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$4 billion plan to ease highway, transit woes

Secret report asks provinces to split cost of upgrades

By William Walker
Toronto Star Ottawa Bureau Chief

OTTAWA - The federal government will ask the provinces to support an aggressive $4 billion transportation program aimed at increasing road safety, boosting mass transit and improving business productivity.

The plan would include new money to help ease traffic problems in the Greater Toronto Area, such as extra cash for the TTC and GO Transit, much-needed improvements to the Queen Elizabeth Way and a possible mass-transit link to Pearson International Airport from downtown Toronto.

Secret government documents obtained by The Star outline the benefits of the program and reveal the sales pitch to be delivered to the premiers at their annual conference, which begins Monday in Quebec city.

“Canada’s highways are deteriorating and are subject to increasing demand, threatening Canada’s productivity and competitiveness,” one of the confidential reports concludes.

The studies - conducted independently by such companies as KPMG and Toronto-based Apogee Research - identify the need for $17 billion in highway and mass transit upgrades across Canada to reduce clogged arteries and make the system safer.

But Ottawa has decided it will put forth a five-year, $4 billion program requiring 50-50 funding - $2 billion from the federal government and $2 billion from the provinces.

Federal officials say a more ambitious program would be unreasonable because the provinces likely could not afford their share of higher costs.

Under the plan, any province, city or transit authority would be eligible for the money. Each proposal would be submitted to provincial authorities for acceptance or rejection.

For example, the TTC could seek $50 million for subway improvements. If Queen’s Park deems the project worthy, then Ottawa and the province would kick in $25 million each.

The province no longer directly funds municipal transit systems, but it would be required to pay its share of the infrastructure projects.

Currently, Ottawa does not directly fund highway or mass transit projects, which fall under provincial or local jurisdiction.

No federal officials will be attending the premiers meeting in Quebec city. The program will be sent to them in writing.

The move comes at a time when the U.S. government has committed to a $217 billion Transportation Equity Act to upgrade its highways.

In Canada, capital investment in highways has decreased substantially since 1970 relative to the gross domestic product, a measure of the country’s economy.

One report says that Canada’s productivity, which lags behind the U.S. rate, could jump a full percentage point with a program in place to upgrade the highways system.

Another major factor is motorists’ safety, a concern this summer following some horrific crashes, including 11 accidents on Highway 401 between London and Chatham in which 14 people have been killed this year.

The government studies show that highway improvements could result in annual reductions of an estimated 160 fatalities and 2,300 personal injuries.

On Ontario roadways alone, there were 929 fatalities and 88,445 injuries in 1996, police data shows.

Rapidly worsening highway congestion and road conditions add to the stress on tractor-trailer drivers, which causes a further threat to the safety of motorists.

The studies also show improved highways add to the quality of life by expanding access to work, leisure, health care and educational services.

The plan allows provinces to identify the highways and transit systems within their borders which would be chosen for funding.

The provinces have been arguing that Ottawa should fund such a program because of the enormous gasoline taxes it collects.

Transportation investments recently topped an internal poll of cabinet ministers’ top priorities and Transportation Minister David Collenette is said to have the support of Prime Minister Jean Chr�tien.

The issue also has support from across the country, including a group called the Coalition to Renew Canada’s Infrastructure, which wrote to the premiers urging them to make the national highways program the top priority at their conference.

Ontario, Quebec and British Columbia are suffering from major overcrowding on highways; Prairie provinces need upgrades due to increased grain shipments by truck; and the woeful two-lane highways strung throughout Atlantic Canada are said to be hurting the tourism industry.

Canada conducts $1 billion a day in cross-border trade with the United States, 75 per cent of it by truck. The studies show improved highways would be a major economic benefit by improving that trade flow.

Highway congestion “does contribute to late deliveries, inconsistent transit times and reduced labour efficiency and vehicle utilization,” one of the government studies concludes.

“It is estimated that a minimum of 10 per cent of (tractor-trailer) driver time is spent sitting in traffic congestion. This results in higher vehicle operating costs.”

That study, by KPMG for Transport Canada, included case studies involving actual businesses which regularly ship cargo by road.

“Major problems that have been encountered relate to the lanes connecting Canada and the U.S. Of particular concern are the Toronto to Windsor/Detroit gateway and the Toronto to Buffalo gateway along the Queen Elizabeth Way. Increased north-south trade has resulted in more congestion on these lanes,” the study concludes.

“Efforts to improve the national highway system should be focused on specific trouble spots such as the QEW.”

In addition, the program would create jobs. The Apogee study for Transport Canada shows that a highway infrastructure program could create 10,000 jobs over the next five years.

For private-sector businesses and job creation, the Apogee study points to a number of benefits, including:

  • Reduced costs for delivering raw and finished goods.
  • Improved access to markets.
  • Opportunities for business to more strategically locate headquarters or outlets.
  • More efficient “just-in-time” deliveries to allow companies to reduce inventory and overhead costs.
  • Better access to higher quality and/or lower cost materials.
  • Improved access to labour.

The employment gains are partly linked to new business enterprises which are inevitably attracted to an improved highway corridor, including some international companies that might otherwise choose to invest elsewhere.