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Can Toll Roads Really Work?

Recently, Ontario premier Dalton McGuinty again raised the prospect of more toll roads in the province. It would be unfortunate if this decision was made without consulting the road user community.



Recently, Ontario premier Dalton McGuinty again raised the prospect of more toll roads in the province. It would be unfortunate if this decision was made without consulting the road user community.

OTA needs no convincing that Ontario faces a highway “infrastructure debt” caused by years of compounding infrastructure deficits. For as long as anyone can remember the provincial government has taken in more in road-related revenue than it has invested in our highway and road systems. Indeed, the revenues generated solely from the provincial diesel fuel tax and heavy truck vehicle registration fees account for at least 85 per cent of the annual expenditures under the provincial highway management program. We believe that road users are already paying sufficient taxes and that the trucking industry is paying more than its fair share.

Nevertheless, we agree that catching up with the infrastructure needs of our society will require a considerable investment in new construction and that the required level of investment is almost certainly beyond existing government resources. We must be realists and recognize that tolls may inevitably form part of the solution to alleviating the infrastructure debt on certain routes. But that doesn’t mean we should throw up our hands and let the government pick our pockets again. The Ontario government needs to define its policy on public/private partnerships and infrastructure development. Ironically, as the premier was making his remarks, the minister of infrastructure renewal was embarking on a series of public consultation on infrastructure issues. However, these consultations had barely begun and it seemed the premier had already decided on a toll road policy.

It is imperative that the government put in place a policy framework for highways that protects the public policy objectives and broader economic interests of the province. Clearly that was not done in the case of the former government’s model for private sector involvement in highway development, namely Highway 407, which has been widely criticized by all road users. A fresh and transparent approach is needed if the government is to overcome the skepticism surrounding toll highways that has been fostered by the Highway 407 rip-off. OTA is advocating for a Toll-Road Users Protection Act that establishes the legal parameters within which the government can introduce tolls. While there may be yet other considerations that should be included in such legislation, the following principles are fundamental:

1. Significant new highway expansion only : Tolls must only be imposed on (1) new highway projects; and (2) to pay the costs of construction not ongoing maintenance.

2. Free alternative routes must exist : A viable non-tolled alternate route must exist for all road users.

3. Public/private partnerships should be a means of building new infrastructure AT NO COST to the government, not as a source of additional revenue : The sale of Highway 407 provided the government with a large “profit” which users of the highway are now paying for through exorbitant tolls. Future private sector deals should be based on lowest toll rates rather than on maximizing the government’s profit from selling the right to construct/operate the road. Tolling should never be used to generate surplus revenues for other, non-transportation purposes.

4. Miles travelled on toll roads should not be taxed : Road users should receive provincial fuel tax refunds for the miles operated on toll roads to avoid double taxation.

5. Highway users must be heard: All points of view need to be considered when making policy. The government must give consideration to the needs of highway users, not just the concerns of government, highway builders and financiers. There is a dangerous myth underlying government policy that truckers have deep pockets and will gladly pay high rates to save time. The reality is that competition in the trucking industry keeps rates down and leads to very narrow margins. While “time is money” is nice catch phrase, the reality is that for many truckers exorbitant rates (like those charged by the ETR 407) will make it uneconomic for truckers to use toll routes.

6. All economic impacts must be considered : Transportation is a significant component of the cost of goods produced and sold in Ontario. Unless there are tangible time/congestion savings from new infrastructure, tolls will simply make Ontario exports less competitive. No road or highway should be tolled without an economic impact analysis.

7. Trucks must have access to new roads : Private toll road constructors/operators may decide that they can maximize their return on investment by designing and operating highways that serve passenger cars exclusively and are inconvenient for trucks to use. Interchange location and design as well as toll rates could be used to exclude truck traffic.

With these conditions enshrined in law, road users, but especially truckers will have more of a say and decisions on what and how to toll will not be made solely by government officials and lending institutions.

– David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.


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