Cool concepts in road pricing for Metro Vancouver

From the 2014 funding plan of the TransLink mayors

Photo from the 2014 funding plan of the TransLink mayors

In his first news conference this month as British Columbia’s minister for Metro  transportation, Peter Fassbender said road pricing deserves a “serious and concerted look” as a possible way to fund transit and regional roads. Mr. Fassbender is a former City of Langley mayor, now a provincial legislator, with a close knowledge of the issues. A sales tax proposal was defeated in a recent referendum; the 17-year-long search for a transit funding formula will now resume.

The road pricing mention matters to the region’s road users, especially long-distance commuters like me. We would face increased costs in return (supposedly) for quicker trips, because some motorists would choose other transportation modes or stay home. And reduced congestion would (supposedly) benefit all taxpayers by reducing the demand for new highway construction.

Serious consideration of bridge and highway tolls was part of the Metro region’s Transport 2021 plan in 1993. Since then we’ve acquired two toll bridges, the Golden Ears (2009) and the reconstructed Port Mann (2012). The proposed Pattulo Bridge rebuild is a third candidate for tolling. A 2010 consultant’s study for TransLink, the regional transportation authority, looks at options for going further. Boiling it all down, three candidate programs emerge:

  • Toll all inter-city bridge crossings, such as the Lions Gate, the Knight Street and the Pitt. This would spread the bridge tolling pain to areas outside the eastern suburbs. It would also create obstacles to movement, isolating the North Fraser, Richmond and the North Shore as mini-regions.
  • Create London-style tolling rings around congested town centres. It’s a neat idea, but only the crossroads city of New Westminster really qualifies, and New West businesses might object to being singled out in this way.
  • Install electronic gizmos in every vehicle and bill motorists for every kilometre they drive. The report warns that as of 2010, there was no international  technical standard for this kind of innovation.

The fairest system is #3, although ongoing delays around the TransLink fare card, still in the test stage, has probably dampened the public appetite for technical adventure. The simplest solution is #1, but it also comes with political baggage. The former New Democratic Party provincial government vowed in the 1990s that existing bridges would never be tolled, and the subsequent Liberal government has made the same commitment. In either case, political acceptability could be increased by collecting higher tolls in peak hours, giving drivers the option of paying lower tolls or no tolls in the off-peak.

London's

London’s “congestion charge” zone (2010)

On a point of jargon, briefly:  “tolling” and “road pricing” are sometimes used to signify different things, with “road pricing”  describing a dispersed, mile-by-mile way of grabbing revenue. The April 2014 TransLink mayors’ report on transportation funding dodges the issue by referring to “mobility pricing,” a general term that captures any user-pay mechanism. The mayors praise “mobility pricing” in a way that makes it clear they are talking about road and bridge tolling:

“…we are now firmly committed to staging the introduction of more comprehensive mobility pricing…we’ll see more immediate benefits in terms of reducing congestion, improving fairness by asking people to pay for what they actually use, and generating revenue to support needed investments across the transportation system.”

The data journalism site Moving Forward has published a tool related to the universal road pricing system proposed in bullet 3 above. An example: Gary lives in Vancouver Fairview and commutes to south Burnaby. At an assumed rate of 2 cents per kilometre,  Gary would pay 50 cents per day in road charges. If he moves to distant Aldergrove but commutes to the same workplace in Burnaby, his daily road pricing cost rises to $2.20. (Moving Forward complicates the picture by suggesting that fuel taxes could be reduced to offset road pricing, but I’m baffled by this: it would keep every vehicle on the road, and in fact would reward fuel inefficiency.)

So would road pricing actually support transit operations and reduce the need for new roads at the same time? Maybe. Not automatically. It could be argued that the promise of road pricing (or tolling) revenues has been used in Metro Vancouver mostly to justify the construction of massive new ribbon-cutting projects. Yes, we have tolls on the two newest bridges, but the annual taxpayer subsidy to the tolled Golden Ears Bridge has risen in every year of operation, as shown below, because the original toll revenue projections were wrong. The toll revenues are flowing in, but they pay less than half the cost of financing and operating the facility. The tolls on the Port Mann, which were to “pay all costs,” are also falling short to the tune of $100 million per year.

Not a dime from these bridge tolls is going to fund transit. This suggests that future road pricing will provide dispersed benefits to transit and transportation only if it comes from dispersed sources.

 Golden Ears and Port Mann deficits

4 responses

  1. Any insight on whether by-the-kilometre road pricing would be progressive or regressive (to use taxation terms)? Would people with lower incomes be affected more than those with higher earnings?

    • Hey Don. Nice question. I’ll try three responses.

      First, I can’t see how road pricing could be progressive, i.e. adjusted to reflect income.

      Second, there’s no form of taxation on the current tax menu that is strictly progressive. Some public charges, notably property taxes, are sensitive to age, but that’s not the same thing. The income tax was sold for many years as a progressive tax, but it has slid sideways. Low-income people are exempt from paying, and hooray for that. Self-employed people are offered an array of deductions, sometimes without reference to need or economic logic. The higher the income, the bigger the write-offs. Moderate-income salaried employees are mostly kept on the straight and narrow; as income grows, so does access to tax-free savings tools. To ease some of the pain on this uneven playing field, Professor Harper has introduced an income transfer to people with children, but this isn’t strictly progressive either, is it?

      Third, even if we had a progressive income tax system that paid for all public services, the spending decisions wouldn’t necessarily be progressive or fair. The Golden Ears Bridge was built to address a notion of “fairness” that was widespread among people living on the wrong side of the muddy river, but from a utilitarian point of view (greatest good for the greatest number) the planners did not rate the Golden Ears as a high priority among candidate highway projects. Investing billions in highways generally, rather than transit, is arguably unfair to low-income people, and quite possibly unfair to the next generation, which gets us into a whole ‘nother discussion.

      • I have one right here. It’s progressive because it enables a more economical and more rapid bus service.

        Reducing road traffic and increasing bus usage due to road pricing means that you can get around without the expense of owning and operating a car. This is a considerable expense when added up, and for people with less income this becomes quite a burden. If the buses aren’t stuck in traffic, they cost less to run since you can cover a given territory with fewer wage-hours, and they’ll be fuller with more ticket paying passengers. This enables more frequent and widespread transit service, which is in the grand scheme of things, progressive

      • I agree. The transit improvements proposed in the mayors plan would bring tens of thousands of casual workers, wage earners and salaried employees within range of frequent bus transit. On the cost of automobile ownership, a February 2013 news release from the BC Automobile Association said in part, “The yearly ownership cost for an average compact car in B.C. is about $9,500 while the average British Columbian spends close to $5,700 on groceries a year.”

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