On May 28, the Toronto Star reported that the proposed Sheppard Subway Extension couldn’t be built without some kind of road toll or congestion charge in Toronto. This matters because the person saying it is Gordon Chong, Mayor Rob Ford’s choice to make sure the Sheppard Extension gets built. Only days later, Ontario’s environmental commissioner brought up congestion charging again, this time in the context of helping the province meet its environmental goals. So what’s it all about?

What’s a congestion charge?
A toll, or tax, or fee, or price, or whatever—basically taking money from drivers to use roads. In Toronto, we usually talk about two possible schemes: first, putting tolls on the freeways that the City owns—the Don Valley Parkway, the Gardiner Expressway; and second, a “congestion zone” in the downtown core where drivers would pay extra to enter the densest part of town, similar to the system in London, UK. Either system would need to get permission from Queen’s Park, because the City does not have the authority to levy its own tolls according to TTC Chair Karen Stintz. (Technically, the City can designate a highway to be a toll road, but S. 116 of the City of Toronto Act lets the Province set the rules on when and how it’s done—and can say no for any reason whatsoever.)

Do we need it?
Toronto has really bad traffic. One of the most often-cited numbers is that the average GTA commute has grown from 68 minutes in 1992 to 82 minutes in 2008. Traffic is estimated to cost the economy $6 billion a year. We could go on, but the rest of the numbers (PDF link here, for starters) aren’t any better. The point of congestion charging is to ease those numbers a bit. Commuters are already paying with their time, and it should be possible for them to buy some of that time back with their money.

But I like using the roads for free!
Who doesn’t love free stuff? The problem is that when the price of a good is zero, demand quickly outgrows supply. (Imagine the demand for free Blu-ray players the week before Christmas, or free convertibles on Toronto’s first sunny day.) What takes over when that happens is almost always less efficient, things like waiting in line—that’s congestion. So long as roads remain free to drive on, they fill up faster than we can pave new ones. This was called “the fundamental law of highway congestion” by British economist Anthony Downs almost 20 years ago, and has been reinforced with recent work by University of Toronto economists.

How would it work?
In London, the congestion charge is taken off of every car that enters the zone by automated cameras that catch people’s licence plates. Alternately the 407 ETR uses radio transponders as well as plate cameras to catch everyone who uses it, with sometimes dubious results. Then there’s Canadian company Skymeter, which proposes putting a little GPS device in your car to accommodate “virtually any type of road pricing scheme you can imagine.” Hypothetically, two parallel roads could have different prices—for example, if one was in gridlock and the other was empty, Skymeter could charge through the nose for one and zero for the other, and adjust the prices until traffic levelled out on both.

Does congestion pricing work?
The evidence from London is mixed. In 2008 some British newspapers reported that the congestion charge had cut traffic jams after it was first introduced in 2003—but that drivers bounced back and by that year congestion was as bad as it had been before the charge. On the other hand, this year London papers are talking about the UK having reached “peak car” as people move back to cities and abandon cars. What we’ve always known is that driving is an “inelastic” activity—the price has to go up a lot to produce small changes in people’s behaviour. If the London charge hasn’t produced a big shift, it might be because the price is too low. One recent report suggested that the area covered by the London scheme (1.4 percent of the metro area) was too small to affect air pollution rates.

Isn’t this just a tax grab?
Maybe. The question of what to do with the money raised from a congestion charge is a political one: it could be spent on public transit (as Gordon Chong suggested) or it could be given back to taxpayers in the form of lower income or payroll taxes. Or the government could just keep it. None of those answers really changes the case for congestion pricing, except that some might be more politically appealing than others.

Blog image by PLTam via OpenFile Toronto's Flickr pool.