OTTAWA - Federal New Democrats floated the idea of a new tax to pay for municipal infrastructure improvements, QMI Agency has learned.
While NDP infrastructure critic Olivia Chow said she’s not calling for any tax increases, one of the proposals in a discussion paper prepared by her office and put before MPs on a House of Commons committee studying Canada’s infrastructure deficit would allow municipalities to impose a 1% value-added sales tax.
"I'm not advocating for higher taxes. The paper reflects what some other countries are doing to address the serious problem of crumbling infrastructure," she said.
A copy of the discussion paper, dated Oct. 28 and distributed to members of the House of Common standing committee on transport, infrastructure and communities on Nov. 1, suggest that a sales tax “presents" an alternative to boosting property taxes, and that the idea could be voted on in a referendum.
In Ontario, that would take taxes to 14% when the 5% federal tax, 8% provincial tax and potential 1% municipal tax would be combined.
The memo Chow distributed to MPs also presents other ways municipalities could get more cash for infrastructure, including direct grants from the federal government.
The Canadian Taxpayers Federation said the idea of a municipal tax should be a non-starter as it would put retailers out of business and drive more Canadians to the U.S. to bargain hunt.
"Cities are not strapped for cash — they just choose to spend their cash on fat salaries, bonuses, benefits and pensions, especially for mid-level bureaucrats, instead of spending the money building roads and subways," said CTF national director Gregory Thomas.
At a Toronto news conference Tuesday lamenting the city's crumbling infrastructure, Chow joined the Federation of Canadian Municipalities in calling on the government to invest heavily across Canada.
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