TORONTO, July 11, 2013 /CNW/ - The true costs of congestion in Canada's
cities are higher than previously estimated, according to a report
released today by the C.D. Howe Institute. In "Cars, Congestion and
Costs: A New Approach to Evaluating Government Infrastructure
Investment," author Benjamin Dachis says there are social and economic
costs to congestion that governments should take into account when
investing in infrastructure, beyond the cost of time lost in traffic.
"When congestion makes people choose to stay at home rather than travel,
all sorts of activities are curtailed, resulting in a quantifiable loss
to the economy," commented Dachis. "These losses should be included in
the costs of congestion and, in turn, estimates of the benefits of new
For the Greater Toronto and Hamilton Area, Dachis estimates the
additional costs of congestion, beyond time lost to traffic, range from
at least $1.5 billion to as much as $5 billion per year.
The report points out that existing studies ignore the positive effects
of relationships among firms and people that are among the main
benefits of urban living. These urban agglomeration benefits range from
people accessing jobs that better match their skills, sharing knowledge
face-to-face, and creating demand for more business, entertainment and
cultural opportunities which, in turn, benefits other people. "When
congestion makes urban interactions too costly to pursue, these
benefits are foregone, adding significantly to the net costs of
congestion," said Dachis.
In general, the social returns from infrastructure can be substantial,
said Dachis. Governments are missing a large portion of the economic
benefits of infrastructure when they do not estimate them. In
particular, economic externalities - which arise when an individual's
use of infrastructure affects someone else - can be quite large.
"Governments should assess the full range of social costs and benefits
of externalities and include them in building a consistent economic
case for investment," said the author.
This report offers a decision-making framework for governments seeking
to include these broader, social welfare costs in selecting which
infrastructure investments merit scarce public funds - ranging from
transportation infrastructure to flood protection to social
infrastructure - and which investments should be handled by the private
For the report go to: http://www.cdhowe.org/cars-congestion-and-costs-a-new-approach-to-evaluating-government-infrastructure-investment/22210
SOURCE: C.D. Howe Institute
For further information:
Benjamin Dachis or Philippe Bergevin, Senior Policy Analysts, C.D. Howe Institute, 416-865-1904; email: firstname.lastname@example.org