[reaperexpress]

But where does that logic start and stop? It does raise an interesting point of the treatment between 'transit' and 'transit-like'.

Agreed. For example, Prestige class tickets on The Canadian probably shouldn't be tax free. Maybe economy class tickets on intercity buses and trains should be tax free, but not premium class tickets.

It is indeed an interesting ideological question. The way I see it, intercity ground transportation is a service that the government wishes to support, due to the environmental benefits relative to other modes, the reduced road demand, and the essential service it provides for people without cars, especially in places such as Northern Ontario where towns are very far apart. This is in contrast to airlines, where the government does wish to subsidize some rural air routes due to the essential service they provide, but for the most part it is not in the public interest to subsidize airline operations.

Given that we want intercity ground transportation to continue existing and to be competitive with other modes such as driving and flying, we need to provide it with some form of financial advantage, especially in the more rural parts of the country.

The distinction between "transit-like" is already very clearly defined for private operators, by bus route licenses awarded by the Ontario Highway Traffic Board. Licensed bus routes allow any person to book a ticket, same as a transit service. Other types of bus service, such as tour buses/trains, chartered buses or employee shuttles, aren't licensed bus routes so sales tax would continue to apply. For private operators, we need this distinction so that a company doesn't just run one little licensed bus route to qualify as a tax-exempt "transit-like" operator, but then focus their entire business on other ventures like charter services.

For the public operators (VIA and Ontario Northland), this is not an issue. Due to those companies' direct accountability to governments, there is no chance of that happening. As such it is not necessary to distinguish between certain tickets which do or don't deserve a subsidy (i.e. tax break) - we wish to subsidize the company as a whole. Prestige class customers obviously don't need any tax breaks, but in practice eliminating the sales tax wouldn't make a difference to them anyway. Those tickets are relatively price-insensitive, so VIA would probably just increase the ticket price by 13% and use the extra profits to cross-subsidize other types of service. This the same reason a publicly-funded operator has a Prestige Class in the first place: it helps support the transcontinental train service, whose public benefit is the economy-class service which is a lifeline for people in remote communities.

 

[tmlittle]

For longer trips the difference gets even slimmer.

20 trips Toronto - Kitchener:
GO: $326.40 on Presto
VIA: $294.00 + 13% tax = $332.22

20 trips Toronto - Guelph
GO: $271.80 on Presto
VIA: $267.00 + 13% tax = $301.71

The only reason VIA is more expensive in many cases is that they get charged sales tax while GO doesn't.

We really need to get rid of the sales tax on train and bus tickets - it is wasteful to be taxing VIA while they receive an annual operating subsidy. It is also counterproductive to be taxing Ontario Northland and bus operators licenced by the Ontario Highway Traffic Board (Greyhound, Coach Canada, Casper Bus, Hammond Bus etc) when they're priving a valuable public service that provides a net benefit to the government and citizens. And they're all constantly perpetually struggling to break even.

I agree that a lot of people I know, especially younger people, have the perception of Via as expensive and GO as cheap. Though especially within the corridor, I wish there was more of an effort for short-trip price reductions outside of the GO zone. I understand the argument that this might tie up long-trip seats and throw off ridership balance, but it would make a lot of trips like Kitchener-Stratford much more practical.

 

[roger1818]

It is indeed an interesting ideological question. The way I see it, intercity ground transportation is a service that the government wishes to support, due to the environmental benefits relative to other modes, the reduced road demand, and the essential service it provides for people without cars, especially in places such as Northern Ontario where towns are very far apart. This is in contrast to airlines, where the government does wish to subsidize some rural air routes due to the essential service they provide, but for the most part it is not in the public interest to subsidize airline operations.

Given that we want intercity ground transportation to continue existing and to be competitive with other modes such as driving and flying, we need to provide it with some form of financial advantage, especially in the more rural parts of the country.

The distinction between "transit-like" is already very clearly defined for private operators, by bus route licenses awarded by the Ontario Highway Traffic Board. Licensed bus routes allow any person to book a ticket, same as a transit service. Other types of bus service, such as tour buses/trains, chartered buses or employee shuttles, aren't licensed bus routes so sales tax would continue to apply. For private operators, we need this distinction so that a company doesn't just run one little licensed bus route to qualify as a tax-exempt "transit-like" operator, but then focus their entire business on other ventures like charter services.

For the public operators (VIA and Ontario Northland), this is not an issue. Due to those companies' direct accountability to governments, there is no chance of that happening. As such it is not necessary to distinguish between certain tickets which do or don't deserve a subsidy (i.e. tax break) - we wish to subsidize the company as a whole. Prestige class customers obviously don't need any tax breaks, but in practice eliminating the sales tax wouldn't make a difference to them anyway. Those tickets are relatively price-insensitive, so VIA would probably just increase the ticket price by 13% and use the extra profits to cross-subsidize other types of service. This the same reason a publicly-funded operator has a Prestige Class in the first place: it helps support the transcontinental train service, whose public benefit is the economy-class service which is a lifeline for people in remote communities.

interesting thought. I wonder how much GST VIA collects compared to their subsidy?

