Do Cyclists Pay for Drivers’ Use of Toronto Roads?

The insinuation that cyclists do not pay for roads (with the further implication that motorists are paying for cyclists’ use of roads) is a well-worn refrain from motorists who are unenthusiastic, to say the least, about sharing the roads with bicycles. The main thrust of the cyclists-are-freeloaders argument stems from the notion that roads are chiefly paid for by revenue schemes that are dependent on the production, sale, and operation of cars. Motorists pay licensing fees, fuel-taxes, and in some places, car-specific sales taxes and registration fees, and drivers assume that it is these forms of funding that pay for their roads.

I have suspected for some while that it is largely an empty argument, as people have taken this question up with regards to other cities and found that, simply put, that cyclists do indeed pay for roads – but I wanted to know the specifics of the situation in Toronto.

Far from it being the case that cyclists do not pay their fair share for road infrastructure, the opposite appears to be the case: cyclists pay disproportionately more than motorists for their use of road infrastructure.

In Canada, highways are typically paid for through provincial and federal funding. A portion of this comes from motorized-road-vehicle-specific taxes, like fuel-taxes and licensing fees, though precise data about how this money is spent on a province-by-province basis has proved inaccessibly hard to come by. However, there is some very general information available. In the fiscal year 2009-2010, the combined levels of all governments in Canada spent $28.9 billion on roads, and collected $16.5 billion in combined permit and license fees, fuel-taxes, and other revenues. This study estimates on this basis that road-user fees cover about 64% of road costs Canada-wide, but this is a massive overestimate.

Crucially, the total revenue gathered from transport-specific sources does not specifically go into roads. Road spending amounts to 73% of the total $39.5 billion spent on all forms of transportation infrastructure Canada-wide (if you take away federal spending, the amount spent on roads rises to about 81%). So, if we assume that revenue use corresponds to total spending (that is, 73% of total revenue is earmarked for roads), we can roughly estimate that perhaps transport-specific fees cover about 42% of the cost of roads. But, this might also be an overestimate, since it’s clear that revenues are not earmarked for specific expenditures based on their source (that is to say, the money gathered from car-specific sources is not spent exclusively on car-specific infrastructure – nor is it clear how much revenue is generated from car-specific sources). For example, nearly $1 billion of transportation revenue comes from sources that are not used by cars at all, such as airport leases, harbour fees, and selling of assets. Furthermore, motorized-road-vehicles (cars, trucks, motorcycles) are not the sole contributors to fuel-taxes. Boats, snowmobiles, dirt-bikes, ATVs, lawnmowers, and so on, all use gasoline and thus use of these vehicles contributes to fuel-tax revenue. And of course, boaters and snowmobilers also pay licensing and permit fees which go into transportation revenues.

However the specific numbers are crunched it is evident that motorized-road-vehicle-specific revenues do not come close to covering the cost of roads. With this in mind, I’m going to turn to the particular example of Toronto.

In municipalities, road-vehicle-specific revenues amount to a tiny fraction of funding sources for road infrastructure. Whereas provincial and federal governments collect licensing-fees and fuel-taxes, municipalities typically do neither (though Vancouver has a fuel-tax; there has been concern that such local taxes actually encourage driving as people drive outside a municipality to find less-taxed gas, but the evidence for this is scant). In Toronto, the revenues collected from the hated Personal Vehicle Tax (the one that Ford repealed) wasn’t even earmarked for transportation. In general, cities fund road infrastructure in the same way they fund everything else – with property taxes.

There are certainly other sources of driver-specific revenue, such as fees from paid-parking, but these are only used for operating costs, not capital costs. And even in this regard, they only make up a small portion of total revenue. In 2011 in Toronto, total revenue from sources specific to motorized-road-vehicle use amounted to only 22% of all transportation-related revenue. The rest comes from recoveries from private capital projects like new developments, sundry revenues, like the sale of assets, and transfers from reserve funds. In total, transportation-specific revenues fund 41% of operation costs, in which case, driver-specific user-fees (and in fact not even all user fees are driver-specific, some are paid for by developers or business owners) fund about 9% of the total City of Toronto transportation operating costs.

But operating costs don’t even cover the building of new roads or the major renewal of old ones. Operating costs pay for street-cleaners, snow-plows, the fixing of pot-holes, the maintenance of street-lights and street-signs, and so forth. Road-building falls under capital costs, virtually none of which is paid by driver-specific revenue sources. In Toronto’s long-term transportation plan, approximately 88% of capital costs will be paid for through debt-financing. And this debt will be paid off primarily with property taxes, as this is the major source of revenue for the city of Toronto. The amount of driver-specific revenue that will go into paying for new road infrastructure is negligible.

