Vancouver, Toronto and Montreal are among the most congested cities on the continent – ranking second, sixth and ninth, respectively, according to TomTom data.
The average person living in the Greater Toronto Area (GTA) spends about 65 minutes commuting each day, and all that gridlock costs the region up to $11 billion per year, according to a C.D. Howe Institute study.
The most common cure thrown around is road tolls, but a new study suggests they may not be the answer.
The report, Congestion Costs, Road Capacity and Implications for Policy-Makers, issued Friday by the Conference Board of Canada and commissioned by the Canadian Automobile Association South Central Ontario (CAA SCO), warns that governments should examine other options before moving forward with more road tolls.
However, economists at the C.D. Howe Institute argue road tolls are the best solution to reducing congestion and the additional revenue is a bonus that can be used to improve transit and other infrastructure.
The Conference Board of Canada report states there is a difference between policies designed to raise revenue and those designed to change driving behaviour.
“We have to be very clear about what we’re trying to achieve,” says Teresa Di Felice, director of government and community relations, CAA SCO. “If we want to achieve reductions, there are various tools, land use planning, ride sharing transit. When you move the conversation to road pricing there has to be a clear objective … If you want to change behaviour, that is a different pricing strategy.”
She says if tolls push too many people out of their cars, government won’t achieve its revenue goals.
The report examines other tools that policymakers can use to reduce congestion – highway ramp metering, variable speed limits, access controls such as time-of-day restrictions, ride-sharing support, biking facilities and public transit investment.
A previous Conference Board of Canada report showed Ontario drivers pay between 70 to 90 per cent of the cost to maintain roads through registration fees, gas taxes, parking tickets and other revenue tools. In the GTA, it’s more than 100 per cent.
“Motorists are frustrated, they are paying a fair chunk of the maintenance costs,” says Di Felice. With these reports, CAA wanted to see if drivers are getting the benefit of what they are paying and if motorists are going to pay more, what does that look like?
Tolls are the best solution, extra revenue is a bonus
“Even if on average, road users cover 100 per cent of spending money on roads, road pricing is still really important,” says Benjamin Dachis, associate director of research at the C.D. Howe Institute. “It is still the best solution for dealing with congestion.”
An example from London, England, supports this. A congestion charge there in 2003 cut traffic by about 15 per cent.
A 2007 study from C.D. Howe says, “Neither fuel taxes nor parking fees are effective in dealing with traffic congestion. Appropriately designed road-pricing schemes are the best instrument. Road pricing’s usefulness in charging for road damage, insurance, and so on, are a bonus.”
Dachis says his research shows that, on average, drivers pay less than 70 per cent of roadway expenses. There is a lot of confusion because there is good data on how much governments collect, but the money largely goes into general revenue, so there isn’t good data on how it is being spent.
Regardless, he says that tolls are effective to reduce congestion and to put a value on roads.
“When you have roads that aren’t tolled, there is something called the fundamental law of congestion, you build new roads and they fill up pretty quickly,” he says.
But the way to toll roads isn’t like what Ontario drivers currently see.
In September, 1,000 Ontario drivers received permits to use the high-occupancy toll (HOT) lanes on the Queen Elizabeth Way west of Toronto. It was part of a pilot project that allows those drivers to have a faster commute at a cost of $180 for three months. The project will last two-to-four years and the government will be adding HOT lanes to Highway 427 in 2021. Highway 407, just north of Toronto, is also a toll road.
“It (HOT lanes) is probably the most rudimentary form of road pricing I’ve ever seen,” says Dachis. “The bottom line is what the (Ontario) government has put in place right now is barely only training wheels.”
Dachis cites metered high-occupancy toll lanes in Seattle, Miami, Minnesota, Georgia and southern California as examples of what works, is not mentioned in the Conference Board of Canada report. The price to enter HOT lanes as a solo occupant is constantly changing based on how much time it saves the driver. Billing is controlled through either a smartphone app or a windshield pass. A sign indicates how much time it will take to get to designated interchanges, guaranteeing the travel time through the pricing scheme.
“We’re trying to guess the dollar value people put on roads,” says Dachis. “Road pricing makes it very clear what people will pay for roads.”
Dachis worries that because current HOT lanes are so basic, they will fail and people will reject any further conversation.
One major criticism of HOT lanes is that they are for the rich – hence the moniker, Lexus lanes. But Dachis says variable pricing will do away with that because there won’t be a monthly subscription. Rather everyone, regardless of income, can make a decision right then and there if using the lane will benefit them financially or socially. One of the biggest users of these lanes will be buses.
Cost is a factor, but a study by the University of Minnesota found that when Minneapolis converted some of its HOV lanes to dynamic HOT, the economic benefits were more than double the operating and capital costs.
“Tolling the whole freeway is totally doable. It would even be the best option, from an economists perspective,” says Dachis. “But that’s a hard sell when there are few examples of working toll roads in Canada.”
He adds that tolling the entire highway would allocate the scarce road space most effectively and should lower taxes for everyone.
Dachis and Di Felice agree that road tolls aren’t the only method governments should consider to reduce congestion. They also agree there has to be better data collected on how money is being spent on roads at all levels of government.