OUR VIEW: For Whom the Road Tolls?
It’s a simple fact of life – freeways are not free. They cost hundreds of millions of dollars.
With municipalities in BC facing a $10 billion infrastructure deficit, there are serious questions about how to pay for the network of major roads and bridges in Metro Vancouver.
A growing population will place more demand on the road network, and many existing routes are nearing the end of their lifespan and will need either major repairs or replacement.
Renewed investment in public transit is one option that would reduce the growth in demand for road capacity, but transit investments are also very expensive. Higher property taxes is another option, but one that could be politically explosive. This leaves one option remaining – some form of user charges or tolls.
A patchwork system of tolls is already being introduced. The new Golden Ears Bridge linking Langley with Pitt Meadows is tolled. The new Port Mann Bridge will be tolled, as will the new Patullo Bridge. When the Knight St. Bridge and the Massey Tunnel need major repairs or replacement, the new crossings will probably be tolled.
However, no tolls are charged on other major bridges and highways such as the Sea-to-Sky Highway, the Pitt River Bridge, the Alex Fraser Bridge, and both bridges over Burrard Inlet.
What is emerging is a transport system that is profoundly unfair. Motorists from south of the Fraser River will be charged hefty tolls, while those from Coquitlam and the North Shore will drive toll-free. Meanwhile, transit users pay a toll every time they board a bus or SkyTrain.
A system-wide toll would charge the users of all major regional routes. The revenues would be channeled into a single fund to pay for the maintenance, repair and replacement of bridges and highways throughout the network. Across the network the tolls could fluctuate based on daily traffic patterns. The most heavily used routes (and peak demand times) could be priced higher than routes with lower demand.
Efficient goods movement is critical for the economy because time in transport adds to the price of goods without adding extra value. Commercial vehicle only lanes could be priced at premium levels, and many companies would be willing to pay premium tolls if it meant their trucks would spend less time stuck in traffic.
System tolls are already used in many countries, such as Portugal, where an electronic tolling system called the Via Verde (Green Road) covers all the major routes in the country. Congestion charges are tolls applied to traffic entering the more congested downtown areas. Singapore introduced the world’s first congestion pricing scheme in 1975. Now congestion charges are widespread, with well-known examples in Bergen, Stockholm, Shanghai and London.
The one-off approach to tolling also helps to facilitate the privatization of our highway network because most public private partnership (P3) models seek to recover construction and operating costs by imposing tolls on new bridges and highway projects.
The Golden Ears Bridge is an example of this kind of privatization. Opened in mid-2009, traffic volumes have been lower than expected. This case illustrates there can be problems of leakage where alternate non-tolled routes exist.
According to TransLink figures, the Golden Ears Bridge is not meeting its revenue targets. While daily traffic volumes have slowly increased in recent months, they remain significantly below TransLinks’s original estimates. As a result, TransLink increased the tolls on the new bridge on July 15, 2010 to capture additional revenue.
Under the terms of the P3 agreement, the payments due to the private company that built and operates the bridge will step up to $4 million per month this year and rise to $4.8 million per month in 2015. If the number of vehicle trips over the bridge continues to lag behind the estimated traffic volumes, TransLink will have to keep raising the tolls to keep up with the P3 payment schedule.
Under a traditional public financing model, big infrastructure projects benefit from lower operating costs and lower government borrowing costs. These costs are predictable and can be amortized over 25 or 30 years. If traffic volumes don’t meet pre-construction projections, the government doesn’t have to hike tolls.
A system-wide toll makes sense. It is the best means to finance the necessary maintenance, repairs and replacement of our highway network. It will also treat all users fairly, allow price signals to regulate demand, and keep our highway infrastructure in public hands, which ultimately saves money for taxpayers.