No more toll-free highways

Posted on June 9, 2000 by urbanrenaissanceinst

David Menzies
National Post
June 9, 2000
The drive of the not-too-distant-future will involve pay-as-you-go fees. And, surprisingly, it is not a bad thing.

Ask not from whom the road tolls, it tolls for thee. New roads probably will be tolling for thee in the near future should any big new highway projects go ahead.

Granted, toll roads take a little getting used to — after all, motorists have long come to expect that using the highways and byways for free is a right. The fact is that governments are no longer flush with the hundreds of millions of dollars needed for new superhighways. At the same time, however, new roads are desperately needed to handle an ever-increasing volume of traffic.

Consider that in the greater Toronto area alone, traffic congestion is estimated to cost Ontario businesses up to $2-billion per year in lost income and productivity.

The most probable solution is an increase in pay-as-you-go toll highways, such as Toronto’s 69-kilometre-long Hwy. 407 electronic toll route (soon to be expanded to 108 kilometres.)

In the eyes of many observers, such a strategy is not necessarily a bad thing.

In fact, some people applaud the implementation of additional toll routes just on the principle of user-pay. Lawrence Solomon, executive director of the Urban Renaissance Institute (a Toronto-based think-tank) notes that, “it won’t be long before all major new roads are toll roads … there are proposals to toll (a rebuilt Gardiner Expressway in downtown Toronto) and the Ontario government has plans for several toll-roads from the U.S. border to relieve congestion on existing routes.”

Mr. Solomon notes that in addition to most toll roads being economically efficient, they are philosophically sound given that “the right people are paying for the use of the road. There really isn’t a good reason not to build toll roads if a road isn’t economic, then that’s a good reason not to build it in the first place.” He adds that whenever a toll road is abolished — as it was recently in New Brunswick — it’s typically due to an election promise of an opportunistic politician, not because it was the right thing to do.

Harry Gow of Transport 2000 (an Ottawa-based group that lobbies for improved transit conditions), still laments the removal of tolls on Quebec’s superhighway system 15 years ago.

“There’s not a toll road left in Quebec, which is a shame,” Mr. Gow says. “The province had successful and functioning tolled superhighways that covered costs and even returned a small profit. Now they’re gone and it’s going to be very hard to bring them back because people have come to expect that there is a free lunch when you drive your car — even though that doesn’t apply to the bus, the plane the ferry or anything else.”

Mr. Gow says he supports the construction of more toll roads in Canada because they are inherently fair given that they are user-pay. Also, tolling may encourage more people to use public transit.

As well, today’s new transponder technology facilitates seamless electronic tolling by removing one of the biggest complaints regarding toll roads the bottlenecking that occurs at toll plazas.

There’s another reason Mr. Solomon is so bullish on toll roads: safety. About 3,000 people die on Canada’s roads each year, with Ontario’s highways being among the most dangerous. Yet, consider the safety record of Hwy. 407.

Since opening in 1997, the 407’s collision rate is just 0.27 for every million kilometres of vehicular travel — about one-third the collision rate of Hwy. 401, which runs parallel to the 407. Mr. Solomon notes that the fatality rate on all North American toll roads is typically one-half to one-third that of non-toll roads.

A major reason why toll roads have such an enviable safety record is simply the bottom line: When traffic isn’t moving, a toll road can lose more than $30,000 an hour. “That (money loss) gives it (toll road) a powerful incentive to invest in safety and other equipment that lets (the toll road’s operators) pounce on small problems before they become big problems,” Mr. Solomon says.

He points to California’s Route 91 Express Lanes, a toll road built in the median of a freeway serving Los Angeles. The toll road is constantly monitored by video cameras. Also, a private fleet of tow trucks constantly trolls the highway, dealing immediately with any problems spotted.

“The (Route 91) tow-truck operator will change flat tires, boost batteries, provide a free gallon of gas to cars that have run out or tow them anything to get cars off the side of the road where they attract the attention of gawking passersby, slow traffic and create an accident risk,” he says.

In the end, it’s almost a given that new highways will be of the toll variety. But while you may gripe when it comes to shelling out more money when hitting the blacktop, there is some good news: At least traffic will move.

