William Watson: Tolls for Toronto highways are a great idea
Maybe the problem is that “toll” sounds too much like “troll.”
I hardly ever disagree with the Canadian Taxpayers Federation, which does great work reminding us all of the often very high costs of taxation. (The other CTF, the Canadian Tax Foundation, also does great work, studying the devilish details of taxation.) But I do disagree with the federation’s opposition to Toronto Mayor John Tory’s proposal for a $2 toll, which I prefer to think of as a “user fee” or, even better, “price” for drivers using Toronto’s Gardiner Expressway and Don Valley Parkway.
Hey, everybody knows you have to pay to use a parking lot, and that’s exactly what those two highways are—parking lots, during rush hour, which in Toronto means anytime between dawn and dusk. Charging a price for the privilege—though it might have to be greater than $2—has the potential to turn the thoroughfares back into functioning roadways.
Have you ever sat in traffic and distractedly calculated how much you’d be willing to pay to get rid of everybody else on the road? If your answer is yes, you’re a natural-born economist, for the other drivers impose a cost on you as you inch along in traffic when you could be doing lots of other good things with your time, intelligence and concentration. If, as you sat there, you also reflected that they might be going through the same calculation, then you’re really an economist, for your presence imposes a cost on them just as surely as theirs does on you. “Externalities” are like that. It takes two to have an externality.
If you really are creating a bother for other people—and when the road is crowded you are—then a charge for the cost you’re imposing may persuade you not to. If the charge is big enough to get you to drive by some other route or at some other time or maybe even by train or bus or subway instead of car, there’s a chance the benefit you create for other people will be greater than the cost to you of these other choices, which means there’s a net-gain overall.
So, in general, economists like tolls. Which isn’t to say CTF Ontario director Christine Van Geyn doesn’t offer up a great line in the federation’s latest email opposing both the proposed toll and a couple of other new Toronto taxes: “If you want to commute on the TTC [i.e., the subway] it’s going to cost you more. If you want to drive into the city it’s going to cost you more. If you want to stay overnight in a hotel in the city, it’s going to cost you more. If you want to buy a house in the city, it’s going to cost you double. Toronto might as well hang out a sign that says ‘for rich people only.’ Because that’s the Toronto John Tory is creating.”
She may be right to complain about higher subway charges and hotel and property taxes, but what’s currently going on with Toronto’s roads—and not just the Gardiner and DVP—is that a valuable resource is being given away, first come first served. When doesn’t that approach lead to overuse? Driving downtown at certain times of the day is a good many, many Torontonians want to consume. There are lots of other goods lots of Torontonians want to consume, too. Restaurant meals, Leafs tickets, Harbourfront condos, the list is pretty much infinite. For all these other things, people pay, and nobody really thinks twice about that. But use of the roads, for some reason, people treat as a God-given right. Free roads, so far as I know, aren’t mentioned in any religion’s sacred text.
However, there are some reasons offered up for why we need tolls that I don’t find persuasive. Financing public transit, for instance. There’s a kind of literary logic to taxing drivers in order to subsidize transit users (if it’s transit users and not transit unions you end up subsidizing). The two groups are clearly related, as travellers in alternate universes, as it were. But if you’re charging properly for road use, that may be an argument for not subsidizing public transit. If tolls get people off the roads, you don’t need the subsidy to subways, too. In economics, two rights can make a wrong. With a double incentive to use transit you get too much of a good thing.
Which is not to imply private cars are a bad thing. Far from it. What a boon to personal freedom they have been! Imagine what people from before 1900 would think if you told them you’d travel 150 or 200 miles this weekend just to visit friends or see a sight or take in an activity. (Of course, you might also have to explain what a weekend was.)
So don’t put me down as someone who thinks, like so many urban progressives, that drivers are trolls. On the other hand, they do need tolls.