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Thoughts about the relationships between transport and the urban area it serves

Pay parking taxes spike to more than 35 per cent

with 16 comments

BC Local News

Another no news story with very little added to what has been said many times.

I really wonder why this gets coverage, and also why there is no discussion in the article of why this is happening. Translink, of course, bears the brunt of the complaints but really the blame lies squarely with the provincial government – firstly for blocking Translink’s access to revenue sources that make more sense and secondly for falling for the blatant bribery of the federal government’s offer of a one time transfer to sweeten the pot of sales tax harmonization. The province has, of course, had to introduce all kinds of special exemptions to soften the blow of HST. It is quite remarkable that the parking issue did not get the same attention. I had had the impression that Gordon tended to listen to downtown Vancouver’s business people. Apparently he no longer does.

Downtown Vancouver BIA executive director Charles Gauthier said …a vehicle levy would be a more even-handed method of raising money while deterring driving.

Well of course he would say that now. A vehicle levy not being on the cards, it is quite safe for him to promote what is not going to happen. Of course, it was highly unpopular when it looked likely – and now looks better than some of the other options. But a flat levy that does not vary with distance driven does not deter driving any more than the current annual licence plate validation sticker does. Compared to the cost of acquiring and insuring a vehicle an annual levy of around $75 (as was proposed last time) looks trivial. Would you give up your car if someone offered to pay you $75 a year? The savings to a household of reducing the number of vehicles are, of course, significant. And those who can find alternatives like transit, walking, cycling or a car co-op (or combinations of some or all of those) do save a lot more money than $75 – but the take up rates are tiny. To deter driving we need congestion charges – preferably charges that vary by distance driven, time of day and route used. The technology to levy such road prices has been around for decades. The political courage to introduce it is absent – as are the necessary commitments to provide workable alternatives to driving.

For now, raising the cost of parking for those who commute to pay parking lots is better than nothing, but is far from adequate. But it is the sort of outcome one expects when planning is thrown out of the window in favour of dogma – and spin doctoring. In the last eight years, the political processes around regional planning and transportation – never very impressive in the first place – have become utterly shambolic. All that matters are the bees in the bonnets of a few provincial politicians. I would argue that the province actually ought to play a minor role in the process. There ought to be sources of revenue adequate for the purpose, some co-ordination on cross boundary and international issues, but generally beyond that it should be up to a directly elected regional body to determine. The sort of institution that most other major cities outside of Canada have had for generations. Most other countries also recognize that national governments have a duty to support better public transport.

Written by Stephen Rees

March 5, 2010 at 11:22 am

16 Responses

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  1. The flat vehicle levy seems entirely wrong since it is the same for rich and poor and those who drive a little or a lot. A parking tax is a bit strange. While it catches those who enter the congested areas, they are leaving vehicles idle. Shouldn’t we tax people actively using the road system?

    However, we don’t need to start a complicated billing and data collection system. Instead, multiply the fuel tax, perhaps another 50 cents a liter, and spend that on public transit, walkways and bike paths.

    A small, fuel efficient vehicle, lightly driven, would result in modest additional tax. People would be encouraged to use transit and to shift away from driving heavy, inefficient vehicles.

    People driving big 4x4s with powerful engines and knobby off-road tires would be discouraged. Grandmas in their hybrids would be encourged.

    Norm Farrell

    March 5, 2010 at 1:48 pm

  2. […] be “realistic” about ending homelessness, says Gregor Robertson [City Caucus] Pay parking taxes spike to more than 35 per cent [Stephen Rees's Blog] INTERNATIONAL Itty Bitty Cities: 22 Models That Miniaturize the World […]

    re:place Magazine

    March 6, 2010 at 10:22 am

  3. Fuel taxes, while theoretically effective in reducing consumption, hit goods suppliers and thus drive up the cost of everything.

    A parking tax, on the other hand, does not drive up the cost of every day goods. However, a parking tax that is not applied universally will change travel patterns by making areas without the tax more appealing. By taxing the most heavily used areas, businesses are encouraged to move out of the core and locate in more employee and customer friendly places. This works against public transit by de-centralizing demand.

    A graduated vehicle levy is a better approach than either a fuel or parking tax. By tying the levy to such variables as insurance class and vehicle fuel efficiency, those producing the most emissions can be made to pay the highest rate. The guy from Langley who drives a full size pick up to Burnaby would have to pay significantly more than someone making the same trip in a compact hybrid or someone who drives the same truck, but only goes to Port Kells each day.

    Unfortunately that could lead to people lying to ICBC, but I consider that Russian roulette. ICBC will make your life hell if you try to make a claim and they suspect you’re using a vehicle for purposes other than those it’s insured for.

