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Prospects for Urban Road Pricing in Canada
First draft: October 24, 2007
Robin Lindsey Department of Economics University of Alberta Edmonton, Alberta CANADA T6G 2H4
Telephone: 1-780-492-7642 FAX: 1-780~492-3300
TABLE OF CONTENTS
1 IN"TRODUCTION 1
2 ROAD PRICING AND INFRASTRUCTURE FUNDIN"G IN CANADA 2
2. I Tolled Facilities 2
2.2 Sources of funding for roads and public transport .4
2.3 Legal powers, studies and public attitudes towards road pricing 5
2.3.1 Legal powers 5
2.3.2 Studies 6
2.3.3 Public attitudes in Canada towards road pricing 7
3.1 Costs of congestion 8
3.2 Public transport 1 0
3.3 HOV lanes 10
3 TRAVEL CONDITIONS IN MAJOR CANADIAN CITIES 8
4.1 Types of schemes and implementation paths 11
4.2 Geographical coverage and scale economies of tolling 12
4 ROAD PRICING SCHEMES 11
5.1 Montreal 14
5.1.1 Background 14
5.1.2 A cordon toll for Montreal 15
5.2 Toronto 22
5.2.1 Background 22
5.2.2 A High Occupancy Toll (HOT) lane network for Toronto 24
5.3 Vancouver 29
5.3.1 Background 29
5.3.2 Tolling major bridges and tunnels for Vancouver 32
5 CANDIDATE SCHEMES FOR MONTREAL, TORONTO AND VANCOUVER 14
6.1 Public acceptability 34
6.2 Long-term possibilities for road pricing 36
6 FURTHER CONSIDERATIONS 34
7 CONCLUDING REMARKS 37
8 REFERENCES 39
When it opened to traffic in 1997, Highway 407 in Toronto was the world's first all-electronic, barrier-free toll highway. Tolls are differentiated by vehicle type, by time of day and by day of week. But no comparable facilities have been established in Canada since. Of the 415,600 lanekilometers of paved public roads in Canada, only 385 km are tolled.' Except for Highway 407 the tolls do not vary over time. And no area-based road pricing or parking charge scheme exists. Moreover, Highway 407 is privately owned and operated and the tolls bear little resemblance to Pigouvian taxes for internalizing congestion or other externalities. Road pricing has therefore not proceeded very far in Canada and it lags behind the US and a number of countries in Europe and Asia.
The goal of this paper is to assess the prospects for urban road pricing in Canada2• The focus
is on the role of road pricing for congestion relief rather than environmental benefits or revenue generation although the latter is given some attention. A particular consideration is the choice -] . between facility-based pricing (i.e. tolling individual roads or lanes), tolling network of roads, .
and area-based schemes. Because congestion pricing has not been implemented anywhere in
Canada, and since planning has not yet been taken very far in any city, the paper draws heavily
on experience in the US and other countries.
Not surprisingly, the case for urban road pricing appears to be strongest in Canada's three largest cities: Toronto, Montreal and Vancouver. The cities differ in topography, share of peakperiod trips taken by public transport, freight transport challenges and institutional barriers to tolls. Various suggestions for introducing tolls in each city have been made. But no formal analyses are yet publicly available. Although urban road pricing in Canada is not quite a tabula rasa the possibilities are relatively wide open. Toronto has Highway 407. According to current plans Montreal Island will soon have tolls on a new expressway bridge, and Vancouver will have tolls on two new bridges.
1 Transport Canada (2006a, Table 7-1).
Lindsey (2007) reviews worldwide experience with road pricing and draws some lessons for Canada while using transportation economics and economic theory only lightly. This paper undertakes a more detailed examination of road pricing in individual cities from a transportation economics perspective.
The concept of an optimal implementation path for road pricing has recently received attention in the literature. But no general and comprehensive rules have yet been established, and it is clear that prescriptions must be tailored to city-specific circumstances and opportunities. Rather than attempting to identify the best scheme for each city - which would call for extensive simulations with travel demand models - the paper will entertain a different type of scheme for each city and consider its merits. This is a useful exercise for encouraging further thought about whether and how road pricing should be introduced in the near future. Implementation of different schemes would also be valuable from an experimental perspective - both nationally and internationally. Experimentation is central to the US Value Pricing Policy Program which provides a model that Canada might consider following.
2 Road Pricing and Infrastructure Funding in Canada
2.1 Tolled Facilities
During the nineteenth century municipalities and private companies in Canada owned and operated many toll bridges, roads, and ferries, but most were later abolished by provincial governments (Bryan, 1972). Table 1 lists the nineteen existing tolled facilities (excluding facilities that are under construction and on which tolls are planned). Twelve are bridges or tunnels linking Ontario and the US. Some - such as the Coquihalla highway in Be (British Columbia) are public, whereas others - including Highway 407 are private. All facilities differentiate tolls according to vehicle type. Electronic tolling has been implemented on six. Some offer discounts to commuters. Highway 407 gives discounts for both light and heavy vehicles as a function of usage. Only Highway 407 tolls by time of day, and it accounts for nearly three quarters of total annual traffic for facilities with available traffic statistics.
-- Insert Table 1 --
Two limitations of road pricing in Canada are apparent from Table 1. First, very little of the road network is tolled at all. Second, existing tolls bear little resemblance to Pigouvian taxes for internalizing congestion externalities which - as discussed in Section 3 - are considerable in the three largest Canadian cities. Only Highway 407 tolls have any time variation at all, and it is limited to a small peak/off-peak differential of about 5 percent. No facility employs dynamic tolling using real-time information such as on the 1-10 and 1-394 High Occupancy Toll (HOT)
lanes in the US. Discounts for frequent users are inconsistent with marginal cost pricing. Commuter discounts can be justified theoretically as second-best adjustments to labor market distortions (e.g. Parry and Bento, 2001), but it is doubtful that the existing discounts accurately reflect any such distortions. On the Confederation Bridge - an interurban facility that opened to traffic in 1997 - tolls were initially based on rates for ferries that the bridge replaced.' In 2006, a new axle-based system was finally introduced with toll levels set to maintain revenue neutral. For both the ferry and axle-based systems fairness was emphasized as a criterion for setting rates, and fairness appears to have been given priority over efficiency.
Tolls on Highway 407 have been controversial since the highway was purchased in 1999 by 407 ETR Concession Company Limited. A primary motivation for building the highway (and also a requirement in the existing concession agreement) was to divert traffic from alternative surface streets and from the very heavily congested Highway 401 which runs roughly in parallel a few kilometers away. Trucking companies allege that congestion on Highway 401 has not been relieved to the extent anticipated because truck tolls are too high (Colle, 2006).4 Tolls are not regulated, but the company is subject to financial penalties ifit fails to meet annual traffic thresholds that are set out in the contract. Highway 407 usually operates at design speeds throughout the day. It is difficult to tell whether free-flowing traffic and the nominal difference between peak and off peak toll rates are a consequence of the traffic thresholds or profit
The ferry rates were based not only on the weight and space occupied by vehicles on the ferry, but also on the seating and on-board services requirements for passengers (Transport Canada, 2005). Heavy single-unit vehicles pay twice as much per kilometer as cars, and heavy multiple-unit vehicles pay three times as much. Minimum trip toll charges apply for both heavy vehicle types, but not for cars. In response to criticism of high tolls, 407 ETR reached a settlement agreement with the Province of Ontario in 2006 that requires it to provide discounts to frequent users. For drivers of light vehicles discounts take the form of free weekend kilometers and savings on gasoline purchases based on the average number of transponder kilometers driven on the highway. For heavy vehicles there are reductions in off-peak, nighttime and weekend charges as well as reductions or elimination of video toll charges.
maximization. It is also unclear how much the toll schedule differs from the (second-best) optimal schedule. 5
2.2 Sources of funding for roads and public transport
In 2006, C$423 million in revenues were collected from the tolled facilities in Table 1. This was just 0.4 per cent of total personal expenditures on motor vehicles" and a similar fraction of total revenues collected from drivers and expenditures on roads. User charge revenues are derived mainly from federal and provincial fuel taxes, and the balance from various vehicle and driver licenses and fees. Canada does not have formal mechanisms similar to the US Highway Trust Fund for funding roads or public transport, and most revenues are not earmarked but consolidated with other taxes in the general fund. Only about 7% of federal fuel tax revenues are spent on roads and highways.
As in the US, much of the road infrastructure in Canada is in disrepair and approaching the end of its design life. There is concern about an unfunded transportation "infrastructure gap" that is expected to grow as increasing vehicle fleet fuel economy erodes fuel tax revenues. To help fill the gap several federal highway infrastructure funds totaling several billion dollars have been established." The March, 2007 federal budget included new infrastructure programs with a total federal contribution ofC$33 billion between 2007 and 2014 (Clarkin, 2007). This sum includes funding for the Gateways and Border Crossings Fund and the Asia-Pacific Gateway Corridor Initiative, and an C$8.8-billion Building Canada Fund to replace the existing infrastructure funds that are set to expire.
To the best of my knowledge efficient tolls for Highway 407 have never been estimated. Before the highway opened Mekky (1995) used the EMME/2 software to simulate the effects of different toll rates on travel times, route diversion and toll revenues. He held total numbers of trips and mode choice fixed, and did not evaluate the welfare effects of tolling. To the extent that Highway 40 land alternative surface streets are underpriced, second-best tolls on Highway 407 should be set below Pigouvian (first-best) levels. However, insofar as users drive on congested links before and after taking Highway 407 second-best pricing calls for tolls above the first best.
Transport Canada (2006b, Table A2-66).
These are the Strategic Highway Infrastructure Program, the Canada Strategic Infrastructure Fund, the Border Infrastructure Fund and the Municipal Rural Infrastructure Fund.
In 2005, the federal government introduced a degree of earmarking for fuel tax revenues by establishing a five-year Gas Tax Fund transfer to municipal governments to be used for road and mass transit projects. The 2007 federal budget extended the transfer to 2014. Some provinces also now earmark a portion of provincial tax revenues. 8
These initiatives have helped to supplement traditional revenue sources for road and urban public transport infrastructure but they are temporary, and grants for infrastructure are susceptible to incentive and accountability problems." Funding partnerships between different levels of government are also vulnerable to political disagreements. 10
In sum, there is a strong case to consider road pricing in Canadian cities both as a tool for addressing congestion and as a user-paid source of funds for road construction and maintenance. The next subsection briefly summarizes the legal powers for, and constraints on, road pricing in Canadian cities.
2.3 Legal powers, studies and public attitudes towards road pricing
2.3.1 Legal powers
, Although the federal government levies a fuel tax, facilitates inter-urban freight transport and plays other important roles in road transport nationally, it does not have jurisdiction over roads except for highways traversing national parks and a section of the Alaska Highway (Clarkin, 2007). II Provincial highways are controlled by the provinces, municipal roads by cities and
In 2000, Alberta introduced a Fuel Tax Rebate program that grants five cents per liter of the provincial fuel tax to Edmonton and Calgary for transportation infrastructure projects. And the Ontario government dedicates two cents of its fuel tax to fund municipal transit systems.
See Kitchen (2006) and Mintz and Roberts (2006).
