A simple solution to traffic congestion

Applying market pricing to Canada's roads a rational response to problem

By Stuart Donovan

Imagine that every flight on the same route cost the same, no matter what the season or time of day.

This would mean there was little available capacity at peak times (leaving frustrated travellers unable to get seats); at other times, plenty of seats would be available on near-empty planes.

This is roughly the situation commuters face in major cities as driving costs remain the same all day, every day.

Nobody thinks twice about paying different prices for air fares. Young backpackers with lots of time but little money take advantage of cheap prices on unpopular flights scheduled at inconvenient times.

We do not apply the same logic to our roads.

That's something economist William Vickery noted as early as 1963, when he wrote that "in no other major area are pricing practices so irrational, so out of date, and so conducive to waste as in urban transportation."

Vickery noted that in "nearly all other operations characterized by peak-load problems, at least some attempt is made to differentiate between the rates charged for peak and for off-peak service."

While almost 50 years has passed since Vickery started advocating for more accurate road pricing (during which time he received the Nobel Prize for economics), our road-use charges have remained almost entirely unchanged.

Canada has persisted with a 1950s approach that sends no price signal about the time of use.

Three recent developments make the case for accurate road pricing even more urgent.