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by Daniel Gloade on June 9, 2014

All three political parties advocate a high-speed train connecting London, Kitchener and Toronto.  The purpose is to save money on road construction and to reduce smog.  People commuting on trains, they reason, will not congest the 401 Highway.

Right now, there are four train routes between Kitchener and Toronto.  There are two routes each way.  It is argued that if one increases the number of routes them more people will use the train.

People can also take the bus.  It is slightly cheaper and there are eight routes to and from Toronto.  The only concern is the occasional delay caused by traffic.

Many advocates state that the key to getting people to convert from personal vehicle to mass transit is the cost to the consumer.  I’m not so sure.  There is substantial cost savings when using mass transit even today.

The Canadian Automobile Association did a study on the true costs of owning a vehicle.  It can be found in their booklet: “C.A.A. Driving Cost 2013”.  It can be downloaded from their website for free.

It made an estimate of the total operating costs of a civic LX.  The amount for fixed costs (insurance, car loan) was $7,225.08 per year.  It also estimated the annual operating costs (fuel, tires, depreciation etc.) It estimated the annual cost to be $4,649.60.

When calculating the annual operating costs, the C.A.A. assumed that the vehicle would travel 32 000 k.m. per year and the price of gasoline was $1.24 per litre.  According to my estimate, if one assumes 21 working days per month then travelling to and from Toronto for work is a total of 53928 k.m. per year.  The average price of gasoline is approximately $1.35 now.  Factoring in these new estimates then I estimate the annual cost of having a Honda Civic, and using it to commute to and from Kitchener for work is $13 000.00.

According to Greyhound, a monthly pass to and from Toronto is $299 before tax .  This amount is $337.87 after tax.

A  T.T.C. pass per month is $ 151.14.  The chart is here.

These amounts total amount is $489.01 per month or $ 5868.12.

What about trips in or around Kitchener?  A monthly pass for Kitchener Transit will soon be $85.88 per month (after tax).  You can either get a taxi or rent a car.  A rental car can be delivered to your house by a rental agency and cost $20.00 per day plus mileage.  You can also save money by running many of your errands in Toronto using your monthly pass.

From these calculations, I do not believe that people will convert from personal vehicle to mass transit on price alone.

The further problem is that we pay for these large infrastructure projects using general taxpayer funds.  In reality, we should pay for these projects using a gasoline tax.  Those that create the problem (road users) would fund the solution (high-speed train).  A tax subsidized mass transit project with high gasoline tax will put be “carrot-stick” solution that may be enough for people to surrender their cars.

In Canada, however, our tax policies subsidize road use to the detriment of other taxpayers.

The amount of revenue from gasoline taxes has remained quite stable from 1997 to 2011.  Gasoline prices have increased substantially, however.  Infrastructure spending in Canada has also increased substantially.   The data is from the Canadian Taxpayer’s Federation, a very conservative group.  Their research is here and here.

I believe that the only way to address traffic congestion is the extreme measure of increasing gasoline taxes to pay for mass transit.  This position is unpopular, but I fear we must eventually stop living in a fool’s paradise and know the true costs of our decisions.

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