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Finger pointing as Metro voters defeat sales tax for transit

Referendum defeat with nearly 62 per cent opposed leaves mayors in search of plan B to expand transit system
Jordan Bateman of the Canadian Taxpayers Federation headed the No TransLink Tax opposition group.

The finger pointing has resumed between the province and Metro Vancouver mayors after voters resoundingly defeated a proposal to charge a 0.5 per cent sales tax in the region to fund transit and transportation.

The proposed tax that would have funded $7.5 billion in upgrades over 10 years was rejected with 61.7 per cent of voters saying No and 38.3 per cent saying Yes.

The Yes side lost in every major city of the region – even in Vancouver where it got 49.1 per cent – and only won in sparsely populated areas like Belcarra and Bowen Island in the mail-in plebiscite conducted over 10 weeks. The No vote was strongest at 75 per cent or more in areas like Maple Ridge and Langley Township. (See breakdown of results by municipality below.)

Elections BC received more than 798,000 ballots – 51 per cent of all registered voters – but more than 38,000 ballots were rejected.

The defeat leaves the region without $250 million a year in new revenue the tax would have brought to expand transit.

RELATED:Referendum Questions series

Surrey and Vancouver are expected to try to cobble together their own plan B strategies to build light rail in Surrey and a SkyTrain extension west along Broadway.

But the region will be without the funding required for a broad 25 per cent bus service lift, including many more frequent express bus routes that had been in the mayors' plan, nor will there be money for increased SkyTrain, HandyDart, night bus or SeaBus service that was to have swiftly kicked in after a Yes vote.

Surrey Mayor Linda Hepner vowed Thursday to push ahead with light rail in Surrey, potentially with private financing.

But light rail in Surrey – if it can be built with hefty senior government contributions – will not be be as viable and efficient in covering its operating costs if it is not accompanied by much-bolstered connecting bus routes to bring riders.

"It sets up a really nasty situation where some people are getting improved rapid transit service in some areas but other people's transit service is being cut back," said Eric Doherty, a HandyDart advocate.

Yes forces had argued defeat would worsen congestion as the population grows and demand pressures intensify on a frozen transit system, spurring more transit users to drive instead.

No campaign head Jordan Bateman of the Canadian Taxpayers Federation exploited many voters' unwillingness to pay more – especially to TransLink – and argued more money could be found if cities restrained their own spending and tax growth.

He successfully framed the campaign as a vote on TransLink, which he accused of mismanagement and which had come off major SkyTrain breakdowns and a failure to fully launch its new Compass card payment system on time.

Bateman called the result a "tremendous victory for taxpayers" and said the No win was achieved on a shoestring against heavy odds.

"They had big business, big government, big labour, big environment and big money. But they didn't have the people."

He called for a core review of TransLink to seek more savings.

Mayors never wanted the referendum and repeatedly said something as crucial to the region as transit expansion should not go to a public vote.

They had previously wrung a pledge from former Premier Gordon Campbell to allow a new transit revenue source.

But Premier Christy Clark reneged and promised in the 2013 provincial election any new tax source for TransLink would have to be approved by local voters.

Left with only that path to new funding, mayors agreed last year to the plebiscite and chose a hike in the provincial sales tax from 7.0 to 7.5 per cent within Metro, rather than other options, such as a vehicle levy.

With the sales tax rejected, mayors could still raise TransLink property taxes, which is an existing source.

That option has been repeatedly suggested by the premier and was touted again Thursday by Transportation Minister Todd Stone as a solution the mayors could deliver "tomorrow."

But Vancouver Mayor Gregor Robertson, chair of the mayors' council, insisted property tax in not an option.

Instead mayors are threatening to pull out of the TransLink governance structure – effectively leaving all decisions and responsibility to the province – unless the Clark government reforms TransLink and finds a funding solution in the next six months.

"TransLink is their creation," Robertson said. "The ball's back in the province's court for next steps."

Coquitlam Mayor Richard Stewart said the key priority now is to "fix TransLink."

Stone said he will work with mayors to explore new solutions, without issuing "ultimatums."

He said the province remains committed to covering one-third of the cost of new rapid transit lines and the new Pattullo Bridge, which would leave one-third to be raised by the region after a matching contribution from Ottawa.

"Doing nothing simply is not an option," Stone said, adding some other funding source will be required and will have to come from the region to cover its third of the costs.

He also suggested the mayors repriorize the projects in their plan, potentially delaying new lines longer.

If mayors hold firm to the need for a new source, it's unclear how that can happen without a new referendum the premier has said can't be held before the next municipal elections in 2018.

Bateman said he will urge Clark to recommit in the 2017 provincial election to an ongoing plebicite requirement for new TransLink taxes.

In the meantime, observers predict some cities will consider freezing much new development in areas that planners had assumed would be served by better transit in the future. Any clampdown on new home construction could drive real estate prices higher.

