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In Further Defence of Toronto Tolls
06/03/2003
James Bow has written a good article about the Toronto highways tolls concept, which I also discussed here a few days ago. He raises the concern that tolls on Toronto highways could represent a tax on downtown businesses, which would further encourage sprawl.
Imposing high tolls on the downtown core imposes yet another tax on downtown businesses which are already under pressure, and see the incentive of lower business taxes in Markham and Richmond Hill. If we are not careful, instead of enhancing Toronto's downtown, we could end up emptying it, increasing the very suburban sprawl that we hope to limit.
James doesn't come to a conclusion, since he also recognizes some of the benefits of tolling, but he is concerned. I, for several reasons, still find myself in the pro-toll camp. First, it is true that tolling the highways makes it more expensive to travel to the city from the suburbs, but I expect that the net financial burden on the downtown would be reduced. Keep in mind that the highways are presently provided as a free benefit to many non-residents at the expense of city taxpayers. Due to current value assessment, much of the tax burden is shouldered by the residents and businesses in the core. Yes, a toll on the Gardiner would make it more expensive for Mississaugans to come into the city. But, it would also lower property taxes in the downtown. It is hard to know exactly how this would balance out, and it would probably vary from business to business, but I expect a net benefit. Right now, we're in the business of providing a free subsidy for people to live elsewhere, and therefore shop and pay taxes elsewhere. The second argument lies in increasing the desirability of our downtown. Tolls on highways may create a net improvement in the attractiveness of downtown. For one, taxes will be reduced. Additionally, congestion will be reduced, valuably increasing mobility. Downtown Toronto today remains an attractive place, a place people pay more to be. If we reduce the cost of being in Toronto (by reducing property taxes) and increase the cost of being elsewhere (by tolling the highways) we should tend to increase the value of being downtown. I would feel differently if the city dynamic were different. I grew up in Windsor, and observed Detroit a lot. There, the city core is undesirable, and everyone has already left -- facilitated by the construction of freeways. In Detroit, everything possible must be done to try to draw people into the downtown. Toronto is still in the opposite situation. Our energy and dynamism continues to be driven by what happens in the old part of Toronto. Premier businesses, innovative people, and the most desirable neighbourhoods are clustered close to the centre. We retain the critical mass of gravity, rather than the centrifugal force of a rotten core. There are, indeed, flaws in our tax systems that subsidize sprawl and dispersion. Free highways offer a further incentive to relocate to outlying regions. The benefit that highways provide is more to suburbanites, providing them with proximity to the attractive and powerful city centre, than it is to those in the core by bringing in the outliers. In short, my view is this: tolling highways is not a cost to downtown. It is a cost to suburbs. One they deserve to pay.
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