By Steve Lafleur
and Kenneth Green
The Fraser Institute
Much of the conversation about the Wynne government’s decision to block Toronto City Council’s plan to toll the Don Valley Parking Lot – sorry, Parkway – and the Gardiner Expressway, has focused on the lost revenue for city hall.
But a far more important point is being lost in the discussion: to stem the worsening of traffic in the GTA, we need more road pricing. By burying the latest modest road-pricing scheme, Queen’s Park virtually guarantees worsening traffic congestion for the foreseeable future.
Traffic congestion isn’t just a nuisance, a public health problem, or an environmental hazard. In addition to being all of those things, it’s also a significant economic harm. And given that the GTA is one of the most important economic engines in Canada, it’s a national economic drain. There’s no consensus on the cost of traffic congestion in the Greater Toronto and Hamilton area, but estimates range from $6 billion to $11 billion annually and project that the problem will only get worse without a credible plan.
There are two comforting myths that opponents of road pricing may cling to. The first is that we can somehow build our way out of the problem. Unfortunately, that vague idea runs afoul of the Fundamental Law of Road Congestion, co-conceived by University of Toronto economist Matthew Taylor. Along with co-author Gilles Duranton, Taylor found that increased roadway capacity tends to be offset by increases in road uses. This negates much or all of the impact of new roads, particularly un-tolled ones. These authors also dispel the second, more common myth of road-pricing opponents – that public transit investments will reduce traffic congestion. The authors also found scant evidence that increasing public transit capacity on its own can mitigate traffic congestion.
The hard truth is that council’s proposed tolling scheme would be a mere starting point for any serious attempt to curtail traffic congestion in the GTA. A credible plan requires a broader road-pricing scheme, likely a combination of tolls on individual highways and a London-style congestion zone that all drivers would have to pay to enter during rush hour. Such measures would generate revenue, and that revenue could be offset by lowering taxes or fees. The key is to change the incentives currently facing drivers.
Road pricing isn’t meant to stop people from driving but rather to influence decisions at the margins. For instance, some people might choose to shop at stores along less-congested routes to avoid tolled highways. Other people might carpool or have their spouses drop them off at a train station rather than taking two separate vehicles to work (had city council opted for time-of-day pricing, it could also have encouraged some people to avoid rush hour by leaving earlier to and later from work). Over time, it would also incentivize people to live closer to work, or potentially shift to public transit.
It isn’t necessary for everyone to change their habits. But pricing roads sufficiently to shift some people’s behaviour some of the time can make a big difference. Road pricing hasn’t only been successful in larger international cities such as London and Singapore, but also in smaller cities such as Gothenburg, Sweden. There’s no reason why it can’t work in Toronto.
Rather than arguing about lost revenue, we should recognize that official Ontario government policy is to increase traffic congestion. While it may be smart short-term politics, it’s a big problem for a city and region strangled by traffic congestion. Charging drivers directly may not be popular, but Torontonians should have an honest discussion about traffic congestion, and devise an actual plan. Unfortunately, the Wynne government has decided that traffic congestion isn’t a priority.
Steve Lafleur and Kenneth Green are analysts at the Fraser Institute.