Tolls would bring in up to $1.6 billion for highway infrastructure



    MONTREAL, March 3 /CNW Telbec/ - Electronic tolls on all of Quebec's main
highways would bring in up to $1.6 billion per year. An Economic Note
published by the Montreal Economic Institute examines four scenarios for
instituting charges of this type.
    Economist Mathieu Laberge, the study's author, explains that "a return to
tolls would be helpful in guaranteeing stable financing for maintenance and
rebuilding of the highway network as well as minimizing traffic jams and
slowing growth of the government debt."
    The author suggests a "network" approach under which all highways with
sufficient traffic volumes would be subject to tolls rather than tolls being
applied only to new infrastructure. He says income from tolls should be used
exclusively for maintaining and rebuilding infrastructure near where they are
collected since any other use would constitute a hidden tax and would
undermine the legitimacy of tolls among motorists.

    Extending tolls more widely

    Tolls disappeared from Quebec in the 1980s but will soon be back with the
new Highway 25 bridge and the Highway 30 extension. This provides a good
opportunity to assess the feasibility of extending tolls over a larger portion
of the highway network.
    The following toll scenarios are examined: a) Montreal Island bridges;
b) highways in the Montreal area; c) highways around major urban areas; or
d) all main highways in Quebec. The last of these is the most attractive
because, by affecting most Quebec motorists, it would help reduce implicit
subsidies to motorists who do not live near the major urban areas.
    A round trip between Montreal and Quebec City would cost about $30. For a
suburbanite who crosses a bridge in the morning and evening rush hours, the
daily cost would be $4.80, for a yearly total of $1,200. These amounts reflect
the value of service received by motorists, with the cost normally hidden in
government debt.

    Reducing traffic jams on Montreal bridges

    The Montreal Island bridges alone would generate revenues of
$449 million. This amount is likely to be well in excess of the bridges'
maintenance, depreciation and administration costs, with tolls aimed not only
at covering costs but also at reducing traffic jams. Surpluses should be
returned to users, for instance in the form of discounts on licence and
registration fees paid to the SAAQ. Using surpluses to finance public transit
or other government spending would go against the user-pay principle, obliging
one category of citizens to assume other people's transportation costs.
Moreover, the pollution issue cannot be invoked in support of this measure
since fuel taxes already compensate for motorists' greenhouse gas emissions.

    Public-private partnerships to resist temptation

    To share the inherent risk of highway projects with the private sector,
to promote innovation and, above all, to prevent the government from being
tempted to reach into toll revenues for purposes other than infrastructure
maintenance and rebuilding, it would be desirable for the new tolls to be
instituted in the form of public-private partnerships. A return to tolls would
thereby guarantee that the maintenance deficit accumulated over the years
would be dealt with.

    The Economic Note titled Bringing back tolls on Quebec highways was
prepared by Mathieu Laberge, an economist with the Montreal Economic Institute
and holder of a master's degree in econometrics and international economics
from the University of Nottingham.

    The full document is available free of charge at www.iedm.org

    The Montreal Economic Institute (MEI) is an independent, non-profit,
non-partisan research and educational organization. Through studies and
conferences, it informs public policy debates in Quebec and Canada by
suggesting wealth-generating reforms, primarily on matters of taxation,
regulation, health care and education. Its publications since 2000 have
included the Report Card on Quebec's Secondary Schools. In 2004 it won a
Templeton Freedom Award for Institute Excellence for the quality of its
management and public relations.




For further information:

For further information: and interview requests: André Valiquette,
Director of Communications, Montreal Economic Institute, (514) 273-0969 ext.
2225, Cell: (514) 574-0969, avaliquette@iedm.org


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