The Cost of Fixing Gridlock
Public opinion meets transit financing
By Bruce Budd
Traffic problems in Toronto are horrendous—among the worst in North America. It’s estimated that congestion costs over $6 billion a year in the Greater Toronto area. The provincial government and its transit agency Metrolinx have a 25 year plan, The Big Move, to improve travel within the Greater Toronto-Hamilton region.
The plan will cost over $50 billion and involve some 60 different transit and road projects. The province has already committed about $8.4 billion over the last four years, paid for out of the general provincial budget. The government is currently asking us how we want to pay this $2 billion per year price tag in the future. We may choose from the following options, or we can refuse them all and have the annual cost of gridlock increase to an estimated $15 billion annually.
About three years ago, a business group called the Toronto Board of Trade came up with a list of possible revenue tools—taxes, fees and tolls—in its report, “The Move Ahead: Funding The Big Move.” This report also includes examples of each tool’s is use around the world. Here are the major ones:
Large Revenue Generators
Annual Revenue (+/-)*
Regional parking surcharge on non-residential spaces ($1/day) $1.0B
Regional sales tax (1% region wide) $1.3B
Gas tax (10 cents/litre) $1.0B
Vehicle Kilometres Tax (based on all kms atravelled)?
Road tolls (10 cents/km on QEW, DVP, Gardiner & 400 series highways) $0.8B
Congestion charge (on all vehicles entering the city core)$1.0B
*Some revenue estimates have been adjusted to reflect newer information
Medium/Small Revenue Generators
National Transit Strategy (i.e. more funds from the federal gov’t) $500M
Long Term Infrastructure Bonds (still need to be repaid) $500M
Employer Payroll Tax $500M
Development charges ?
Vehicle registration fees $300M
High Occupancy Toll (for single occupant vehicles in HOV lanes) $100M
Before we apply these tools in our region, we must evaluate them against criteria such as:
• How much money would be generated and is this income stable or cyclical?
• Ease of implementation (set up and annual cost)
• Impact on travel patterns/demand/land use
• Fairness/equity: within the region, by income level, user pay
Very recently, the Toronto Board of Trade updated its report and has now recommended a combination of items 1, 2, 3 and 12 above, as the best option for our region. Items 1-3 are all large revenue generators and could be scaled back a bit from the levels indicated above to reach the $2B/yr target. Item 12, a high occupancy toll for single occupant vehicles in HOV lanes and a small generator of funds, was included as a means of introducing GTHA drivers to the concept of road tolls or a vehicle kilometer tax, which are seen as the likely long-term revenue tools.
Recent opinion polls have indicated a willingness by the public to accept additional fees and taxes if the funds generated are designated only to tackle transportation infrastructure. This would be accomplished by establishing a segregated Transit Infrastructure Fund that could only be used to pay for new transit projects. Opinion polls also indicate that there is a need for quick action, and that government should not delay in making decisions regarding new revenue tools.
Have your say. Send us your views on which new revenue tools would be best in making our transit system function better. Or tell us that you accept the growing cost of gridlock and want no new taxes. Whatever your views, please send a copy to John Howe of Metrolinx (email@example.com) and Glen Murray, the Minister of Transportation (firstname.lastname@example.org).
Bruce Budd is secretary of Transport Action Ontario, an advocacy group for better public transportation.