User fees vs Taxpayer Funding For Infrastructure

[Big Guy]

Canada has a serious funding problem of deteriorating infrastructure. Canada's roads, bridges, wastewater treatment centres and sewer systems are starting to fall apart. In the next 10-15 years, Canadian cities will face some seriously expensive bills. But what is the best way to fund needed infrastructure? For many reasons, the best solution is one that municipalities are most reluctant to implement: user fees.

In a ground-breaking report released today by The School of Public Policy, authors Philip Bazel and Jack Mintz suggest that the only answer is that the user fee system must be introduced.

The authors suggest that the municipalities can no longer afford the escalating costs. General taxes and debt financing can no longer sustain the needs.

They suggest that transfers from other levels of government allow municipalities to maintain a low tax rates for their constituents. But citizens, (often the wrong citizens), will ultimately pay the price through provincial or federal income taxes. The authors argue that Canada needs to move toward more optimal pricing for infrastructure. Instead of costs falling on taxpayers, governments need to start charging citizens for the use of the infrastructure they value through user fees.

Should taxpayers in Calgary help pay for a new bridge in Quebec?

Should people in rural Canada pay for infrastructure in cities?

Should people who do not drive have to help pay for highways?

We already have highways (like the 407 in Ontario) which pay for themselves through tolls. The United States went to toll roads years ago to pay for their building and maintenance. Why are we not doing the same?

Is it time to start charging (toll booths) for drivers to use municipal, provincial and federal highways and bridges?

The report can be found at;

http://policyschool.ucalgary.ca/?q=content/free-ride-over-%0Bwhy-cities-and-citizens-must-start-paying-much-needed-infrastructure

Additional information and references can be located by typing into Google;

"The School of Public Policy report"

The search engine called Google can be found at:

https://www.google.ca/

Edited May 21, 2014 by Big Guy

[Boges]

Well what seems to be happening in Ontario is a will to tax or toll drivers, not to fund the infrastructure to maintain the road, there's a pretty heft gas tax that's supposed to be devoted to that. BUT they (Ontario Liberals) seem to want to to tax or toll drivers to pay to expand public transit. In many cases public transit that isn't meant to benefit the people they want to tax.

If a city like Toronto doesn't like the gridlock it experiences, by all means toll the "city owned" highways that people use to get into the city, It costs $30 to get into New York City. But leave the thru-ways like the 401 alone.

[Topaz]

User's fees or tolls call it anything you want, but that is the only fair thing to do. People outside of a region shouldn't have to pay with their tax dollars for something they may never use.

[Boges]

User's fees or tolls call it anything you want, but that is the only fair thing to do. People outside of a region shouldn't have to pay with their tax dollars for something they may never use.

What if the toll is used to fund something other than the road that's being used? Example: a Toll on the Gardiner Expressway used to fund a Scarborough Subway.

The thing people forget about tolling on US roads is that they don't have the ridiculous gas taxes we do in Canada. In Canada we also have the offensive practice of tacking on a VAT on top of the price with the Excise Tax. A tax on top of a tax.

Edited May 21, 2014 by Boges

[dre]

Should taxpayers in Calgary help pay for a new bridge in Quebec?

Should people in rural Canada pay for infrastructure in cities?

Should people who do not drive have to help pay for highways?

Yes. Yes. And Yes. And each person benefits from this infrustructure whether they personally use it or not, and theyll still pay regardless. Toll booths around the country would result in goods and services being more expensive for everyone. The easy flow of people and goods and services is like grease to an economy.

And the government already has infrustructure set up to collect income tax and gas taxes. Having to build, and maintain, and tax a vast network of tollbooths is simply going to make this infrastructure MORE expensive to build, and MORE expensive to maintain.

We will pay dearly for stupid, short-sighted approaches like this.

[dre]

User's fees or tolls call it anything you want, but that is the only fair thing to do. People outside of a region shouldn't have to pay with their tax dollars for something they may never use.

Its a terrible idea, and it will accomplish nothing besides making transportation infrastucture much more expensive to build and maintain.

