While the conversation in Toronto is bubbling over with talk about cutting pay raises and closing subway lines, the real solution to the city's budget problems is barely getting mentioned: congestion charging. What Toronto needs is an expansive and intelligent road pricing system that would charge motorists an appropriate amount every day for the luxury of driving in our city. The charge could be different depending on the time of day, the day of the week and the part of the city.
The problem with our current tax system is that it is based on the assumption that everyone will use a car to get around, so everyone will pay somewhat evenly for the road system through property tax. This system doesn't work in an age when reducing car use is critical to our future. (Consider global warming and high oil costs predicted by the IEA in 2012).
On a provincial level, the budget for transportation is similar to the gas tax, about $3 billion (although there is no direct connection). However, the majority of the roads covering our cities are funded by municipal budgets, which get most of their income through property tax, something we all pay, renters and owners, whether we drive a 1 ton vehicle every day or not. The system practically begs people to drive so they get their money's worth. If you want to see more numbers that show how this system is unfair and regressive, read this study from the Victoria Transport Policy Institute.
The key feature of a congestion charge is that it encourages every car owner to consider whether or not to use a car every morning. If a car gets used, the owner pays the 2 or 5 or 10 dollars. If the car stays parked at home, the owner can spend the money on a TTC token or maybe a bike. This is where the $60 annual tax on car registration was weak. Once the registration fee is paid, it won't do anything to encourage people to leave their cars at home. With a congestion charge, the motorist directly associates car use with the cost of the limited road space.
Other cities around the world have already demonstrated how to do this. In London and Stockholm, and now New York, people have the same complaints about not having an adequate transit system. Mayor Bloomberg addressed this. Toronto is not the first. If we wanted to do this, we could quickly implement express bus routes covering the city, and even dedicate portions of our roads to the bus and bike.
A congestion charge makes so much sense on so many levels, it's painful to see it ignored.