The social, economic and environmental malady of gridlock in greater Toronto can be cured. This week, the Toronto Region Board of Trade prescribed a treatment to raise the $2 billion a year needed to fund the Big Move regional transportation plan: a combination of small regional sales and gasoline taxes, a commercial parking levy, and paid express lanes.
While any new fee or tax is a tough pill to swallow, harder still is the prognosis of adding millions more residents and cars to the roads of the Greater Toronto and Hamilton Area (GTHA) without major improvements to transportation infrastructure. Ignoring the problem is expected to cost GTHA commuters $7.8 billion and the GTHA economy another $7.2 billion in lost output per year by 2031, according to consulting firm HDR Corporation.
Vancouver, Los Angeles and many other large cities are facing similar problems and are implementing plans comparable to the Board’s proposals with great results. The Board’s Rx is a sensible formula that will generate predictable and stable revenue dedicated to relieving the GTHA’s congestion. It looks to those who will benefit from the Big Move to pay for it — residents, visitors, commuters, drivers, and local businesses. And it includes incentives to increase transit use, walking and cycling.
Let’s examine these proposals.
A dedicated regional sales tax has everyone — residents, commuters, and visitors — pay for better transportation, recognizing that all gain from the prosperity and quality-of-life benefits associated with improved mobility. In many U.S. cities, transit-dedicated sales taxes of 0.5 per cent or less have successfully generated revenue with broad public support and without significant negative impacts on local retail sales.
In 2008, sales taxes were reduced by two per cent, leaving enough tax room for a modest regional increase of around 0.5 per cent.
Significantly, the Board’s three other proposals would support the goal of reducing traffic while raising revenue. The regional fuel tax brings drivers into the revenue stream. In Vancouver, expanded public transit has been funded in part by a fuel tax, catalyzing a drop in car use and a jump in cycling and transit use. Although Vancouver’s 17 cents per litre fuel tax, added to B.C.’s six cents per litre carbon tax, has led some cross-border shoppers to fuel up in neighboring Washington State, this should be less of an issue if a much lower rate — such as five to 10 cents per litre — is adopted for the GTHA.
An optional, paid express lane would provide relief from congestion including free access for carpoolers. The revenue could go into a public transportation fund.
In California, which shares Toronto’s congested highway problems, paid express lanes average as much as 100 kilometres per hour during peak periods compared to 25 kilometres per hour in the regular lanes, and vehicles with three or more passengers travel for free.
A commercial parking levy would apply to non-residential parking lots and be paid directly by businesses. A per-space levy (exempting small businesses) reduces free or low-priced parking and these higher parking costs encourage transit use, reducing congestion.
A solid prescription can help heal gridlock in greater Toronto, but only as one part of an integrated treatment. Those who pay taxes and charges will need to see regular reports demonstrating that this money is directed to a transportation fund, not topping up general revenue.
Even then, the dosage could leave a bitter taste if residents continue to suffer from congested roads, jammed streetcars, or scant rapid transit alternatives.
To help the medicine go down, it’s worth investigating how to speed up road and transit projects so residents see results in real time. In Los Angeles, financing mechanisms accelerated the completion of a light-rail transit (LRT) plan from 30 years to 10. Public-private partnerships and various types of bonds should be assessed to finance faster action on the Big Move.
Last year’s Drummond report made a sober diagnosis: there is no fiscal fat in Ontario’s budget for new transit infrastructure. New sources of funding are needed. The Board of Trade proposal is a thoughtful and balanced prescription for how best to fund the Big Move with the least pain and the greatest hope for restoring regional wellbeing.
Cherise Burda is director of Ontario policy at the Pembina Institute, a national clean energy think-tank. Stephanie Cairns is managing director of sustainable communities at Sustainable Prosperity, a green economy think-tank at the University of Ottawa.
Cherise Burda was Ontario director at the Pembina Institute until 2015.
