Road Pricing in Canada

1. Road Pricing in Canada Robin Lindsey Transportation Futures: Ontario Road Pricing Forum, November 13, 2008

2. Outline • Tolled facilities in Canada • Costs of congestion in major cities • Candidate road pricing schemes for Montréal, Vancouver and Toronto

3. History of road pricing in Canada (Broadly similar to U.S.) • 19th century: many toll bridges, roads & ferries owned and operated by municipalities and private companies • 20th century: Most tolls abolished by provincial governments • 1950s: Brief revival • Toronto: Last toll booth removed in 1973 • Montreal: Tolls booths abandoned in 1980s • Current trend: Public Private Partnerships

6. Characteristics of tolled facilities Constructed via diverse mechanisms Coquihalla highway (1986): public Highway 407 (1997): publicly funded, now private Confederation Bridge (1997): PPP - finance, design, build, operate All recently tolled facilities are new or reconstructed

7. Limitations of road pricing in Canada Only 199 km tolled Compare: Over 8,500 km. of toll roads in the US Toll revenues of $469 million (2007) = 0.4% of total personal expenditures on road travel Tolls are not congestion charges Flat except on Highway 407 No dynamic pricing Quantity discounts Highway 407: Privately owned and operated Regulated via minimum annual traffic counts Congestion relief on parallel facilities less than planned

8. Need for additional revenues • Declining cost recovery for roads (83%) • Large transit deficits (41% recovery). • Large transport “infrastructure gap” • Major investment plans for roads and transit (esp. Montréal, Toronto & Vancouver) • Federal infrastructure funds are temporary • Fuel tax revenues vulnerable to increasing vehicle fuel economy and alternative-fuel vehicles

9. Outline • Tolled facilities in Canada • Costs of congestion in major cities • Candidate road pricing schemes for Montréal, Vancouver and Toronto

10. Transport Canada (2006) study Travel demand forecasting models in nine largest urban areas used to quantify costs of congestion in: • Travel delay (90%) • Additional fuel consumption (7%) • Additional greenhouse gas emissions (3%)

12. Caveats re estimates • City travel demand forecasting models differ • Estimates are of total congestion costs, not potential benefits from congestion relief • Estimates exclude: freight transport off-peak congestion nonrecurrent congestion congestion-related costs of accidents, noise, local emissions, road damage & behavioral adaptations

13. The case for road pricing in Canada • As additional revenue source, satisfying user pays principle • For congestion relief • Pricing emissions and other external costs

14. Outline • Tolled facilities in Canada • Costs of congestion in major cities • Candidate road pricing schemes for Montréal, Vancouver and Toronto

15. Candidate road pricing schemes Candidates Cost-benefit analyses required Main choice criteria: Proposed by others (Montréal, Vancouver) City topography Existing investment plans Institutional barriers Details in Lindsey (2008)

16. Candidatefor Montréal Inspiration: Mayor Gérard Tremblay, 2007 City Transportation Plan

18. Candidate for Vancouver Proposed in 1993 Livable Region Strategic Plan (Transport 2021)

20. Candidates for Toronto • 1. Kitchen (2008): • Major 400 series highways • QEW • Don Valley Parkway • Gardiner Expressway • Red Hill Creek Expressway • Lincoln Alexander Parkway • 2. Building 450 km. network of new lanes as • High Occupancy Toll (HOT) rather than HOV

21. 407

24. HOT Candidate for Toronto

25. General conclusions Congestion imposes high costs in the largest Canadian cities Toll revenues would help to fund road and public transit investments, operations & maintenance Experiencein other countries sufficient to warrant consideration of congestion pricing in Canada Main barriers to road pricing are public and (some) government opposition

26. Global Navigation Satellite Systems Alternative to infrastructure-based technologies Applications Charging for parking, emissions & insurance Distance-based charges Supplement or replacement for fuel taxes Environmental benefits and revenue generation gain importance relative to congestion relief Case for Canada Long intercity driving distances High per-capita transportation infrastructure costs Above-average susceptibility to global warming

27. References Bryan, N. 1972. More Taxes and More Traffic. Canadian Tax Papers, No. 55, Canadian Tax Foundation, Toronto. Kitchen, H. 2008. “Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton: Future Initiatives”, January, The Residential and Civil Construction Alliance of Ontario (www.infracoalition.ca). Lindsey, R. 2007. “Congestion Relief: Assessing the Case for Road Tolls in Canada.” C.D. Howe Institute Commentary 248. Lindsey, R. 2008. “Prospects for Urban Road Pricing in Canada.” G. Burtless and J. Rothenberg Pack (eds.), Brookings Wharton Papers on Urban Affairs: 2008, 235-293. Mylvaganam, C. and Borins, S. 2004. If you Build it ... Business, Government and Ontario’s Electronic Toll Highway, University of Toronto Centre for Public Management, Toronto: University of Toronto Press.