Its almost mind boggling that it would even be considered....

Our answer to transportation infrastructure being too expensive to build and maintain, is to put tollbooths staffed with full time government employees on each road. ROFLMAO. Brilliant.

And your take on this is myopic and self centered. EVERY SINGLE PERSON in this country benefits from having modern infrastructure, whether they personally use it or not. Previous generations understood this, and we inherited from them a modern civilization and benefited from that greatly. But GENERATION DEADBEAT (thats us), just sat there, whined about paying taxes, and let it all go to seed. Stupid things happen to stupid people and we are gonna pay for our laziness and lack of vision.

[Wilber]

Only 2 billion of the 5 billion the feds collect in gas taxes go back into infrastructure. In addition to that, they collect 1.6 billion in GST on motor fuels and their taxes. A tax on a tax. Air travel is user pay in Canada yet governments tax the crap out of it and the feds make over 250 million per year on airport rents.

Edited May 21, 2014 by Wilber

[Big Guy]

Its a terrible idea, and it will accomplish nothing besides making transportation infrastucture much more expensive to build and maintain.

Are you also against local tolls to pay for the new Champalin Bridge in Montreal and the new border crossing bridge in Windsor even if the tolls will be in place only until the infrastructure has been paid for?

[dre]

Only 2 billion of the 5 billion the feds collect in gas taxes go back into infrastructure. In addition to that, they collect 1.6 billion in GST on motor fuels and their taxes. A tax on a tax. Air travel is user pay in Canada yet governments tax the crap out of it and the feds make over 250 million per year on airport rents.

Thats the thing. The government is incompetent, and the citizens are lazy and cheap. Thats why our infrustructure is going to seed, and building tollbooths and public roads and staffing them with civil servants is not going to help anything at all.

We deserve to have shitty roads. I guess what needs to happen is for things to get so bad that we elected a party that makes infrastructure spending a major part of their platform.

[dre]

Are you also against local tolls to pay for the new Champalin Bridge in Montreal and the new border crossing bridge in Windsor even if the tolls will be in place only until the infrastructure has been paid for?

Yes because I just dont believe it. They told us that about the tollbooths on the coqe here in BC. The highway has been paid for for a decade and the booths never went away.

Im a firm believer in infrastructure being a national public priority. Living in a modern country doesnt COST money... it MAKES you money.

[dre]

Tell me this... which costs more over time...

A bridge?

Or a bridge with a tollbooth and a bunch of government employees working 24/7 shifts?

This is not going to save anyone a dime. It might shift costs a bit, and placate the "I should only pay for services I actually use" libertarian crowd. But all it will do is make infrastructure in this country cost more.

[Boges]

Not that I support tolling. But Tolling can be achieved without tollbooths. The 407 just has cameras and transponders.

[dre]

Canada has a serious funding problem of deteriorating infrastructure

Thats like saying a person that spends all his money on cocaine and alcohol instead of fixing his teeth has a "dental funding problem". He DOESNT. He has a prioritization problem. We are spending billions of dollars on ships to protect artic tundra, and billions more on planes designed to blow up random dark-skinned folks on the other side of the world. But we dont have money for critical national infrastructure.

[dre]

Not that I support tolling. But Tolling can be achieved without tollbooths. The 407 just has cameras and transponders.

Fair point sir.

[Black Dog]

Thats the thing. The government is incompetent, and the citizens are lazy and cheap. Thats why our infrustructure is going to seed, and building tollbooths and public roads and staffing them with civil servants is not going to help anything at all.

We deserve to have shitty roads. I guess what needs to happen is for things to get so bad that we elected a party that makes infrastructure spending a major part of their platform.

Except voters are already conditioned to believe that low taxes and spending are the most important thing of all. I swear people would rather die in a bridge collapse than spend an extra $20 a year in taxes.

User's fees or tolls call it anything you want, but that is the only fair thing to do. People outside of a region shouldn't have to pay with their tax dollars for something they may never use.

