I'm not against user fees in practice. I think user fees are far fairer than broad-based taxes, but I think this issue is not as simple as Ms. Thomson makes it out to be.
It's one thing for London to start imposing congestion fees and tolls when they already have one of the most extensive fixed-rail systems in the world. We're starting from the perspective of the Great North American Frontier, which was mostly developed as we know it today, after the invention of the automobile.
The general obsession we have over trying to overlay a European model into the North American context when it comes to things like comprehensive regional transit system has been, is, and will probably continue to be a pipe dream for as long as my time horizon extends.
Here's a few negative effects that I foresee happening with Thomson's plan:
Construction of new subways lines on the scale she's proposing will take 7-10 years to come on stream. All the while, punitive measures will be taken against drivers to help pay for, while also incentivizing drivers to use transit.
As it turns out, I have no doubt that measures like this will reduce personal vehicle usage and increase transit usage. But like all things in economic analysis, we're often quick to lean too heavily on one datapoint.
We all seem to agree that transit is inadequate, and as such, given the amount of time it will take for the investment in transit to "pay off" as it were, commuters will be dinged with punitive taxes of diminishing returns as people seek ways to avoid them, and the biggest effect will be a significant decrease in quality of life for commuters in the short to medium term. Certainly short-term pain for long-term gain is a valuable principle in many cases, but I don't believe we've fully flushed out the issues at play here.
Commuters of average income (middle-class) may throw in the towel and switch to GO Transit. It goes without saying that by doing so, the city will not collect the $5.00 toll. And it also goes without saying that GO Transit itself is running near capacity -- as anyone who takes it at rush hour can attest. If this were to even cause GO Transit usage to increase by 15%, you could be looking at serious capacity problems.
Second, other people will simply accept the extra time cost and use arterial streets like the Queensway, Lakeshore Blvd, Dundas St, etc to get downtown. This will cause serious pressure on downtown streets, which will have the effect of slowing down streetcars, taxis, buses and other means that Torontonians use to get around the city. In this sense, Torontonians will -- as a negative externality -- bear some of the cost, even if they don't ever use the highways.
There's also a lot of people looking to move downtown these days, due to commute times. This could cause a spike in demand for Toronto real estate which will, push housing prices through the roof. Now for someone like me, this is probably a good thing. But for someone who's living hand to mouth and just trying to get by, this could actually have the unfortunate effect of pushing them out of the city.
This is actually an important point. Because while the North American inner cities tend to be where the slums are. In mainland Europe, as some people may have no doubt noticed, it's somewhat reversed. In cities like Paris and Berlin, the slums are in the suburbs. This is because the taxation and housing costs have pushed lower-class people out of the urban centres. And policies like this consistently have that effect.
One thing studying economics has taught me is: there is always a downside. Or at least, unexpected consequences to all these policies.
Disclosure: I live in downtown Toronto (near Bay St. and Lakeshore Blvd) and I don't own a car, and use transit exclusively. I certainly want to see transit improved in Toronto. But I don't want to see massive infrastructure projects just rammed through without careful consideration. Ms. Thomson's proposal seems like it was thought out on the back of a napkin, to be quite honest.