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Real Estate Heavyweights Propose Tax on Distance Traveled in Montréal

View of Pont Champlain bridge, Montreal, Canada

Montréal, Canada's federal government is counting on imposing a toll to finance a new 5 billion dollar bridge, but Québec's largest group of real estate owners is warning that the city center risks being "marginalized" to the benefit of the suburbs if the toll is implemented. Instead it is proposing implementation of a "kilometric tax."

The Institute for Urban Development of Québec (IDU) will add its weight today to this hot topic by publishing a new study, which was obtained by La Presse Affaires. The organization, whose members hold real estate assets valued at 30 billion, believes that the imposition of a tax for each kilometer traveled represents – by far – the most equitable option among all the scenarios imagined by authorities.

"The kilometric tax would entail the least distortion and would not marginalize Montréal's city center," states the IDU. "On top of contributing to financing transportation, this tax would allow for a reduction in congestion and our impact on the environment."

The release of the IDU tax occurs as the construction work on the new Champlain Bridge is about to begin. 

The bridge of Route 25 and the most recent section of Route 30 already have tolls. Several observers propose the installation of a "string" of tolls on all the road connections between the island and its suburbs. But, we are talking about the "best solution to isolate Montréal even more," Mario Lefebvre, Executive Director of IDU, said during an interview; which has among its members Ivanhoé Cambridge, Canderel and Cadillac Fairview.

Pont Champlain Bridge, Montreal, Canada

"A Second GPS"

The "kilometric tax" proposed by IDU is not a new idea. The Interuniversity Center for the Research and Analysis of Organizations (CIRANO) had already suggested its implementation in June 2013. "Of all the scenarios, the kilometric tax is the best means of dividing the costs between the largest number of users, and therefore reducing the impact on the commuting cost," concluded the research group.

Basically, it would be a matter of taxing the trips of all drivers in function of the chosen route, the number of kilometers traveled, the time of day, and the number of cylinders. The tax would be calculated by giving each vehicle a detection device, "something like a second GPS," said Mario Lefebvre.

According to the IDU, this extra tax should replace the gas tax in time and serve to finance road infrastructure as well as mass transit.

While this form of kilometric taxation is still in the early stages at the North-American scale, things are progressing fast. Next July, Oregon will launch a pilot project with 5,000 drivers, and a dozen American states are also planning such a measure in order to finance infrastructure.

Highway overpass infrastructure, Portland, Oregon

Joanne Castonguay, one of the economists who worked on the CIRANO study in 2013, believes that technology today would allow for the easy implementation of such a measure in Montréal. She recalls that several insurance companies are installing detection devices in their clients' cars and that smart phones are also equipped with sensors.

Which is a better option, the tolls or the kilometric tax? How does your city pay for transportation infrastructure? Does your city impose gas taxes or distance traveled taxes? Share your stories and thoughts in the comments area below. 

Original article, originally published in French, here.

Credits: Data and images linked to sources.