Environmental Protection Fees, Intergovernmental Equalization Payments and Other Options for Transportation Funding Explored

1. INTRODUCTION Transportation planning is always accompanied by the quintessential question: how to fund it. Such is the dilemma facing policy-makers in Toronto, Canada's largest city and also the capital of Ontario, Canada's largest and most commercial province. Metrolinx, the provincial agency set up to manage regional transit expansion in Toronto and its surrounding area (known as the GTHA) developed a plan called The Big Move. It addressed deficiencies in the city's transportation system and how to keep it up to date with the transportation systems of other major cities in North America and the world. The Toronto Board of Trade estimates the cost of this plan at $50 billion over a 25-year period. In order to cover these costs, the Board proposed raising funds through four revenue tools: a 1% regional sales tax, a $1 per space per day parking space levy, a 10-cent/litre regional fuel tax and a 30-cent/kilometre toll for single drivers on high occupancy lanes (Toronto Region Board Of Trade 2013). Public opinion polls show that these funding methods are not supported by a large majority of the impacted population. A recent report by the Toronto Dominion Bank provides a broad outline about how this issue can be broached. It suggests that the GTHA leverage behavioral change and demand management mechanisms within its transit systems. In doing so, it should charge fares based on distance travelled and time of travel. The report also suggests adopting a regional outlook for urban transportation (TD Economics 2013). Consolidating urban transportation regionally is advantageous because urban transportation networks bring people and jobs closer together in denser communities, discourage urban sprawl and bring more workers within commuting distance from employers. For projects involving urban road, rail and transit improvements, this raised benefit-cost ratios by an average of more than 20 per cent (The Conference Board of Canada 2011). As the next paragraph explains, there is ample need for doing this. During the morning rush hour, approximately two million automobile trips are made in the GTHA. This poses a problem for local authorities as it increases the cost of the region's transportation activities and has a negative impact on the region's economy. Costs to the economy are a result of reduced output and accompanying job losses. Travel delays, unpredictable travel times, more frequent traffic accidents and re-timing of trips to avoid severe congestion also add to the problem. There are costs to individuals such as higher vehicle operating costs associated with higher traffic volumes and costs to society like local and global environmental costs of vehicle emissions (Residential and Civil Construction Alliance of Ontario 2013). Besides the need to alleviate congestion, Toronto's roadways are also in urgent need of repair. One of the city's main expressways, the Gardiner express, is in need of fixing after parts of it began to break off earlier this year. The city manager unveiled a 10-year capital plan, which would cost the city $505-million from 2013 to 2022. Some city councillors have suggested tearing down a portion of the Gardiner Expressway and allowing the private sector to build and manage a toll expressway in its place as a means of avoiding this huge capital outlay (Alcoba 2012). This is certainly a complex issue facing the Toronto region. It not only has to find a way to upgrade existing infrastructure but also decide how to fund it. Should it risk falling out of favor with the public and raise taxes and impose tolls and fees? Or should it find alternative ways of funding its transportation plan? This paper explores urban infrastructure provision from a broad perspective, analyzes public opinion about transportation funding in the GTHA and provides a list of funding alternatives that might spice up this discussion. 2. CONCEPTUAL FRAMEWORK Urban infrastructure draws high capital investment costs. …

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