DAILY NEWS Mar 25, 2014 1:52 PM - 2 comments

Defining a New National Transportation Policy

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By: Vijay Gill, Director, Policy Research, Conference Board of Canada

A new briefing by the Conference Board of Canada's Vijay Gill, Director, Policy Research, looks at defining a new National Transportation Policy.

As our public infrastructure struggles to keep pace with the demands of goods and people movement, there are growing calls for a national transportation strategy or policy. But transportation policy means different things to different people. For some Canadians living in urban areas, it is very much about how to reduce road congestion and commute times. For rural Canadians, it is often about being connected with the rest of Canada or having access to essential services. For goods-producing businesses, it is about having access to the materials they need to build their products and having access to their customers within Canada, across North America, and around the world.

We do, by the way, already have a National Transportation Policy (NTP). The Canada Transportation Act (CTA) defines the NTP this way:

It is declared that a competitive, economic, and efficient national transportation system that meets the highest practicable safety and security standards and contributes to a sustainable environment and makes the best use of all modes of transportation at the lowest total cost is essential to serve the needs of its users, advance the well-being of Canadians, and enable competiveness and economic growth in both urban and rural areas throughout Canada.1

That’s quite a mouthful! The CTA goes on to state that the objectives of the NTP are most likely to be achieved when the conditions shown in Exhibit 1 are present:

While it is difficult to disagree with any of the principles or conditions above, there are practical difficulties that prevent policy-makers from implementing strategies and making investments in accordance with the NTP. There will often be conflict between the stated objectives, but it is not clear which of the objectives are subordinate to others, and when. Second, political boundaries often prevent comprehensive policy solutions. Finally, we need to be able to measure the success with which we meet those objectives—something that is often overlooked.

The CTA (and therefore the NTP) is due for review beginning in 2015. The last comprehensive review was conducted in 2001 and resulted in the government-appointed panel’s final report, Vision and Balance: Report of the Canada Transportation Act Review Panel.2

This report has come to be known among some researchers as the Canadian transportation policy “bible.” Over the years, I have had the pleasure of working or simply conversing with many of the key contributors to the previous review, including the panel’s chair, Brian Flemming. Recently, the Conference Board’s Centre for Transportation and Infrastructureheld meetings to hear and discuss the views of some of these and other researchers on our policy research needs leading up to the next review.

Some of these views are summarized in our new briefing, What’s Next for Transportation Policy? For example, our transportation policy needs to consider first principles and how they affect the consistency in our public policy (both within transportation and infrastructure and relative to other policy areas). These include:

• How much should users pay for transportation services?

• For what reasons do we depart from user pay? And when we do, how do we know by how much?

• What rules do we apply when determining the extent of governments’ role in the provision or regulation of transportation services?

As an example, we currently ask the users of our rail freight transportation services and air transportation services to pay the full costs. We don’t ask the same of many others. As we currently debate the when, where, and how of our transportation investments, we are making these decisions—without explicitly thinking about them.

In order to answer these questions, it requires us to measure (among other things):

• the cost of transportation services, particularly those that are provided by governments;

• the extent to which users currently pay for the transportation services;

• the extent to which individuals benefit from different transportation services and infrastructure;

• the culmination of the above—how the distribution of transportation and infrastructure investments redistributes wealth (not only between income classes but among geographic regions, different user groups, etc.).

The issue of the fiscal imbalance—the revenue-raising capacity of governments relative to their respective responsibilities—inevitably creeps up in debates regarding the funding of municipal transportation infrastructure in particular. Given the fact that local infrastructure is already subject to political intervention by two levels of government, this raises the question of what local governments actually want—a federal strategy for local transportation needs, or simply the federal dollars?

In any event, though it is a given that the senior levels of government have greater powers with respect to income and sales taxes, the various transfers between levels of government makes the accounting of who pays for what difficult to track. This, too, is something that can be better measured and needs to be part of the upcoming CTA review.

1 Department of Justice, Canada Transportation Act.

2 Transport Canada, Vision and Balance: Report of the Canada Transportation Act (Ottawa: Transport Canada, 2001).

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Reader Comments

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Dom Di Stroia

"This type of public investment would also help Canada remain competitive by reducing manufacturing input costs, lowering some exporter's transportation costs and would benefit consumers by reducing distribution costs."

In the short term, wouldn't investing in new infrastructure increase distribution costs?

"The goal would be to create a safe highway where long combination vehicles could be used to transport cargo between Toronto and Winnipeg."

Wouldn't the railroads accomplish this task more cost-efficiently than the LCV's?

Posted April 4, 2014 11:56 PM

Barry Frain

I would like to see the next national transportation policy address the Trans Canada Highway in Northern Ontario. A long term policy tied into infrastructure spending to create a four lane divided highway through northern Ontario would significantly increase public safety, reduce transportation costs and help address driver shortages. This type of public investment would also help Canada remain competitive by reducing manufacturing input costs, lowering some exporter's transportation costs and would benefit consumers by reducing distribution costs. The goal would be to create a safe highway where long combination vehicles could be used to transport cargo between Toronto and Winnipeg.

Posted April 3, 2014 04:06 PM

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