The key thing to take away from this number crunching is that road infrastructure is subsidized. Firstly, the user fees that drivers pay obviously don’t come close to cover the cost of their driving, and thus have to be paid for through other sources (on provincial and federal levels, typically sales and income taxes, and on municipal levels, property taxes). Furthermore, the total per-capita contributions that the average driver makes to transportation costs, including property taxes, doesn’t come close to covering the cost of their driving. We have a socialized transportation system. Todd Litman’s aforementioned study tries to give a rough estimate of the actual costs of driving, and I’ll use his numbers here (though you’ll notice if you look closely that he actually errs in some of the calculations – though I make the necessary corrections here – and some of his sources are unclear. In any case, we could to this same exercise almost wholly hypothetically).

Litman estimates that in general (though the costs would certainly be higher in a major city like Toronto), the cost to local governments of maintaining infrastructure for cars is about 6.3 cents per mile travelled (despite his study being Canadian-centric, he still uses miles because a lot of his background data were from US studies. I guess he didn’t feel like doing the conversions). Of this, only 0.7 cents is covered by driver-specific revenue. Thus, 5.6 cents per mile is covered by general taxes (in the case of a city, it would be property taxes). So, let’s say a driver who has driven 10000 miles in the last year pays $300 in total taxes that will end up being used for roads. The total cost of the driver’s driving on the road system will be $630. The driver’s user fees contribute $70. So, the driver has paid $370 towards road infrastructure, but has a total cost of $630, and so the cost of the driver’s driving has been subsidized by $260.

Ok, now we can finally get to bicycles. Bicycles obviously exert less costs on road infrastructure. Even if every part of Toronto’s road infrastructure was left intact and maintained, bicycles would still cost far less than cars for the simple fact that they cause virtually no damage to roads. But if you adjusted the road infrastructure to meet the needs of cyclists only, then the costs would be drastically less. You would need far less space. Roads would be smaller. You wouldn’t need parking lots. You could sell off an enormous amount of assets. You wouldn’t need as many stop lights. You would arguably require less traffic patrol. And so forth. Litman estimates that the roadway costs for bicycles to be about 1.6 cents per mile (though it’s not clear if this is an estimate based on maintaining existing road infrastructure that only bicycles would use, or if this is how much it would cost if cities only needed to build bike specific infrastructure). So, a cyclist who pays the same amount of taxes and who travels the same distance as the above driver, ends up costing the government $160, and thus subsidizes road infrastructure by $140. (Of course, cyclists also tend to live closer to their work and thus travel less miles than drivers).

And none of this even includes the cost of externalities. The cost of congestion in the GTA is estimated at $2 billion! Not to mention insurance costs related to crash risk. Or the vast infrastructural and health costs of pollution. Or climate change, if you believe in that kind of thing. Litman estimates that if you factor in externalities, cars actually end up costing governments $29.3 per mile.

In the case of Toronto, given a cyclist and a driver that pay an equal amount of property taxes, it is likely that the cyclist actually subsidizes the driver’s use of roads. In any case, it is abundantly clear that the average driver is definitely not paying for the average cyclist’s use of roads. 

In the end, who bears the brunt of the costs has nothing to do with cycling or driving per se, but as with all socialized programs, with who is paying the most taxes. I suspect that cyclists in Toronto (people who use bicycles as their primary or only source of transportation, and probably don’t own cars) probably pay less property tax per-capita than drivers, since cyclists on average likely have less income and less expensive homes than motorists. But overall, it just comes down to who has a higher-valued property. The driver and the cyclist with a really expensive house are both subsidizing the poor driver’s and the poor cyclist’s use of the roads, though the driver is being subsidized to a far greater degree. And the poor cyclist is closer to covering his or her road costs than the poor driver, and the wealthy (or expensive property-owning) cyclist is over-paying his or her road costs to a higher degree than the wealthy driver.

Two conclusions:

First, insofar as road infrastructure is necessarily socialized, in that the majority of drivers would refuse wholly user-pay solutions, cycling is indisputably the more responsible (if responsible means less-dependent on government welfare) mode of transportation. Rich luxury-SUV-driving jerks shouldn’t be disdainful of cyclists, they should be thanking them for causing less of a tax-burden.

Second, if for some reason you feel entitled to yell like an asshole from your car at some cyclist to get off the road, be sure that you at least pay more property taxes than they do.


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