Posted in Toll roads | Leave a comment

How the free road lobby led us astray

Posted on May 30, 2000 by urbanrenaissanceinst

Lawrence Solomon
Financial Post
May 30, 2000

Wrong turn left us with too many roads, too high taxes. Canada has too many roads, and Canadians spend too much money building them. All told, according to StatsCan, roads and road vehicles account for almost 20% of total investments in the economy, making them one of our largest sectors. Yet our road system is nevertheless in serious disrepair — the Canadian Automobile Association estimates 50% of our highway system needs refurbishing — and gridlock threatens to paralyze our major centres. The road lobby’s answer? Build new roads, rebuild old ones, do it on the double and keep roads free — the same road map that brought us to the dead end we’re at. Free roads don’t provide the economic signals needed to determine what roads are needed and when; they allow politicians to build pet roads devoid of economic rationale. If we tolled our roads, instead of funding them through gasoline taxes, property taxes and general government revenues, we’d have fewer but better-maintained roads, we’d have fewer two-car families and we’d tend to drive our one car far more economically. The Canadian Automobile Association sees things differently. It treats automobile mobility as a right and claims congestion is caused by too few roads, not by too many cars freeloading on free roads. The CAA wants to boost spending on road construction and maintenance dramatically. A 1998 federal study pegged the cost of upgrading the national highway infrastructure at $17-billion. The CAA, if it costed out its requests to expand the full road system, might be asking for $170-billion.The CAA has company in demanding that governments rev up the concrete mixers and lay more asphalt. That’s also the demand of the Canadian Trucking Alliance, the Canadian Portland Cement Association, engineers, organized labour and other groups, many of them organized by the Canadian Construction Association into a lobby group called the Coalition to Renew Canada’s Infrastructure. Pointing out that the number of cars on the road rose by more than 20% between 1986 and 1998 while road length increased by only 7%, and that the United States is about to spend $300-billion revamping its transportation system, road lobbyists claim that the Canadian economy needs more roads. They also claim — through sleight-of-hand accounting — that governments rake in more money from gasoline taxes and other “user” fees than they spend on roads. To arrive at this conclusion, they exaggerate governments’ take from fuel taxes, for example by assuming the normal provincial sales tax shouldn’t apply to gasoline. And they ignore basic costs, such as the cost of financing the roads. A fuller accounting, as detailed in a 1999 report for Transport Canada, shows that drivers don’t fully pay their way, even ignoring indirect costs such as noise pollution and vehicle emissions.

You’d expect environmental groups, social activists and anti-car lobbies to promote measures that raise the costs of highways. But opposition to the highway lobby’s free ride also comes from the libertarian Cato Institute, a Washington-based organization that strongly promotes the free enterprise system and holds no distaste for the private automobile. In an exhaustive scholarly work by Robert L. Bradley entitled Oil, Gas, and Government, Cato documents the U.S. road lobby’s relentless role in seeing to the overbuilding of the U.S. highway system. Fifty years ago, organizations such as the American Automobile Association, trucking associations, the Asphalt Institute, the American Concrete Paving Association and the Big Three automakers banded together to promote “scientifically based, tax-free road building.” Their massive lobbying campaign in the 1950s swayed Congress to fund the largest public works program in U.S. history, 41,000 miles of interstate highway. To obtain congressional support, the highway system passed through 406 of the 435 congressional districts.

Free roads had high costs. “With full road pricing, transportation would have shifted to mass transit and other modes such as trains and airplanes. With fewer vehicles, particularly passenger cars, less lead, carbon monoxide and ozone-producing hydrocarbon pollution would have occurred. This would have improved air quality, particularly in major urban areas … With greater transportation economies, motor-fuel prices could also have been lower for vehicle owners and for consumers across the energy spectrum,” concludes Mr. Bradley.

The free road movement in the U.S. in the 1950s arose just in time to squelch a major threat: the toll road movement, whose popularity alarmed the U.S. Public Road Administration and other government officials committed to conventional roads. After the Pennsylvania Turnpike and the Maine Turnpike proved popular with the driving public in the 1940s, pay roads swept the United States in the 1950s, with 2,500 miles built in 16 states. The trend then spread north to Quebec. The free road lobby’s success sent our transportation system on a detour that has lasted half a century.

Toll roads are now back — many are on the drawing boards in Canada and the United States. And so is the free road lobby.

Reader’s Response

Related articles:
Toll roads v. the Canadian Accident Association
London’s green streets
Toll skeptics be damned: London’s rolling
The toll on business
The take from tolls
Don’t tax, toll: Presentation to the Canadian Home Builders’ Association
London unjammed
Don’t tax, toll
How the free road lobby led us astray
Toll road commentary
Road safety
How to cut highways’ human toll

Toll today’s roads, don’t build more
Posted in Toll roads | Leave a comment

Toll Road Commentary

Posted on May 19, 2000 by urbanrenaissanceinst

Lawrence Solomon
CBC Radio 1
May 19, 2000

Next month, a coroner’s inquest will investigate one of Canada’s worst-ever highway calamities — the fiery 84-vehicle crash last September on a stretch of the 401 between Windsor and London. That stretch, which took 8 lives on that occasion and many others before and since, is dubbed Death Alley. Other stretches on other Canadian highways have names like Killer Road. All told, 3000 Canadians lose their lives to traffic accidents each year.

