Staff Report #7
March 6, 2023
To All Commissioners
Re: Provincial Funding Update
Recommendation
That the report be NOTED and FILED.
Background
In 2004, the Province of Ontario announced the establishment of the Provincial Gas Tax Program (PGT) dedicated specifically for public transit services (conventional and specialized transit services). PGT funding supports operating and capital expenditure investment related to the maintenance and growth of services and ridership. The PGT program is a performance based program, with the annual moneys received by respective transit systems being based upon the transit service’s position in terms of population and ridership in relation to total population and total ridership for all Ontario public transit services. The amount of PGT moneys available is fixed at $0.02 per litre of gasoline sales in a given year. Annual allocations are placed in a reserve fund maintained by the transit service with the reserve fund being subject to annual reporting and audit to/by the Province.
The use of PGT is approved via the annual (multi-year) budget process, noting the use for capital versus operating expenditures can fluctuate year to year depending on priorities and available funding options for same.
On February 23, 2023, the Provincial government announced the 2022/2023 allocations for the Provincial Gas Tax for Transit program. Funding for the program is determined by the number of litres of gasoline sold in the province during the previous year. Municipalities that support public transit services in their community receive two cents per litre of provincial gas tax revenue collected. To make up for reduced gas sales due to ongoing recovery from the COVID-19 pandemic, this year’s gas tax program includes a one-time additional funding of $80 million to help ensure municipalities can continue to support their transit systems.
The announcement confirmed that the Province will provide $379.5 million in Provincial Gas Tax for Transit funding to 107 municipalities for the 2022/23 allocation year. The methodology to determine allocations for this round of funding utilized a five-year average for ridership for the years 2017-2021 versus relying on pre-pandemic ridership as had been done over the previous two years. London’s allocation has been calculated at $11,052,415 which is slightly less than the previous year’s allocation. Provincial Gas Tax for Transit funds will be transferred to the Provincial Gas Tax reserve fund and utilized consistent with the program guidelines. Further details with respect to the status of the Provincial Gas Tax Reserve Fund will be provided at the April 13, 2023 meeting in the Reserve and Reserve Fund Status Report.
Enclosure
I – Ministry of Transportation Provincial Gas Tax 2022/23 Allocation Announcement
Recommended by:
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager