Toronto Mayor David Miller recognizes that congestion and gridlock are at the
top of the Greater Toronto Area's list of long-term challenges.
He has targeted public transit as an integral part of the solution.
Canada's rail industry agrees that more should be done to support
commuter rail and urban transit.
Toronto's congestion and gridlock problems do not just relate
to the movement of people though, but also to the movement of
The facts are striking. From 1990 to 2001, for-hiring trucking
has increased in revenue by 120 per cent, activity is up more
than 140 per cent.
In Canada, growth rates in trucking are significantly outpacing
our neighbour to the south. Other modes (rail and marine) have
grown at a rate of one-fifth of trucking.
The lion's share of this growth is in cross-border traffic going
through Ontario border gateways and along the 401 corridor.
Why, after massive spending on highways, do we still have ever-increasing
congestion and gridlock? Statistics Canada estimates the capital
stock of publicly owned highways and roads to be $82.3 billion.
Public investment in highways helps reduce the cost and improves
the service of commercial road users. By doing so, it induces
traffic to shift from other modes contributing to increases
in congestion and gridlock.
This new dilemma begets additional spending, resulting in more
traffic, and inducing more highway building etc. It is a core
reason why our major urban centres and key trade corridors are
The fact is that highways in Canada continue to be underpriced
(often free) for users, with society and the taxpayer bearing
the resultant direct and hidden costs. This "free rider
problem" is at its greatest for the most intensive (often
the heaviest and largest) highway users.
Heavy axle vehicles do the vast majority of damage to roadways.
Other capital-intensive modes - rail, for example - build, own,
finance and maintain their own networks. This makes it difficult
for rail to compete for freight business, especially over relatively
But can the "free rider problem" be fixed? There
are two intertwined solutions - "full-cost accounting"
and "user pay" - that have been endorsed in principle
by a recent independent review of Canada's transportation system
and by other countries.
Full-cost accounting refers to the practice of government calculating
the full cost of financing, long-term cost of capital, and land
use costs of investments in highways, instead of the pure cash
basis used today.
When such an approach is adopted and the true costs calculated
it is clear that fuel taxes and other fees do not cover the
real costs of highway infrastructure.
Nor do governments attempt to apportion the "external costs"
that private vehicle and truck use imposes on society and taxpayers.
In surface transportation, these costs relate to the costs
of congestion in terms of delayed deliveries; the impact of
air pollutants from idling engines; the toll of accidents (injuries
and fatalities) and their associated health-care costs and insurance
payouts; the health issues around high levels of ambient noise;
and the general aesthetic impacts of the construction of massive
The absence of user pay and full cost accounting - and the
failure to recognize "external costs" - has given
rise to significant market distortions in surface transportation.
In commercial freight markets, serious market imbalances between
truck and rail have arisen.
Trucking has grown at an explosive pace in the wake of NAFTA.
Trucks run over publicly provided highway infrastructure and
have no proprietary interest in the roadway upon which they
operate. Furthermore, a great deal of the truck traffic travels
the GTA on its way to destinations south of the border or elsewhere
in Canada. Toronto's major arterial roads and highways have
become akin to one gigantic parking lot.
The result of all this unfettered heavy truck and private vehicle
use is rundown highways, congestion, and serious questions about
the sustainability of surface transport in its current form.
There is another way. Railways are self-financing entities
that operate their own rights of way. Furthermore, as a recent
report by the Organization for Economic Cooperation and Development
points out, "Road freight's external costs per unit are
almost 10 times higher than those from rail freight."
In an open market, where competing modes such as rail cover
their full costs, user pay would ensure that commercial road
users pay their full cost, reflecting the wear and tear they
impose, for the use of public highways.
To get there though, governments must reassess how they finance
road building and consider the imposition of charges for road
use by category of vehicle. For example, the Swiss Heavy Vehicle
Fee (HVF) is driven by the principle that user charges should
cover both infrastructure costs and external costs such as accidents,
pollution and noise.
There are a range of other worthy public policy solutions to
the problem of rampant vehicle use, including a surcharge on
parking, a 1 or 2 cent surcharge to the price of fuel that might
go to municipal governments, or adding a transit tax to the
cost of a new car.
These initiatives take time, and considerable work has to be
done to implement them. In the meantime, a simpler alternative
is to not limit public investment to public assets. There is
merit to "public private partnerships," where industry
and government come together to invest in private assets, like
rail, that is a viable alternative to more highways.
Bill Rowat is president and CEO of the Railway Association of