    David

    March 6, 2010 at 12:04 pm

  4. @David
    “Fuel taxes, while theoretically effective in reducing consumption, hit goods suppliers and thus drive up the cost of everything.” While this is what the trucking industry would like people to believe, this likely would not be the case. By raising the price of fuel, the industry would be encouraged to buy more fuel efficient trucks sooner and change operating practices to reduce fuel costs. As well, by encouraging people not to drive, congestion delays would be reduced thus reducing labour and other costs. After a period of adjustment, prices could be cheaper.

    Road pricing has the advantage that it can be targeted on corridors where transit improvements have been made making it more likely that people will use transit. As such, it would also raise transit revenues making transit more cost effective.
    As people do have choice, it would likely be received as being fairer by the public thus making it politically easier to implement than broad based measures such as gas taxes or vehicle levies.

    Richard

    March 6, 2010 at 1:17 pm

  5. A vehicle levy rewards the heaviest roadway users and penalizes the lightest users. If I work at home but occasionally use a car to visit Grandmother in Mission, maybe driving 4,000 km a year, I pay the same as another who lives in Abbotsford and drives to Burnaby and back every day, cruises Robson Street on weekends and puts 40,000 km a year on a vehicle.

    If my car sits idle in my driveway, why should it cost the same as one that joins the rush hour on the streets every day? Flat rate assessments have less impact than incremental amounts tied to utilization.

    With higher fuel taxes, goods suppliers will pay more. That’s ok, they use the road system more and need encouragement to efficient. High fuel cost leads to using more efficient trucks, reduced idling and better engine maintenance. Whatever the form, transportation costs are tax deductible for commercial goods. This moderates impacts of costs and results in small changes having little marginal effect.

    Driving style and engine and tire maintenance affect fuel efficiency. Fuel taxes reward or penalize according to the actual world not the theoretical one. High fuel tax constantly reminds the tax payer of its existence, unlike periodic assessments.

    Norm Farrell

    March 6, 2010 at 1:44 pm

  6. Stephen said, “The province has, of course, had to introduce all kinds of special exemptions to soften the blow of HST. It is quite remarkable that the parking issue did not get the same attention. I had had the impression that Gordon tended to listen to downtown Vancouver’s business people. Apparently he no longer does.”

    In fact, few of the higher income types will pay the HST because most organize their affairs to make commuting vehicle expenses business deductions and thus the HST gets returned as part of input tax credits. Those guys don’t much care if HST taxes a tax or anything else because it doesn’t apply to business. Then again, perhaps lawyers, accountants, consultants and bankers etc. will be reducing their fees and service rates. That’s the pass-through theory, right?

    Norm Farrell

    March 6, 2010 at 2:44 pm

  7. I couldn’t understand the purpose of this tax beyond a revenue stream. This tax targets parking in an an area (downtown) where already the number of stalls are decreasing, and so are the vehicle trips. But unlike the flat parking tax proposed earlier, does nothing to discourage companies to locate near transit (in fact the opposite), nor does it discourage the practice of offering free parking to customers and employees.

    We should be discouraging the development of land into flat spaces covered with asphalt, and discouraging the location of trip generators away from transit, (like Canada Way) or discouraging walking trips (No 3 road where parking is for customers only, necessitating driving from business to business)

    JP

    March 6, 2010 at 2:55 pm

  8. @Norm:

    A graduated levy mostly solves your issue. The car insured for pleasure use that sits at home most of the time pays the lowest levy while the one insured for to/from work >15 km pays substantially more.

    Dealing with high income people whose vehicle is owned by, for example, a personal law corporation, is far too complex for a blog comment. Sure ICBC could say any corporate asset is in the “business use” category and charge the highest possible vehicle levy and insurance rates, but the corporation would then get a bigger income tax write off.

    @Richard:

    I support fuel taxes. I just wanted to point out a likely negative side effect. You’re optimistic that truckers would improve their own efficiency, but when gas prices here went up to $1.30/l the cost of everything in our stores went up noticeably.

    There is another serious flaw with fuel taxes: the relative proximity of Washington State. Many people would avoid higher fuel taxes by taking their business south of the border.

    Road pricing is another concept that’s great in theory, but has one serious “gotcha” in practice. The people paying a highway/bridge toll will expect and demand that the money be used for highway/bridge projects. Because drivers make up a majority of voters, any government that collected tolls and used them to build public transit would likely not be the government for long.

