Winning the Battle with Traffic Congestion: The benefits of accurate transport pricing

Instead of increasing road capacity, Canada’s government agencies should implement accurate transport pricing.

Executive Summary

Most of us have experienced the frustration of being stuck in traffic when you need to be somewhere else. As Canada’s cities have grown in size (and become increasingly motorized) congestion and all its associated economic, social, and environmental impacts have become all the more common. In 2008, for example, Toronto was ranked the fourth most-congested region in North America (behind only Los Angeles, San Francisco and Chicago), with the direct cost of congestion estimated to be in excess of $2-billion per year. Canada’s government agencies have responded to ever-growing congestion by trying to increase the capacity of the transport system. They hope that building wider roads and providing public transit will reduce congestion, at least to tolerable levels. This investment, however, ignores other ways to manage congestion.
Instead of increasing the capacity of the transport system, Canada’s government agencies should implement accurate transport pricing that charges people more to travel in peak times. Travelling during peak times incurs substantially higher costs (in terms of both infrastructure and external costs, such as congestion) than does travelling during off-peak periods.
Accurate transport pricing not only reduces congestion, it also generates additional revenue to fund investment in additional capacity when and where it is justified by demand. Most importantly, accurate transport pricing is mode-neutral in that it neither discriminates against nor favours any transport mode, although it does favour high-value vehicles, such as buses and emergency vehicles. Accurate transport pricing also allows people the freedom to manage their travel needs in the way that best suits them. Some workplaces, for example, may allow their employees to work flexible hours in order to reduce their transport costs.
This paper suggests that accurate transport pricing is an essential part of Canada’s transport investment. There is no need to reinvent the wheel: Canadian cities and towns can emulate cities overseas that have invested in and benefitted from accurate transport pricing.

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