Toronto Regional Board of Trade Regional Rail Report

[W. K. Lis]

Steve didn't like the report because there are no streetcars or in-median LRTs in it.

The emphasis in the report is on l-o-n-g distance commutes, not local or neighbourhood transit. Being the "Board of Trade", they were concerned about getting employees to and from downtown Toronto, not to and from people's medical offices, shopping, or visiting friends or relatives.

If movie theatres are still around, would people use the "Trillium Network" or the light rail to get there and back? How about getting to and from the Toronto Zoo? Or to and from a local hospital?

 

[afransen]

My takeaways were that he found it unrealistic because it downplayed the importance of local transit, did not consider operational funding or the impact/cost of fare integration, was too unrealistic, and did not fully consider operational details.

I think there were better ways to get that point across: he could be less wordy and have dropped the snark.

I also happen to disagree with some of his takes on the report.

I think the question of how we pay for it is legitimate. I imagine the fare integration proposal would cost money. I'm also sure that the regional rail proposal would have significant cost, but not all that high. New rolling stock should be coming anyway. Reconstruction of Union platforms would likely be expensive but a necessary investment in capacity. A couple of fly over/unders. The Milton Line would cost a few billion. The new stations proposed are mostly low cost. Spadina and Cherry stations are more significant. Spadina is already planned (but not very well). So, the plan might cost $20-30B, but considering the massive amount of service it provides, it should really help to mollify the 905 demands for investments in rapid transit.

In terms of paying for it, I think road tolls are going to have to be part of the picture. Gas tax is going to become an increasingly ineffective tool as the fleet converts over to electric. Road tolls perform the task of reducing congestion while raising revenue at the same time. They are pretty unpopular, but if it is shown to be plowed back into transit (and potentially road) investments that are addressing congestion, I think people could be willing to tolerate them. I think the important part should be that unlike the 407, off-peak tolls should be low/zero. The policy goal of the tolls should be to reduce congestion, not necessarily revenue maximization.

 

[afransen]

The emphasis in the report is on l-o-n-g distance commutes, not local or neighbourhood transit. Being the "Board of Trade", they were concerned about getting employees to and from downtown Toronto, not to and from people's medical offices, shopping, or visiting friends or relatives.

If movie theatres are still around, would people use the "Trillium Network" or the light rail to get there and back? How about getting to and from the Toronto Zoo? Or to and from a local hospital?

The focus of the report is on regional rail because they are leaving local/last mile transit for a later report! They are not diminishing the importance of local transit. In the report, they talk extensively about the importance of integrating with local bus and streetcar routes. The key thing about regional rail is that it opens up the whole region as a place where you can travel to in a reasonable amount of time. Today, people must constrain where they look for jobs due to excessive commutes, particularly if they don't drive and cannot move. This creates a lot of economic inefficiency and also pushes employers to locate downtown, as that is the only place where you can reach most of the region's talent in a reasonable commute. If we had a true network, it would be easier to distribute employment more broadly around the region and create more 2 way flows which are critical to making efficient use of infrastructure.

 

[Undead]

The policy goal of the tolls should be to reduce congestion, not necessarily revenue maximization.

But then does that generate enough to fund major transit expansion?

 

[afransen]

But then does that generate enough to fund major transit expansion?

Even if we were just to tax major highways (400 series + Gardiner DVP), we could use 407 as a guide. In 2019, the 407 had revenues of $1.5B, for 2.74B vehicle kms or $0.55/km on average. I'm guessing the rest of the major highways in the region see 5-10x the vehicle kms collectively. Not sure if we have good stats on that anywhere. If we tolled at a rate even half of the 407 ($0.27/km) we're looking at $4-8B per year in revenues. Not sure how high tolls would need to be set to manage peak-time congestion. That should make a good dent in funding for a capital program and operating subsidy.

I think with EVs, we may eventually need to add a per km vehicle registration road tax as well because they are just so darned cheap to operate. This would replace the gas tax and be applicable to all vehicles, and perhaps vary by weight class. I can see that being in the range of $0.10/km, which would cover all kms driven by vehicles registered in Ontario. If you drive outside Ontario substantially, perhaps we could have an opt-in transponder to be mounted on the vehicle that records how many kms are driven outside Ontario and deducts that from the total. Canada has about 400B vehicle km travelled per year, so Ontario's share is around 160B. At $0.10/km, that's $16B.

Ultimately, I think the province needs to take on funding of transit more completely through Metrolinx. Transit is a region-level service and shouldn't be left to local municipalities to fund and plan, though they may have a role in operating/sweating the local details.