The recent International Bridges and Tunnels Act gives the federal government legislative oversight over existing, and any future, international vehicular bridges and tunnels. The government can roll back tolls if they have a "negative effect on traffic .. ,. but only after consulting with the bridge operators and/or owners as to the potential fmancial implications of the revised rates" (Transport Canada, 2007a). The Act gives the federal government rather narrow powers, and since the existing
10 A recent example is the debacle over funding a Light Rail Transit project in Ottawa which involved the federal government, the Ontario government and the City of Ottawa (Hilton and Stoney, 2007).
municipalities, and any form of road pricing would have to be initiated by provincial and lower levels of governments and their agencies. 12 Cities are generally in a weaker position than the provinces as far as funding a road pricing scheme because they lack a secure revenue stream from vehicle user charges (Transport Canada, 2007c) and do not have the legal power to introduce tolls or other new charges. The main exceptions are the urban transportation agencies in the three largest cities - Montreal, Vancouver, and Toronto - which will be discussed in Section 5.
Transportation policy in Canada was reviewed in three major federal studies between 1992 and 2001: the Royal Commission on National Passenger Transportation (1992), the National Transportation Act Review Commission (1993), and the Canada Transportation Act Review of 2001. These studies generally supported the user pays principle and recognition of environmental costs in transport pricing. In 2003, the federal government conducted a study of the full social costs of transportation (Transport Canada, 2003a) and described a vision for future transportation in which user prices better reflect these costs (Transport Canada, 2003b). However, the federal government has not established a research program for road pricing analogous to the US Value Pricing Pilot Program, or a counterpart to the National Strategy to Reduce Congestion on America's Transportation Network.
Recent interest in - and support for - road pricing in Canada is nevertheless evident at various levels. The City of Vancouver has reviewed alternative approaches for tolling (Greater Vancouver Regional District, 2007a). The mayor of Montreal is a proponent ofto11s for the city. Several recent scholarly articles support the idea of tolling. 13 The Victoria Transport Policy Institute devotes a section of its website to road pricing (http://www.vtpi.org/tdmltdm35.htm) and supports road pricing for Canada. The Canadian Urban Transit Association is undertaking a project that will investigate High Occupancy Vehicle (HOV) lane utilization in Canada and the
international bridges and tunnels are largely outside cities the Act has limited relevance to urban road pricing.
12 However, as discussed in Section 5 the bridges connecting Montreal Island are federally owned, and the federal government would have to approve any tolls.
13 See Brown et al. (2005), Kitchen (2006), Soberman et al. (2006), Conference Board of Canada (2007) and Lindsey (2007).
possibility of integrating HOV lanes and congestion charging (Canadian Urban Transit Association, 2006). In late 2006, the National Post published a series of articles on traffic congestion, road infrastructure deficiencies and the case for road pricing (National Post, 2006). Articles continue to appear in the popular press.
2.3.3 Public attitudes in Canada towards road pricing
Other than for users of Highway 407, Canadians have little experience with tolls although they pay tolls on many of the bridges that link Canada with the US. The limited evidence on Canadian attitudes towards tolls is mixed. A 1992 Ontario Ministry of Transportation discussion paper prepared while Highway 407 was under consideration reported results of surveys indicating that tolls would be acceptable if they were dedicated to funding the tolled facility, if the facility would not otherwise be built, and if a free alternative were available (Mylvaganam and Borins, 2004, 15). Highway 407 is heavily used today (more than 350,000 trips are made on an average workday) although - as noted above - there has been discontent with toll levels. Recent focus groups in Vancouver reveal majority support in some municipalities for tolls if they are levied throughout the region to maintain geographical equity (Nagel, 2006).
Tolls have also been strongly opposed in Canada. A prominent example is the FrederictonMoncton Highway Project. In January, 1998, the New Brunswick government engaged a contractor under a public-private partnership to design, finance, build, operate and maintain the highway for 25 years and toll a pre-existing toll-free section. Had the highway been completed and tolled throughout its length, it would have been the longest toll highway in Canada. But public resistance to the toll developed and contributed to the downfall of the government. Under the new government the contract was revised to compensate the contractor with shadow tolls, and in March, 2000, toll collection ended.
Another example is a 2003 plan to privatize the Coquihalla highway which had operated as a public toll road since 1986. The BC govemmentbacked down in the face of massive opposition, and tolls for cars, light trucks and recreational vehicles have remained unchanged since. Both these experiences are with interurban highways and may not be indicative of attitudes towards urban road pricing. But they suggest resistance to tolling existing toll-free roads as well as to
prospects oflarge increases in tolls. It is noteworthy that all recently completed and planned toll projects in Canada involve newly constructed facilities. 14
3 Travel Conditions in Major Canadian Cities
3.1 Costs of congestion
The Texas Transportation Institute's annual Urban Mobility Reports reveal how congestion delays are changing in US cities. No comparable series exists for Canada. Information on commuting in urban areas is collected as part of Statistics Canada's occasional time use survey, and Table 2 lists mean commuting times for the most recent cycles in 1992, 1998 and 2005. The figures indicate that travel times increased over the period except in Vancouver. But they do not reveal whether the trend was due to worsening congestion or to other factors such as changes in locations of work and residence, trends in trip chaining, and so on.15
-- Insert Table 2 --
The first direct estimates of the costs of traffic congestion for passenger transport in Canada were compiled in a major study by Transport Canada (Transport Canada, 2006c). Travel demand forecasting models for the nine largest urban areas were used to quantify the costs of travel delay, additional fuel consumption and greenhouse gas emissions caused by congestion. 16 To measure
14 The facilities are the Confederation Bridge, Cobequid Pass/ Highway 104, Highway 407, Autoroute A25, Highway 30, the Coquihalla Highway, the Golden Ears Bridge and the Port Mann Bridge. As noted above, much road infrastructure in Canada is in disrepair - especially in Toronto and Montreal - and tolls might be introduced on roads after reconstruction or major rehabilitation. However, upkeep of existing infrastructure may not be viewed in the same way as new capacity. As an indication of this from the US, the Urban Partnership Agreement between the US DOT and San Francisco requires that reconstruction of Doyle Drive be financed by a toll on either Doyle Drive or the nearby Golden Gate Bridge. Marin County officials have objected on the grounds that reconstruction does not provide a new benefit (Prado, 2007).
15 The travel times include time devoted to errands during the commute, but not other activities.
16 The unit values vary by city and trip purpose. For work and work-related trips they range from C$24. 71/h to C$31.351h, and for non-work-related trips from C$7.63/h to C$9.671h (2002 C$). Costs of addi tional fuel consumption employ estimates of fuel consumption as a function of vehicle speed
travel delays the study adopted a percentage of the speed limit as a baseline below which congestion could be considered "unacceptable". I? Since this threshold may differ between cities calculations were done using 50 percent, 60 percent and 70 percent thresholds.
With the 60 percent threshold the total cost for the nine urban areas is about C$3 billion (Table 3). Travel delays account for 90 percent of the total, additional fuel consumption 7 percent and greenhouse gas emissions 3 percent. The annual cost per capita ranges from C$17 for Hamilton to C$270 for Toronto. The calculations exclude the costs of accidents, noise, local emissions, road damage and behavioral adaptations to congestion, and they account for recurrent congestion but not nonrecurrent congestion. The figures therefore probably understate the true cost by a significant percentage. IS
.- Insert Table 3 .-
No study comparable to Transport Canada (2006c) has been undertaken of the costs of freight congestion in major Canadian cities. These costs are likely to be considerable. The greater Toronto area produces more than half of Canadian manufactured goods, and about three-quarters of the value of total Canadian exports to the United States cross the border in Ontario, primarily by road. 19 Vancouver and Montreal are major maritime freight gateways, and truck volumes to and from the US are heavy. Nationwide, freight shipments are concentrated along a few widely separated corridors so that substitution possibilities are limited in the event of weather- related or other disruptions (Moving the Economy, 2004).
and the price of regular unleaded gasoline in each urban area. Greenhouse gas emissions were valued at C$29.97 per metric ton (1998 C$).
17 Free-flow conditions are used by the Texas Transportation Institute and other studies as a benchmark, but they have been criticized as misleading (e.g. Waters and von Warburg, 2005).
18 The estimated annual cost of congestion in Toronto at the 60 percent threshold is about C$1.3 billion.
A study back in the late 19808 (Metropolitan Toronto Roads and Traffic Department et al., 1988) obtained a higher estimate ofC$1.8 billion (C 1997 dollars).
19 According to the Ontario Chamber of Commerce, delays at the US border cost Ontario more than C$5 billion/yr. (Ontario Ministry of Public Infrastructure Renewal, 2005).
3.2 Public transport
Good public transport is often identified as a prerequisite on both efficiency and acceptability grounds for area-based road pricing schemes. A rough indication of public transport service availability and quality is the share of commuting trips taken by public transit. Modal shares for the nine largest cities in 2001 are reported in Table 4/° The public transit share is highest in the two largest cities - Toronto (22.4 percent) and Montreal (21.7 percent) - which rank first and third in congestion costs per capita according to Table 3. Vancouver, with the second-highest congestion cost per capita, has a much smaller public transit share of 11.5 percent. These shares are far smaller than in London, Stockholm or Singapore where area-based pricing has been implemented.
-- Insert Table 4 --
Public transit shares in Canada are low despite the fact that service in Canada has traditionally been heavily subsidized by the provinces " although subsidies were eliminated in Ontario in 1997 (Conference Board of Canada, 2007). After sustained lobbying by the Canadian Urban Transit Association and other parties a tax credit formontbly or longer-term transit passes was introduced as part of the May 2006 federal budget. The credit is only granted at the lowest marginal tax rate of 15.5 percent. Auto commuting costs are not tax deductible.
3.3 HOV lanes
High Occupancy Vehicle (HOV) lanes are of interest for road pricing because they enable HOT lanes to be established without building new capacity. Table 5 lists existing and planned HOV lanes on controlled-access highways in Canada.22 There are only a few existing lanes in
20 Comparable information from the 2006 census will become available on March 4, 2008 (http://www12.statcan.calenglishicensusO 1 /home/Index. cfm).
21 In 2005, revenues from urban transit services contributed 43 percent of total urban transit revenues (Transport Canada, 2006b, Table A7-4). Fare box revenues meet 60 per cent of the total operating costs of Canadian transit operations - although in Toronto the proportion is about 90 per cent.
22 The list excludes HOV lanes on arterial (i.e. signalized) roads which are not as suitable as freeway lanes for HOT operation, and have not been used for this purpose in the US. As explained by Schijns
Montreal, Ottawa, Toronto and Vancouver. However, the Ontario Ministry of Transportation has started to build a 450 km network ofHOV lanes in the Toronto area, and the network forms the basis for the HOT lane network proposed for Toronto in Section 5.
-- Insert Table 5 --
The remainder of the paper focuses on the prospects for road pricing in the three largest Canadian cities: Toronto, Montreal and Vancouver. According to Table 3 these cities suffer by far the highest traffic-congestion-related costs for passenger transport in Canada, both in total and per capita terms. Freight transport in the cities also poses serious challenges. The three cities have pressing need for additional revenues to fund construction and maintenance of roads and public transport. All three cities have urban transportation agencies with some powers to levy tolls and other auto user fees. And all three with soon have at least one tolled facility that will serve as a precedent for tolling in the modem era. The next section briefly reviews alternative designs for road pricing and some guidelines on how road pricing should be sequentially extended over a road network.
