June 24, 2014

His Worship
Mayor Richard Walton, Chair
Mayors’ Council on Regional Transportation
287 Nelson’s Court, Suite 400
New Westminster BC 
V3L 0E7 

Dear Mayor Walton:

Re: Mayors’ Council Vision

I am pleased to acknowledge receipt of the Mayors’ Council transportation plan, Regional Transportation Investments: a Vision for Metro Vancouver. I have reviewed the Vision and appreciate your hard work and efforts. The Mayors’ Council has identified priorities that will be critical to ensuring that the region is able to accommodate the million additional people that are expected over the next thirty years. That being said, to also ensure that B.C. has a strong and growing economy, more work is required with respect to the safe and efficient movement of goods across the region. More work is also required on some of the funding assumptions to ensure there is an accurate and realistic plan to pay for the Vision.

Funding Mechanisms

As outlined in the Vision, I understand that the preferred revenue source of the Mayors’ Council is a reallocation of provincial carbon tax revenues in the near term and at a later point, mobility pricing. The Vision also identifies an alternative option of a new regional carbon tax in combination with mobility pricing.

I have been clear since becoming Minister that any new sources of funding requested by the Mayors’ Council for the expansion of transportation must be affordable for families, not negatively impact the economy, be regional in nature, and not negatively impact provincial revenues. As such, the Province cannot support a re-allocation of provincial carbon tax revenues. As the provincial carbon tax is revenue neutral, any revenues collected in Metro Vancouver are entirely offset through a combination of measures such as an equivalent level of provincial income tax reduction.

Conversely, a new regional carbon tax may be an option for consideration by Metro Vancouver residents. A new regional carbon tax will be complex and costly to administer, making it important that the full spectrum of costs and economic impacts (for example, on motor fuels, home heating and industrial processes) are well understood by the residents who would need to vote on it through a referendum. Should the Mayors’ Council confirm with me that a new regional carbon tax is its preferred funding option, the Province will work with the Mayors to undertake an assessment of administrative requirements for implementation.

With respect to mobility pricing, I appreciate the Mayors’ interest in pursuing this approach over the longer term and look forward to receiving further details on the proposal. As the specifics become better understood, I am prepared to work with the Mayors’ Council to undertake an assessment of the available options.

I also noted that the Vision suggests that property taxes cannot be raised beyond the 3 per cent increases allowed by legislation. I would like to clarify that while it is true that TransLink is limited in this regard, the legislation does not restrict the Mayors’ ability to approve additional increases in property tax rates. Further, as property taxes are not a new source of funding, any increases would not be subject to referendum. I encourage the Mayors’ Council to give further consideration to this opportunity.

Senior Government Funding

The Vision puts the funding gap at approximately $250 million a year, based on an assumption of two thirds senior government funding for capital projects. As stated in my letter of February 6th, the Province is prepared to consider funding one third of major new rapid transit projects and the replacement of the Pattullo Bridge, provided that they fit within the provincial capital plan and strong business cases can be made for the investments.

As you are aware, I have also committed to work with the Mayors’ Council to advocate for matching federal project funding. As currently proposed, the Vision assumes over $1.5 billion in federal funding over the next ten years. However, you should be aware that our entire province’s share is 33 per cent less than your assumption. British Columbia’s per capita allocation (inside and outside Metro Vancouver) under the new Building Canada Fund is anticipated to be $1 billion in total. This amount of funding will not be enough to accommodate all of the projects in your Vision, as well as other necessary and competing infrastructure needs throughout the province.

Realistically, if the Mayors’ expectations for federal funding are not met, this will either require higher regional contributions to fully fund the identified priorities, or phasing of projects over a longer time frame. I would be pleased to discuss these options with you in greater detail.

Pattullo Bridge and HandyDART

As I have noted above, the provincial commitment with respect to the Pattullo Bridge is to fund one third of the capital costs for replacement of the bridge. It is my expectation that these capital contributions will be matched by partner funding. Additional funding for operating or rehabilitation costs of the existing bridge remains the responsibility of TransLink.

With respect to the additional funding for HandyDART capital and operations, it is the view of the Province that the provision of these services falls within TransLink’s mandate, and as such should be accommodated within the broader regional vision. When TransLink was created in 1999, the Province took responsibility for paying the regional hospital capital costs for Metro Vancouver and transferred significant revenue powers to the region, including a portion of provincial fuel tax revenues. These revenues, in addition to any new revenue sources approved by voters in a future referendum, must be used to fund the full operation of TransLink’s system.

Governance

Bill 22 was passed by the Legislature this spring, and made changes to TransLink governance that significantly increases the authority and accountability of the Mayors’ Council. The Mayors are now responsible for approving the 30 year long term strategy and the 10 year investment plan. These powers, in addition to assumption of the TransLink Commissioner’s responsibilities, provide the Mayors with the tools needed to shape the future of the region’s transportation system. While I appreciate the frustration that the Mayors’ Council has had with respect to governance of TransLink in the past, I believe that the new model, which includes representatives of the Mayors’ Council and the Province on the TransLink board, provides an effective approach for decision making and collaboration.

Referendum

The Mayors’ Council has been clear that new funding sources will be required to support implementation of the full range of proposed projects. In keeping with the Province’s commitment, if the Mayors confirm that a new regional carbon tax is their preferred funding source, this will need to go to referendum to be voted on by the taxpayers of Metro Vancouver.

In order to commence planning, I will require a formal notification of a referendum date from the Mayors’ Council by July 15, 2014. Assuming it is not your intention to hold a referendum in November 2014, additional analysis on the impacts of a new regional carbon tax, and consideration of whether to include mobility pricing, may be required, therefore recommendations on a referendum question will not be required until Fall 2014.

Given the scope and complexity of this work, I would encourage the Mayors Council to invite feedback from the citizens of Metro Vancouver prior to bringing the Vision forward to referendum. A public dialogue will allow residents to have a say on the identified priorities, and start to build their understanding of what is being proposed before a final decision is made through the referendum. I am willing to discuss this in more detail with the Mayors Council.

Once again, please accept my congratulations on your accomplishment. I look forward to further discussion on the details of the Vision and your plans to secure the support of Metro taxpayers for the Mayors’ Council transportation priorities. 

Sincerely,

Original Signed By:

Todd G. Stone
Minister