 

[Darwinkgo]

interesting thought. I wonder how much GST VIA collects compared to their subsidy?

Important to remember that making VIA's sales GST free, while not making its inputs GST free, actually makes VIA worse off.

And it is free to see, it is in VIA's annual report (including straight sales taxes like BC, SK and Man.):

 

[reaperexpress]

Important to remember that making VIA's sales GST free, while not making its inputs GST free, actually makes VIA worse off.

How so? Could you explain further? What do you mean by inputs?

 

[Fritter]

How so? Could you explain further? What do you mean by inputs?

I am not an accountant, and I stand to be corrected if I'm way off on this, but I believe the GST system works this way.
A business collects GST on all it's sales, subtracts the GST paid on all its inputs to make those sales (In VIA's case Diesel, cleaning supplies, food and beverage sold onboard etc) and pays the government the net amount. If a business did not collect GST, then costs on inputs would be higher without the negating GST collected.
In other words, GST is paid by the final customer not each time along the procurement line.

 

[EnviroTO]

That is correct. The amount of the GST collected that a company needs to remit is how much it collected from sales minus the GST it paid on supplies that make up the product they sell. However, I believe if the product you sell is non taxable the tax you pay on inputs directly related to the product still get claimed resulting in a GST refund. Because the value is usually added through the supply chain most industries a refund doesn't happen, but if what you make is nontaxable but relies on taxed items that can happen.

 

[roger1818]

I am not an accountant, and I stand to be corrected if I'm way off on this, but I believe the GST system works this way.
A business collects GST on all it's sales, subtracts the GST paid on all its inputs to make those sales (In VIA's case Diesel, cleaning supplies, food and beverage sold onboard etc) and pays the government the net amount. If a business did not collect GST, then costs on inputs would be higher without the negating GST collected.
In other words, GST is paid by the final customer not each time along the procurement line.

How do transit agencies get around this, or do they have to cover the GST on their supplies? As for food and beverage sold, they would still be charging GST on those items.

 

[SFO-YYZ]

Guys, I think we may be getting a bit off topic here with the GST/tax remittance transit discussions...

Let's try to get back to VIA/HFR, etc.

 

[reaperexpress]

Guys, I think we may be getting a bit off topic here with the GST/tax remittance transit discussions...

Let's try to get back to VIA/HFR, etc.

Well we are talking about whether there should be HST on VIA tickets, so I'd say that's VIA related...

Anyway, to sum up: If I understand correctly, my statement should have been that VIA tickets (and other intercity tickets) should be deemed non-taxable, and VIA (and other operators) should receive a GST/HST credit for the HST they spend directly operating the service (fuel, parts etc).

 

[DirectionNorth]

Given that both VIA and the CIB are crown corporations, is it normal to have this little in publicly available documentation? We've reached the stage of the HFR project having funding allocated in a federal budget, so I'd expect at least a modicum of scrutiny on what the funding is actually being used for? I'm surprised at the fact that any report from the JPO will come after the budget proposal.

I can see a few interpretations to this.

The most generous one is that they don't want the airlines to lobby against them, so they're keeping it quiet.

The other interpretation is that it would be a failure in some way (too expensive, too slow, not enough passengers) and they don't want us to know.

 

[innsertnamehere]

The feds in general are notoriously secretive in almost all their work. The province is an angel of open book government by comparison. I'm sure it'll be released eventually, but they are in no rush.

Someone should be filing an FOI for the info.

 

[roger1818]

I can see a few interpretations to this.

The most generous one is that they don't want the airlines to lobby against them, so they're keeping it quiet.

The other interpretation is that it would be a failure in some way (too expensive, too slow, not enough passengers) and they don't want us to know.

My interpretation is they don't want to compromise the negotiations for acquiring the ROW. If VIA were to release the price the expect to pay for the ROW, that would then tell the owner how much VIA is willing to pay and make it more difficult for VIA to negotiate effectively and get the best possible price.

 

[crs1026]

^ I can’t imagine that land acquisition is the issue. It might be if there were choices of route, but that isn’t the case. Landowners largely know whether or not their property will be affected. The owner of the biggest parcel is CP which can afford lawyers and will ask the moon and stars anyways. There isn’t much point in second guessing VIA’s offer. I can’t imagine that bidders on the design/construction phase would be guided by that information either, assuming they intend to bid competitively.

I-have to think that the reluctance was to avoid releasing data that could be seized by either political or lobbyist opposition, especially when government is so ambivalent in the first place. The reports likely outline major risks and uncertainties. And they will likely declare the most likely and best possible performance outcomes. Giving HFR’s opponents that information so they can begin slagging HFR, before Ottawa is ready for a public debate, would be very unwise. Especially if the project has some iffy bits.

I suspect VIA is ready and willing to put its best foot forward.... but the pols sure aren’t. It’s as if they still want it to go away.

- Paul

 

[roger1818]

The owner of the biggest parcel is CP which can afford lawyers and will ask the moon and stars anyways.

While I agree that CP will lawyer up and ask for the moon, there is no point giving them more ammunition than they need.

There is also the QGRY between Montreal and Quebec. They may not be able to afford as many lawyers.