4 Road Pricing Schemes
4.1 Types of schemes and implementation paths
Road pricing can be implemented in various ways: on individual links (i.e. roads or traffic lanes), on network oflinks, within areas (e.g. enclosing a city centre) and comprehensively via distancebased or time-based charges and/or satellite technology. The choice is driven by technological, practical, legal, institutional and acceptability constraints which may evolve exogenously or endogenously over time. The choice process can be formalized as one of selecting an implementation path: a sequence of steps that satisfy the constraints and leads to a final system that meets specified objectives.
(2006, 1) " ... the two categories are fundamentally different in terms of objectives, operating conditions, geometric design, implementation, and Measures of Effectiveness".
The problem of identifying an optimal implementation path has received some attention in the Iiterature.f No simple and overarching rules have been derived, but it is generally argued that a path will progress towards increasing geographical coverage, increasing differentiation by vehicle characteristics and time of day, increasing technological sophistication and possibly an evolution or expansion of the goals of the scheme. One of several tradeoffs is between the advantages of interoperability from adopting a common scheme in different areas, and the value of experimentation with different schemes.
The scope of this paper falls far short of identifying an optimal implementation path for any city -let alone for Canada as a whole. Interurban and national schemes are ignored. These are long-term prospects, and the priority here is to consider how Canadian cities might introduce road pricing in the next few years. And the focus is on one type of scheme for each city rather than a sequence of steps. Some consideration is nevertheless given to how tolling should be sequentially extended over the links of a road network, and a brief review of some theoretical insights on this question is worthwhile before turning to the proposals.
4.2 Geographical coverage and scale economies of tolling
In deciding where next to apply tolls on a congested road network, and how much of the network eventually to cover, it is useful to consider three related questions (de Palma et al., 2004):
• Priority: Which link yields the largest incremental benefit from tolling next?
• Concentration: Should tolling be concentrated on one part of the network, or dispersed?
• Economies of scale: Are there constant, increasing or decreasing marginal benefits from tolling successively more links?
Some answers to these questions have been derived using analytical and numerical methods for simple road networks. Consider first the case of flat (i.e. time invariant) tolls and the well-studied prototypical network with one origin and destination joined by two perfectly substitutable links. In general it is more beneficial to toll the link that carries more traffic without tolls 01 erhoef et al, 1996; de Palma and Lindsey, 2000). But even tolling the "better" link may yield only a modest
23 See Ison and Rye (2003), papers in a recent special issue of Transport Policy (de Palma et al., 2006), Verhoef et al. (2007) and Lawrence and Skolnik (2007).
fraction of the welfare gain from tolling both links (the first-best case) because congestion is exacerbated on the untolled link. Consequently, there are scale economies in tolling both links (Verhoef et al, 1996; Verhoef, 2002). Extending consideration to a network with multiple alternative links this implies that tolling should be concentrated on adjacent links rather than dispersed over the network in order to minimize traffic diversion onto untolled alternatives that are good substitutes (de Palma et al., 2004).
Rather different conclusions emerge with variable (i.e, time-dependent) tolls because they influence not only route-choice and mode choice decisions, but also departure-time decisions. 24 A given number of trips on a link can be made at a lower social cost because the variable toll flattens the peak and reduces flow congestion and/or queuing delay. It is therefore efficient to draw traffic onto variably tolled links by reducing the height of the toll schedule (without changing its time profile) since this alleviates congestion on toll-free substitutes. Depending on the size of the time steps, the shape of the speed-flow curve for the tolled link, and the feasibility of charging negative link tolls at off-peak times, the results with flat tolling can be reversed: scale diseconomies prevail and dispersal- rather than concentration - of tolling over the network is preferred.
The theoretical advantages of variable tolls are well established, and they have been demonstrated in practice with Singapore's electronic road pricing and HOT lanes. Less wellknown, perhaps, is that optimal first-best and second-best variable tolls are generally more favorable to drivers because they not only reduce peak-period congestion but are also set at lower average levels (Braid, 1996; Arnott et al., 1993). Relatedly, variable tolls may induce a smaller reduction in auto trips because they are more efficient (de Palma et al., 2005a), and hence result in less need for investment in additional public transport services.
Priority, concentration and scale economies of road pricing are different again for complementary links (i.e. links in series). Scale diseconomies generally prevail regardless of the time structure of tolls since tolling one link alleviates congestion on other links. Dispersal of tolling points is therefore efficient. However, scale economies may still prevail due to the fixed costs of acquiring and installing transponders, the fixed time costs of participating in carpools that
24 Flat tolls also influence departure-time decisions insofar as they reduce total usage and hence narrow the time interval during which trips are made.
can use toll lanes at reduced rates, and the benefits in travel time reliability from traveling long distances under free-flow conditions" All these considerations highlight the importance of considering the time structure of tolls, network topology, speed-flow curves, link traffic volumes and other factors in designing road pricing schemes.
5 Candidate Schemes for Montreal, Toronto and Vancouver
Candidate road pricing schemes for Toronto, Montreal and Vancouver are developed in this section. Table 6 lists the schemes in the order they will be considered: a toll cordon around ile de Montreal, a network of HOT lanes for Toronto, and tolling of major bridges and tunnels for
Vancouver. It should.be emphasized that these schemes are not based on either cost-benefit or k, \Ah." ~~ detailed institutional analyses which will of course b~e any serious road pricing ~+. t-; 7 proposals are made. No claim is made that the candidate schemes are thebest choices. Rather, the
candidates are presented as plausible alternatives in the hope that this will encourage further Wi-S ~1
thought. ~., -". - b..4tC
-- Insert Table 6 --
(Wi\. lc: ~ru'_'" j ~\(i~I.L ~l'4 _
5.].1 Background J..rt''--e..Vs 7
Table 7 lists a few facts about Montreal. It is the second-largest city in Canada and the largest in \--.v ~~.r)
Quebec, and serves as a hub for maritime and rail freight transportation between North America and Europe. The city of Montreal is located on ile de Montreal which is bounded by the st. Lawrence River to the south and the Riviere des Prairies to the north; see Figure 1. The island is connected to the South Shore and to the suburb of Laval on the north by 17 bridges and one bridge-tunnel listed in Table 8.
-- Insert Figure 1 --
-- Insert Table 7 --
25 These benefits are one of the merits of Bus Rapid Transit (BRT) and truck toll lane networks (Poole and Orski, 2003).
-- Insert Table 8 --
The only east-west corridor that traverses the island, the Metropolitaine Expressway (Highway 40), is heavily congested and traffic spills over onto local roads. Congestion is exacerbated by gaps in the road infrastructure, particularly in the eastern part of the island, which inhibits metro service as well as automobile and truck mobility. A further challenge is that much of the road and mass transit infrastructure was built in the 1960s and needs repair.i"
The-city's master plan (City of Montreal) sets out several priorities for transportation including: facilitating freight movements to maintain the city's competitive position as a freight hub while limiting the environmental impact of road freight transport, upgrading selected highways and building new ones, and giving public transport precedence over the auto for passenger transport. Travel demand measures include extension of the bicycle-path network and reductions in parking supply.
Two toll highwayJbridge projects are underway. One is completion of the A25 expressway between central Montreal and Laval. A group led by Macquarie is financing and building the link and will operate it as a toll concession for 35 years. Transit lanes and bus stations are part of the project. The second is completion of Highway 30 on the south shore under a public private partnership. A toll bridge spanning the St. Lawrence River will be built just upstream of Montreal (Transport Canada, 2007b).
The mayor of Montreal, Gerald Tremblay, has proposed a cordon toll on lIe de Montreal accompanied by expansion of the Metro, a new light-rail tramway network, a carpooling program and measures in addition to those in the master plan to facilitate bicycle and pedestrian movements downtown (Gordon, 2007). Revenues from the cordon could help to fund the other components of the package (Lavallee, 2007).
5.1.2 A cordon tollfor Montreal
Only the outline of Mayor Tremblay's proposal has been made public and it is not possible to evaluate it in detail. But a cordon toll has several a priori merits for Montreal:
26 This was harshly underscored in September, 2006, by the collapse of a bighway overpass in the suburb of Laval that killed five people, and in August, 2007, by settling of pavement under de Maisonneuve Boulevard.
• Area-based schemes have greater potential impacts on travel than either link-based or (limited) network-based schemes because they encompass a greater geographical area and can feature a wider array of policy instruments. Consequently, they offer greater potential for congestion reduction, environmental benefits and encouragement of non-motorized forms of transport - all of which are stated priorities for Montreal,
• Area-based schemes are more acceptable to the public than smaller-scale schemes insofar as the effects are more readily visible - as several studies indicated was the case for the Stockholm Trial (Algers et al., 2007).
• Congestion is not limited to expressways in Montreal but extends to other parts of the road network.
• Gaps in the road network, the need to rehabilitate infrastructure and ambitious public transport investments all require expenditures that could be partly financed by tolls.
• Construction of new links such as the A25 expressway provides an increasingly rare opportunity to introduce tolls on new facilities which - experience in Canada and other countries indicates - is more acceptable than imposing tolls on existing free infrastructure.
• The planned public transport investments will foster acceptability by offering a better alternative to driving.
• An area-wide scheme is consistent with other travel demand measures in the master plan such as reductions in parking supply on lIe de Montreal,
• lIe de Montreal is conducive to area-based pricing because the 17 bridges and one bridge tunnel intercept all vehicular traffic entering and leaving the island.
• Bridges were tolled in the past (the last toll was removed in 1984). Construction of the two new toll bridges creates a new precedent, and the A25 expressway extension would form part of the cordon.
• At least as evidenced by official policy documents support in Montreal for better public transport and curbs on automobile usage is strongest amongst major Canadian cities.
• The current mayor supports tolling: no small consideration given the widely-perceived need for road pricing "champions".
A majority of the merits of a cordon toll in the list above also apply to an area charge in which a fee is levied for driving inside the charging zone. The choice between a cordon toll and an area
charge has not been systematically examined in the literature. And practical experience is limited since the London congestion charge is the only operating area-charging scheme, and there are no cordon or area-charging schemes in North America.
London's scheme has worked surprisingly well in reducing congestion, but at least half the revenues are consumed by the capital and labor costs of tracking vehicle movements on the boundary and within the charge zone. A cordon toll was not considered practical for London given the large number of entry points to the zone. But tolling the 18 links accessing lIe de Montreal would not be very expensive using off-the-shelf technology. The Stockholm Trialwhich has the same number of control points - is estimated to have yielded a considerable net social surplus (Algers et al., 2007) and Stockholm is considerably smaller than Montreal.
An area-based scheme is currently under study for New York City as one of the five Urban Partnership Agreements being funded by the US Department of Transportation (US DOT, 2007). The proposal entails inbound and outbound charges in Manhattan below 86th Street on weekdays from 6:00 to 18:00, and a reduced charge for driving within "the Zone". The scheme has been criticized as both complex and costly due to the large number of gantry points required. Tolling the four free East River bridges into Manhattan and across 60th Street using E-ZPass monitors has been suggested as a much cheaper alternative that would be at least as effective in reducing congestion (Konheim and Ketcham, 2007).
