Let’s put hick-town status far behind us. Calgary and Edmonton have a golden opportunity to be world leaders. And all we have to do is lower our municipal taxes, and replace them with road tolls.
Having simultaneously low taxes and superb roads and transit is possible.
Most cities, notably Singapore and Toronto, waited until congestion was at epidemic levels before implementing tolls. Other cities and highways are quickly following suit.
If we think ahead, we may be able to reap such big-city rewards without paying the big-city penalty – stifling congestion.
With low provincial taxes, we have a golden opportunity to turn our two major Alberta cities into world-class hubs. Let’s not forgo it.
Tolling roads is an idea whose time has come, assuming politicians don’t take the toll as a licence to overspend. As Edmonton city Councillor Karen Leibovici put it: “You get into a real dangerous game there. It’s so easy to increase the user-fee side, while in the meantime your taxes are going up as well.”
But we have no real choice but to head into that danger.
We are at a crossroads.
Calgary, for example, is borrowing an additional $350 million over the next few years, while Edmonton is considering similar measures at its March 18 council meeting.
Who’s going to pay those bills?
We face two extremes: we can let our debts mount as we fork out for necessary overpasses and LRT extensions, potentially chasing away, through regressive property and business taxes, the very businesses and citizens that we need to pay for them; or we can save money and let the roads degrade, chasing away businesses by the shoddy transportation system.
But, we can have the best of both worlds by instituting fair user fees. And the most dramatic instance of such fees would be tolled roads. New technology makes them easier than ever to implement.
Such fees would address the two major, but hidden, problems that are hurting both Edmonton and Calgary: regressive taxation and sprawl.
Regressive tax rates, by definition, increase as earnings go down. Property taxes, or any tax that is linked to property value, naturally fall into this category. When you or your business hits a downturn, your taxes do not decrease, being linked only to property value. All the cost-cutting efforts in the world, short of moving, do not help.
Businesses feel twice the pinch that residents do because they pay both a tax based on their property value (the mill rate) and one based on the land’s rental value (the business tax).
These two taxes curtail start-up and small business activity because the rates remain static no matter what the earnings of that business might be. On the face of it, this is unfair, since the rates do not reflect the true cost of providing services, which is often meagre at start-up.
That’s why toll roads make so much sense. People pay for what they use.
Theoretically at least, this would discourage inefficiency and encourage public transit.
Let’s forget old-fashioned notions of toll roads. These days, vehicles no longer have to stop at a booth. No loose change is required. No onsite personnel are needed. All the “inconvenience” arguments have vanished with the advent of cheap transponders, digital camera, sensors, databases and the like.
The technology is here, and it’s relatively inexpensive.
Calgary Mayor Dave Bronconnier has serious reservations about tolling roads. “I don’t believe Calgarians are of the view that they are prepared for their local government dinging them every time their wheels turn.”
But we have to face the facts of life. The technology is available, and cities who use it will have (and do have) competitive advantages. Traffic would move faster and ratepayers, as a whole, would pay less. Everyone wins but the city that fails to implement it.
Whether we like it or not, toll technology is prevailing. Drive through Chicago and you will be several U.S. dollars poorer. Toronto has a privately owned highway, 407, arguably the most sophisticated electronic toll road in the world when it was created just a few years ago.
Singapore uses sophisticated monitoring technology to charge for the use of virtually every street. To date, “Singapore is the only city in the world that has really introduced a user-pay type of road system.” That’s according to Dr. Andrew MacIver, a Calgary expert in intelligent transportation systems (ITS) and a professor of civil engineering at the University of Calgary. He told me that the city of London is close to implementing a Singapore-type system for its streets.
I’m not advocating such a thorough system (at least not yet). We are not as congested as London or Singapore (at least not yet). What the ability of those cities to toll every single cordon illustrates is just how cost-effective the technology has become.
It may already be feasible to monitor every road coming into Edmonton or Calgary, for example. If not, it will be soon.
People without transponders could pay a significant flat fee (i.e. $6 per photographed licence plate). This is a great way to make trucks that travel through this city, for example, pay for the privilege.
If Alberta wants to be considered a cutting-edge province, then this issue deserves serious consideration by our big municipalities.
“The idea pops up every couple of months,” Edmonton city Councillor Alan Bolstad told me last week. “But it’s not a particularly workable idea. The bottom line is we are a wide-open prairie city with a hundred different ways to get in or out.”
But if it requires 100 different cameras and 100 different “gantries,” then let the travellers in or out pay for it.
In Calgary, with the city borrowing to create such basic things as overpasses and new LRT lines, the best way to recoup those costs is by dinging the cars and trucks that benefit from them, not every citizen and the businesses twice.
Roads such as McKnight, 14th Street S.W. and Crowchild Trail would make ideal toll-road candidates.
Let me make something clear here. I am not in favour of increased taxation, just a better way of collecting the same revenues.
Without concomitant tax reductions, and significant ones at that, my whole idea crashes down. But Edmontonians and Calgarians alike must stop subsidizing the tourists, business travellers and especially commuters who use the infrastructure but do not pay for it.
Casey VanderPloeg, with the Canada West Foundation, has spent much time looking at the best ways to create vital cities. He told me that “traffic congestion is a prime example of a bunch of people going for a free-for-all on a free service. A so-called free service. It is not priced. But if every time you step on the Deerfoot (provincially owned) and pay 50 cents, or something like that, people might think twice about using that road three times a day. They might look for more efficient types of transportation. And so it’s not just a tax, it’s a way to price the service. There is a big difference.”
I agree with VanderPloeg when he says: “If a city is going to be able to adequately finance itself, we have to start moving towards the concept of user-pay for services that provide a private benefit.”
