Toronto Mayor John Tory's road toll proposal unique in Canada
Tolls aren't currently used to fund city coffers in Canada, but some experts think they should be considered
If Toronto city council approves the mayor's plan to implement tolls on two highways, it would make Toronto the first Canadian municipality to do so.
Brock Carlton, the CEO of the Federation of Canadian Municipalities, told CBC News he's not aware of any major roadways that go into Canadian cities that have tolls for revenue purposes.
The roads and bridges that do have tolls — including Highway 407 in the Greater Toronto Area or the western portion of a bridge on Highway 30 around Montreal — are rare and don't fund city coffers, he said, making Mayor John Tory's proposal unique.
However, Carlton said, several cities are looking at creative revenue generators, likely including the possibility of toll roads, but there are costs associated with implementing tolls and the concept can be controversial because Canadians aren't used to them.
Tolls and fees are more common in Europe. London's congestion charge is the most familiar example. The charge was implemented in 2003 and drivers have to pay if they drive into the city centre.
As of 2014, the congestion charge had brought in £1.2 billion ($2 billion Cdn), which has been reinvested in transit and roads.
A similar model was implemented on a trial basis in Stockholm in 2006, where it led to a significant reduction in congestion. The charge was fully reinstated in 2007 and it brings in roughly $107 million per year in revenue.
"Congestion is such an economic detractor," Carlton said, partly because congestion slows down the movement of goods in and out of a city.
"The cost is enormous in a place like Toronto."
Tory has said money from the proposed toll on the Gardiner Expressway and Don Valley Parkway would help fund two major transit programs in Toronto. A road toll of $2 per vehicle could raise $200 million a year for transit.
A plan funding transit would go over better with taxpayers than putting the revenue into a general fund, Carlton said.
"Canadians are much more willing to provide additional tax support when it's targeting specific projects," he said.
Tory is also proposing a hotel tax, which is expected to bring in about $22 million a year.
Need for revenue streams
Carlton didn't address similar taxes in other Canadian communities, but said large cities are always looking for ways to overcome revenue shortfalls.
Cities have three streams of revenue, Carlton said: property taxes, user fees and transfers from federal and provincial governments.
"The revenue base is very very narrow," he said.
Because road tolls are a new approach for a city, Carlton expects other mayors to be watching Toronto's decision closely.
"I think what it will do is give it an illustration of the positive aspects and the challenges," he said. "Mayors are going to have to make their own decisions depending on local challenges."
Enid Slack, director of the Institute of Municipal Finance and Governance at the University of Toronto's Munk School of Global Affairs, told CBC's Metro Morning that all large cities need other revenue streams.
"If you look over the last 30 years there's been a lot of pressures on the expenditure side of the budget," Slack said. "But nothing's changed on the revenue side of the budget.… Maybe we need a diversification of revenue tools."
People want less congestion, good transit, parks and libraries, but they haven't been paying for them, said Slack, who co-authored a report on alternate revenue streams for Canadian cities.
"I don't think they have a choice. I think they have to pay for those services," she said.