Congestive Traffic Failure: The Case for High-Occupancy and Express Toll Lanes in Canadian Cities

Congestion on Canadian highways is having a significant negative economic impact on major Canadian cities. Rather than face the political challenge of introducing road tolls to discourage traffic, governments have chosen to build carpool lanes on urban highways, despite evidence that these lanes have limited effectiveness in curbing congestion. Policymakers in major Canadian cities need realistic options for reducing the economic cost of congestion and increasing revenue for transportation infrastructure: converting carpool to HOT lanes would fit those needs.Urban Issues Series, high-occupancy toll lanes (HOT lanes), highway congestion, Canada

Picking up Savings: The Benefits of Competition in Municipal Waste Services

Cities save money through competitive tendering of waste services contracts. This study finds municipalities that have their waste services provided through contracted operations have substantially lower average costs per household than municipalities with few of their services provided through contracts. The study shows that where city employees provide the bulk of waste services, such as in Toronto (and many other cities in Ontario), Vancouver, and Calgary, municipalities could reduce the costs of their waste services through increased contracting. Contracting can also be used to attain other goals, such as increased recycling rates, if municipalities provide incentive payments for contractors who meet their targets. The study, which analyzes the finances of hundreds of cities in Ontario, also finds cost savings from contracting will be apparent only if municipalities follow certain guidelines. Contracts should clearly define outcomes, and not specific processes, that contractors must meet.Urban Issues, competitive tendering, waste services contracts, Ontario, municipalities, contracting

Low-Carbon Fuel Standards: Driving in the Wrong Direction

In pursuit of greenhouse gas (GHG) emissions reductions, policymakers in some Canadian provinces are contemplating a low-carbon fuel standard (LCFS), a regulation that would require transportation fuel providers to distribute a mix of fuel that, on average, emitted a declining amount of GHG per unit of energy produced. This report examines the drawbacks of the LCFS concept and suggests that economy-wide measures would be a better way to reduce GHG emissions.economic growth and innovation, cap-and-trade, transportation fuel providers

A Clean Canada in a Dirty World: The Cost of Climate-Related Border Measures

As the federal government weighs policy options for reducing greenhouse gases, the question arises as to how to treat imported goods from countries with less stringent emission targets. One policy option is to impose a “carbon tariff” on imported goods from those countries.economic growth and innovation, carbon tarriff, greenhouse gas reduction, WTO

Zapped: The High Cost of Ontario's Renewable Electricity Subsidies

Ontario’s Green Energy and Green Economy Act subsidizes producers of renewable electricity by paying them far more for their output than the prevailing market price of electricity. Wind power receives a fixed electricity price of 13.5 cents per kilowatt-hour, and solar receives even larger amounts. This subsidy will result in additional costs to the average Ontario household of $310 per year; ostensibly designed to reduce emissions and create jobs, Ontario’s renewable electricity subsidy is an expensive way of meeting these goals. The drag of unnecessarily high electricity costs on the Ontario economy could be reduced if the province did not award any further subsidized contracts to renewable electricity generators.Economic Growth and Innovation, renewable energy, Province of Ontario, Canada, Feed-In-Tariff (FIT) program, energy subsidies

The Laws of Unintended Consequence: The Effect of Labour Legislation on Wages and Strikes

When politicians consider intervening in labour disputes, they should also consider the long-term, potentially unintended results of such action. In this study, the authors investigate the lessons from previous government legislative interventions, whether through compulsory arbitration, “back-to-work” legislation or bans on replacement workers during strikes, and find these actions have unintended results that give reason for sober second thought.Economic Growth and Innovation, Canadian federal and provincial governments, labour relations, compulsory arbitration, back-to-work legislation

Holding Canada's Cities to Account: an Assessment of Municipal Fiscal Management

Cities are the most visible level of government for most Canadians, providing services such as waste collection, policing and transit. Yet their budgets are the most opaque of any level of government. Municipalities generally use accounting in their budgets that does not match what they use in their financial reports. Peering through the messy numbers reveals that most cities routinely miss budget targets by large amounts. Councillors and taxpayers who seek to hold these municipal governments to account face a daunting task. Amid the mixed record, however, are some municipalities with clearer numbers and better records for spending control. That fact, along with improvements that have occurred at the federal and provincial levels in recent years, shows that progress is possible. The authors suggest five basic reforms would create clearer, more consistent budgets and would bring the financial management of Canada’s municipalities into line with their fiscal impact and their importance in Canadians’ lives.Fiscal & Tax Competitiveness, Governance and Public Institutions, Urban Issues Series, Canadian municipalities, fiscal management, municipal budgets

Out on a Limb: Assessing the Fiscal Sustainability and Effectiveness of the 2009 Federal Budget

The 2009 federal budget proposed a $40 billion economic stimulus package spanning two years and projecting a return to balanced budgets within five. The projected quick recovery of federal finances relies primarily on aggressive assumptions about future interest rates, growth of program expenditures and effectiveness of the economic stimulus plan.fiscal policy, Canadian Federal budget

The effects of land transfer taxes on real estate markets: Evidence from a natural experiment in Toronto

Taxes levied on the sale or purchase of real estate are pervasive but little studied. By exploiting a natural experiment arising from Toronto’s imposition of a Land Transfer Tax (LTT) in early 2008, we estimate the impact of real estate transfer taxes on the market for single family homes. Our data show that Toronto’s 1.1% tax caused a 15% decline in the number of sales and a decline in housing prices about equal to the tax. Relative to an equivalent property tax, the associated welfare loss is substantial, about $1 for every$ 8 in tax revenue. The magnitude of this welfare loss is comparable to those associated with better known interventions in the housing market. Unlike many possible tax reforms, eliminating existing LTTs in favour of revenue equivalent property taxes appears straightforward.Land transfer tax, property tax, land regulation

Unbalanced Books: How to Improve Toronto’s Fiscal Accountability

As Toronto gears up for a municipal election this fall, the city's poor record on fiscal accountability promises to be a central issue. As the sixth largest government in Canada, with a budget of over $11 billion annually, Toronto city hall should have its finances under better control. A 10-year comparison of planned spending changes announced in budgets with actual results reported after year-end reveals large deviations between planned and actual spending that are routine. To increase transparency and accountability, Toronto should consolidate its now separate capital and operating budgets, move to a uniform accounting basis for its budgets and year-end results, and provide multi-year budgets. City government should adhere more closely to the budgets Council votes every year.Governance and Public Institutions, Toronto, fiscal accountability