With plans to make all new passenger vehicles sold in Canada electric by 2035, it might be time to reconsider how the upkeep of the country’s expansive road networks are funded.
Because electric vehicle owners aren’t paying at the pump, governments are looking for ways to incorporate EVs into existing fuel tax funds. Rather than just retooling legacy frameworks, “the whole discussion about how we fund road maintenance has to be rethought completely,” said Daniel Breton,president and CEO of Electric Mobility Canada, a national industry association that works to advance electric transportation.
“If you either get an electric car, or you decide not to use a car and go to use transit, that will also reduce funding for road maintenance. What that means is that the way we fund road maintenance is obsolete,” Breton said.
“Because if the purpose is to lower (greenhouse gas) emissions and fuel consumption, either by using transit or electric cars or active transportation, the way we fund road maintenance doesn’t work anymore,” he said.
Saskatchewan has already introduced a $150 annual road-use fee for EV drivers to recoup road maintenance costs, and other regions have made the switch to a per-kilometre charge. But how big a hole would it leave if everyone swapped their pickup for an electric?
“To think that the gas tax goes from paying at the pump to road maintenance, it’s not the case,” Breton said.
Formerly known as the Gas Tax Fund, the Canada Community-Building Fund distributes over $2 billion from collected excise taxes annually to the provinces, which in turn divvy it up between municipalities. That money can go to road maintenance, but it can also be spent on sport, airports, fire halls, or more than a dozen other project categories.
The decision on whether that money is invested in a highway “or any other eligible category of investment, rests with municipalities who are the ultimate recipients under the program,” a spokesperson for Infrastructure Canada said.
If recipients did choose to pour every penny into their roads, it still wouldn’t get them very far.
“It’s not a huge amount. I think in my county it would allow me to do a half-mile of pavement every year,” said Paul McLaughlin, Ponoka County reeve and president of the Rural Municipalities of Alberta. “So, I’m definitely not replacing the 5,000 kilometres of road I have right now.”
McLaughlin said that about 90 per cent of road infrastructure work done in rural Alberta municipalities is covered by local taxes, not external funds. With relatively low populations, the tax base for rural municipalities is low compared to urban centres, but the amount of highway municipalities are responsible for is enormous.
“All of our rural municipalities of Alberta actually have the most roads under our jurisdiction per capita and per kilometre than any other jurisdiction in Canada. Even by population and square kilometre, we have more authority and responsibility over roads than any municipality in Canada,” he said.
If you include the bridges maintained by every town and county, the infrastructure liabilities shouldered by municipalities is easily in the hundreds of millions.
“It would be counterintuitive to believe that you should put another tax on electric vehicles to pay for infrastructure,” McLaughlin said. “If the concept of electrification of transportation is as a counter to climate change, why would you disincentivize that action? You’re putting a tax on a positive behaviour.”
“The way to deal with infrastructure is actually a conversation of comparing population to asset management.”
Municipalities only have access to 10 per cent of all tax dollars collected, with the rest going to provincial and federal governments, yet they manage more than half of public infrastructure, McLaughlin said.
A system where funds were distributed according to population and managed assets like roads and bridges would even out the disparity between rural communities and cities, he said.
“We’re already at a disadvantage out of the gate. And what there needs to be is greater access to tax dollars based upon needs, which would be driven by that ratio of population to assets,” he said.
“That proportion should drive those grant dollars and increase the access we have to tax dollars that are shared by the federal and provincial government.”
Breton described current thinking on roads and fuel tax as having developed in silos, and said that isolated 20th-century vision no longer serves us.
“There is a Health Canada report that was published in 2021 that estimated that air pollution has a cost of approximately 15,300 deaths a year plus over $120 billion a year,” he said. “If we transition to transit, to active transportation, to electric vehicles, it means that will save thousands of lives and billions of dollars. All of that has to be included in the whole conversation, going beyond gas tax to road maintenance.”
There are many moving parts in the discussion of future transport systems, including the rapid rollout of technologies that will change the ways we get around. As it becomes more commonplace and cost-effective, technology should catch up with need, McLaughlin said.
From behind the wheel of his new hybrid — “insane fuel efficiency and an amazing vehicle” — McLaughlin mused about a day when he could use an app to order an autonomous car to pick him up from the farm, and catch up on work or sleep from the back seat while en route.
“I know it’s one of those things,” he said. “Everybody goes, ‘Oh, that seems far in the future.’ And then the future shows up right away. Autonomous vehicles, it might be four years … it could be faster.
“One thing we’ve learned is that everything happens faster. Maybe we need to start having these conversations now.”
By Brett McKay, Local Journalism Initiative Reporter
Original Published on Oct 24, 2023 at 09:56