But one highway in Canada has never claimed a life — Highway 407, which runs parallel to Highway 401, just a few miles to its north. In part, that’s a coincidence — no highway is immune from fatal car crashes. But Highway 407 does have something going for it. Highway 407 is a toll road, and toll roads are remarkably safe. Highway 407’s accident rate is about one-third that of Highway 401.

U.S. toll roads are also safer than U.S. freeways. In terms of fatalities across North America, your chance of being killed per mile traveled on a freeway is typically 50% to 100% higher than on a toll road.

In part, the toll road has a vastly superior safety record because its crews tend to be dedicated to the one road, making them more familiar with its particular characteristics. As a result, they more promptly clear debris, plow snow and find and treat icy patches.

But more importantly, toll road operators — whether public or private — have a bottom line. When traffic isn’t moving, a toll road can lose $30,000 per hour or more, giving it a powerful incentive to invest in safety equipment and in other equipment that lets it pounce on small problems before they become big.

One example of such incentives at work is California’s Route 91 Express Lanes, a toll road built in the median of a freeway serving Los Angeles. Express Lanes employs high-tech cameras – and a private fleet of tow trucks on continuous patrol — to monitor its road. When the control centre spots trouble, it immediately dispatches the nearest tow truck. The tow truck operator will change flat tires, boost batteries, provide a free gallon of gas to cars that have run out — anything to get cars off the side of the road, where they attract the attention of gawking passersby, slow traffic and create an accident risk.

The operators of Highway 401 and other freeways don’t like to see carnage on the road any more than their for-profit counterparts.

But unlike toll road operators, which are primarily focussed on road profits, government freeway owners have many masters to please. Because road investments come out of the general purse, they compete with medicare, education and other public demands for new spending.

For this reason, governments across Canada have allowed our road system to deteriorate badly, despite persistent warnings from safety-minded organizations. Although governments and road authorities acknowledge that necessary upgrades to the national highway infrastructure would save 250 lives a year, they balk at the $17-billion price tag involved. To a toll road operator, unsafe roads are bad for business. To a government, they’re a luxury. The question for society: Can we afford the human toll of free roads?

This commentary is available in Real Audio at the CBC website.

Related articles:
Toll roads v. the Canadian Accident Association
London’s green streets
Toll skeptics be damned: London’s rolling
The toll on business
The take from tolls
Don’t tax, toll: Presentation to the Canadian Home Builders’ Association
London unjammed
Don’t tax, toll
Toll today’s roads, don’t build more
How the free road lobby led us astray
Road safety
How to cut highways’ human toll

Posted in Toll roads | Leave a comment

Fixing health care from the bottom up

Posted on May 16, 2000 by Other News Sources

Lawrence Solomon
National Post
May 16, 2000

 

It isn’t brain surgery. Fixing medicare only seems complicated because the health-care bureaucracy devises convoluted reforms to maintain its control over one of Canada’s largest economic sectors. Any top-down plan will inevitably be next to impossible to administer efficiently.

The real solutions to medicare’s plight are all simple, but some are more desirable than others.

Simple plan No. 1 involves keeping the status quo, but putting more government money into medicare. The federal government supports this plan if the money comes from the provinces, and the provincial governments support this plan if the federal government pays. Under this plan, politicians will bolster medicare just enough to quiet the most vociferous criticisms. Medicare will operate at the general public’s pain threshold. Those who can afford it will be treated in executive health clinics and across the border.

Simple plan No. 2 involves going to two-tier medicine. Under this approach, those who can afford better health care won’t need to leave the country for it, and the government won’t need to put quite as much money into medicare, since many middle-class Canadians will pay for part of their care directly.

Two-tier medicine has other advantages, too. Doctors will become more service-oriented when patients — not the government — hold the pocketbook. Paying patients are likelier to take charge of their own health. But two-tiered medicine will do nothing to empower those who most need help — the poor and other disadvantaged groups, which have the highest morbidity rates and the lowest lifespans.

Simple plan No. 3 involves health-care allowances, under which medicare would provide all Canadians, rich or poor, with an annual allowance equal to what they currently cost the system, plus an annual top-up. Variations of this system work well in many countries, including Canada, where some employee plans have adopted it. To determine its value for the Canadian public as a whole, Toronto-based Consumer Policy Institute hired U.S. health actuarial firm Milliman & Robertson, the world experts in the field. Here are the basics of health-care allowance for Canada:

The government gives every Canadian an insurance policy that has a deductible, plus a debit card account to which it deposits an annual allowance for routine needs based on age and gender (older people, who tend to have more medical needs, or those with chronic conditions receive larger annual allowances; younger people smaller ones). In a healthy year, the account will be in the black. In an unhealthy year, after drawing down the entire annual allowance, the individual’s insurance policy automatically kicks in to cover all medical expenses. A 35-year-old woman pays a $165 deductible should she need to use her insurance policy, and a 60-year-old man $183. Low-income Canadians never pay a deductible under the actuarial plan.

