Gridlock is costing Toronto up to $11 billion yearly—here’s how to fix it
Read More: http://www.canadianbusiness.com/economy/the-end-of-gridlock/
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Metrolinx, Ontario’s transit authority, pegged the cost for the Toronto region alone at $6 billion annually in 2008. That number was too modest. The figure could be $7.5 billion to $11 billion every year, according to new data supplied to Canadian Business by the CD Howe Institute. The higher price tag isn’t based on commutes getting worse over the past five years—although they probably have. Metrolinx’s numbers only considered the costs of gridlock, like businesses spending more to transport goods or having to pay their employees better to tolerate long commutes. But the CD Howe report also recognizes that easing gridlock would create new opportunities by increasing the size of Toronto’s talent pool and consumer base. By not acting, these lost opportunities become lost dollars from our bank accounts.
- If progress is going to be made, we need to stop looking at transit as something we pay for on a project-to-project basis and instead see it as akin to health care or education, a need that requires long-term, sustained funding. Investing in transit isn’t just about saving time—it’s about making money. Carol Wilding, president and CEO of the Toronto Region Board of Trade, says her organization’s 10,000-plus members understand the link between healthy transit and healthy bottom lines. “They consistently rank this as the top economic and competitiveness issue,†she says. People turn down jobs because “they know the cost that it’s going to have on them personally in terms of changing their commute patterns, and therefore the impact that it also has on their family life. They’re just not prepared to make that kind of investment.†Academic literature backs Wilding’s anecdotal evidence. People will spend up to 90 minutes commuting, and that’s effectively the end of a company’s talent pool, explains Benjamin Dachis, author of the new CD Howe study.
- When people start moving faster, you get a bigger consumer base, as well. “We’ve got this huge mass of people who are all able to go to a baseball game or use a subway or an airport, who are all in the same labour market,†Dachis explains. If more people could quickly reach the Rogers Centre, for example, the Blue Jays would see an increase in ticket sales. Together, these benefits add up to another $1.5 billion to $5 billion, his study concludes, in addition to the $6 billion we already knew we were losing. Though he can’t vouch for the accuracy of Metrolinx’s figure, Dachis says the costs are definitely higher than we thought. Even the feds are losing out. An improved economy would allow Ottawa to rake in more income tax—one of the ways in which transit investment offers a return to governments.
- A 2005 study in London examined housing prices after light-rail and subway lines linked previously unconnected areas of the city, and found houses within two kilometres of new stations rose in value by up to 12% more than those further away. Canadians could glean these benefits as well, but that will first require a radical shift in how transit is funded. The current method—year-to-year funding drawn from the existing tax base—is flawed. Consider Edmonton’s dilemma. The city’s proposed $1.8-billion light-rail line will likely face delays due to a $515-million funding gap, despite politicians wanting the line running by 2019. But big construction and engineering companies won’t bid on the project without secure funding, according to Edmonton’s transportation general manager, Bob Boutilier. If the project proceeds in its current state, bidding will be less competitive.
- In 2006, Stockholm introduced a congestion zone around its city centre, adding more buses and bike lines as an alternative. Drivers going through the zone had their licence plates snapped by cameras and were automatically charged. It began with a seven-month trial and a disapproval rating of 75%. But traffic fell by 22%, only to rise again at the end of the pilot project. When asked for their opinion when the trial was over, a majority of Stockholmians voted the tolls into law. Other cities have made a similar choice. New York imposes a 0.375% regional sales tax and multiple business taxes. London has a congestion charge similar to Stockholm’s; motorists driving downtown during business hours pay £10 per day. Even Los Angeles, North America’s most congested city, is ahead of Toronto. In 2008, L.A. voters backed a 30-year regional sales tax of 0.5% to fund a $40-billion transit expansion.
- Indeed, sustained revenue has myriad benefits. In both London and Madrid, predictable funding helped expand the construction sector, and because work was regular, engineers and workers became more familiar with the processes and tools used for building transit; their improved expertise boosted productivity and further drove down costs. Road tolls also reduce gridlock precisely because people would rather not deal with them, says Dachis. Building more roads, meanwhile, does little to help reduce congestion. “When you increase the capacity of something without changing the price, demand usually just fills up thatadditional capacity.â€
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