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Rob MacLennan said:
And, as I hinted at in another post, they recently yanked out some toll booths, on I-190.
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Where????

If the 407 charged rates that were more in line with.. or even somewhat remotely close to.. rates i have paid on I-90 in NY and I-80 in Illinois I would take it all the time.
 
caboose483 said:
Where????

If the 407 charged rates that were more in line with.. or even somewhat remotely close to.. rates i have paid on I-90 in NY and I-80 in Illinois I would take it all the time.
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If I remember correctly, it was I-190 near the airport. They made a big deal about tearing them out, at the time.
 
ike said:
Thanks for telling me about that website. It is very interesting but there are enough inaccuracies in their report to cast doubt on the entire thing. But lets say they are right about there being a clause that limits price hikes to inflation plus 2%. According to them tolls were 7cents/km in 1999. Do the math (assuming inflation is 3%), and you will discover that with 5% compounded annually the tolls should be just under 13 cents/km now. Current tolls are now almost 23cents/km for that same time of day period. One would think that if the original agreement was as they stated, the government would be able to step in and enforce that...
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I wouldn't be so quick to dismiss that article as being inaccurate, in part because you managed to misread the article. Peak hour tolls were stated to be 7 cents USD per km, not 7 cents CDN. The article clearly states the peak rate was 10 cents CDN per km. That difference changes the math outcome considerably. Doing the math on that including an increase for 1999 and the rate goes up to 19 cents per km. That's getting much closer to the current rate ballpark. There may be other incidental clauses in the contract that permit higher increases as well based on lane expansion and increase in vehicle traffic criteria as well.

The article provides a high level overview of the highway and the sale, not a minute examination of the contract details surrounding permissible rate structures. Interesting that the overall lane distance of the highway has almost doubled in a very few years, and the combined running lanes distance has much more than doubled as the highay got expanded. None of that was paid for from public tax coffers, nor is any of the policing, snow plowing and general maintenance of the highway paid for out of the public tax coffers. All of that was paid for privately. As others have said, without the private commercial aspect, the 407 would not be any where near as extensive a highway as it is today.

The matter of contract compliance has been before the courts. There are enforceable conditions of sale including conditions of operation. If 407ETR violates them, the contract can be cancelled, but so far the company has been rather scrupulous about fulfilling the terms of the operating contract.
 
caboose483 said:
And you can take I-90 from Buffalo to Syracuse (about 200km) for $7. Hmmmm
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I-90 was constructed back in the mid-50s, fundedd in large part by the US federal government during the Cold War as part of a nationwide program of highways that could double as military transport corridors and emergency military aircraft landing facilities. They're long past recouping finance and construction costs, and probably collect funds well beyond recouping current maintenance and occasional expansion costs.

The 407 operating righst were purchased for $2.1 billion. How much on top of that has been spent for additional expansion? That's a lot of investment to recover, even before you get on to the matter of paying for ongoing operational and maintenance costs.
 
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turbodish said:
I-90 was constructed back in the mid-50s, fundedd in large part by the US federal government during the Cold War as part of a nationwide program of highways that could double as military transport corridors and emergency military aircraft landing facilities. They're long past recouping finance and construction costs, and probably collect funds well beyond recouping current maintenance and occasional expansion costs.

The 407 operating righst were purchased for $2.1 billion. How much on top of that has been spent for additional expansion? That's a lot of investment to recover, even before you get on to the matter of paying for ongoing operational and maintenance costs.
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Charge higher toll rates to recover the cost of expansion that is done with the intent of increasing revenue? I'm not sure if any other private business could get away with such practice.
 
caboose483 said:
Charge higher toll rates to recover the cost of expansion that is done with the intent of increasing revenue? I'm not sure if any other private business could get away with such practice.
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The benefits of a monopoly...literally my way or some other highway.
 
caboose483 said:
Charge higher toll rates to recover the cost of expansion that is done with the intent of increasing revenue? I'm not sure if any other private business could get away with such practice.
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The ultimate measure of whether rates are acceptable or not is that of usage. Pointing to other "cheaper" highways if pointless, because one can also point to other, more expesive highways in rebuttal. So it gets back to usage.

The revenue only increases if usage increases. Though most would no doubt prefer a free highway, continued and even increasing usage levels provide a reasonable affirmation that the bulk of users find the rates to be acceptable given the benefit they receive from using the highway. If the highway increases rates too high and beyond that acceptable to users, the contract includes penalty clauses that kick in and force rate reductions if traffic volumes should fall.
 
turbodish said:
The ultimate measure of whether rates are acceptable or not is that of usage. Pointing to other "cheaper" highways if pointless, because one can also point to other, more expesive highways in rebuttal. So it gets back to usage.

