March 27, 2001
Toronto has a magic bullet at its disposal able to stem urban sprawl, solve the city’s budget crisis, reduce traffic congestion, attract businesses back into the city, reduce air pollution, and provide the city with a revenue source so powerful that it would eliminate the city’s financial dependence on provincial and federal levels of government.
The magic bullet comes from the heavens but it doesn’t require prayer, divine intervention or any major new taxing powers – such as the right to levy a municipal income tax or gas tax – that Toronto has repeatedly, but unsuccessfully, sought.
The magic bullet is satellite tolling of vehicles that use Toronto’s roads, beginning with trucks and other commercial vehicles.
Road building and maintenance is one of the city’s biggest expenses, directly accounting for over $400-million of its $6-billion budget, and indirectly costing hundreds of millions more in other road-related expenses such as the policing of roads and environmental costs. Even with these enormous expenditures, the city’s roads are poorly maintained, leading to needless wear and tear on private vehicles, costly delays to businesses and individuals, accidents and pollution.
Although all vehicles erode pavement, the overwhelming cause of road damage comes from commercial vehicles, especially heavy trucks – a 10-tonne axle on a big truck does 160,000 times as much pavement damage as an automobile axle; a semi-trailer truck, 29,000 times as much damage as an automobile. Because trucks cause the greatest proportion of damage to city roads, their owners should pay the city a proportionate share.
Under the current system, the owners don’t. Toronto residents and businesses pay to maintain the roads through their property taxes, without regard to the damage – or lack of it – that individual businesses or individual families cause. To compound the mismatch, every morning some 110,000 commercial vehicles enter Toronto and every afternoon and evening a comparable number leave. Most of these commercial vehicles contribute nothing toward Toronto’s maintenance of its roads. In fact, many of them are owned by companies that primarily serve the Toronto marketplace, but from outside its municipal boundary, to avoid Toronto’s extraordinarily high business taxes.
With satellite technology, it is now feasible to track all vehicles, and toll them on the basis of their road usage. Michigan and eight other U.S. states are considering a satellite-based "odometer tax" – a tax from outer space, critics call it – that would replace the gas tax and toll booths by charging vehicles a flat fee per mile travelled to finance transportation needs. But an odometer tax on the private automobile that was unrelated to the damage caused by driving would only draw fire from a public wary of an indiscriminate tax grab – and of Big Brother spying on its activities. Much better to toll based on the costs that driving incurs, and to start with trucks and other commercial vehicles, whose day-to-day operations are already regulated, and whose movements are already tracked – most large truck fleets and many taxi services, including some in Toronto and other North American cities, are either already dispatched by satellite or are planning to be.
Tolling commercial vehicles on the basis of the damage that they do, by varying the toll by truck and by a road’s capability to support it, would discourage the use of very heavy trucks – the fastest growing part of the road system, by far – by encouraging shippers to use lighter trucks or different routes, and to avoid sensitive roads. The entire Toronto region would benefit from fewer potholes and other causes of road-related congestion, which cost the greater Toronto area an estimated $2-billion a year in delays in moving goods alone.
Because commercial vehicles contribute to Toronto’s gridlock, a Toronto councillor recently suggested a complete daytime ban on all delivery vehicles in large swaths of the city, and Toronto Mayor Mel Lastman envisages the need to ban both commercial vehicles and passenger vehicles within a decade. Rather than banning commercial vehicles, Toronto should simply toll them.
While commercial vehicles are less numerous than private automobiles, and while most commercial vehicles already arrange their schedules to avoid rush hour and congested areas – their owners understand better than most that time is money – trucks nevertheless worsen congestion out of all proportion to their number: They’re slow to accelerate, they often have trouble negotiating turns, they squeeze other vehicles by taking up a large proportion of road space and they disrupt traffic when they unload in older areas that weren’t designed for large vehicles.
By tolling commercial vehicles for the costs they foist on others, many shippers and their customers would find new ways to avoid road damage and congestion costs: Suppliers might locate closer to their customers, for example, and businesses might extend their hours to receive goods after hours. The city, meanwhile, would have found a new way to raise hundreds of millions of dollars in road user fees. The revenues raised from out-of-towners could then help meet Toronto’s crippling budget deficit – and allow for road improvements, rather than the cuts now envisaged – while the road revenues from Toronto businesses could be entirely used to lower the crushing property taxes paid by businesses. The result? City businesses that imposed great demands on the road system would face new costs if they couldn’t adapt, while those with modest needs for road services would realize savings. On the whole, Toronto businesses would thrive – they would no longer face crippling competition from businesses located just outside the city boundary, which were paying low suburban taxes and nothing for the use of Toronto roads.
Once commercial vehicles are efficiently tolled, travel distances would contract and congestion would ease, helping Toronto’s economy run more smoothly. With the satellite infrastructure in place, the tolling of private automobiles can then be tried on some of the expressways already touted for tolling – government bodies have long-standing plans to toll the Gardiner Expressway, a major east-west route, and earlier this month, a councillor suggested a $2 toll on the Don Valley Parkway, a major north-south expressway. Tolling these routes could test solutions to the public’s privacy concerns – pre-paid toll cards, similar to pre-paid long-distance cards, for example, could guarantee anonymity.
Inefficient road systems are the single greatest problem facing city economies and city life around the world. Electronic toll roads – also called free-flowing roads, because proper management can ensure they are never congested – will inevitably be called upon to solve this city conundrum. A constellation of factors – Toronto faces twin budget and congestion crises within the greater Toronto area, North America’s fastest growing region – point to satellites high above the skies of Toronto.