 

[sixrings]

Even if we were just to tax major highways (400 series + Gardiner DVP), we could use 407 as a guide. In 2019, the 407 had revenues of $1.5B, for 2.74B vehicle kms or $0.55/km on average. I'm guessing the rest of the major highways in the region see 5-10x the vehicle kms collectively. Not sure if we have good stats on that anywhere. If we tolled at a rate even half of the 407 ($0.27/km) we're looking at $4-8B per year in revenues. Not sure how high tolls would need to be set to manage peak-time congestion. That should make a good dent in funding for a capital program and operating subsidy.

I think with EVs, we may eventually need to add a per vehicle registration road tax as well because they are just so darned cheap to operate. This would replace the gas tax and be applicable to all vehicles, and perhaps vary by weight class. I can see that being in the range of $0.10/km, which would cover all kms driven by vehicles registered in Ontario. If you drive outside Ontario substantially, perhaps we could have an opt-in transponder to be mounted on the vehicle that records how many kms are driven outside Ontario and deducts that from the total. Canada has about 400B vehicle km travelled per year, so Ontario's share is around 160B. At $0.10/km, that's $16B.

Ultimately, I think the province needs to take on funding of transit more completely through Metrolinx. Transit is a region-level service and shouldn't be left to local municipalities to fund and plan, though they may have a role in operating/sweating the local details.

You wouldn’t need to fund it all in one year. Why not 2-3 cents a km over a series of years. That said once everyone goes ev they will have to make some additional tax because they won’t be getting people at the pumps.

 

[afransen]

Honestly, we probably need ~$10B+/year in on-going revenue to support transit in the region for 1) operating subsidies 2) state of good repair/vehicle replacements and 3) capital expansion programs.

Not sure what you mean by 2-3 cents/km. That might not even be worth collecting. The idea of highway congestion pricing isn't to hit a revenue target, it is to ensure we are using highway capacity effectively. When highways are congested, they are creating less social value than if they were free-flowing, even if there are fewer people on the roads. But free-flowing highways have higher capacity/throughput than congested ones. You need to set the toll high enough to eliminate marginal trips from peak congestion times. 2-3 cents per km would have no measurable impact on congestion.

 

[sixrings]

Honestly, we probably need ~$10B+/year in on-going revenue to support transit in the region for 1) operating subsidies 2) state of good repair/vehicle replacements and 3) capital expansion programs.

Not sure what you mean by 2-3 cents/km. That might not even be worth collecting. The idea of highway congestion pricing isn't to hit a revenue target, it is to ensure we are using highway capacity effectively. When highways are congested, they are creating less social value than if they were free-flowing, even if there are fewer people on the roads. But free-flowing highways have higher capacity/throughput than congested ones. You need to set the toll high enough to eliminate marginal trips from peak congestion times. 2-3 cents per km would have no measurable impact on congestion.

I made an assumption that we would gather driving data and collecting tolls based on gps so that you could toll all roads. So that’s a lot more driving which would mean needing less cents per km to make the money work. I don’t know what the answer is honestly but we have started building very expensive infrastructure for people who hate taxes and wanted to get rid of the gravy train.

 

[afransen]

If we are straight-up replacing gas tax with per km road tax, the current tax is $0.147/L for provincial excise tax. At 10L/100km fuel economy that is $0.0147/km. So around 2 cents per km would replace the current tax. If carbon taxes stick, I'm okay with eliminating the fuel excise tax and rolling into vehicle registration. You don't need a GPS on every car, as that raises privacy concerns. You can use odometer readings.

Even if road congestion pricing raises more revenue than needed for transportation investment, the balance can go into general revenues to offset other taxation.

 

[sixrings]

If we are straight-up replacing gas tax with per km road tax, the current tax is $0.147/L for provincial excise tax. At 10L/100km fuel economy that is $0.0147/km. So around 2 cents per km would replace the current tax. If carbon taxes stick, I'm okay with eliminating the fuel excise tax and rolling into vehicle registration. You don't need a GPS on every car, as that raises privacy concerns. You can use odometer readings.

Even if road congestion pricing raises more revenue than needed for transportation investment, the balance can go into general revenues to offset other taxation.

I guess that’s true that you could use the odometer. As long as no one finds a way around it. In Holland years ago they had insurance that was connected to gps offering rates lower based on when you drive (less cars on the road sometimes) and how fast you drive. (Fast or slow). But it never got traction because of privacy issues. As long as I walk around with a cell phone I don’t really believe I have any privacy. But that’s just me so I’d appreciate the cheaper insurance but if the odometer works that’s fine with me.