The revenue only increases if usage increases. Though most would no doubt prefer a free highway, continued and even increasing usage levels provide a reasonable affirmation that the bulk of users find the rates to be acceptable given the benefit they receive from using the highway. If the highway increases rates too high and beyond that acceptable to users, the contract includes penalty clauses that kick in and force rate reductions if traffic volumes should fall.
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Compare 407ETR usage, to that of 401 across Toronto, and you see that the 407 is grossly under utilized. To me, this tends to indicate that fees are at far from optimal levels.
 
turbodish said:
The ultimate measure of whether rates are acceptable or not is that of usage. Pointing to other "cheaper" highways if pointless, because one can also point to other, more expesive highways in rebuttal. So it gets back to usage.

The revenue only increases if usage increases. Though most would no doubt prefer a free highway, continued and even increasing usage levels provide a reasonable affirmation that the bulk of users find the rates to be acceptable given the benefit they receive from using the highway. If the highway increases rates too high and beyond that acceptable to users, the contract includes penalty clauses that kick in and force rate reductions if traffic volumes should fall.
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Yes, if the rates were too high usage would drop. It seems that quite a few people are ok with paying them.

I would say the acceptance of rates is based at least partially on how unappealing the alternative is. Would you rather pay $100 for a regular oil change or $10 for another but during this one you get kicked in the crotch once every thirty seconds?
 
Rob MacLennan said:
Compare 407ETR usage, to that of 401 across Toronto, and you see that the 407 is grossly under utilized. To me, this tends to indicate that fees are at far from optimal levels.
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Perhaps the rates are set at a level where the people that are willing to pay it get to enjoy a fast moving highway without all that much traffic.
 
caboose483 said:
Perhaps the rates are set at a level where the people that are willing to pay it get to enjoy a fast moving highway without all that much traffic.
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If the tolls were lowered the 407 would just become a parking lot like the other 400 highways.

For this reason alone they have keep the prices high.

It's a choice not a need to take it.
 
caboose483 said:
Perhaps the rates are set at a level where the people that are willing to pay it get to enjoy a fast moving highway without all that much traffic.
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Whether that's the actual intent is up for grabs. It's the obvious result though, which fails to maximize road use or profit.
 
Definitely a luxury but The prices indicate not for common folk. Only people with enough disposable income can save time to be with their family. I'm not rich or poor by any means but I know a lot of people who would love to save 1-2 hours a day on their commute but simply cannot afford the extra bill. What will the province do when our population increase even more?

Imagine they did this at hospitals? Wait hours less but pay an outrages premiums or wait like everyone else as we are all tax paying citizens.
 
A question to the people who think the 407-ETR is a ripoff: if it were free (or significantly cheaper) as you so desire, what do you think would happen to traffic volume on the ETR?
 
VifferFun said:
A question to the people who think the 407-ETR is a ripoff: if it were free (or significantly cheaper) as you so desire, what do you think would happen to traffic volume on the ETR?
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What do YOU think would happen to traffic volume on the 401?
 
Rob MacLennan said:
What do YOU think would happen to traffic volume on the 401?
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A lot of traffic would be diverted from the 401 to the 407, probably such that both would be in gridlock (if not right away, then certainly soon afterward as more people move out to the burbs and commute in to work).

When I had to take the 407, I didn't like paying for it either. What I did was join a carpool with three other people so that we could share the costs. This was easier on my wallet and the environment.
 
turbodish said:
Your biggest mistake is that you are ignorant of the history of the highway and of the spin-off benefits that highway provides. Even the sale of the highway provided a lot of spin-off benefits to the average taxpayer.

The goverment sold the rights to operate the highway for twice what it cost the government to build that highway. The money from the sale made went back into the public tax coffers and was used to fund various government programs, pay off some deficit, and even reduce provincial income taxes for a time.

In selling the operating rights, the government also managed to transfer all of the huge ongoing costs of highway maintenance and lane expansion onto that private company. That highway is much longer and much wider than it was at the start, and all that expansion was paid for by 407ETR folks and not out of the public tax coffers. If that work had to be constructed and paid out of public tax coffers, we'd still be waiting for much of that highway to be completed, assuming it ever did get done

The conglomerate that owns the 407 operating rights does have a foreign component to it, but 39% of the 407 is owned by Canadian companies. The 407ETR company itself provides jobs to hundreds of local maintenance, billing, road patrol and other employees that help run the highway. More jobs can be counted among the various construction companies involved in expanding the highway. All policing costs on that highway are paid by the 407ETR company.

The province maintains title to all the land under the highway. At the end of that 99 year operating lease, all of the highway infrastructure and all of the tolling rights go back to the province. At that time the province will gain a fully-built and operating highway system at no cost to the tax coffers.

Of course none of this will matter a bit to you though. After all, it's all about you, isn't it?
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As for the total cost this is not really true, when one takes into account all the environmental assessments over decades, lost property taxes, overall adjusted cost to appropriate the land etc. the sale was for only a fraction of the cost.

The sale was for more than the short term construction cost (ignoring all lost revenue and costs prior to ground braking) but not for more than the tax payers are out of pocket, not even close.
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