December 5, 1997

Pollution Probe Calls For Tax-Free Transit Pass

At a Transit Summit today, Pollution Probe called on the Federal Government to amend Income Tax Legislation and treat employer-provided transit passes as a non-taxable benefit, offering a first practical step to reducing human impact on climate change.

Currently, the government is allowing employers to provide employee parking as a non-taxable benefit, while employer-provided transit passes are taxable. This tax policy has the perverse effect of encouraging people to pollute more by driving to work instead of using transit.

The transit pass tax issue was one of several transit-related actions to reduce greenhouse gas emissions identified today at a Summit of key government, industry, academic and environmental group decision makers addressing transit issues in the Greater Toronto Area.

"The Federal Government needs to wake up to the fact that its tax policies are a hindrance to climate change solutions," said Ken Ogilvie, Executive Director of Pollution Probe, a leading non-profit environmental organization. "The issue of Transit Passes is a straightforward and easy to implement solution offering an immediate and significant impact. While government officials in Kyoto are promising actions, tax policy in Ottawa is encouraging Canadian workers to use the more-polluting automobile rather than cleaner transit systems."

An employer-provided non-taxable transit pass could deliver a 20% increase in transit use. Over the next ten years, a 5% reduction in vehicle traffic and emissions could be realized.

Transportation is one of the largest and fastest growing uses of fossil energy, primarily from the automobile. Transportation is responsible for 30% of all greenhouse gases produced by human activity. To meet emission targets set in Kyoto, Canadians must reduce automobile pollution. Increased transit use is a very practical way to accomplish this.

In times when environmental concerns are mounting and transit ridership should be increasing, overall transit ridership in the GTA has decreased by close to 1% over the last ten years, while overall auto use has increased by 28.5%. Work trips by transit have decreased by 11% with work trips by automobile increasing by 19.2 %.

"Canada’s transportation practices must shift to make a real and lasting difference in our environment," said Ogilvie. "It is the responsibility of all stakeholders - government, industry and transit authorities - to work together to find the answers," he said. "As our leaders meet in Kyoto, we must collectively find solutions here."

Canada is lagging behind most other industrialized countries on the tax treatment of transit passes. In the United States, employers have been allowed to provide employees tax-free transit passes since 1986. In San Francisco, an estimated 17 million vehicle miles were removed from the Bay area, and an estimated 61 million tons of pollutants eliminated.

For more information, please contact:

Nancy Eskin
Pollution Probe
(416) 926-1907