A detailed analysis would naturally be required to assess adequately the relative merits of a cordon and area charge for Montreal. But a priori a cordon appears to be a better choice as far as cost and simplicity, and the remainder of the discussion here will focus on the design characteristics of a cordon. Existing cordons are those in the major Norwegian cities, Stockholm and the restricted zones in Singapore. Some of their principal features are listed in Table 9.
-- Insert Table 9 --
The topography of a cordon scheme is defined by the number of cordons, their locations and any supplementary measures such as radial screenlines to control orbital movements. All the existing cordon schemes have single cordons, and this would seem to be a logical choice for Montreal too since the bridges accessing lIe de Montreal form a natural cordon. The topography
of the region is not conducive to a second cordon located further out, and the island itself is probably too small to warrant an inner cordon although one or more screenlines could be added. 27
A second design characteristic is the time structure of the toll. Dynamic pricing is not practical for an area-based scheme since, unlike with HOT lanes, drivers do not have a ready to11- free option if they arrive at a bridge when the toll is higher than they anticipated. However, as discussed in Section 4, variable pricing is desirable. All-or-nothing tolls as in London and for the New York City proposal can induce drivers to race to beat a toll increase or to idle while waiting for a decrease. Tolls with large steps may do likewise - as was the case in Singapore before 2003 when it implemented 5-minute graduated steps for certain time periods. Half-hour steps with modest increments and decrements would appear reasonable. Since the optimal toll schedule varies across access points of a cordon, different schedules should be considered for the Montreal bridges although this could cause confusion for drivers. Since the A25 expressway will form part of the cordon the toll on it should be variable as well (the structure has yet to be decided).
A third design consideration is whether to toll all the bridges. The London, Stockholm and proposed New York City schemes all feature toll-free links.28 In Stockholm's case at least, the exemptions were defended by the lack oftoll-free alternatives. Providing a free alternative for anyone of the links accessing lie de Montreal would be possible although the minimum number of links that would have to be left toll-free depends on what is considered an acceptable alternative in terms of added travel distance " and congestion delay. Tolling only some links
27 The island suburb of Laval could be included in the charged area by tolling the bridges connecting it to the north shore. This would result in a cordon with a figure-eight shape.
28 London has two uncharged roads: the Western boundary of the original charging zone (Edgeware Road, Park Lane, Grosvenor Place, Vauxhall Bridge Road) and the Westway A40 which cuts through the northwest corner of the new Western section. The Stockholm congestion charge exempts vehicles traveling on the Essingeleden motorway and vehicles traveling in 30 minutes or less between the island of Lidingo to a point outside the charge zone. New York City's plan exempts the FDR Drive, the West Side Highway, and West Street.
29 The average distance between bridges on lIe de Montreal is about 4.5 krn (estimated using Google Maps).
would exacerbate congestion on adjacent links.3o As discussed in Section 4, the welfare loss from not tolling all links depends on the time structure of the tolls and would be smaller the more effective the toll in suppressing congestion peaks.
The welfare loss would also depend on the cross-price elasticities of demand between links which cannot be assessed properly without doing road network simulations. Empirical studies (e.g. Burris, 2003; Matas and Raymond, 2003) find that elasticities depend on many factors: trip purpose, trip frequency, journey length and section length, average speed and percentage of heavy trucks on toll-free alternatives. Estimated elasticities are typically lower during peak periods and most are small in magnitude."
Another question is whether to charge for inbound crossings only, or outbound crossings as well. For the Norwegian toll rings and Singapore's restricted zones tolls are only levied in the inbound direction, but in Stockholm the toll applies in both directions. Ifmost trips are return trips, charging in only one direction would economize on costs. But with electronic toll collection most of the costs are fixed, and drivers can pay without stopping, so the savings would be small. And since variable tolls influence trip-timing decisions (cf. Section 4) it is preferable to toll in both directions to flatten both the morning and evening peaks.
Public opposition is now widely regarded as the greatest barrier to road pricing. Objections are raised on vertical, horizontal and geographical equity grounds - and examples from a Canadian perspective were given earlier. For a toll cordon probably the most important distinction is between drivers who cross the cordon and those who don't. One might expect people living and working on lIe de Montreal to support the toll since they will benefit from less congestion and emissions without paying the toll regularly. Analogously, those crossing the bridges and traveling only short distances would lose the most while those not traveling on the island would not be materially affected. But experience with the Stockholm Trial indicates that the distributional effects may not be as simple. According to Algers et al. (2007) much of the benefits from the Trial accrued to motorists who did not cross the cordon but still experienced
30 For trips across the island (e.g. between Laval and the South Shore) two links would be driven in series, and these would be complements rather than substitutes for such trips.
31 For New York City bridges and tunnels, Hirschman et al. (1995) obtained a median elasticity estimate of -0.1 and a maximum (absolute) elasticity of -0.5. For the New Jersey Turnpike, Ozbay et al. (2006) obtained elasticities ranging between -0.06 and -0.18 depending on trip purpose and time of day.
less congestion delay. They also note (p.16) that people living inside the cordon were more supportive of the Trial than those living outside although they "experienced smaller reductions in travel time, and paid more charges, than people living in other areas."
Existing road pricing schemes feature discounts and/or exemptions according to vehicle type (e.g, taxis and hybrid vehicles in London), individual characteristics (e.g. residents in London), frequency of usage (e.g, Stockholm and Highway 407). Naturally, discounts and exemptions are popular with groups who receive them. And if a single toll such as a cordon toll is applied over a wide area, it may be second-best efficient to provide discounts or exemptions to individuals such as residents who tend to travel short distances. But in general discounts and exemptions undermine efficiency. Accounting and enforcement of tolls are also easier ifvehic1es and individuals are treated equally. And opinions can differ as to who should be favored on efficiency
.c: • d 32
or rarrness groun s.
The cordon toll outlined here for Montreal has the advantages of a cordon toll that are well documented in the literature. It has modest technological requirements, it is relatively easy to understand, there are several existing schemes to learn from, etc. It also has actual and potential disadvantages that deserve recognition:
• Most of the costs of the tolling infrastructure are sunk, (However, this is also true of facilitybased and area-charging schemes.)
• A cordon toll is inefficient since the charge is independent of distance traveled and route taken, and trips wholly within the cordon are not tolled (Mun et al., 2003; Yang and Huang, 2005).
32 The congestion charge under study for Cambridge, UK, has been modeled on the assumption that city residents will pay since they contribute to congestion and would benefit from a reduction (Cambridge Evening News, 2007a, 2007b). But support for a resident discount has been voiced on the grounds that they do not benefit from Park and Ride schemes (Cambridge Evening News, 2007c). The Urban Partnership agreement between the US DOT and San Francisco has drawn responses from readers variously calling for exemptions to residents, motorcycles, users of car sharing programs and tourists (San Francisco Chronicle, 2007).
• Traffic diversion and parking congestion near the boundary of the charged area can be problems. However, London and Stockholm largely managed to avoid them. And the topography of Montreal makes it difficult for traffic to circumvent the Island.
• The cordon may adversely affect economic activity within boundary. But the London congestion charge does not appear to have had a major negative impact on retail sales (Quddus et aI., 2006) and surveys for Stockholm indicated no appreciable effect (Algers et al., 2007).
• As noted earlier, unlike with HOT lanes or other link-based charges with toll-free alternatives, motorists have to pay a fee if they wish to enter (or exit) the charge area.
Probably the greatest obstacle to introducing a cordon toll or other area-based charge in Montreal other than for public acceptability is the lack of a single institution with the mandate and will to do it. The three institutions responsible for transportation in Montreal are identified in Table 7. The provincial ministry of transport, Ministere des Transports du Quebec, has prime responsibility for roads. Agence metropolitaine de transport manages and funds the metropolitan commuter train network, and Societe de transport de Montreal organizes public transportation within Montreal's boundaries. A further consideration is that the federal government owns the bridges and would have to approve new tolls. And municipal governments in the suburbs have opposed proposals to reintroduce tolls on bridges (Gordon, 2007). Coordination and agreement between the different levels of government would therefore be necessary to introduce a cordon toll and any accompanying public transport improvements and other measures of a politically viable road pricing package.
These barriers notwithstanding, a cordon toll deserves serious consideration. Experience with the Stockholm Trial in particular has been encouraging. As Algers et al. (2007, 21) observe:
"Transport economists have long discussed to what extent a cordon toll of the kind used in Stockholm is sufficient for controlling traffic in an entire city. Traffic relations change from street to street and from minute to minute. As the charge cordon in Stockholm was large, there was concern that compensatory increase of traffic inside the zone would substantially mitigate or even eliminate the reduction of congestion from the cordon toll. Alternative solutions with multiple zones were therefore discussed prior to the trial." "The Stockholm Trial confirms that a simple cordon toll can create significant effects within a large area."
Toronto is the largest city in Canada and the capital of Ontario (Table 7). It is part of the Golden Horseshoe, a densely populated region of over eight million people at the west end of Lake Ontario. The freeway network consists of 400-series highways and municipal expressways. Freeways and public transit are heavily congested and together carry nearly half a million commuters per day across municipal boundaries in the Greater Toronto Area and Hamilton. Average commuting times are the highest in Canada (Table 2). As in Montreal, part of the road infrastructure is in poor condition.
In 2006, the provincial government launched a five-year highway construction program (Government of Ontario, 2006) and is planning extensions of existing 400-series highways as well as new highways and corridors. It has started to build a 450 km network ofHOV lanes and it is rehabilitating and improving Highway 401. In 2006, the province also announced a multibillion-dollar transit investment plan "MoveOntario 2020" for the Greater Toronto Area and Hamilton to be cost shared between the provincial and federal governments.
Highway 407 is the only tolled road in the GTA (Greater Toronto Area) but tolls are levied on twelve Ontario bridges and tunnels that cross into the US (Table 1). The province does not have plans to introduce further tolls although the possibility has been discussed. Administrative power over road pricing and transportation demand measures is divided between provincial, regional and municipal agencies. The Ontario Ministry of Transport can make decisions unilaterally on provincial highways. Control at the regional and municipal level changed in June, 2006, with creation of the GTTA (Greater Toronto Transportation Authority). Under the Greater Toronto Transportation Authority Act the GTT A's responsibilities include "to provide leadership in the co-ordination, planning, financing and development of an integrated, multi-modal transportation network". According to Regulation 42(2)(b) the Lieutenant Governor in Council may make regulations, "authorizing the Corporation to establish and impose fees and charges and to utilize other mechanisms for revenue generation". (Legislative Assembly of Ontario, 2006).
The division of control over tolling is illuminated by answers given by the Ontario Ministry of Transportation to questions posed in an e-mail interview (Grush and Peters, 2007, 3):
"[T]he Mayor of Toronto [n]ow has the legislative authority to levy tolls on municipal roads within the City's jurisdiction. Municipalities across the province also have this ability through
the Municipal Act, 2006. In both cases, however, a Lieutenant Governor in Council regulation is required to enact municipal road tolls .... the City of Toronto only has authority to toll roads under its jurisdiction such as the Don Valley Parkway and the Gardiner Expressway, but not the 400 series of highways, as these highways are under provincial jurisdiction."
