Proposals to privatize the Coquihalla highway have set off an avalanche of opposition, particularly in Kamloops, the end-point of the highway. People are upset and rightly so.
After all, why should residents of Kamloops pay a toll to commute to the Lower Mainland in addition to paying fuel taxes to send skiers to Whistler? The answer is, they shouldn’t. Kamloops residents should pay to commute to the lower mainland and West Vancouver residents should pay to drive the Sea-to-Sky.

Transportation infrastructure is never free. Whether it’s the original building costs, or the ongoing maintenance and upgrade costs, or the costs of emergency services, mobility has to be paid for on a continuing basis. The question is how. The two main choices are to fund mobility through broad-based taxes or to utilize road tolls. We must decide which approach to use and then use it properly, avoiding the kind of double-charging that puts motorists up in arms. Which is the better approach to funding transportation infrastructure? We suggest that tax-deductible tolls administered by private entities are superior to tax-based approaches for several reasons.

First, tax-based financing of transportation is terribly wasteful. With no concerns for profitability or cost-containment, government transportation agencies have no incentives to bring projects in on time, or on budget. Projects such as the Alex Fraser Bridge, the upgrade to Lion’s Gate Bridge, and the Coquihalla highway all came in over budget.

In comparison, the 407 Express Toll Road (ETR), a highway that extends 108 km east-west, just north of Toronto, was developed as a public-private partnership between Canadian Highways International Corporation (CHIC) and the Government of Ontario. There was a guaranteed construction price tag of $930 million and the project was delivered on schedule and according to budget. The road was then sold to a private company for $3.1 billion dollars, earning a windfall for the taxpayers in Ontario.

Second, taxes on gasoline are often inequitable, taking money from people who never use certain roads, and subsidizing other people who do. Sometimes that subsidy is quite regressive, with lower-income people paying to fund mobility for higher-income people. Why should a motorist who can’t afford a new, better-mileage car (and who will therefore pay more gasoline tax) subsidize someone who can afford a newer, higher-mileage car? And why should automobile drivers pay to subsidize the mobility of for-profit trucking firms who use and impose most of the wear on the roads between the lower mainland and Kamloops?

Third, fuel-tax based financing of highways undercuts efforts to reduce air pollution and results in over-use of newly constructed capacity. Studies suggest that controlling air pollution as well as roadway degradation is best done by the use of proper economic incentives, rather than through command-and-control regulations. So the best way to make sure that roadways aren’t rapidly degraded by excess truck traffic is to establish a maintenance program funded by tolls paid by trucks in proportion to their impact on the roadway. By the same token, the best way to insure that motorists incorporate environmental concerns into their driving behaviour is to make sure that the cost of driving includes the cost of remediating their environmental impacts. That’s not easily done if the transportation system provides motorists with seemingly unlimited highway mobility paid for obliquely via taxes, and sometimes by a third party altogether.

The Liberals should stop their inequitable and wasteful approach to funding of transportation infrastructure. Privately administered, tax-deductible toll road approaches can give motorists the mobility they need, fairly apportion the costs according to use, create better incentives for environmental protection, and reduce wasteful governmental spending.