July 15,2010 Vancouver Sun
Fuel taxes, road tolls may be the $600-million solution
By Vaughn Palmer, Vancouver Sun
Listeners who tuned in to Premier Gordon Campbell's weekly radio address heard an enthusiastic pitch for the long-delayed Evergreen Line as the next priority for rapid transit expansion in the Vancouver region.
"The Evergreen Line is part of Metro Vancouver's future," Campbell declared Saturday. "Our government in partnership with the federal government has committed hundreds of millions of dollars to this project to improve the environment, improve the economy and to improve the quality of life for thousands of families."
A few days earlier the B.C. Liberal government issued a "request for qualifications," as a first step in identifying a private partner to design, build and finance the 11-kilometre line linking Coquitlam to the existing SkyTrain network in Burnaby.
Contract to be awarded next summer. Line in service by the end of 2014, roughly 10 years after it was first slated to be up and running.
Still to come is a plan to close an estimated $600-million gap between the $800 million committed by senior governments and the estimated $1.4-billion cost. Prospective bidders have been advised to be prepared to finance up to $400 million worth of construction costs in the interim.
"It's going ahead," project manager David Duncan told the Tri-City News this week. "The money will come."
Critics have expressed doubts about the wisdom of expanding transit services on a model of "if we build it, they will come." Now the government would appear to have adopted the stance of "if we build it, the money will come."
Talks continue between the province and TransLink, the regional transportation authority, about how to close the funding gap. Supposedly the region is on the hook. But with every dollar in TransLink revenue already committed to existing services, that in effect means boosting existing sources or developing new ones.
Fares and property taxes are regarded as being tapped out. Alternatives include fuel taxes, road tolling and other, no less controversial possibilities.
I would note some interesting insights from a report on "reliable funding for transit and transportation infrastructure," published earlier this month by the Toronto City Summit Alliance, a grouping of business and community leaders. The report compared many of the same options that have been under discussion here.
Road tolling, collected via electronic detectors posted on the major routes, was rated as potentially lucrative. A levy of 10 cents per kilometre travelled -- $10 a day for a round trip commute of 100 kilometres -- was expected to bring in $1 billion a year.
A similar amount could be raised from a levy of 25 cents per kilometre on premium access routes, like high-occupancy vehicle lanes, express lanes and bypass ramps on the freeways, according to the report.
To raise an equivalent $1 billion from the gas tax in metro Toronto, the report figured it would take a levy of 10 cents a litre. Sales tax? One more percentage point. Parking tax? $1 per space. Vehicle levy? $500 per year.
Or if Toronto chose to follow the lead of the city of London and impose a congestion charge to enter the city core, it would necessitate a levy of $20 per vehicle per day to raise the equivalent $1 billion. The $1 billion is merely a point of comparison. Metro Vancouver has about one-quarter as many people as the Toronto area and correspondingly fewer vehicles. Then again, the revenue needs are proportionally smaller as well.
The boost-the-sales-tax option can be discounted here for the reason it was discounted in Toronto -- a don't-go-there-acknowledgment of the backlash over the harmonized sales tax. The parking stall and vehicle levies are possibles, if undertaken at a smaller scale in combination with other options
The two best bets in terms of revenue potential are probably increased fuel levies or road tolling.
The TransLink mayors council has already called on the province to divert a share of the carbon tax to fund transit improvements. Campbell ruled it out because the current revenues are used to offset dollar-for-dollar reductions in other taxes.
But that could change after July 1, 2012, when the last of four increases in the carbon tax is scheduled to take effect. The province could decide that the tax would continue to grow at the current annual rate of 1.2 cents a litre, but future revenues would be dedicated to funding transit.
On road tolling, B.C. has an advantage over Toronto. There, concerns were expressed that tolls could divert motorists off the routes that are "priced" onto ones that are not. Here it could be done by tolling a dozen or so choke points, mainly bridges into Vancouver.
If all the routes were tolled, there might be enough revenue to fund other projects (extending SkyTrain into the valley, replacing the Pattullo Bridge) beyond the Evergreen Line.
In any event, one can readily see why the B.C. Liberals haven't said much about the options for closing the funding gap. In the midst of the backlash over the HST, they are in no rush to get into a discussion of what will be denounced as another tax grab.
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