Mobility and Transportation

NOTES FOR A PRESENTATION AT A CONFERENCE ON

AGE FRIENDLY COMMUNITIES IN ONTARIO
Nov 5, 2013
Harry Kitchen
Professor Emeritus
Department of Economics, Trent University
Peterborough, Ont. K9H 6Y3
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Spending on roads & transit: % of municipal

spending and avg. annual growth rate 2006-11

Toronto
Hamilton
Ottawa
Sudbury
London
Prov. Avg.

% of total spending
2006
2011
19.3%
25.9%
14.5%
19.7%
24.0%
26.1%
13.5%
19.1%
15.0%
15.5%
16.9%
22.1%

Avg. Ann.
growth
11.2%
11.2%
6.7%
6.9%
4.0%
10.0%

Per Cap Mun.

2011
Rank
$ 978
1
$ 540
1
$ 801
1
$ 578
2
$ 404
3
$ 632
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Current Financing of Roads and Transit

Major revenue sources:
Property taxes
Transit fares
Grants

Framework for Evaluating Funding Tools

Analytical framework:
Ability to pay
Benefits received
Principles applied within the framework:
Efficiency
Fairness
Transparency
Accountability
Ease of administration
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Current problems with transit fares

Almost never based on distance traveled (GO is an exception); hence,
short distance riders subsidize long distance riders creating an
incentive for urban sprawl.
Do not vary with time of day failure to charge higher prices in peak
periods leads to over-crowding and creates an incentive to overinvest in public transit.
Low fares for seniors, children and students are difficult to justify on
efficiency and fairness grounds.

Current problems with funding roads

Funds collected from road related charges go into general provincial
revenues and are not dedicated to roads.
No specific road usage charge for use of highways, roads and streets;
hence, an incentive for overuse and over investment.
Lack of properly priced road usage has led to growing congestion,
increased environmental pollution, reduced productivity, and lower
economic output and fewer jobs than could otherwise be achieved.
Lack of properly priced road usage provides an incentive for sprawl.
A recent study for the GTHA estimated ($2006) that congestion cost
commuters $3.3 billion annually and reduced GDP by $2.7 billion. If
nothing is done, this will rise to $7.8 B and $7.2 B in 2031.
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What should be done?

Public transit:
Transit fares should vary by time of day and distance traveled this is not an
argument for an increase in average transit fares.
Current practice of providing public transit discounts based on age (seniors &
children) and status (students) should be removed.
Highways and roads one or more of the following should be implemented:
A vehicle registration charge
A parking lot tax
Congestion/toll charges
High occupancy toll lanes
A fuel tax
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Issues around new road taxes or charges

Revenue sharing or local rate setting.
Piggy-backing onto provincial taxes or a separate
municipal tax administration.
Implemented region-wide or locally.
Dedicated revenues or general revenues.
Locally generated revenues or grants.
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