Calgary considers road pricing or a fuel tax rise

The Calgary Sun reports that the City of Calgary is having to consider how it bridges a funding shortfall due to declining real revenues from provincial government.  The options being floated include either raising fuel taxes or what it describes as "tolling", which apparently is more a case of more widespread road pricing.

Mac Logan, the city’s general manager of Transportation says there is a C$200 million (US$200.6 million) shortfall between 2013 and 2022.

The report continues to say that Logan would prefer an increase in the federal fuel tax, which is C$0.10/l.  Alberta also has a C$0.09/l provincial fuel tax.  However, there is a concern that such an increase would not see Calgary getting the revenue it seeks.  Tolling becomes more attractive, although he makes it clear this is not about funding discreet highway projects, but about raising revenue for the entire transportation budget.

What that implies is everything from congestion charging to a full network pricing initiative.

The newspaper report includes the predictable kneejerk reactions from politicians:

- Alderman Shane Keating said "A toll road system would be impractical for Calgary’s roadways — there’s just not enough room for such a system and the tolling booths could be easily circumvented her" and "All in all, toll systems are very inefficient in design".  What's a bet he thinks of manual toll booths as being tolling, and he thinks of tolling being individual points rather than a distance based charging system?

- Alderman Ray Jones said "people could simply drive through other neighbourhoods to get around it". Again, an area charge, zonal charge or distance based charge would avoid all of this.

It would be good for Calgary to at least explore options, and consider that the long term sustainability of fuel tax is questionable given vehicle efficiency and alternative fuels.  However, I'd suggest that if this is about revenue, the solution needs to be at the provincial level.  If Calgary wants to manage congestion, it could certainly consider options that deliver such benefits and generate revenue.

Conclusion

To determine the right solution, the problem needs to be well defined.  In short, Calgary should present, in a transparent way, exactly what will happen if it has a growing funding gap.  It needs to consider options for greater efficiencies, fare increases for public transport, fuel tax increases, parking and road pricing alternatives.  Then it can start to see how to match revenues to more efficient pricing overall.  Considering a source of revenue independent from its impact on behaviour and the distributive impact of that source of revenue is not likely to provide the best solution.

Think Tank proposes HOT lanes for Vancouver, Calgary and Montreal

The Vancouver Sun reports on a report by the C.D. Howe Institute by Benjamin Dachis that calls for the 74km of existing and planned HOV lanes in Vancouver to be converted into HOT lanes, to help reduce congestion.  He also writes about doing the same for Calgary and Montreal.

The report claims congestion in Vancouver cost C$927 million per annum (US$935 million) which comes to C$466 per capita (US$470).   It looked at allowing vehicles to use the network by paying a toll akin to C$0.23 (US$0.23) per km at peak times and half that at the off peak - to match the Toronto 407 toll road rates.  

That would generate C$81 million (US$82 million) per annum in revenue.  The report notes that existing motoring taxes in Vancouver are too low, saying that taxes on fuel and ownership only cover 53% of road infrastructure costs - quite the opposite of such taxes in Europe.  

The Vancouver Sun article is quite complimentary of HOT lanes because:

- HOT lanes preserve untolled options;

- HOT lanes improve travel times for buses as well as cars;

- HOT lanes ensure better utilisation of HOV lanes;

- Lower income drivers often value the time savings greater than middle income ones, contrary to the much abused "Lexus lanes" label (in part this is due to a greater need to get to work on time or having a busier schedule with multiple jobs);

- The primary use of HOT lanes is for urgent trips, which is typically irregular (e.g. attending appointments or to meet flights).

The report does not explain the potential congestion reduction benefits, but assuming the lanes are underutilised, there would clearly be some benefits.   One issue not yet adequately addressed is quite why HOT lanes should simply not be toll lanes.  After all, if a car carries two or three people that is two or three people who can pay for the scarce road space.  I strongly advocate HOT being HOV for 3+ occupancy, with a long term intent to phase out the HO component over time.  

However, for now HOT lanes make a lot of sense for cities with extensive HOV networks.  They can improve utilisation of networks, introduce road pricing in a painless way, with a parallel unpriced option, and offer the real benefit of express lanes that are appreciated by motorists undertaking trips with a high value of time.  I would argue they should also be available to trucks, as freight has similar challenges of meeting time. 

I hope Canadian policy makers can start to think of how they might take lessons learned from US HOT lanes to replicate the successes seen there in Canada.