    David

    March 6, 2010 at 9:34 pm

  9. first best choice is road pricing

    People really pay for the externality they produce: congestion…if they travel at a time of day there is no congestion (and transit option not really available)…there is little reason to charge them, but if they travel at 9am to Downtown, there is, and business can take advantage of it (and if need to travel at rush hour get the advantage of less congested road, so less time to pay a driver idling in congestion…)…
    here is more on it: http://voony.wordpress.com/2009/09/18/translink-and-bridge-tolling/

    and David, people paying congestion charge are not expecting that the money to be poured in more highway or bridge…
    they are expecting in more transit funding keeping more car off the road, keeping the congestion charge low (level fo congestion is a equilibrium aiming to keep traffic moving, not to prevent traffic), or if not, see that money back in the taxpayer pocket…and taxpayer make the majority of voters…

    second choice is flat parking stall levy…
    business, disregarding how much they charge for the stall pay a flat tax, because car to get there need to use the road (and also one could say as pavement of land is an environmental damage, increase risk of flodd, pressure on the city sewage system,…)
    but that doesn’t do demand management (not prevent congestion, so it is just a reasonable tax).

    third choice is gas tax. it imply a car using road system will consume gas, the relationship could be less and less valid, and it doesn’t provide a sustainable funding source for transit: traffic now increase more than gas consumption thank to more fuel efficient car on the market…

    worst choice is the vehicle levy:
    the more you increase the ownership cost of a vehicle, the more marginal you make the cost to drive it…

    let say if my fix cost for my vehicle are $5000 (depreciation cost + ICBC insurance, + other financial cost including a possible vehicle levy), whatever I do, pour $25 gas in the tank every week is peanuts : not driving my car basically save nothing …it should be the reverse…

    second worst case is property tax: because the more valuable the property is, the more tax you pay…but the most valuable property are in transit rich area, so this is a disincentive for densifiying in transit reach area. and an encouragement for non sustainable living choice (eventually the reason why our government like it…)

    voony

    March 6, 2010 at 10:54 pm

  10. @David

    “Road pricing is another concept that’s great in theory, but has one serious “gotcha” in practice. The people paying a highway/bridge toll will expect and demand that the money be used for highway/bridge projects. Because drivers make up a majority of voters, any government that collected tolls and used them to build public transit would likely not be the government for long.”

    Which is kind of why I support a more dictator type of ruler when it comes to transportation infrastructure. Someone who doesn’t worry about what the people say.

    While it would be expensive to build a perfect road pricing system. Would be to have an electronic toll booth maybe every 2-5 km on every single major road, but not on side streets.

    When driving past a toll you there would be a modest fee maybe $0.10. So someone going 10 KM at a toll ever 2 KM would be charged $0.50. Of course the price could be raised. Also for areas of the city that have a lower transit service the price at the toll could be lower. So in Vancouver it would cost the most. They could also lower the price or put it to free later at night.

    If not that option. Then I feel every bridge should be tolled with a modest toll fee. About $2 per crossing.

    Paul

    March 7, 2010 at 12:49 am

  11. @David

    The difference between fuel taxes and price spikes caused by demand is that fuel taxes are predicable and give companies certainty and time to adapt while price spikes aren’t thus companies will adapt to gain a competitive advantage. It is called the free market and believe it or not, it does work some of the time.

    Price spikes also tend to be much larger than gas tax increases for transit. For example, the last increase for transit was only 3 cents per litre while the demand spikes a couple of years ago were around 30 cents a litre. Big difference.

    Regarding, “Because drivers make up a majority of voters, any government that collected tolls and used them to build public transit would likely not be the government for long.” If this is a “gotcha” with road pricing, it is also a “gotcha” with any form of revenue from motorists including fuel taxes, vehicle levies, parking taxes, etc. The advantage of road pricing tied to transit improvements in a corridor is that this is most likely to be seen as fair by motorists. Motorists also benefit from reduced congestion.

    Richard

    March 7, 2010 at 6:05 pm

  12. Where is the logic that would have a person who crosses a bridge paying a toll but a person traveling a highway paying none. To reach Vancouver from North Van, I cross one bridge over the Seymour River eastbound and, a moment later, a different bridge over the same river as I travel westbound. (to limit residential traffic so it makes sense). If I work near the south end of the Ironworkers Memorial Bridge, tolls would have me pay for six crossings to and from work in a (usually) 8-10 minute drive. Someone who lives in New Westminster could drive to the same location but over 4 times the distance and pay no tolls. For further amusement, consider that Hwy 1, through much of Burnaby, is a causeway crossing a bog, more expensive to build and maintain, rather similar to a bridge.