"The Province has no jurisdiction over municipal roads; as such, policy decisions impacting these roads are the domain of the municipality. However, as municipal road pricing initiatives would likely have impacts on the provincial highway network (particularly at junction points with municipal roads), other municipal roads bordering Toronto, and goods and people movement across the GTA, the Province would need to be involved with any municipal initiatives in this respect."
The Ministry also indicated in the interview that "The Province does not intend to toll existing 400 series highways." (Grush and Peters, 2007, 4).
The provincial government's reluctance to consider tolls is a barrier to road pricing in the
GT A. There are several other barriers. One is lack of experience with urban road pricing since, before Highway 407, the most recent tolled facility was the Burlington Skyway bridge where tolls were removed in 1973. Another is that- unlike Montreal- the GT A does not have a natural boundary for a cordon or area charge. And unlike Vancouver, it does not have a set of bridges and tunnels that intercept a large fraction of traffic flows. A third difficulty is that the GTTA was established only recently, and it is not yet clear how much decision-making power it will wield. Furthermore, the current mayor of Toronto, David Miller, is ambivalent about tolls - unlike his counterpart Gerald Tremblay in Montreal.
An opportunity for road pricing in the GTA nevertheless exists since the 450 km network of HOV lanes that is being built on 400-series highways could be adapted to a network of HOT lanes. The plan will be evaluated here by summarizing its main features and preliminary impacts, and then reviewing its merits and limitations.
Table 5 lists the new HOV lanes that are planned for the Toronto area. Figure 2 shows the near-term extensions and the HOV lanes on Highway 403 (eastbound and westbound) and Highway 404 (southbound) that became operational in December, 2005. Medium-term and longterm extensions are shown in Figures 3 and 4. Ontario Ministry of Transportation (2007) describes the plan and how highways in the area were selected for inclusion in the HOV network. The main selection criteria were: (a) projected volumes of at least 500 vehicles per peak commuting hour; (b) potential for use by transit vehicles; and (c) opportunity to build HOV lanes in conjunction with other highway projects. Most of the HOV lanes are to be constructed as new
highway lanes. Where space constraints preclude construction, and contiguity of the HOV network would be materially enhanced, the possibility of converting existing lanes to HOV lanes will be considered.
-- Insert Figure 2 -
-- Insert Figure 3 --
-- Insert Figure 4 --
The HOV lanes are built in the leftmost highway lane and separated from general purpose lanes by a striped buffer zone. They operate as HOV lanes 24 hours a day and seven days a week (the Ministry explains that the lanes experience high volumes for most of the day and intermittent operation might confuse drivers). They are open to buses regardless of occupancy, and to other vehicles carrying at least two people (HOV2+) except for trucks over 6.5 meters long which are prohibited for safety reasons. To encourage use of the lanes, parking space for carpoolers and transit users will be expanded as the network develops.
Some performance statistics for the operating lanes on Highways 403 and 404 are given in Table 10.33 They suggest that the lanes were successful in encouraging carpooling during peak periods. And the travel time savings of six minutes relative to the general-purpose lanes is large in percentage terms, although it is below the benchmark of 10 minutes considered for HOT lane conversion as discussed below.
-- Insert Table 10 --
5.2.2 A High Occupancy Toll (HOT) lane network/or Toronto
A HOT lane network in the GTA could be constructed by converting the existing HOV lanes on Highways 403 and 404 toHOT, and building the remaining lanes as HOT from the start. Access to the HOV lanes could be priced dynamically. Minimal exemptions and no frequent-user or other discounts would be offered. This proposal will be evaluated here by comparing it against
33 Ontario Ministry of Transportation (2006) highlights the time savings for HOV lane users compared to the period before the lanes opened, but the relevant benefit from using the HOV lanes is the time advantage relative to the general purpose lanes. This was calculated from information provided on the Ministry website and is included in the final row of the table.
the HOV lane network as it is planned rather than against a "do-nothing" scenario in which no HOV lane network is built.
The limitations ofHOV lanes and the merits of HOT lanes have been evaluated extensively in the literature. HOV lanes are effective only when initial congestion is substantial and when the initial modal share of carpools is sizable. Lane capacity indivisibilities make it difficult to allocate capacity between vehicle categories in efficient proportions (Dahlgren, 1998, 2002). The main advantages (generic and specific) of a HOT lane network for the GTA are as follows:
• The lanes are relatively cheap to build or convert, and can be developed relatively quickly compared to alternative road pricing schemes.
• Excess capacity currently exists on the Highway 403 and 404 HOV lanes. The highest flow is 1,3501h on Highway 404 southbound which is well below typical HOV lane capacity. Ifusage of the lanes by HOVs eventually increases to the point where few SOVs (Single Occupancy Vehicles) can be accommodated without degrading performance, the HOV occupancy requirement could be tightened from HOV2+ to HOV3+.
• Studies have found that usage of HOT lanes is only weakly correlated with household income and that an appreciable portion of low-income households benefit from them (Small et al., 2006).
• HOT lanes offer SOVs the option of paying for a quick and reliable trip. And having a legal option may reduce the violation rate (US DOT, 2003).
• HOT lanes provide insurance against travel time uncertainty in case a carpooling partner cancels.
• The new lanes complement Highway 407 as far as establishing a relatively comprehensive network of tolled capacity (cf. Figure 4).
• Tolling 400-series highways can be done by the provincial government; it does not require coordination and agreement with regional or municipal governments.
• Tolls would be imposed primarily on new capacity. This is consistent with recent practice in Canada, and more conducive to public acceptance than introducing tolls on existing toll-free facilities.
The proposal specifies that HOT lanes be priced dynamically although the choice between dynamic pricing and variable pricing is not clear-cut. The only two facilities in the world with
dynamic pricing are the 1-15 Express Lanes in San Diego Country and the 1-394 HOT lanes in Minneapolis-St. Paul. Tolls on each facility are adjusted to maintain Level of Service C or better. 34 These tolls meet public approval, but so does variable pricing on Highway 407, on the SR-91 Express Lanes, on the Stockholm cordon and elsewhere. The 1-15 and 1-3941anes are single links. Since the GTA network will include a number oflinks in series, a decision would have to be made on whether to set tolls separately on every link between access points."
The advantage of dynamic pricing is that it accommodates unanticipated demand and capacity shocks. Shocks are responsible for much of the congestion in the GT A. According to Ontario Ministry of Transportation (2005) "About 60 per cent of all delays on urban highways are the result of collisions, spills or other debris". The proportion of congestion that is nonrecurring is presumably even higher after bad weather, special events and so are factored in. Setting tolls responsively to maintain a given service quality level has inherent advantages (de Palma et al., 2005b). Unlike with second-best pricing only local information is required (i.e, traffic flows and delays on the tolled links). The goal is well-defined, visible (and hence verifiable), and readily explained and motivated to the public.
The proposal specifies that all lanes of the new HOV network be tolled rather than only some.
This can be defended on two grounds. First and foremost, it allows SOY s to benefit from the network scale economies for users identified in Section 4 that arise from the fixed costs of installing transponders and paying bills, the fixed time costs of participating in carpools, and the benefits from being able to take more trips (and a greater proportion of the distance on a given trip) quickly and reliably. 36 Second, it is more spatially equitable insofar as all 400-series highways in the region with dedicated lanes are priced in the same way.
34 Several more dynamically priced HOT lanes are planned, but so are variably priced lanes. For example, the Urban Partnership Agreement between the US DOT and Minneapolis calls for conversion ofHOV lanes to dynamically priced HOT lanes whereas the Agreement with Miami entails conversion from HOV to HOT with variable pricing.
35 1-15 is being expanded to a 20-mile managed lanes facility with intermediate entrances and exits, and a distance-based dynamic toll will be charged.
36 It is not obvious from Figure 4 whether links in the new network are, on balance, substitutes Or complements, and consequently whether tolling them is subject to scale economies or diseconomies as defined in Section 4.
Various objections can be raised against the HOT lane network proposal. Some anticipated criticisms and responses follow:
• The current travel time differential between the HOT lanes and general purpose lanes on Highways 403 and 404 of six minutes is below the benchmark 0/10 minutes usedfor identifying worthwhile HOV-to-HOT conversion projects (Swisher and Ungemah, 2006). The differential is likely to increase as traffic grows. And the travel time savings will be cumulative for drivers who use a series of lanes on the network.
• Most of the potential gains from congestion pricing will not be realized because the general purpose lanes will remain untolled. This is true, but one goal of the proposal is to demonstrate the merits of road pricing. Unlike with Highway 407 the time savings from using HOT lanes are evident Gust as they are to users ofHOV lanes) since the general-purpose lanes run in parallel in plain view.
• HOT lanes are underutilized because they are tolled while the general-purpose lanes are not.
There is evidence that HOT lanes actually support a higher throughput than general-purpose lanes (Kim, 2000) although the matter is controversial (Evans et aI., 2007).37
• Providing discounts or exemptions on the basis of occupancy is inefficient since occupancy does not materially affect the congestion that a vehicle causes. In fact, Small et al. (2006) find that a one-route toll without exemptions is slightly inferior to HOT lanes - both for their base-case simulations (Table 7) and for their "Low HOV share" (Table 9). Discounts or exemptions based on vehicle occupancy may be defensible on the grounds that ride sharing is inconvenient to some participants, and Coasian bargaining is not completely effective in internalizing the externality.
• Enforcement is easier if exemptions are limited to buses and vanpools because there is no need to determine whether autos meet the occupancy requirements. This is true, and should be factored in to any cost-benefit analysis of the proposal, 38
37 Most analytical studies of congestion pricing preclude this possibility by using models in which travel time (and generalized travel cost) is an increasing function of flow.
38 Most new vehicles have passenger-detecting sensors that could be used to register the number of occupants and communicate it to roadside systems (Schijns, 2006). This would aid enforcement of vehicle occupancy requirements for HOV lanes and HOT lanes alike.
• HOT lanes are unlikely to be self-financing or even to be significant net revenue generators (Swisher and Ungemah, 2006). This too is true, but revenue generation is not the primary objective of the scheme.
• The net impacts of HOT lanes on emissions and noise depend on how numbers of automobile trips and speeds are affected, and any benefits are likely to be small (US DOT, 2003; NCTCOG, 2005; Burris and Lanan, 2005). It is true that area-based schemes such as the cordon proposed for Montreal are likely to have greater environmental (as well as congestion reduction and revenue generation) benefits because of their large and comprehensive coverage. But it is not clear that facility-based schemes such as HOT lane networks are less cost-effective than area-based schemes on all counts - especially if, as proposed, free-flow conditions are maintained by dynamic pricing.
• The Ministry is quoted above as saying: "The Province does not intend to toll existing 400 series highways" (italics added). This attitude could change. And except for Highway 403 and 404, the HOV lanes do not yet exist and will constitute new capacity.
• The network is not envisaged to be completed until203l. This is a drawback in that the plan maybe scaled backed or shelved, or superseded by a satellite-based scheme which would presumably render the tolled infrastructure obsolete. The long time horizon for completion is also an advantage in that most of the network can be built from scratch as HOT lanes.