 

[aquateam]

I think dedicated taxes for transit expansion/operation (like the conversation Metrolinx was driving back in 2016 about how to pay for the Big Move) are a great idea.

They would preferably meet these 3 criteria:

1. Be easy to collect
2. Raise significant revenue
3. Incentivize positive outcomes

Based on that, I think the answer would be:

1. Regional Vehicle Registration Tax

This would vary significantly based off of the emissions, safety, and size of the vehicle.

• EVs don't have any local emissions, so they would pay very little. Diesel vehicles produce lots of PM2.5 pollution (huge cause of death) so they would pay a lot
• Smart fourtwo's, sedans, and vehicles which are unlikely to kill vulnerable road users would pay very little. Massive trucks with bullbars at pedestrian head height and with large blind spots would pay significantly more
• Wear and tear on roads is proportional to the cube of vehicle axel loading, so light cars would again pay much less than heavy trucks.

The minimum yearly vehicle registration tax at the lowest rate would be the same as when Rob Ford cancelled it (~$80). This would help combat the dangerous vehicle arms-race trend of larger and larger vehicles.

This could raise $700 million/year.

2. Gas Tax Increase

Revenues from gas taxes have been declining due to more fuel-efficient vehicles, and the gas tax itself hasn't been raised since the Blue Jays won the world series, so it's about time to increase it. Although with the Supreme Court ruling (showing unfortunately consistent disdain for the constitution because reasons) and the carbon tax coming into place, it looks like it will rise regardless.

This kind of tax is great for increasing the cost of car trips and incentivizing public transit use (or HOV use.)

5 cents/Litre increase (bringing us on par with Quebec) would raise $300 million/year.

3. Land Value Tax

Even as a revenue-neutral option, the province should switch municipalities from being Property Value based to being Land Value based (or most likely a blended system.)

Land Value Tax is based off of the "highest and best" use of a plot of land. Which means that:

• Speculators sitting on an underused lot pay tax as though it were fully developed
• Property owners aren't penalized for improving or densifying their properties

American cities that use this tax are much more walkable and livable than cities that don't. They also tend to have fewer downtown parking spaces.

I'm proposing that the taxes are at a constant mil rate, so that the city is able to recover some of the land value uplift that comes from transit construction.

4. Parking Levy

The single greatest lever that the city/province has at its disposal to encourage public transit over driving is with parking policy.

Our current policy is for socialized parking. Government provides subsidized oversupplies of parking (through free parking on roads competing with private garages, parking minimums, FSI maximums) and then acts surprised that people are driving so much. Ending parking minimums province-wide is the bare minimum (at zero cost) that any provincial government should do.

Metrolinx estimated a $0.25 / parking space/day levy would raise $350 million/year.

5. Toll for Municipal highways

It's unfortunate that the Province can download highways onto Toronto but Toronto doesn't have the right to toll them to maintain them. Given that the city is spending 44% of its capital budget just to rebuild the Gardiner, it's reasonable to expect users of the Gardiner to pay for its reconstruction with tolls. This would free up $2.2 billion for public transit.

Tolling other limited-access highways, like the 401, would be a good thing but would be a harder sell.

6. Charge for GO Parking

This is a drop in the bucket compared to other things, but it's something that should be instituted regardless.

It's perverse that it costs $8 round trip to take a bus to the GO station, but parking is free. Given that it costs $50k per parking space to build a parking garage (and ongoing costs to maintain it), that means that transit users are subsidizing wealthier people who drive to the stations.

It's gotten so bad that Metrolinx is now one of North America's largest providers of parking. We have a parking agency that also sometimes runs trains. Charging for parking will let them reduce their dependence on Park n Rides and free up land for more productive, revenue-generating uses.

Charging $3/day for parking would raise $25 million/year. The shift in local access station to other modes would also allow Metrolinx to save the $100 million/year it spend on parking garage construction.

Charge for parking and reduce GO fares by a similar amount to the increase. Oh, and have local transit operator fares go towards the price of your GO fare.

I guess that’s true that you could use the odometer. As long as no one finds a way around it. In Holland years ago they had insurance that was connected to gps offering rates lower based on when you drive (less cars on the road sometimes) and how fast you drive. (Fast or slow). But it never got traction because of privacy issues. As long as I walk around with a cell phone I don’t really believe I have any privacy. But that’s just me so I’d appreciate the cheaper insurance but if the odometer works that’s fine with me.

TD Auto Insurance already does that. There is an app always running in the background of my phone with GPS. It gives me a score based on how well it thinks I am driving (apparently I am too speedy but at least I am light on the brakes) and based on the driving score TD offers me a discount.

But the key difference is that I voluntarily signed on for it in exchange for a rebate.

