Friday, June 13, 2008

Kitchen Report #1

Earlier this year a report by Trent University Professor Harry Kitchen got some coverage in the mainstream media.

This report, Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton: Future Initiatives*, includes among its recommendations a call for tolling roads.

This caused quite a stir as apparently our right to drive at no cost is enshrined in the Constitution somewhat like Americans right to bear arms. Here is my new slogan for Ontario license plates: “Drive Free or Die.”

In all seriousness though this is a good report that should promote serious discussion.

Let’s Get The Price Right

It is really a no-brainer to say it but we need an effective and efficient public transit and transportation system for economic and environmental reasons. Things are getting worse not better.

As Kitchen says “something must be done.”

An important aspect of what must be done is setting correct prices.

Kitchen notes:

“A more efficient and effective transportation system can only be achieved if users (businesses, individuals and governments) pay for the infrastructure and operational cost of services it provides – building, maintenance and repairs plus environmental damages."

He sets out some principles.

For example, those who benefit from local infrastructure and the services it provides should pay for it. (This is called the benefits based model.)

According to Kitchen, services such as public transit and highways “have a mix of private and public good characteristics” and, therefore, financing should be based on the theory of “second best.”

Principles of efficiency and fairness would suggest that car and truck drivers pay a charge that reflects the full cost (capital, operating plus congestion and environmental costs).

But car and truck drivers pay nothing to local governments for each trip taken while transit users are charged when they travel.

This logic justifies some subsidization of public transit but also provides rationale for the implementation of road charges that are designed to control road use.

So while subsidizing public transit makes sense Kitchen says that determining the exact subsidy (and what you’ll pay at the farebox) is a “tricky business” that really has more to do with politics than actual costs. And that is probably the way it should be until the competitive form of transportation i.e., roads is costed properly.

If there was a level playing field “public transit might not require a subsidy to be competitive: certainly it is unlikely that it would require the size of subsidy it often gets.”

Back to you Tomorrow

If you’re still with this argument I know you will be keen to find ways to put proper prices in place. But you’ll have to wait until tomorrow.

Here is a bit of a tease. It is complicated because while the problems that need solving are GTHA wide ones the responsibility for our transit and much of our roads is generally in local hands.

*You can find this report on the Residential and Civil Construction Alliance of Ontario’s (RCCAO) website.

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