To conclude, a HOT lane network in Toronto appears to warrant formal study. HOT lanes would demonstrate to Canadians the merits of road pricing using proven technology and on a small scale, and in a different format from Highway 407. Six HOT lane facilities are currently operating in the US and there are guidelines on how best to implement them.39 The public more readily accepts tolls when levied on new capacity, and it is easier to build the lanes as HOT from the start rather than converting them from HOV. Consequently, early introduction is advantageous from both a political economy and operational perspective, and the economic benefits from the lanes would be realized more quickly too, If opinion turns against a HOT lane network while it is being developed, it would be relatively easy to convert it (back) into a HOV lane network - although this flexibility is a disadvantage as far as making a commitment to road pricing.
39 See US DOT (2003), NCTCOG (2005), Benjamin et al. (2006) and Eisele et aI. (2006).
Vancouver is the third largest city in Canada and the largest in British Columbia (Table 7). It is part of the Greater Vancouver Regional District (GVRD) and the larger Lower Mainland area. Downtown Vancouver has a greater population than central Toronto or central Montreal, and one of the highest population densities in North America (City of Vancouver, 2005a). It is also the only major city in North America without a freeway system in the centre. Overall, travel conditions within downtown and between downtown and other regions have been improving. Between 1974 and 1996 morning peak trips by auto decreased by 35 percent while trips on foot and bicycle more than doubled (City of Vancouver, 2005b). The City is succeeding in meeting its mode share targets, and (unlike Montreal) does not have plans to materially change the total number of parking spaces (City of Vancouver, 2006).
Road transport outside the downtown faces more serious challenges. According to Table 3 the cost of congestion per capita for the whole Vancouver urban area is slightly higher than for Montreal and public transit accounts for a much smaller share of work trips than in Toronto or Montreal, Commuting patterns are highly dispersed. More than 60 per cent of commuters cross municipal boundaries, and most of the growth in commuting flows is occurring between suburbs and from the City of Vancouver to the suburbs (Government of British Columbia, 2006). Container movements through the Port of Vancouver are growing very rapidly, fueled by a boom in trade with China. Truck traffic is growing commensurably and contributing to congestion delays that impede passenger transport as well as disrupt freight supply chains."
As in Montreal and Toronto, control over transportation in the GVRD is divided between the province, regions and municipalities. The BC Ministry of Transport is responsible for planning and coordination of highways and other modes throughout the province, as well as promoting economic development. Municipalities are responsible for day-to-day operations on local roads. TransLink (the Greater Vancouver Transportation Authority) is responsible for the GVRD. When TransLink was established in 1998 it was the first urban transportation agency in North America
40 The BC Trucking Association has estimated the cost of congestion to freight movements in the GVRD as C$500 million/yr (Government of British Columbia, 2006, 1).
with authority for roads and public transportation, and responsibility for long-range transportation and land use planning. It receives dedicated funding from transit fares, fuel taxes, parking taxes and property taxes. It may assess charges on motor vehicles that are primarily used in the region, but does not currently do so. It also may levy tolls to recover costs of improvements to major roads."
The province is currently investing in regional road and transit improvements including eight new road projects. It is also building a new bridge across the Fraser River, the Golden Ears Bridge, under a 35-year finance/designlbuildlmaintainlrehabilitate contract. Tolls will be collected on behalf of TransLink and used to pay the private partner. The planned tolls are flat. For cars they are C$2.50 for payment using transponders, C$3.00 for prepaid video toll and C$3.50 for postpaid video toll. There will be no cash payment (Tollroadsnews, 2007).
In response to congestion problems, in early 2006 the province embarked on an ambitious Gateway Program administered by the Ministry of Transportation in consultation with TransLink and local municipalities.Y The Gateway Program includes a further set of major transport infrastructure projects. The centerpiece is the Port Mann IHighway 1 Project to twin the Port Mann Bridge crossing the Fraser River, upgrade Highway 1 (the Trans Canada Highway), extend HOV lanes on Highway 1 and expand public transit across the Port Mann Bridge. The bridge is to be tolled; the provisional toll is a flat C$2.50.
The Gateway Program treads a fine line between the goals of accommodating freight transport and improving competitiveness of Vancouver vis a vis other gateways, reducing congestion and controlling emissions. Attitudes towards the Program vary widely among public agencies and the public. The GVRD opposes the Program mainly because it provides an increase in general purpose traffic capacity rather than being targeted at activities critical to the regional
41 In January, 2007, an independent review panel recommended that TransLink be reorganized on the grounds that its governance structure prevents it from making decisions effectively (TransLink Governance Review Panel, 2007). The Panel's recommendations include a planning framework with 3, 10 and 30 year time horizons; a new three-part governance structure with an independent Commissioner; expansion of TransLink's service region inland; and significant new revenue.
42 The federal government's Asia-Pacific Gateway and Corridor Initiative, launched in October 2006, is providing additional funds (Transport Canada, 2006d).
economy (GVRD, 2007b). The GVRD believes that before capacity is expanded the province should adopt:
"[a] comprehensive transportation demand management strategy ... together with a regionwide road pricing strategy which includes tolls on the twinned Port Mann Bridge and other measures that will ensure the Pattullo Bridge is not the 'free alternative' to the twinned Port Mann Bridge .... " (GVRD, 2006, 1).
The GVRD further notes that road pricing was proposed in the 1990s, and supported in a 1996 long-range plan that stated:
"The Province should introduce road pricing measures or tolls structured to reduce congestion, provide clearer price signals to users for the costs they incur and impose on others, and to raise revenue for transportation improvements." (quoted in GVRD, 2007b, 2)
Road pricing is supported more widely. TransLink is supportive of tolls (Greater Vancouver Transportation Authority, 2004a) and will collect them as owner of the Golden Ears Bridge. There is mixed support for the Port Mann !Highway 1 Project amongst municipalities, but greater support for tolling the bridge as part of a comprehensive regional approach to road pricing (GVRD,2006, 1). Comprehensive tolling is also backed by the Consulting Engineers ofBC (Boei, 2006) on the grounds that tolling just one or two bridges would divert too much traffic onto other routes. According to the engineers, bridges into downtown Vancouver could also be tolled - but at a lower rate since they are less congested."
Despite TransLink's authority to levy tolls, and support for tolling from municipal governments, the public and other institutions, tolling is constrained by the British Columbia Guidelines for Tolling:
2.1 Only major projects that result in significant increases in capacity will be subject to tolling.
2.2 Tolls will be implemented only if there are clear, demonstrable net benefits for the users
of the new or improved facilities. ~
2.3 Tolls will be implemented only if a reasonable untolled alternative is available.
2.4 The level of tolls and limits on the amount and frequency of increases will be established in advance.
43 According to Glenn Martin, Executive Director of CEBC, the organization has not conducted a survey on how congestion pricing might be implemented in the Vancouver area (personal e-mail message on August 16, 2007).
2.5 Public consultation will occur in all cases where new tolls are considered.
2.6 The public will have the same rights to access tolled highways as non-tolled highways. 2.7 Tolls will be used to generate revenue for transportation projects and provide a return on the investment of the private-sector partners. (British Columbia Ministry of Transport, 2003, paragraph 2)
The Port Mann Bridge meets all of the guidelines with the possible exception of2.3 requiring a "reasonable untoUed alternative". But the provincial government appears to be ambivalent even towards tolling the bridge, as indicated by the statement:
"Tolling could potentially be an option in combination with HOV priority lanes, commercial priority lanes, and transit and commercial vehicle priority access facilities. These measures are being considered in various combinations to reduce congestion and limit growth in traffic on the highway and Port Mann crossing." (Government of British Columbia, 2006,9)
5.3.2 Tolling major bridges and tunnels for Vancouver
Any major road pricing scheme for Vancouver using conventional tolling technology will likely differ from the proposals for Montreal and Toronto. The GVRD does not have a natural cordon such as lIe de Montreal. And even after the planned HOV lane extension on Highway 1, the region will not have a network ofHOV lanes comparable to the network being built in the Toronto area. The best prospect would appear to be tolling major bridges and tunnels as suggested by the Consulting Engineers of BC. This section briefly examines the prospects of such a scheme.
Including the new Golden Ears and Port Mann bridges there are 22 major bridges and two tunnels in the GVRD (Table 11, Figure 5). Tolling them would be similar in many respects to tolling the bridges of lie de Montreal although the tolled facilities in Vancouver would not form a cordon. Variable tolls designed to minimize congestion are recommended, including the Port Mann Bridge and the Golden Ears Bridge for which flat tolls are currently planned.
-- Insert Figure 5 --
If tolling all bridges and tunnels passed a cost-benefit test they should be tolled as soon as possible. Barring this, the question of how to phase tolling comes to the fore. As noted, travel conditions in the downtown compare favorably with elsewhere in the GVRD so that tolling the
Burrard Street, Granville Street and Cambie Street bridges might not be the highest priority.l" The review in Section 4 highlighted the importance of substitutes and complements in determining priority, concentration and scale economies of tolling. Four sets of substitutes are discernible in Figure 5 (each set listed from west to east):
• Crossing False Creek: the Burrard Street Bridge, the Granville Street Bridge and the Cambie Street Bridge. The Burrard Street and Granville Street bridges are closely spaced. The peninsula to the east provides another way to access downtown.
• Crossing the Fraser River: the George Massey Tunnel, Alex Fraser Bridge, Pattullo Bridge, Port Mann Bridge and Golden Ears Bridge.
• Crossing the North Arm of the Fraser River: the Dinsmore Bridge, Moray Bridge, Oak Street Bridge, Knight Street Bridge and Queensborough Bridge.
• Crossing Burrard Inlet: the Lion's Gate Bridge and the Second Narrows Bridge.
Four sets of complements are also visible (each set listed from north to south):
• The Lion's Gate Bridge and the three bridges crossing False Creek
• The Oak Street Bridge and George Massey Tunnel
• The Queensborough Bridge and Alex Fraser Bridge
• The Pitt River Bridge and Golden Ears Bridge
The Port Mann Bridge and Golden Ears Bridge which are scheduled to be tolled are nearestneighbor substitutes for crossing the Fraser River. Theory suggests that concentration of tolling in this way is efficient - although the bridges are 12 km apart and levying variable tolls would reduce the benefits of concentration.
Another natural criterion for determining priority is traffic flow and congestion delay. The Port Mann Bridge carries the highest annual traffic volume of bridges for which statistics are available (Table 11). It is congested over 13 hours a day and is a major artery for goods movement (Government of British Columbia, 2006), and it is no surprise that it was chosen for expansion.
44 The Port Mann !Highway 1 Project could affect the downtown by expanding road network capacity to the east. According to a study (Be Ministry of Transportation and Highways, 2006) expansion of Highway 1 would induce some changes in route choice by local traffic to exploit the greater capacity, but there would be little impact on traffic in the City of Vancouver which includes the downtown.
6 Further Considerations
A number of factors have been omitted in sketching and assessing the candidate road pricing schemes in Section 5. Other than for identifying the overlapping powers and opposing views of provincial, regional and municipal authorities, political economy considerations have been ignored. One danger in devolving toll-setting authority to a local jurisdiction is that it will engage in tax exporting by setting high tolls to exploit outsiders (Proost and Sen, 2006; Laird et al., 2007). Another is the role of the private sector. Highway 407 is privately owned and operated. And most of the recently tolled facilities in Canada have involved some combination of finance, design, construct, operate andlor maintain contracts with the private sector. 45 Comments here are limited to public acceptability of the proposed schemes and longer-term possibilities for road pricing in Canada.