Does this just apply to infrastructure or can we extend it to other expenditures that don't apply to us?

[dre]

Does this just apply to infrastructure or can we extend it to other expenditures that don't apply to us?

This gets right to the heart of the whole problem with this kind of thinking...

I dont fly, so why should I have to pay for airports or the administration of aviation regulations?

I dont get sick so why should I pay for healthcare?

I live in the prairies so why should I pay for the coast guard?

I dont ride a bicycle so why should I pay for bike lanes?

I dont go to parks... why should I pay for national park administration?

You can take this short sighted way of thinking, which unfortunately is one of the defining features of Generation Useless, and literally apply it to every single government function or service.

[Boges]

We talk about lack of revenue yet government spending continues to rise and so does government debt.

I suspect governments don't properly spend the money they do get.

[Wilber]

User's fees or tolls call it anything you want, but that is the only fair thing to do. People outside of a region shouldn't have to pay with their tax dollars for something they may never use.

Whether an individual drives on them or not, virtually everything they need and consume comes from somewhere, at some point delivered on a road by a truck.

[Big Guy]

Yes, taxes and user fees can pay for the same projects. I believe the difference is in the collection of those revenues. Taxes are paid according to income and/or "ability to pay". User fees are paid only by those gaining immediate benefit from the project.

Which type of revenue generating is more "fair" to the individual?

As has been mentioned previously about Toronto, a driver can use the 401 for free (?) to drive across the north part of the city in 2 to 3 hrs or take the 407 for about $13 and do it in about half an hour. You have the choice.

[monty16]

The real problem is funding and that's what needs to be addressed. User fees are unpopular and so consequently there will be an effort by the Harper government to make it obvious that's what's needed. It's not! It's only when it's put to the people in that form that it will be rejected as more unfair taxation. And that's the goal of all conservative governments. Hence, little money spent on the obvious need to maintain the infrastructure.

Liken it to funding for our health care system. There's no doubt that the conservatives would like to destroy it. In order to do that the Harper gov needs to continually keep funding down to a minimum so as to damage the system to the point at which the people begin to question it's value.

There are reasonable answers for the problem. We Canadians should get involved in discussing such and not be tricked into thinking like an American when it comes to these sort of questions.

[Wilber]

Yes, taxes and user fees can pay for the same projects. I believe the difference is in the collection of those revenues. Taxes are paid according to income and/or "ability to pay". User fees are paid only by those gaining immediate benefit from the project.

Which type of revenue generating is more "fair" to the individual?

As has been mentioned previously about Toronto, a driver can use the 401 for free (?) to drive across the north part of the city in 2 to 3 hrs or take the 407 for about $13 and do it in about half an hour. You have the choice.

Canadian motorists already pay high user fees in the form of fuel and other taxes. An average of 40 cents per liter on fuel, much higher in some places.

[Bonam]

I don't see why people support the idea of user fees for infrastructure but not user fees for education, healthcare, welfare, police, firefighters, etc. Infrastructure is every bit as fundamental to a functioning and prosperous society as any of the above, and we pay taxes for all of these things. Unless one supports a pure libertarian minarchist vision of government where ALL of those things are paid for by user fees, I don't see why infrastructure should be any exception.

[Topaz]

True, but can't business write off tolls as a business expense, were you and me can't???

[CPCFTW]

We talk about lack of revenue yet government spending continues to rise and so does government debt.

I suspect governments don't properly spend the money they do get.

This. Giving public servants and teachers 5 less bankable sick days per year would probably save us enough to build a new subway in every major city.

[Boges]

Tolling people for a "public" highway that's paid for is punitive.

The 407 has always been a toll road. It's expensive to use but your time is money right?

Anyone who thinking tolling large highways like the 401 or the Trans-Canada highway are out of touch. Those are economic pipelines that cover multiple communities and jurisdictions.

I don't oppose a large city like Toronto tolling the highways that go into their city because going into a city like that is often a choice. And there are alternatives. There isn't really an alternative from getting from one end of the province to another.