The Financial Accountability Office on Tuesday released an analysis on the service fees levied by Ontario, many of which are going up.

And, whereas the province scrapped its $30 Drive Clean fee and those for adoption agencies in the budget, next year, certain fees – including those for driver and vehicle licensing, camping in provincial parks, fishing, hunting and liquor permits – will be adjusted for inflation.

The fees are forecast to pull in $2.74 billion, or 2.1 per cent of total revenue for the 2016-17 fiscal year, according to the FAO. That compares with $2.1 billion in 2014-15. Since 2011, total service fee revenue has gone up nearly 40 per cent. The FAO contrasts the increase to money the province makes from taxation, which, over the same period (2016-17) is expected to increase by nearly half that amount, or 21.5 per cent.

Driver and vehicle registration fees remain the fattest cash cows – raking in almost two-thirds of the total projected service fee-revenue.

"The key driver of increasing service fee revenue is vehicle and driver registration fees. Since 2011-12, revenue from vehicle and driver registration fees has increased by 62.9 per cent, an average annual growth rate of 10.3 per cent, more than five times the growth rate of all other provincial service fees,” the report notes.

But because the budget did not provide specific details on how the government plans to adjust service fees for inflation, the FAO said it is impossible to know how much new revenue it will gain for the 2017-18 fiscal year. The FAO also requested information from the government on how much of the revenue increase since 2011 was a result of rate changes, new fees, or higher demand for services - but the government said it does not collect such data centrally, and pointed the FAO to work directly with individual ministries and agencies.

Vic Fedeli, the Progressive Conservative’s finance critic, said the FAO’s document is proof the government is “nickel and diming the people of Ontario.”

“Service fee is just another name for tax. Because of this government, families are already burdened with the soaring costs of living,” Fedeli said during question period. “If you drive a car, you’ll pay more. If you heat your home with gas, you’ll pay more. If you camp, fish, or hunt, you’ll pay more.”

Treasury Board president Deb Matthews countered that such fees are a means of ensuring costs of providing a program or service are paid for by the beneficiary of that program rather than by taxpayers in general, calling it "cost recovery."

“There’s a legal limit on how much you can charge in a service fee, and we’re well below that legal limit. So we're not recouping the costs,” Matthews later told QP Briefing. She added that the government is currently reviewing current service fees to ensure any changes are fair and reasonable. "This approach will help sustain programs by ensuring a stable source of funding for services provided by the government. Other fee rate changes may be announced by the ministries responsible for delivering the service."

According to NDP Leader Andrea Horwath, the FAO's report is raising red flags on access and cuts to government services.

“The biggest issues that concerned us was the serious disparity in how Ontario funds public services versus everybody else. Virtually, we’re at the bottom of the barrel when it comes to per capita service funding for Ontarians. Everywhere you turn, people are losing access to services in this province because of the Liberal’s austerity agenda and I think it was quite clearly laid out with the FAO’s report today," she said.

To contact the reporter on this story:
snanji@qpbriefing.com
416-212-5789

Rising Ontario service fee revenue scrutinized by FAO

Read this for free.