Media Release – Better Accounting Could Solve Funding Headaches for Rural Roads

Press Release, Taxation, Frontier Centre

Rural municipalities all face a common problem of maintaining large road networks with a limited tax base. The result is constant political wrangling between RM’s and higher levels of government over who is responsible for funding maintenance of these roads.

The argument used by rural municipalities—that road users from outside their jurisdictions benefit from the use of their roads, so taxpayers from outside their jurisdiction should pay—is a valid one. In practice, this political process of deciding who-should-pay-for-what is seldom satisfactory for any party.

Other jurisdictions in other parts of the world, however, have short circuited this problem by seeking funding direct from the road users who necessitate the maintenance. Using the “exceptional user pays” principle, particularly heavy road users can be assessed for the disproportionate road damage their activities create and be charged accordingly.

The solution works because a very small number of heavy users can create a disproportionate amount of road damage; charging them spares local taxpayers.

“This solution,” says study co-author David Seymour, “eliminates the need for political wrangling between small cities and towns and higher levels of government over who should pay for road maintenance.”

“However, identifying the heaviest road users and working out what to charge them requires better asset management than is currently common in rural Canada. What is required is an integrated approach from engineering and accounting staff to assess the value of road usage.”

Download a copy of the Policy Series here: Text

For more information and to arrange an interview with the study’s author, media (only) should contact:

David Seymour

Gary Slywchuk
Troy Media Corporation