The rules of federalism don't always make sense. John A. Macdonald wasn't a fan.
But it is what it is and we have it. If you want to mess with it, Toronto, and have the federal government pay for bus drivers and potholes, than here is what we could also change.
-Duty on foreign made cars. In Canada, new cars are only made in Ontario. Why should the rest of the country pay duty on non-Ontario made cars? That's a giant subsidy of Ontario, at the expense of poorer Canadians in the rest of the country. Is there a duty on foreign fish? Foreign oil? Foreign paper? Foreign lumber? No.
-Capital gains on homes. If you make a million dollars on your home, you don't pay a cent in federal tax. How is that fair? That is a giant subsidy to the people of the Toronto area and, lately, Ottawa. You know where homes are not increasing in value? Rural Canada, and that includes most of the Maritimes.
-GST on financial transactions. Many banks charge $10 a month for a checking account. Others charge 65 cents per transaction. Not a penny is paid in GST. There is GST on a sandwich, but not on financial transactions. That's a giant gift to the banking industry, you guessed it, based in Toronto.
-Why is the banking industry based in Toronto? Does it need to be federally regulated? Credit unions under provincial jurisdiction seem to be doing OK. So do provincially regulated insurance companies. Banking in the USA is under state jurisdiction. I'm not saying the industry would necessarily be better, but it would spread the wealth to non-Toronto cities, and that is a good thing.
-Federal jobs in Toronto and Ottawa. In the age of the Internet, does it really make sense to have all those federal jobs concentrated in expensive cities? In Ottawa-Gatineau it is even more absurd. Move the jobs across the river, save on rent, and workers that follow their job to the Quebec side would pay their income and sales tax to the government of Quebec, reducing federal transfer payments. Very few federal jobs need to be in Toronto. There is no reason for the CBC, for example, to have their HQ there. Move it to Hamilton, Montreal, Halifax, Winnipeg. Just not expensive Toronto!
-International flights to Toronto. Any European airline can fly to any city in Canada, but they can't make stopovers and pick-up passengers en-route. Worse, countries that don't have agreements with Canada can inexplicably fly accross half of Canada's airspace and land in the most lucrative market (Toronto) without serving the rest of the country. Make them land in Quebec City, Halifax, St. John's, Yellowknife, Iqaluit.
Asking for federal funds is very shortsighted. Wealth might be concentrated in Toronto, but voters are not. In addition to all those non-citizens in Toronto who can't vote, Canada is a big country and the vast majority of Canadian don't live in Toronto. Hence, getting federal funding for transit is giving power to politicians in Moncton and Moosejaw. Power to literally decide the location of streetcar lines and the frequency of bus routes. That strikes me as not good. Worse, Torontonians, on average, have higher incomes than most Canadians. Since many cities have pot holes and city busses, asking the federal government to contribute 33% is the equivalent of asking the federal government to increase taxes. And basic math dictates that rich people spend more in tax than they get back in public services. The federal government spends, Toronto loses.
Both Montreal and Vancouver have local gas taxes. The city of Toronto has the power to impose tolls. Many cities have a hotel tax. London, UK, has vastly more expensive transit with zone fares. The Toronto Maple Leafs suck. But the solution isn't to change the rules of hockey.