Forget more transit, congestion charges best solution for traffic woes

The best way to tackle traffic congestion is not by building more transit, according to new research.

Traffic congestion is Canada’s topic du jour at the moment.

In Toronto it was one of the most talked about issues in the city’s recent mayoral election – for good reason. Congestion costs the Greater Toronto Area (GTA) as much as $11 billion a year, according to one study. Residents in Vancouver and Montreal have it no better, as various studies place both of those cities in the top spot for the worst traffic congestion in the country – highlighting the countless hours lost each year to traffic jams.

In all of these cities, the solution for tackling congestion most commonly touted relies on the creation of more public transportation – to free up valuable road space by enticing drivers out of their cars (see here, here and here). Traffic congestion, according to this argument, is simply a result of commuters having no other option than their car to take them to work and back.

The experience of cities in other countries, however, shows that more-transit policies are destined to fail. Los Angeles, Dallas and Portland (the darling of transit advocates) all pursued massive public transit expansion programs that either resulted in lower-than-expected ridership, financial burdens (and an increase in fares to pay for new subway lines) or an actual increase in car usage for daily commutes.

What none of the elected officials in Canada’s congested cities are talking about – apart from a brief mention in a report on “mobility pricing” released by the Vancouver Mayor’s Council – is the use of pricing to more efficiently move traffic along busy highways and arterial roads.

The current model, in which road space is free during the busiest travel periods, is not only outdated, but also broken.

New research from Paris, “Road pricing and transport pricing reform in Paris: complements or substitutes”, reveals that the best way to tackle congestion is to implement a congestion charge, where motorists pay a fee to drive in busy areas of a city during peak travel periods. Contrary to findings elsewhere, the Paris report also recommends policymakers avoid massive expansion of public transit systems as doing so will fail to produce significant benefits.

Drivers benefit from congestion charges as those who value road space the most are most willing to pay for it, the study shows. A congestion charge, then, becomes a way to shift commuters who take up valuable road space during peak travel periods to off-peak periods. Transit customers also benefit from a congestion charge, as it frees up valuable road space for buses – thereby increasing the attractiveness (and reliability) of public transit, particularly for low-income riders who rely on the bus more heavily than high-income riders.

Commentators suggesting that any congestion charge must be preceded by an increase in public transit investment have it all wrong, the study warns.

“The benefits of an overall increase in public transport capacity are fairly low and do probably not justify the investment cost,” the authors write. They add that any increase in transit capacity without fare hikes attracts new riders that “do not pay all of the additional costs” and so imposes an overall cost on society that must be collected through other means.

Any transit capacity that is added during peak travel periods should be matched by an increase in fares, the authors suggest. “The reason,” they write, “is that additional passengers still require extra operation costs, so the marginal cost of additional passengers in the peak remains important.”

Overall the authors conclude that the best policy would be a congestion charge for all drivers in the immediate downtown core, combined with an increase in fares for public transit users. Any increase in public transit capacity, using their model, produced “relatively small benefits.”

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) or at (416) 964-9223 ext 236.


4 thoughts on “Forget more transit, congestion charges best solution for traffic woes

  1. This is a very good article I would add a few points:

    FIRST, traffic congestion is not proportionate to the number of cars on the road. Beginning at 3 am (when most roads are empty) you can add many cars without any noticeable congestion. It is only when a road segment approaches its carrying capacity that the addition of very few cars can cause a noticeable reduction in speed. So, even though roadway pricing might not change the behavior of most drivers, it does not need to. If only a small percentage of drivers change behavior during rush hour, there can be a noticeable reduction in congestion.

    SECOND, one of the biggest factors in congestion is land use. Cars take up an enormous amount of space when parked — and even more when moving. If land use patterns dictate that everyone must take a car trip to access every activity outside the home, then congestion will be the result. There are two policies that flow from this:

    Policy #1: If land use controls are relatively weak (as they are in most places in North America), then “cordon pricing” is probably inappropriate. Cordon pricing (as is used in London) charges drivers a fee when they cross a boundary. Over time, people will seek to avoid this fee by moving their homes and businesses away from the boundary where charges are imposed. Thus, cordon pricing creates an incentive for sprawl — and sprawl is one of the major causes of congestion. Instead, a mileage-based fee is more appropriate. This encourages households and businesses to minimize the distance between typical activities — and this encourages more compact land use patterns that help make walking, cycling, car-pooling, car-sharing and transit more convenient and practical.

    Policy #2: Roads, transit and other infrastructure can be a double-edged sword. We create them to facilitate development. But if they are well-designed and well-executed, land prices near these facilities go up. This pushes new development to seek cheaper, but more remote sites. Thus, infrastructure intended to facilitate development can actually push it away, creating sprawl. Part of the solution is “value capture,” whereby publicly-created land values are returned to the public. This helps make infrastructure financially self-sustaining. It also reduces the profit from land speculation, thereby reducing the speculative demand for land which helps lower land prices, making infrastructure adjacent development more affordable.

    Achieving the right balance between user charges and value capture is a key to success in fighting congestion. For more information, see “Funding Infrastructure for Growth, Sustainability and Equity” at

    1. Some assertions in the article are suspect, particularly:
      Los Angeles, Dallas and Portland all pursued massive public transit expansion programs that either resulted in lower-than-expected ridership, financial burdens (and an increase in fares to pay for new subway lines) or an actual increase in car usage for daily commutes
      And theory of policy 2 appears more than a bit odd.

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