One project TransLink is still expected to pursue is the $1-billion replacement of the Pattullo Bridge, to be funded through tolls.

Mayors also intend to pursue some system of road pricing and Stone has signalled tolling reform will be required if the Pattullo and future Massey Tunnel replacement are both tolled, leaving only one remaining free crossing of the Fraser River.

Further reforms are possible at TransLink, Stone said, beyond a new CEO and move to open board meetings, which he also hoped would improve accountability.

SFU City Program director Gordon Price said the TransLink board of directors should submit to a reconfirmation of their seats by the mayors' council.

He said the result relegates the region to living with "a second rate transportation system"  that will have profound implications for the development of Metro Vancouver.

Price also said it raises the threat that future decisions will be made, not on the basis of an overarching plan rooted in good planning, but on politics as cities are pitted against each other in a project-by-project battle for scarce dollars.

"Politically, it may be better for the province not to have to commit itself to large scale, sustainable ongoing funding, but to be able to pick and choose those projects it believes are best for the region, but also politically advantageous and affordable."

INTERACTIVE TIMELINE: History of TransLink funding tribulations

Road to referendum: Yes side was quickly on the defensive

Many observers and some mayors predicted the referendum was doomed from the start.

But Metro Vancouver mayors – forced into a box created by Premier Christy Clark – opted to proceed in the hopes that they could pull out a surprise win, just as the premier had a year earlier.

They did succeed in hammering out a detailed transit expansion plan a year ago in a tight time frame laid down by the province. The only mayor opposing it then was Burnaby's Derek Corrigan, who called the $7.5-billion package too ambitious and predicted failure.

Haggling continued over what funding source to propose until after the 2014 municipal elections.

When mayors settled on the sales tax hike in December, two more mayors from West Vancouver and Maple Ridge voted against proceeding. Lack of sufficient control over TransLink by the mayors was a major objection for the holdouts.

While the Yes side didn't have complete consensus of mayors out of the gate, it did have a huge and growing coalition that united disparate groups from business leaders to environmentalists.

But despite the big tent of supporters – more than 140 groups ultimately signed on to the coalition – confusion and strategic errors ensued.

Observers say the lack of time available to prepare voters for the campaign was a major cause of the defeat.

U.S. jurisdictions where new transit tax measures won voter approval had years to lay the groundwork.

Crucial weeks were lost in January waiting for the province to clarify how the tax would work – that it would be a simple provincial sales tax increase to 7.5 per cent rather than a separate line item on bills as the government first indicated.

One of the biggest missteps of the campaign arguably happened before it even started.

Surrey Mayor Linda Hepner's election campaign promise that she would find a way to build light rail in her city even if the referendum failed put the Yes side in trouble in the region's second largest city.

Why, some residents asked, should they vote to pay for a new tax if they'd still get light rail without it? In the end, 65 per cent of Surrey voters rejected the tax.

Elsewhere in the region, voters were receptive to No campaign suggestions the money could be found by fixing waste within TransLink.

Mayors struggled to explain why drivers should pay more for transit they don't use.

"People were worried about change, they were worried about pricing, they were worried about waste at TransLink," said Peter Robinson, president of the David Suzuki Foundation and co-chair of the Better Transit and Transportation Coalition.

"All of those came together in a brew that made it very difficult for folks to keep thinking about the real issue – how do we move people around this region."

By February, an early lead for the Yes side had evaporated and a new poll put the No campaign decisively ahead by 15 points.

The 10-week period when mail-in ballots were accepted saw a blizzard of campaign claims by both sides.

Yes forces rolled out economists, medical health officers, police chiefs, university presidents and others to argue why improved transit would be good for residents.

No campaign strategist Jordan Bateman, in contrast, stuck to a single, simple message: TransLink wastes tax money and it can't yet be trusted with any more.

On the defensive, the TransLink board, which includes the Vancouver and Surrey mayors, removed Ian Jarvis as CEO of TransLink in February but kept him on as an advisor to avoid a costly payout.

That meant the hiring of an interim CEO at $35,000 a month, creating the spectre of "two CEOs." Rather than rebuilding trust and turning the page, the move added more momentum for the No side and refocused public attention on executive salaries.

In March, billionaire businessman Jim Pattison stepped forward to head a committee that would, if the tax was approved, oversee the flow of money and ensure it wasn't misspent by TransLink.

As the campaign wound down, mayors hosted telephone town halls to field questions, grassroots campaigners crafted viral videos and Yes forces worked to identify supporters and persuade them to send in their ballots.

All the effort didn't come cheap.

The Mayors Council spent $5.8 million on the campaign, but spending by some cities, other Yes campaign partners, as well as Elections BC's costs push the total bill for the plebiscite to more than $12 million.

"The whole thing was a waste," said SFU City Program director Gordon Price, who said there should never again be such a referendum.

"How can you possibly justify spending another $12 million, including the Elections BC part, for a dubious outcome?"