Monday, 5 November 2012

Calgary considers road pricing or a fuel tax rise

The Calgary Sun reports that the City of Calgary is having to consider how it bridges a funding shortfall due to declining real revenues from provincial government.  The options being floated include either raising fuel taxes or what it describes as "tolling", which apparently is more a case of more widespread road pricing.

Mac Logan, the city’s general manager of Transportation says there is a C$200 million (US$200.6 million) shortfall between 2013 and 2022.

The report continues to say that Logan would prefer an increase in the federal fuel tax, which is C$0.10/l.  Alberta also has a C$0.09/l provincial fuel tax.  However, there is a concern that such an increase would not see Calgary getting the revenue it seeks.  Tolling becomes more attractive, although he makes it clear this is not about funding discreet highway projects, but about raising revenue for the entire transportation budget.

What that implies is everything from congestion charging to a full network pricing initiative.

The newspaper report includes the predictable kneejerk reactions from politicians:

- Alderman Shane Keating said "A toll road system would be impractical for Calgary’s roadways — there’s just not enough room for such a system and the tolling booths could be easily circumvented her" and "All in all, toll systems are very inefficient in design".  What's a bet he thinks of manual toll booths as being tolling, and he thinks of tolling being individual points rather than a distance based charging system?

- Alderman Ray Jones said "people could simply drive through other neighbourhoods to get around it". Again, an area charge, zonal charge or distance based charge would avoid all of this.

It would be good for Calgary to at least explore options, and consider that the long term sustainability of fuel tax is questionable given vehicle efficiency and alternative fuels.  However, I'd suggest that if this is about revenue, the solution needs to be at the provincial level.  If Calgary wants to manage congestion, it could certainly consider options that deliver such benefits and generate revenue.

Conclusion

To determine the right solution, the problem needs to be well defined.  In short, Calgary should present, in a transparent way, exactly what will happen if it has a growing funding gap.  It needs to consider options for greater efficiencies, fare increases for public transport, fuel tax increases, parking and road pricing alternatives.  Then it can start to see how to match revenues to more efficient pricing overall.  Considering a source of revenue independent from its impact on behaviour and the distributive impact of that source of revenue is not likely to provide the best solution.

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