6.1 Public acceptability
Public attitudes in Canada towards road pricing were briefly reviewed in Section 2. They are similar to attitudes in other countries: tolls are more acceptable if they are imposed on new capacity (especially if the facility would not otherwise be built), if a reasonable toll-free alternative is available, if the revenues are dedicated to funding the tolled facility and if toll increases are moderate." There is not much evidence on the attitudes of Canadian freight transporters towards tolls. Recent research in the US has shown that truckers have little scope for adaptation to tolls because of rigid delivery schedules imposed by freight receivers (HolguinVeras, 2006). For this reason one might expect truckers to oppose tolls. But congestion tolls can benefit truckers by reducing non-commercial vehicle traffic. This is one reason why tolls are planned for the Port Mann Bridge although the proposed flat toll will be less effective than a variable toll at congestion relief.
45 The facilities are the Confederation Bridge, Cobequid Pass/ Highway 104, Autoroute A25, Highway 30, Golden Ears Bridge and Port Mann Bridge.
46 Perhaps not coincidentally, these attitudes are generally reflected in the British Columbia Guidelines for Tolling listed in Section 5.
Many studies and surveys indicate that earmarking toll revenues to transportation enhances acceptability't' and most successful road pricing schemes feature earmarking to some combination of road and public transport investments (de Palma et al., 2007). But earmarking is frowned upon by nonnative public finance theory because it reduces flexibility in making taxation and expenditure decisions independently. And the Canada Transportation Act Review Panel recommended against dedicating revenues from congestion tolls and other road user charges to road investments if expenditures on other transport modes would yield a higher return. 48
Earmarking can nevertheless be defended as a cost that must be incurred if road pricing is to be implemented at all. Small (2004, 2005) argues that allocating revenues to public transit sets off a virtuous circle of improved transport services that benefit from higher running speeds and reliability for buses as car traffic falls. His model suggests that the modal shift from auto to transit is proportionally much larger for a representative US city than for London where the effects became apparent after congestion pricing was introduced. To the extent that Canadian cities resemble the US prototype in Small's model, this suggests that a strong positive feedback loop would occur in Canada too.
Montreal and Toronto have ambitious public transport investment plans. Whether these plans strengthen the acceptability of road pricing in the cities is unclear. On the one hand all the necessary funding has not been secured and toll revenues could help fill the gap." The plans are also advantageous insofar as good public transport offers a viable alternative to driving. But the plans could be harmful if the public believes either that the investments will go ahead without the
47 See for example Enoch et al. (2003), Schade and Schlag (2003), Farrell and Saleh (2005), Commission for Integrated Transport (2006) and Ubbels and Verhoef (2006).
48 Earmarking schemes will be undermined if funds from other sources are reduced in an offsetting way.
According to Richards (2005) there has been concern that revenue allocations to local transport from the London congestion charge have been partially offset by reductions in central funding. And Langmyhr (1999) notes that a suspicion of counteracting funding reductions weakened political support for the former toll cordon in Trondheim. I do not know of evidence for Canada as far as earmarking of funds to transportation.
49 The cordon toll proposed for Montreal would yield considerably higher revenues than the HOT lane network in Toronto.
help of road pricing revenues'" or the investments will alleviate traffic congestion and emissions - thereby reducing the potential benefits from tolls.
Another consideration regarding public transit is how fares might adjust following introduction of road pricing on a large scale. As noted in Section 3, fares cover only 60 per cent of total operating costs of Canadian transit operations. A traditional second-best argument for subsidizing transit is that auto travel is underpriced. The case would be weakened with congestion pricing, and the prospect of higher fares might work against acceptability.
6.2 Long-term possibilities for road pricing
The three schemes proposed here for Montreal, Toronto and Vancouver could all be implemented using existing tolling technology. Interoperability should be possible and this would be advantageous for Montreal and Toronto which are only about seven hours driving time apart. However, roadside infrastructure would be made obsolete if satellite-based road pricing technology is eventually implemented. After a series of delays due to technological problems, GPS technology has been used for charging heavy goods vehicles on German motorways since January, 2005. The Netherlands is considering a national system and several Value Pricing projects in the US involve GPS systems.
GPS-based technology for urban charging has been developed by Skymeter Corp. of Toronto (see www.skymetercorp.com and Hamilton (2007)) and is described as meeting requirements for New York City's congestion pricing system (Grush, 2007). It handles parking pricing and PAYD insurance as well as tolling, is interoperable with the E-ZPass system and can be upgraded to a distance-based system. As argued in Section 5 an area-based system using conventional technology is problematic for Toronto given the lack of natural barriers. It might be better for Toronto to develop a GPS system in parallel with - or possibly instead of- the HOT lane network proposed here. However, a major goal of the HOT lane network is to boost public acceptability for road pricing in Canada, and it has the advantages that it poses less technological risk and can begin relatively quickly.
50 This was allegedly the case with a tram line for the failed attempt to introduce a double cordon toll in Edinburgh (Gaunt et al., 2006).
7 Concluding Remarks
This paper has assessed the prospects for urban road pricing in Canada in the next few years. Congestion adversely affects the quality of life in major Canadian cities, and it appears to be] severe enough in the three largest cities - Toronto, Montreal and Vancouver - to warrant consideration of road pricing in some form. Schemes have been proposed for each of the three cities that reflect their topography and the political and public acceptability barriers to road
pricing, and that build on their current road investment plans. The schemes are: a cordon toll for Montreal that includes the new bridge on the A25 expressway, a HOT lane network for Toronto that exploits the HOV lane network that is being built, and tolls on major bridges and tunnels in Vancouver including the new Golden Ears Bridge and the expanded Port Mann Bridge.
The proposals are based on a general assessment of transportation in the cities and experience with road pricing elsewhere in the world. Before proceeding with any proposal it will of course be necessary to evaluate it against alternative schemes (and do-nothing) using travel demand models and detailed spatial information on traffic flows and public transit service. Studies of road pricing have demonstrated the need for city-specific models to capture the network flow and welfare-distributional effects of road investments and tolls - both of which are sensitive to the geographical and demographical characteristics of the area (Kalmanje and Kockelman, 2004; Santos, 2004).
As experience in other countries has shown, great care is warranted in taking the first steps in implementing road pricing. Canada has an advantage in being able to learn from other countries as well as from its own experience with Highway 407. Electronic tolling technology is proven, and neither technological hurdles nor costs should stand in the way of road pricing. The main barrier in Canada is political. Multiple levels of government are involved with road transport in Toronto, Montreal and Vancouver. And the provincial ministries of transport in Ontario and British Columbia are not yet favorably disposed towards tolling.
In developing an implementation path for road pricing - either in individual cities or in Canada as a whole - flexibility is important. Cities and provinces develop long-range strategic plans, but these are often modified or abandoned due to obstacles, changing priorities, changes of government, and so on. After the short seven-month trial several changes were made to the Stockholm congestion charge. London's scheme has changed in several ways since being launched in 2003. And the private operator of Highway 407,407 ETR Concession Company
Limited, has more control over tolls than the Ontario government surely anticipated when it began plans to develop the highway.
It is widely agreed that road pricing schemes should not be designed towards perfection in the sense of attaining a first-best optimum. They are an exercise in the art of the possible that must recognize public acceptability and other barriers. The review and proposals here were presented in this spirit.
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Transport Canada (2005), "New toll structure approved for the Confederation Bridge", Media Room, November 7 (http://www.tc.gc.ca/mediaroom/releases/at1l2005/05-a014e.htm, last accessed October 16, 2007).
Transport Canada (2006a), Transportation in Canada 2006: Annual Report, Minister of Public Works and Government Services, Canada
(http://www.tc.gc.ca/po II enlReporti anre2006/tc2006ar -e. pdf, accessed August 9, 2007).
Transport Canada (2006b), Transportation in Canada 2006: Annual Report Addendum, Minister of Public Works and Government Services, Canada (!1ttp://www.tc.gc.ca/pollenlReportianre2006/add2006-e.pdf. accessed August 9, 2007).
Transport Canada (2006c), "The cost of urban congestion in Canada", Ottawa: Transport Canada, Environmental Affairs. March 22 (http://www.tc.gc.calprogramslEnvironmentlEconomicAnalysis/ docs/summary .pdf; accessed December 16, 2006).
Transport Canada (2006d), "Canada's Asia-Pacific Gateway and Corridor Initiative", Ottawa (www.tc.gc.ca. accessed January 23, 2007).
Transport Canada (2007a), The International Bridges and Tunnels Act receives Royal Assent, News release, February 1, 2007 (http://www.tc.gc.cafmediaroom/releases/nat!2007/07- hOI6e.htm, accessed August 1, 2007).
Transport Canada (2007b), Completion of Highway 30 under a PPP: Request for proposals, bid agreement and tolls, News release, July 13,2007 (http://www.tc.gc.ca/mediaroom/releases/nat/2007/07-h138e.htm. accessed August 1, 2007).
Transport Canada (2007c), Urban transportation pricing options, Urban Transportation Showcase Program, July 18 (http://www.tc.gc.ca/programs/environmentiUTSP/urbantransportation.htm. accessed August 1,2007).
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Ubbels, B. and E. T. Verhoef (2006), "Acceptability of road pricing and revenue use in the Netherlands", Trasporti Europei 32,69-94.
U.S. Department of Transportation (2003), A Guide/or HOT lane development, Federal Highway Administration, FHWA-OP-03-009, March
(http://www.its.dot.gov/JPODOCSIREPTS TE/13668.html, accessed August 8,2007).
U.S. Department of Transportation (2007), "Urban Partnership Agreement by and between U,S.
Department of Transportation and its New York City Urban Partner", August 8, 2007 (bttp://www.upa.dot.gov/agreements/newyorkcity.htm. accessed October 19, 2007).
Verhoef, E.T (2002), "Second-best congestion pricing in general networks: Heuristic algorithms for finding second-best optimal toll levels and toll points", Transportation Research B 36B(8), 707-729.
Verhoef, E.T., P. Nijkamp and P. Rietveld (1996), "Second-best congestion pricing: The case of an untolled alternative", Journal of Urban Economics 40(3), 279-302.
Verhoef, E.T., E. Niskanen, A. de Palma, R. Lindsey, P. Moilanen, S. Proost and A. Vold (2007), "Implementation paths for marginal-cost-based pricing in urban transport: Theoretical considerations and case study results", forthcoming in C. Jensen-Butler et al. (eds.), Road
Pricing, the Economy and the Environment, Springer Verlag. .
Waters, W. II and M. von Warburg (2005), "Measuring congestion costs", Proceedings of the 40th Annual Conference of the Canadian Transportation Research Forum, Hamilton, May 8-11, 371-384.
Yang, H. and H-J. Huang (2005), Mathematical and Economic Theory of Road Pricing, Elsevier.
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Table 2: Average round-trip home to work travel time [mins]
Census 1992 1998 2005
Toronto 68 76 79
Montreal 62 65 76
Vancouver 70 68 67
Ottawa-Gatineau 57 62 65
Calgary 52 64 66
Edmonton 50 58 62
Other Census Metro. 44 50 53
Non-CMAIRural 44 50 54
Canada, total 54 59 63 Source: Turcotte (2005). Compiled from Statistics Canada, General Social Survey, 1992, 1998 and 2005.
