Owen Sound Council approved once again entering into an agreement with the Ontario Minister of Transportation to receive gas tax funds to help offset the cost of our public transportation system.

Here is the staff report to explain what we know about the agreement for 2019.

Since 2004 the Province of Ontario has allocated a portion of gas tax funds collected on the sale of fuel across the province. The Province collects 14.7 cents for every litre of gasoline sold in Ontario. Of that amount 2.0 cents has been allocated to municipalities and has remained unchanged since 2006. Under the previous government, a commitment was made starting in the 2019/20 year to increase that amount to 2.5 cents and then 3.0 cents in 2020/21 and 4.0 cents in 2021/22. It is unknown at this time of the current Government will adhere to this commitment.

Since the program’s inception in 2004 these funds have been used by the City of Owen Sound to offset the annual cost of providing public transit as well as fund improvements terminal and bus stops on the transit routes. The allocation of gas tax funds is based on formula applied to the Provincial participation and weighted 70% ridership and 30% population. For the 2018/19 funding year, the City of Owen Sound is eligible for $255,220 (2017/18 $246,233). As the City’s population is relatively stable, the increase is associated entirely with an increase in ridership.

The total amount of annual provincial gas tax has been recognized as revenue in the transit budget to offset current year operating costs. Until now there has been sufficient funds retained in the transit reserves to fund capital projects however this reserve will be depleted rapidly if it is not replenished over time. It is recommended that in future years if the allocation of gas tax to municipalities is increased, the incremental amount be set aside into reserves for future capital asset rehabilitation and replacement.