Bring back license fees – and make them progressive

Ontario license plate stickers are back in the news.

Last week, CTV News reported that the Ford government’s decision to stop charging sticker fees has put public money in many already-lined pockets.

In February, Premier Doug Ford estimated annual savings for most drivers would be $120 and $240 for those with two cars. But the government didn’t just stop charging fees; it gave discounts for fees paid in the previous two years. At least 21,000 drivers received $1,200 or more in rebates, CTV found. A driver somehow got $38,000.

The identity of this driver, who we know may own 300 cars, has not been made public. But one thing is obvious: whoever they are, they didn’t need the money.

The provincial budget did. The refunds cost the Treasury $2.2 billion. Lost sticker revenue will now cost $1.1 billion a year.

This money could have been invested in public services, like our crumbling healthcare system. Or supports for autistic children. Or core funding for universities and colleges, where Ontario spends less per student than any other province.

It could have gone into the pockets of poor Ontarians who cannot afford rent or groceries.

Instead, the money goes, unnecessarily, to many drivers who pay $120 for lunch.

Unconditional cash gifts are the hallmark of the current government. Pandemic payments to parents, for example, are poised to cost the treasury more than $2 billion. Surprisingly, these checks are not targeted to a specific goal. They can be used for anything.

It’s a weird and expensive way to budget.

Clearly, the chances of the current government doing a U-turn on the sticker fee are slimmer than slim. That said, public services need money to operate. With two opposition parties looking for leaders – and presumably ideas – there is no better time than the present for a broad discussion on how to finance vital public spending in a phased manner.

For years, Ontario has received too little revenue to provide public services at the level that Canadians expect. Since 2018, two dozen tax and fee changes made by the current government have reduced overall revenue by $7.5 billion a year.

No change in income will recover what has been lost. But here’s a start: let’s bring back the license sticker fee – and make it progressive.

It’s not hard to figure out how. It suffices to link the registration fee to the value of the vehicle. Expensive cars would cost more to lay off; cheaper cars would cost less, or — below a certain threshold — nothing at all.

In provinces where auto insurance is public, registration fees are always tied to the year, make and model of the vehicle. As the saying goes, it’s not rocket science.

When it comes to funding public services, building infrastructure and supporting low-income Ontarians, graduated license fees are simple and obviously fair. Sending checks to millionaires leads us all down a dead end.

Randy Robinson is the Ontario Director of the Canadian Center for Policy Alternatives.

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