March 25, 2006
For whom the road tolls:
If there was a theme to Thursday’s Ontario budget -- other than sheer incontinence -- it was infrastructure: what roads and bridges are called between elections. And if there was a theme to the province’s infrastructure spending, it was utter confusion. The Finance minister, Dwight Duncan, struggled mightily to invest it all with the necessary rhetorical grandeur. “Infrastructure,†he began, “is the schools where our children learn, the hospitals where we are treated, the public transit systems we ride, the roads we drive on, the plants that clean our drinking water and the power stations that keep our lights on.†The question defined, the answer was obvious: more spending. “Each generation,†he went on, “is called upon to build and renew our vital infrastructure.†To everything there is a season. A time to tax, and a time to spend. Or in other words: If it moves, this government will subsidize it. Or even it if doesn’t. The important thing is to spend, or be seen to.
There was money for energy conservation and money for energy consumption; money for roads and money for public transit. You read that right: The government of Ontario will pay you to turn the lights off and pay you to leave them on; pay you to use the car and pay you to leave the car at home. Indeed, since the same government boasts of its willingness to subsidize the auto industry, we can further sum up the McGuinty approach to transportation: More cars should be built, but fewer people should be driving them.
But why pick on Ontario? All governments, at every level, do the same thing, for every mode of transportation. The poor traveller is beset on all sides by conflicting messages. Take the bus! No, take the train! Please, I’m begging you: take the plane! We’re paying top dollar to anyone who will just drive their car! And all these subsidies are paid for with the taxes on his own labour. The government, he may conclude, wants him to quit working and take up travelling.
Here’s another suggestion: Instead of paying all these offsetting, overlapping subsidies to lure travellers down this road or that railway, why don’t we just stop subsidizing any of them? The one indispensible ingredient of rational resource use, in transportation as in other areas of economic life, is for consumers to pay the full cost of their choices. That can’t happen so long as governments are paying the freight on their behalf. The reason Ontario roads are so clogged isn’t for lack of public subsidy. Quite the contrary: the more we spend building new and wider roads, the more congested they become. That’s not accidental. By building and maintaining roads at public ``expense that drivers could perfectly well pay for themselves -- Britain is in the process of implementing a nationwide, satellite-guided system of road tolls -- we are in effect paying drivers to use the roads. Or, if they do pay, it is in time, rather than money: the time spent idling in traffic jams. Which is perverse. It means scarce road space is given over to those who least need it. How much more would truckers and other time-sensitive travellers be willing to pay to use the roads, if only they were permitted to do so? And not only to save time.
Anyone who has driven on France’s immaculate toll-highways will have noticed, not only how smooth the ride is, but how many restaurants and rest stops line the way. It turns out drivers are willing to pay more for better roads -- more, that is, than ministers around the cabinet table, where roads must compete against the more pressing demands of health care, education and other public services. There’s a lesson in that for fans of public transit. Transit subsidies are supposed to lure drivers out of their cars, reduce fuel consumption and so on. They fail at this, on two counts. One, even if we subsidize people to consume fuel in less wasteful ways, we are still subsidizing them to consume fuel. And two, the last thing that is likely to make transit more attractive to passengers is to subsidize it.
Think of those French toll-roads: the reason they are so attentive to the needs of drivers is because they depend on drivers for their revenue. Whereas subsidies, in whatever field, insulate the providers of a service from the need to court consumers. Among the many projects for which the budget promised funding, the single largest was a $670-million extension of the Toronto subway system into the suburbs north of the city: subsidizing sprawl, just as generations of road-builders have done. Was this the best use of these funds? Is there more demand for the planned extension than, say, another line serving the city centre? How can we know, if not by asking consumers themselves? In any case, there’s a simpler, more direct way than subsidy to get drivers out of their cars and onto the subways: Start charging drivers to use the roads. They’ll get the message soon enough.