    Roadway pricing might be fairest but employ the most people to administer. Can’t you hear the advertisements, “There’s a sale on Arbutus Street today, but only the 4000 block . . and only after 7:45.” A new job of urban trip planner would be created, people who could ensure our travel was least cost. Road pricing also supposes that any vehicle crossing the toll point pays the fee, no accounting for efficiency or cleanliness.

    I can also imagine the bureaucrats conferring after implementing a congestion charge. If it doesn’t work, they will raise the rates to cure the problem. If it does work, they will also raise the rates because revenue will be less than projected.

    Let’s recognize that public transit is best for travel in densely populated areas but that clean and very efficient personal vehicles work well for the many people not able to use transit conveniently. You may think that a mother with three children under five years should be on the bus when she visits the doctor or the grocery store but it’s not highly practical.

    Norm Farrell

    March 7, 2010 at 11:23 pm

  13. Norm,

    You are against road pricing, and bring more or less anecdotal example to support your position.
    It is fair…but doing this, you are criticizing bridge tolling, not road pricing.

    There is several way to implement road pricing, London, Singapore give examples…Vancouver downtown is surrounded by Bridges on all of its side, and it is natural to think to install “congestion charge barrier” on those bridges since it is where congestion occurs and where it could be the more effective…it doesn’t means that parallel roads like Hasting should escape to it…

    secondly, “congestion charge” apply to limit congestion, not to limit traffic…and if there is no congestion, there is no reason to charge…in your example:
    you could be charged on the first bridge entering the city, but not the other where you will be reverse flow…
    and probably to limit the implementation cost of a road pricing scheme, no control could be installing on outbound lane (this is assuming that the limitation of the congestion in the morning rush hour will have same effect in the evening).

    Regarding your other anecdote…the “mother of 3 kids” can certainly a arrange doctor appointment outside congestion hour if she need to travel thru a “congestion barrier”, what could be a very seldom case…and I notice she then will not bother to pay parking (in addition of gas)..both park meter and gas pump doesn’t look at the social aspect of their usage… why we should bother with it with a congestion charge which can be still avoided…

    But still, to address some case, like the one you mention, it could be possible to have a tolerance threshold of 3-5 trips per month where people could escape the congestion charge…

    Again, your opposition is based on anecdote which refers more to the implementation of the road pricing idea than the idea itself. All this can be addressed, and it is where the discussion could evolve.

    voony

    March 8, 2010 at 9:45 am

  14. @Norm

    My mother, who at one point, had 3 children under 6, did not have a car or even a driver’s license. We seemed to get by just fine in several North American suburbs. As voony mentioned, even such mothers who do drive, would probably not be too affected by congestion pricing, either distanced based or on bridges, as most of their trips would be short local trips that would not likely cross bridges. Those who don’t drive would really benefit from transit improvements funded through road pricing. The children would also likely greatly appreciate it if we do not burn up every last drop of oil in automobiles and save some so they can take advantage of this precious resource later on in their lives, when they have 3 children.

    Richard

    March 8, 2010 at 11:45 am

  15. Road pricing is good because it allows specific routes and times of day to be targeted and because avoiding it is inconvenient or, in the case of a congestion zone, impossible.

    There is a decentralization effect because some businesses will choose to relocate outside the congestion zone, but this effect tends to be small.

    I also support fuel taxes, but worry about the avoidance rate. Look at all the Tsawwassen residents who fill up in Point Roberts and Langley residents who fill up in Abbotsford. As the tax goes up so does the incentive to shop elsewhere.

    It’s much harder to avoid a vehicle levy and one that’s based on vehicle age, class and usage would target those producing the most emissions.

    @Paul:

    We already have the “dictator” style of transportation infrastructure planning here in BC and look where it has gotten us.

    David

    March 8, 2010 at 12:26 pm

  16. There is an easy solution for the mother with 3 children… each car will have a dedicated smart chip that can be programmed to give discounts for some users. For example a mother with 3 children, a dog etc.

    Just to lighten up a serious subject, have a look at the amazing discount given by Berlin Transit system to weekly/ monthly transit pass holders:

    “One adult and up to three children aged from 6 to 14 years of age travel free of charge with a pass holder on Mondays to Fridays from 20:00 hrs as well as Saturdays and Sundays, and all day on public holidays.
    Further accompanying persons, etc.: Children under 6 years of age (a maximum of 3 children on ferries), prams/pushchairs and luggage as well as one dog travel with the pass holder free of charge. A reduced tariff ticket is required for each additional dog”.

    Obviously, anyone that has the courage to travel by transit with such an army deserve a break..

    Red frog

    March 10, 2010 at 1:53 am


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