Winnipeg's roads are in bad shape, to put it mildly, and the city's coffers aren't exactly overflowing. That makes it tough to scratch together funds for roadway maintenance, let alone improvements. Even projects as crucial as the unfinished inner ring road could bump up against budgetary constraints. Despite the fact Canadians already pay steep gas taxes, current roadway expenditures exceed gas-tax revenue. That is largely due to decades of federal and provincial governments using gas taxes as slush funds. Fixing badly damaged roads is more expensive than routine maintenance, so years of neglect have meant we will pay dearly to fix what we have. Money for new roadway improvements will have to come from somewhere else. The best place to collect that revenue is directly from drivers who use those roads -- particularly those who don't pay property taxes in Winnipeg. That is why Winnipeg needs road tolls.
Municipal road funding comes mainly from two sources: property taxes and transfers from the provincial and federal governments. Since non-residents who work in or regularly visit Winnipeg don't pay Winnipeg property taxes, they are getting a free ride. Yes, they pay provincial and federal taxes (including gas taxes), but those taxes aren't paying for the entirety of current road expenditures, let alone required maintenance and expansions. As such, they are the first people we should look to for revenue-generating purposes.
Toll roads are a good way to finance high-traffic roads, particularly those with heavy traffic congestion. But they can also be a way to charge users who would otherwise not pay for roads. Some municipalities, such as Vancouver and New York, use bridge tolls to charge commuters from outside those cities who don't pay local property taxes, and, hence, don't pay for road maintenance. That is a reasonable approach. It only works when there aren't many convenient alternative routes for drivers to evade the tolls. Fortunately, that's not much of a problem in Winnipeg.
There are 15 major connections to Winnipeg's outer ring road, the Perimeter Highway. That is the ideal place to start tolling. While elaborate road-pricing schemes such as those found in London and Stockholm are more expensive than can be justified in a smaller city without serious traffic-congestion issues, a more modest tolling system aimed at those 15 intersections would be relatively cheap to implement. Since the city already uses photo radar, it already has the administrative capacity. Bills could be sent out by the month or could be charged to credit card accounts. The city would simply need to buy and maintain 15 cameras.
Some non-residents who work in or visit Winnipeg would take secondary roads to avoid tolls, and others would take fewer trips. Having some traffic pushed onto secondary roads wouldn't be a problem so long as the numbers weren't too high. The city could simply expand the number of cameras to fix that if it became a significant problem. And while some of the 79,000 non-residents who enter the city every year would take fewer trips, few would opt out altogether.
Let's assume 50,000 drivers enter Winnipeg from outside the city on a daily basis for work. There are 250 weekdays in 2014, but we'll assume the average driver misses 20 days of work for holidays and sick days. Moreover, we'll assume zero weekend trips into the city. That adds up to 11,500,000 trips per year from daily commuters. Let's further assume another 25,000 commuters travel into the city less frequently. Some who telecommute, work part time, do business in the city fairly regularly or visit for personal reasons. We'll conservatively assume they take 100 trips into the city per year. That adds up to another 2,500,000 trips per year for a total of 14,000,000.
Assuming each driver paid a net $3 per day, after the cost of administering the program, the city would receive $42 million per year. That would be enough to cover the $560 million required to complete the inner ring road in just over 13 years.
Though out-of-town drivers would surely be upset by having to pay tolls, they are not only paying zero property taxes in Winnipeg, but they are also paying fewer property taxes to their own municipalities than Winnipeggers pay to theirs. It only makes sense they should pay something to use Winnipeg roads. There's nothing wrong with commuting from outside the city. But it shouldn't be a method of avoiding taxes. A small toll to compensate Winnipeggers makes sense.
Steve Lafleur is a public policy analyst with the Frontier Centre for Public Policy.