The high toll of price distortion

Excessively low tolls at the Cross-Harbour Tunnel are distorting traffic patterns, adding to congestion, increasing pollution and health costs, and providing invalid justification for plans to build more roads along the harbourfront.

Of the three harbour tunnels, the Cross-Harbour Tunnel provides the highest number of convenient connections, the Eastern Harbour Crossing the second-highest number of convenient connections, and the Western Harbour Crossing the fewest.

In a market economy, the price of a product or service reflects supply and demand. Under free market conditions, Cross-Harbour Tunnel tolls would be the highest, with the Western Harbour Crossing charging the least. The reverse is actually the case, and the Cross-Harbour Tunnel is causing the distortion.

Since its opening in 1972, its tolls have not kept up with inflation. In 1972, private cars paid $5. They now pay $20, but the inflation-adjusted toll should be $36. Taxis paid $5 in 1972 and now pay only $10, but their toll, too, should be $36. Heavy-goods vehicles originally paid $20. They now pay $30, but should be paying $144. Amazingly, buses pay virtually the same as in 1972, and the average bus passenger contributes less than 25 cents.

The Cross-Harbour Tunnel is government-owned. It is a public asset and operating profit helps keep our taxes down. Only users benefit from artificially low tolls and there is no justification for them to be subsidised by the rest of the community, or for us to suffer the increased congestion, noise, air pollution and health costs resulting from the consequent elevated traffic volume. The community is entitled to hold the government accountable for failing to charge enough for the use of this publicly owned asset. Cross-Harbour Tunnel tolls should be raised to inflation-adjusted levels at least, so that the element of subsidy is removed.

Allowing the tunnels to openly compete and set their tolls according to supply and demand is another possibility to be considered.