax, to fund billions of dollars worth of upgrades. Follow the links below to read more in this series.

Just Posted

Flames lose at home, win in Mission

Host Kodiaks on Friday night

Weavers and spinners to kick off holiday shopping

The Whonnock Weavers and Spinners’ 38th annual exhibit and sale takes place Nov. 25

Strong support for Pitt Meadows transportation projects

Overpass/underpass projects get majority support

Police aim to prevent retaliation after Hells Angel found dead in Maple Ridge

IHIT confirms Chad Wilson, 43, was the victim of a ‘targeted’ homicide

Ridge Meadows Hospital parking is still pay, but streets free

Surrey has removed meters on streets, asking Fraser Health for free parking at the hospital

UPDATE: IHIT confirms identity of Hells Angels homicide victim

Chad John Wilson was one of four men arrested in Spain in 2013 on allegations of smuggling cocaine.

Former NHL player and coach Dan Maloney dies at 68

Maloney coached the Toronto Maple Leafs and Winnipeg Jets

Ex-MSU president charged with lying to police about Nassar

Lou Anna Simon was charged Tuesday with lying to police during an investigation

Otter makes a snack out of koi fish in Vancouver Chinese garden

Staff say the otter has eaten at least five fish

Police looking into two more incidents at private Toronto all-boys’ school

Police and the school have said two of the prior incidents involved an alleged sexual assault

B.C. lumber mills struggle with shortage of logs, price slump

Signs of recovery after U.S. market swings, industry executive says

25% of Canadians still won’t say they use pot, survey says

Statistics Canada poll says Canadians on average were 18.9 years old when they first tried pot.

Canucks’ 50/50 jackpot expected to surpass $1 million

The guaranteed prize for one lucky winner will be $500,000 minimum when Vancouver hosts LA Nov 27

The latest advent calendar trend: Holiday cannabis

A Canadian company is giving people from coast to coast a new way to celebrate the Christmas countdown.

Most Read