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Majority of Ontario Road Infrastructure Costs Paid by Motorists

In the Greater Toronto and Hamilton Area, road users more than cover the total cost of road infrastructure

Ottawa, October 17, 2013 – Ontario drivers pay almost the full cost of the roads they use, according to a Conference Board of Canada report released today. Province-wide, fuel taxes and other fees cover between 70 and 90 per cent of annual road construction, maintenance and policing costs.

highwayIn the Greater Toronto and Hamilton Area (GTHA), the Conference Board analysis indicates that road users paid more in taxes and fees than it cost to operate the road network.

The report, Where the Rubber Meets the Road: How Much Motorists Pay for the Road Infrastructure, produces new and comprehensive estimates of the costs of the Ontario road network, and the revenues generated by road users.

"One of the major challenges in addressing traffic congestion is determining who should pay the costs of additional road infrastructure," said Vijay Gill, Director, Policy Research, The Conference Board of Canada. "Virtually all the discussion about congestion is related to the presumption that users of the road infrastructure are heavily subsidized by all taxpayers. The findings of this report don't remove policy options such as congestion charges from consideration. They do, however, shed new light on the conventional wisdom about who pays for road infrastructure."

Highlights

  • Ontario motorists cover between 70 and 90 per cent of the costs of the road network through fees and fuel taxes.
  • In the Greater Toronto and Hamilton Area, road users more than cover the costs of construction, maintenance and policing.
  • Vehicle ownership and operating costs make up, by far, the largest portion of total costs for road users. However, they are paid directly by the motorists themselves.

The analysis focuses on light-duty vehicles, which cover automobiles up to 4.5 tonnes — cars, minivans, sport utility vehicles and light pickup trucks. Revenues included in the analysis included federal and provincial fuel taxes, vehicle registration fees and tolls, but not general sales taxes. The Conference Board used three different approaches to estimate total road infrastructure costs (construction, major and regular maintenance and policing).

Province-wide, road-network related revenues from fuel taxes, licence fees and other sources totaled more than $7.5 billion annually between 2008 and 2010 (the latest year with available data). These revenues covered between 70 and 90 per cent of annual road costs, depending on the method used to calculate infrastructure expenditures.

Motorists cover even more of their share of costs of the urban region of the Greater Toronto and Hamilton Area. Revenues collected in the GTHA between 2008 and 2010 generated almost $1 billion annually more than the yearly cost of the road network in the region. However, local governments —which own and maintain a large part of the infrastructure— collect a relatively small portion of the revenues related to road use.

Vehicle ownership and maintenance costs were not included in the results as they are paid for directly by motorists, although estimates of those costs can be found in the report. Social costs — from accidents, congestion, greenhouse gas emissions, and criteria air contaminants — are not included in the main calculations. But research evidence on them was examined, and typical estimates of the external components of congestion, accidents and emissions would not change the conclusions of the calculations radically.

The research was initiated and financially supported by the Canadian Automobile Association South Central Ontario (CAA SCO). A subsequent report will elaborate on the policy implications of these findings.

For more information contact

Corporate Communications
613-526-3280
corpcomm@conferenceboard.ca


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