Everyone over time winds up with a positive account balance because in each year, three out of four Canadians — whether they have chronic conditions or not — won’t have spent their annual allowance. Half of the unspent amount goes back to the government to let it break even relative to the status quo, and half stays with the individual.

The half that stays with individuals amounts to more than $6-billion each year — more than $200 for every man, woman and child — which they can then spend on health needs not currently covered by medicare, such as prescription drugs, dental work, home care, preventive medicine and even future years’ deductibles. The savings cannot be spent for non-medical needs, but they can be invested, as in an RRSP. Once they grow beyond an amount that the individual needs for future health care, and he is retired, the surplus can be taken out as retirement funds.

All health-care critics acknowledge that the current system operates inefficiently. Those with a bureaucratic mindset try to squeeze out savings by capping doctors’ incomes to prevent them from “churning” patients, and by creating elaborate, top-down rules to stop people from using expensive hospital emergency wards for routine medical needs. The health-care allowance approach lets individuals find the savings from the bottom up, by giving patients the financial incentive to question needless doctor’s visits and by letting people choose, say, between paying $300 from their health-care allowance account for an emergency ward service or $30 for service in a doctor’s office.

More importantly, those who most use emergency services — the poor and the otherwise unempowered, who don’t have a good relationship with a family doctor — would have a powerful financial incentive to develop one. To increase their incomes, doctors would similarly have an incentive to court them — after all, they’d have the same personal health-care budget as a rich person. This is the healthiest outcome of all.

Posted in Regulation | Leave a comment

Road safety

Posted on May 4, 2000 by Other News Sources

Lawrence Solomon
CBC: Commentary
May 4, 2000

Next month, a coroner’s inquest will investigate one of Canada’s worst-ever highway calamities – the fiery 84-vehicle crash last September on a stretch of the 401 between Windsor and London. That stretch, which took 8 lives on that occasion and many others before and since, is dubbed Death Alley. Other stretches on other Canadian highways have names like Killer Road. All told, 3000 Canadians lose their lives to traffic accidents each year.

But one highway in Canada has never claimed a life – Highway 407, which runs parallel to Highway 401, just a few miles to its north. In part, that’s a coincidence – no highway is immune from fatal car crashes. But Highway 407 does have something going for it. Highway 407 is a toll road, and toll roads are remarkably safe. Highway 407’s accident rate is about one-third that of Highway 401.

U.S. toll roads are also safer than U.S. freeways. In terms of fatalities across North America, your chance of being killed per mile traveled on a freeway is typically 50% to 100% higher than on a toll road.

In part, the toll road has a vastly superior safety record because its crews tend to be dedicated to the one road, making them more familiar with its particular characteristics. As a result, they more promptly clear debris, plow snow and find and treat icy patches.

But more importantly, toll road operators – whether public or private – have a bottom line. When traffic isn’t moving, a toll road can lose $30,000 per hour or more, giving it a powerful incentive to invest in safety equipment and in other equipment that lets it pounce on small problems before they become big.

One example of such incentives at work is California’s Route 91 Express Lanes, a toll road built in the median of a freeway serving Los Angeles. Express Lanes employs high-tech cameras – and a private fleet of tow trucks on continuous patrol – to monitor its road. When the control centre spots trouble, it immediately dispatches the nearest tow truck. The tow truck operator will change flat tires, boost batteries, provide a free gallon of gas to cars that have run out – anything to get cars off the side of the road, where they attract the attention of gawking passersby, slow traffic and create an accident risk.

The operators of Highway 401 and other freeways don’t like to see carnage on the road any more than their for-profit counterparts.

But unlike toll road operators, which are primarily focussed on road profits, government freeway owners have many masters to please. Because road investments come out of the general purse, they compete with medicare, education and other public demands for new spending.

For this reason, governments across Canada have allowed our road system to deteriorate badly, despite persistent warnings from safety-minded organizations. Although governments and road authorities acknowledge that necessary upgrades to the national highway infrastructure would save 250 lives a year, they balk at the $17-billion price tag involved. To a toll road operator, unsafe roads are bad for business. To a government, they’re a luxury. The question for society: Can we afford the human toll of free roads?

 

Related articles:
Toll roads v. the Canadian Accident Association
London’s green streets
Toll skeptics be damned: London’s rolling
The toll on business
The take from tolls
Don’t tax, toll: Presentation to the Canadian Home Builders’ Association
London unjammed
Don’t tax, toll
Toll today’s roads, don’t build more
How the free road lobby led us astray
Toll road commentary
How to cut highways’ human toll
 

Posted in Automobile, Toll roads | Leave a comment