The Toronto mayor’s proposal to put road tolls on existing expressways to raise $200 million a year is the kind of scheme that appeals to market nerds, ecofiscalists and radical bicyclists. For the rest of society, road tolls are nothing but unadulterated tax grabs. Even the name is deliberately misleading. As proposed by Mayor John Tory, these are essentially road taxes, nothing but.
Like mayors of most major cities across Canada, Tory sits atop a fiscally challenged regime whose impenetrable financial structure has run out of money to pay for grandiose transit and infrastructure plans worth — in Toronto’s case — $33 billion. Desperate for cash flow to fund these mostly money-losing infrastructure extravaganzas, city politicians are crying poor to other levels of government and trying to find politically correct justifications to raise their own taxes.
Road “tolls” fit the bill. Tolls on Toronto’s two major expressways — the Don Valley Parkway and the Gardiner Expressway — would “ease congestion” and “encourage people to take transit,” said the mayor. The money, he said, would be earmarked for financially unjustifiable transit projects the city wants to build to complement existing money-losing transit operations.
How many new taxes will automobile drivers have to absorb to fund the dreams of scheming politicians selling subsidized public transit?
The new Toronto road tax, at $2 per one-way trip, represents a triple-whammy on drivers, coming as it does on top of the current 36 cents/litre gasoline tax and the pending 4.3 cents/litre carbon tax (heading to 50 cents or more in future) announced in a recent government of Ontario budget.
Carbon taxes are supposed to reduce gasoline use. Maybe drivers will switch to electric vehicles. But then, electricity prices have been priced to punitive levels in Ontario. Toronto drivers, therefore, face a quadruple tax whammy.
It’s all based on ecofiscal theory, wherein a road toll — known as congestion pricing — leads to “reduced traffic congestion and creates net economic benefits both for the economy as a whole and for individual drivers,” according to a report from Canada’s self-appointed Ecofiscal Commission.
It’s a theory without much solid evidence to back it up. The most famous congestion toll regime in the world, established 13 years ago in London, England, now charges drivers $20 to enter the city. Rather than clear up traffic, it has turned London into a city with the worst traffic congestion in Europe. A Eurostat report said drivers spend 101 hours a year bogged down in London traffic.
The cause of the new congestion? A report in The Atlantic magazine last month cited the Uber-Amazon delivery explosion, increasing volumes of private taxis, a major shrinkage of road space due to construction, rampant expansion of road-killing bicycle lanes, and population growth. Road pricing, in other words, may have helped reduce some congestion in the early going but ultimately also promoted new congestion that has returned London to its normal big-city state — congested.
Related
- Chris Selley: Toll road proposal opens Toronto to strange new universe of paying for what it wants
- Andrew Coyne: Toll roads the only solution to traffic congestion
- Rex Murphy: An ‘Idle no More’ I can really get behind — the end of toll roads
In principle, road pricing is solid economic theory, but only if the price is attached to the building and funding of roads. Drivers should pay for the roads they consume, but not for everybody else’s pet infrastructure projects. That’s not pricing, that’s central planning.
If politicians and ecofiscalists were honestly interested in people playing full share of costs and externalities, how about looking at public transit? Most urban transit systems avoid the idea. Toronto’s transit system just announced an increase in its flat-fare price to $3. That means an inner-city transit user going three stops to cover two kilometres pays the same price as a rider on a 20-km trip to the suburbs travelling on expensive infrastructure that cannot support operating costs, let alone the massively subsidized capital costs.
If we want economically coherent funding regimes with full cost pricing — as recommended by the ecofiscalists — let’s do it right. Taxing the life out of automobile use and using the money to subsidize uneconomic government spending is something even ecofiscalists should, in principle, oppose.
• Email: tcorcoran@nationalpost.com | Twitter: terencecorcoran
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