Table 3: Total Annual Costs a/Congestion in Selected Canadian Cities (C$ 2002 million)
Toronto (4,682,897) 2001 $889.6 $1,267.3 $1,631.7 $271
Montreal (3,426,350) 1998 $701.9 $854.0 $986.9 $249
Vancouver (1,986,965) 2003 $402.8 $516.8 $628.7 $260
Ottawa-Gatineau (all) 1995 $39.6 $61.5 $88.6 $58
Calgary (951,395) 2001 $94.6 $112.4 $121.4 $118
Edmonton (937,845) 2000 $49.4 $62.1 $74.1 $66
Quebec City (682,757) 2001 $37.5 $52.3 $68.4' $77
Winnipeg (671,274) 1992 $48.4 $77.2 $104.0 $115
Hamilton (all) (662,401) 2001 $6.6 $11.3 $16.9 $17
Total, all urban areas $2,270.2 $3,015.0 $3,720.6
Source: Lindsey (2007). Compiled from Transport Canada (2006, Table 5) and Statistics Canada,
"Population and Dwelling Counts, for Census Metropolitan Areas and Census Agglomerations,
2001 and 1996 Censuses."
Accessed January 13,2007. 50
Table 4: Modal Shares/or Commuting to Work in Selected Canadian Cities [percent]
Car, truck, van Public
City Walk Other
Driver Passenger Subtotal transit
Toronto 65.2 6.3 71.4 22.4 4.6 1.6
Montreal 65.6 4.8 70.4 21.7 5.9 2.0
Vancouver 72.2 7.0 79.2 11.5 6.5 2.8
Ottawa-Gatineau 64.6 7.4 72.0 18.5 6.8 2.7
Calgary 71.8 6.8 78.6 13.2 5.9 2.4
Edmonton 77.7 6.6 84.3 8.6 4.7 2.4
Quebec City 76.0 5.2 81.2 9.8 7.0 2.0
Winnipeg 70.0 8.4 78.4 13.2 6.1 2.3
Hamilton 78.2 7.1 85.3 8.0 5.1 1.6
All urban areas 72.5 6.8 79.3 12.5 5.9 2.2 Source: Lindsey (2007, Table 2). Compiled from Statistics Canada (2001),2001 Census, Mode of Transportation (http://www12.statcan.ca/english/censusOl. accessed December 15, 2006)
Table 5: High Occupancy Vehicle (HOV) facilities on Canadian freeways
No. lanes Route HOV General Changes
length [km] operation eligibility in rules
period requirements since
Hwy. A25 From
(outside 1 each SB: 6-9:30. in Dec
shoulders) direction 4.1 NB: 15-22:30 3+ and taxis 2003
Rte. 10/15/20 Speed
Champlain NB: 6:30-9:30; limit
Bridge 1 6.9 SB: 15:30-19 Buses only reduced
(outside 1 each
shoulders) direction 4.8 Peak periods Buses only No
only ramp (Acres
Rd.) 1 0.3 24 hours Buses only No
Orleans (outside 1 each
shoulders) direction 4.8 Peak periods Buses only No
Five transitways 1 each
direction 32.2 24 hours Buses only No
to Hwy 416 1 eastbound 4.4 Planned
B-1 Trans 1 each
CanadaHwy. direction 6 24 hours 2+ No
H-99 1 each SB: 6.4 Originally
direction NB: 1.6 24 hours 3+ bus only
Hwy. Cape Horn
(Burnaby) 16 2+
Mississauga 1 each
(outside direction 4 24 hours Buses only No 52
Mississauga 1 each Opened
(buffer separated) direction 14 24 hours 2+ 12/0S
Hwy. 404 SB:
TorontolY ork Opened
(buffer separated) 1 11 24 hours 2+ 12/05
Hwy. 404, SB
direct access to Directional Opened
Hwy 401 ramp - 24 hours 2+ 12/0S
Sheppard Ave to Opened
Highway 7 1 7 24 hours 2+ 7107
Proje~ts: 1 lane each direction; HOV operation period: 24 hours; General.eligibility
Near-term projects (2007-2011)
Queen Elizabeth Way: Guelph Line to Trafalgar Road in Halton Region
Burlington to Oakville 16km.
Hwy 427: Hwy 409 to Hwy 407 near Pearson Airport. 7km.
Hwy400: Major Mackenzie Drive W to King Road in York Region 8km.
Medium-term projects (20ll -2016)
Hwy 401: Mississauga Road to Hwy 4031 Hwy 410 in Mississauga 8km.
Hwy 400: King Road to Hwy 9 in York Region in York Region 12km.
Hwy 404: Beaver Creek to Aurora Road 19km.
Long term projects (after 2017)
Queen Elizabeth Way: Upper Centennial Parkway (Hamilton) to Hwy 406
Hwy 403: Hwy 6 Hamilton) to Hwy 4071Queen Elizabeth Way (Burlington) 7km.
Queen Elizabeth Way: 407/403 to Guelph Line 3km.
Queen Elizabeth Way: Trafalgar Road (Oakville) to Hwy 427 _(Mississaugal 21 km.
Hwy 403: Queen Elizabeth Way to Hwy 407 Skm.
Hwy 410: Hwy 401 to Queen Street (Brampton) l O km.
Hwy 401: Milton to Mississauga Road 16km.
Hwy 400: Hwy 9 to Barrie 42km.
Hwy 404: Aurora Road (Newmarket) to Keswick 26km.
Hwy 401: Brock Road (Pickering) to Ritson Road Oshawa) 19km.
(outside 1 each
shoulders) direction 4.8 Peak periods Buses only No
Hwy. 417 bus
only ramp (Acres
Rd.) 1 0.3 24 hours Buses only No S3
Orleans (outside 1 each
shoulders) direction 4.8 Peak periods Buses only No
Five transitways 1 each
direction 32.2 24 hours Buses only No
to Hwy 416 1 eastbound 4.4 Planned
Hwy. A25 Bus-only
(outside 1 each SB: 6-9:30. until Dec
shoulders) direction 4.1 NB: 15-22:30 3+ and taxis 2003
Rte. 10/15120 Speed
Champlain NB: 6:30-9:30; limit
Bridge 1 6.9 SB: 15:30-19 Buses only reduced Source: Transportation Research Board, Committee on HOV Systems (2005), HOV projects (http://www.hovworld.comlinventory assets/Hov%200perations%20 I 1-2] -05. pdf, accessed August 8, 2007); Ontario Government Newswire, May 24, 2007
Notes: NB = North-bound; SB = South-bound; Route lengths for 400-series projects in Golden Horseshoe estimated using Google maps and rounded to nearest kilometer.
Table 6: Candidate road pricing schemes for Montreal, Toronto and Vancouver
Type of road- Montreal Toronto Vancouver
Link-based Variable tolls on major
bridges and tunnels
Convert existing HOV
lanes to dynamically-
Network-based priced HOTlanes, and
build new lanes as
Area-based Variable toll cordon
around lIe de Montreal 55
Table 7: Features of Montreal, Toronto and Vancouver
Montreal Toronto Vancouver
Population 3,426,350 4,682,897 1,986,965
Tolled A25 expressway (TBD) Highway 407 (1997) Golden Ears Bridge
facilities (2009). Port Mann
(opening date) Bridge (TBD)
Road links to 18 road bridges Numerous 4 bridges, peninsula to
city centre east
lanes open to 8.2km 54km 30km
cars (tot., both (450 km planned)
share of trips to 21.7% 22.4% 11.5%
Major freight Port of Montreal, Exports by truck to US, Port of Vancouver (esp,
generators in eastern limit of CP rail esp. at Windsor-Detroit containers ),
region line, Pierre Elliott Gateway Vancouver airport
Trudeau Intl, airport
.Institutions.respo:nsible·for.tians_1)_orta.tion· ...... ·i< • ...• .' · .• i~/'· . ........ ... '
Provincial Ministere des Ontario Ministry of BC Ministry of
transport Transports du Quebec Transport Transport
Planning, design, Planning, construction, Integrated planning &
construction and maintenance, coord. for highway &
fmancing of transport engineering and travel other modes. Promotes
inf. and systems demand measures economic development.
Urban Agence metropolitaine Greater Toronto Greater Vancouver
transportation de transport (1996) Transportation Transportation
Authority (2006) Authority (Translink)
Management & funding Co-ordination, Long-range transport &
of metro. commuter planning, fmancing and land-use planning. Uses
train network, development of roads dedicated funding for
park&ride centres, and public transit. Has operation, maintenance
reserved bus lanes & power to impose fees & rehabilitation of
bus terminals. Societe and utilize other roads & selected
de transport de mechanisms for bridges in GVRD and
Montreal organizes revenue generation to contract for public
metro. & bus networks transit services
within Montreal Sources: Various
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,-.... 00 C"f'l ......
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Table 9: Selected characteristics of Norwegian, Singapore & Stockholm cordons
Norwegian city Singapore Stockholm
toll rings restricted zones congestion charge
Remarks Bergen, Oslo, Part of electronic road Stockholm Trial
Kristiansand, pricing system conducted Jan 3 - July
Stavanger, Namsos, 31, 2006. Permanent
and Tensberg. scheme began August
Trondheim converted 1,2007 with some
from cordon to zonal changes in to 11
scheme in 1996, collection technology
abandoned in 2005 and exemptions
Tolled area or Single cordons around Cordon charges for Cordon around city
infrastructure city centres. Oslo three restricted zones centre with 18 control
cordon toll has 19 toll around CBD with points
stations multiple gantries
Toll application Inbound crossings. Per passage; inbound Per passage; inbound
One charge per day. crossings of restricted and outbound
Time variation Stavanger and former Charging 7:30-10:00, Variable: 10, 15, or 20
Trondheim toll 12:00-19:00. Tolls Swedish kronors,
variable; others flat change in 5 or 30- depending on time of
min. steps; levels day from 6:30-18:30;
reviewed quarterly daily maximum of 60
kronors; no charge on
or day before holidays
Toll differentiation by By vehicle type; Differentiated by six Exempt: Buses,
vehicle & user discounts for pre-paid vehicle types; emergency vehicles,
characteristics SUbscriptions and exemption for police electric & hybrid cars,
passes. Exemptions cars, ambulances, fire traffic between
for handicapped engines Lidingo island & rest
persons of county that
spends less than 30
charging zone Source: Adapted and updated from Lindsey (2007)
Table 10: HOV lane performance on Highways 403 and 404
Vehic1e flows per peak period'
Morning peak Afternoon peak Morning peak
Before HOV lane 14% (2003) 22% (2003) <16% (2004)
After HOV lane Nearly 40% 37% 37%
Increase Nearly 26% 15% Over 21%
HOVlane 8 min 9 min
General purpose lane 14 min Not reported 15 min
HOV lane advantage 6 min 6 min Sources: 1 Ontario Ministry of Transportation (2007); 2 Ontario Ministry of Transportation (2006)
~ (/) Figure 2: High Occupancy Vehicle lanes planned/or Greater Toronto Area: Near-term
Figure 3: High Occupancy Vehicle lanes planned/or Greater Toronto Area: Medium-term
Figure 4: High Occupancy Vehicle lanes planned/or Greater Toronto Area: Longer-term
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