 

[ssiguy2]

I do have a bit of a problem with tolls except on brand new infrastructure. It inevitably results in winners and losers depending on whether you live near a highway that has become tolled or not. Someone going from Rosedale to downtown would pay nothing and yet people going downtown from low income Malvern would pay thru the teeth. This also applies to both gas taxes and paying for how much you drive in a year when figuring out yearly fees. In expensive Toronto, it is only the wealthy who can afford to live near where they work but lower income people have to live further from work as, especially if they work downtown, housing is financially inaccessible to them.

Parking taxes are the way to go as everyone has to pay the same amount so the wealthy who can live close to work don't get an unfair financial advantage. This should obviously not only apply to GO's ridiculous free parking but all metered and non-metered parking in the city. Even the massive big box parking lots should be pay parking whether that is thru meters or a heavy tax levelled on the mall per spot. The prior is far more ideal as it would only cost money for drivers while the latter would be passed on to all consumers regardless if they drove or not.

A sales tax on all vehicles should also be applied based upon both their emissions levels and gas mileage. EVs should not be exempt as right now they are still for the well off although that will eventually change.

 

[aquateam]

Any kind of tax that is directed to public transit is inherently progressive. People who are very low income can't afford the $10 000 yearly average carrying costs of owning a vehicle, so they overwhelmingly benefit from fees on drivers that go towards public transit. Poor people are much better off when public transit is fast and reliable enough that they don't need to be locked into auto-dependency. So those people in Malvern would see much more benefit out of Trillium line service at Agincourt than they would be disadvantaged by tolls on the DVP.

When you say that a parking fee is on the drivers whereas a parking tax on the mall is levied on all consumers, you've described the status quo where all consumers pay for the cost of those "free" parking spots (either directly through maintenance or indirectly through the opportunity cost of not using 2/3rds of the land for something better that the mall could make money off of.) At least with a parking levy, the mall would be likely to start charging for parking to replace an indirect subsidy with a user fee.

It's funny that we would charge an additional sales tax on EV's given that there are federal/provincial tax breaks for purchases of EVs. But I guess those should phase out anyway once EVs are cheaper than ICE vehicles.

 

[afransen]

I do have a bit of a problem with tolls except on brand new infrastructure. It inevitably results in winners and losers depending on whether you live near a highway that has become tolled or not. Someone going from Rosedale to downtown would pay nothing and yet people going downtown from low income Malvern would pay thru the teeth. This also applies to both gas taxes and paying for how much you drive in a year when figuring out yearly fees. In expensive Toronto, it is only the wealthy who can afford to live near where they work but lower income people have to live further from work as, especially if they work downtown, housing is financially inaccessible to them.

Parking taxes are the way to go as everyone has to pay the same amount so the wealthy who can live close to work don't get an unfair financial advantage. This should obviously not only apply to GO's ridiculous free parking but all metered and non-metered parking in the city. Even the massive big box parking lots should be pay parking whether that is thru meters or a heavy tax levelled on the mall per spot. The prior is far more ideal as it would only cost money for drivers while the latter would be passed on to all consumers regardless if they drove or not.

A sales tax on all vehicles should also be applied based upon both their emissions levels and gas mileage. EVs should not be exempt as right now they are still for the well off although that will eventually change.

Frankly, this seems like rationalizing existing congestion. Face it: we have 6 lanes of supply on say, the Gardiner, but 10 lanes of demand. We should sell the right to use those lanes to those that derive the most benefit from it by setting tolling at rates that allow the highway to flow freely. Selling it for nothing just results in congestion and massive destruction in value. Poor people don't own cars.

 

[Rainforest]

Any kind of tax that is directed to public transit is inherently progressive. People who are very low income can't afford the $10 000 yearly average carrying costs of owning a vehicle, so they overwhelmingly benefit from fees on drivers that go towards public transit. Poor people are much better off when public transit is fast and reliable enough that they don't need to be locked into auto-dependency. So those people in Malvern would see much more benefit out of Trillium line service at Agincourt than they would be disadvantaged by tolls on the DVP. At least with a parking levy, the mall would be likely to start charging for parking to replace an indirect subsidy with a user fee.

I think that's a bit more complex. People on very low income, who cannot afford a car at all, would benefit from the expansion of public transit and won't lose anything from road tools etc. On the other hand, there exists a sizeable group of "working poor" who can afford cheap cars, often second-hand, and who must use the car to earn their income. Either their daily trip to work is impractical by any means other than a car, or driving a car is part of their job.

Not to be bluntly against the road tolls, but there are some nuances here that need to be taken into account.