SOURCE: Canada's Ecofiscal Commission

November 02, 2015 06:00 ET

Worsening Traffic Congestion Threatens Canada's Economy and the Health of Canadians, Warns New Report

Canada's Ecofiscal Commission Calls for Pilot Studies of Congestion Pricing in Canadian Cities to Help Deal With Traffic Problems

OTTAWA, ON--(Marketwired - November 02, 2015) - Canadians are increasingly frustrated by traffic congestion in their major cities and want solutions before the situation gets worse and costs them even more time and money, according to a new report released today by Canada's Ecofiscal Commission.

And it's not only commuters who are suffering. Traffic congestion is damaging the economy and threatening the health of Canadians, says commission chair Chris Ragan, an associate professor of economics at McGill University and former Special Advisor to the Governor of the Bank of Canada.

"Congestion on our roads and freeways leads to wasted time for commuters and delayed goods movement," he says. "This translates into a less efficient economy and makes almost everything Canadians buy more expensive."

Ragan notes that congestion costs regions like Vancouver, Toronto, Montreal, and Calgary billions of dollars every year. Meanwhile, 71% of Canadians in our biggest cities say it is simply too hard to get around and 20% of full-time Canadian workers report experiencing congestion every single day that they commute.

"Congestion also means lower quality of life for the thousands of frustrated commuters who respond by making difficult choices about where to live and where to work, further exacerbating the costs of congestion," he adds. "And congestion increases air pollution from vehicles, which contributes to health problems such as asthma, high blood pressure, cardiovascular disease, diabetes, and stress." Those health costs amount to as much as $7 billion per year.

The commission's new report, We Can't Get There from Here: Why Pricing Traffic Congestion is Critical to Beating it, recommends pilot programs in Canada's cities to explore how "congestion pricing," as part of a broader, coordinated package of policies, can help solve traffic problems. The report offers specific project proposals for the country's four biggest metro areas: Greater Toronto, Greater Montreal, Calgary, and Metro Vancouver.

"As Canadian cities continue to grow, with higher levels of urbanization and car ownership, traffic congestion and its associated costs are expected to worsen," says Ragan. "The higher these costs climb, the greater the benefits from reducing congestion."

Expanding transportation capacity -- Canada's traditional approach to dealing with traffic congestion -- will not solve the problem alone, says Ragan. But a growing body of evidence and policy experience suggests that congestion pricing works, particularly as part of a broader policy package that includes better public transit and road infrastructure.

"Congestion pricing has worked in cities around the world, benefiting local economies and drivers," Ragan says. "It's worth finding out if it can work here."

Case studies in the commission's report illustrate the success of congestion pricing. In Minnesota, for example, the state's High Occupancy Toll (HOT) lanes increased traffic speeds by 6 per cent in the general-purpose lanes while maintaining free-flow speeds in toll lanes. In Oregon's pilot project, drivers subjected to higher per-mile charges during peak times responded by reducing driving at those times by 22 per cent relative to those paying a flat rate.

Ragan says congestion pricing is the crucial missing piece of a broader, coordinated package of policies that Canadian cities need to consider. "More roads and more transit are important, but we will not reduce congestion without the right incentives. That's where congestion pricing comes in."

Canadian pilot projects to explore pricing should address the unique geographies, traffic patterns and pressures faced by each city, explains Ragan. Municipalities should have a significant voice in design because they best understand their own congestion context. Provincial governments can play multiple roles in enabling and coordinating congestion pricing trials, and the federal government should help fund and communicate the results of the pilot projects.

"People should have the opportunity to put pricing to the test, experience the results, and decide if it makes sense," says Ragan. "We need to get Canada's cities moving and that won't happen without a serious conversation about congestion pricing."

About Canada's Ecofiscal Commission

Established in November 2014, Canada's Ecofiscal Commission is a unique effort to advance fiscal policy reform for the benefit of Canada's economy and environment. The commission comprises a dozen prominent economists from across Canada's regions and 18 advisors including former political leaders and leaders from the business sector.

Over the next five years, the commission will publish and promote discussion of research and recommendations grounded in Canada's unique and regionally diverse economic and policy context. It will focus on issues most relevant to Canadians and policy-makers including those affecting fresh water, air quality, environmental disasters, greenhouse gas emissions, transportation and road congestion.

The Commission termed these ecofiscal policies -- a new word to facilitate a new conversation about solutions guided by both economic and environmental objectives. The Commission is funded by several Canadian family foundations and Canadian corporations.

For more information about the Commission and to view its reports visit: www.ecofiscal.ca

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