PRESS RELEASE - Wednesday, November 29, 2006

Transportation: the most costly item for Nova Scotian households

Costs Nova Scotian households even more than shelter

Report urges switch to more efficient and affordable transport

HALIFAX, NS – The largest cost for Nova Scotian households is not health, housing, food, or even shelter, but transportation And the cost of transportation is rising relentlessly. But the full extent of that rising cost is not visible to households, according to a new, more than 550-page report released today by Genuine Progress Index (GPI) Atlantic, that pegs the true cost of road transportation in Nova Scotia at more than $6.4 billion annually.

The GPI Transportation Accounts: Sustainable Transportation for Nova Scotia is the most detailed, comprehensive, and rigorous analysis of transportation indicators ever conducted for Nova Scotia. The study found that Nova Scotia relies overwhelmingly and increasingly on highway transportation to move both passengers and freight. It estimates that in 2002, the true cost of road transportation in Nova Scotia was at least $6.4 billion the first time that total cost has been calculated for Nova Scotia .

The full cost includes both direct costs that the consumer or user pays, and also a range of invisible costs that are either paid indirectly (for example, through taxes, higher prices for goods, or increased health costs), or are not counted in the market economy (for example, the long-term costs of greenhouse gas and air pollutant emissions).

“The average Nova Scotian spends about $3,036 a year directly on costs such as vehicle ownership and operation, transit fares, and parking – and incurs an additional $4,562 in indirect economic and environmental costs,” explained GPI Atlantic Executive Director Ronald Colman, Ph.D. “As consumers, we see the direct costs – fuel, car payments, insurance, registration fees, and repairs – but we don't see the indirect costs.

“For example, Halifax homeowners pay hundreds of dollars annually in property taxes that provide roads, parking spaces, traffic patrols and other services for motorists, and in income taxes that provide provincial and federal services related to transportation. For example, vehicle emissions create serious health problems and contribute to global warming, and governments cover those costs. There are uncompensated accident and crash costs, and t here's even a cost to congestion, like the value of the time people spend stuck in traffic jams.”

Other indirect costs include “free” parking, transport-related water pollution, and the value of the land devoted to roads and parking lots.

“We pay these kinds of costs indirectly through taxes and higher consumer prices, and also by imposing environmental costs on future generations,” notes Dr. Colman. “So we don't connect those costs with our transportation choices. If we did, we might make quite different choices.”

The GPI Atlantic study is designed to assess Nova Scotia 's transportation system in terms of its sustainability – its capacity to “meet the needs of the present without compromising the ability of future generations to meet their own needs.” GPI Atlantic's mission is to assess Nova Scotia 's progress and the sustainability of its economy by considering social and environmental factors which are ignored by traditional economic measures, and by applying “full cost accounting,” which quantifies and “monetizes” the costs of such factors.

GPI Atlantic's analysis shows that Nova Scotia 's transportation system, with its heavy reliance on roads both for passengers and freight, is not sustainable – and its problems are growing. Between 1990 and 2002, passenger travel increased by 5.2% and truck freight traffic by 66%. Greenhouse gas emissions from heavy-duty diesel trucks increased by 54%, and emissions from light-duty gasoline trucks, including SUVs and mini-vans, jumped by more than 60%. Off-road vehicle emissions rose by 68%.

In fact, of the 20 key indicators of sustainable transportation examined by GPI Atlantic, 13 were pointing in the wrong direction, away from sustainability. A few indicators, including air pollution, crashes involving dangerous goods, and recycling rates, showed signs of improvement. But most indicators were deteriorating, including transportation expenditures, accessibility, truck freight reliance, and energy efficiency.

Some of the key problems identified in the GPI Atlantic report stem from “sprawl” – rapid low-density suburban and ex-urban development that increases automobile dependence and results in longer commutes.

The report's co-author, Todd Litman, Executive Director of the Victoria Transport Policy Institute, noted that alternative policies in land use and transportation could give Nova Scotians more travel options and a variety of other benefits by encouraging ride-sharing, public transit, telecommuting, walking, and cycling.

“That's known as ‘smart growth,'” said Mr. Litman. “Smart growth communities reduce real transportation costs to both individual consumers and society when all costs are taken into account.” Such communities have shops, schools, work-places and high-quality public transit all within convenient walking distance. These kinds of communities result in lower transportation costs and also enhance public health, safety and fitness.

“Our report shows that the transport market is distorted because so many of the costs of road transportation are externalized and concealed,” Mr. Litman notes. “But many of those distortions can be corrected using Win-Win solutions.”

“We can lower taxes on employment and instead charge users directly rather than indirectly for using roads and parking facilities and for imposing pollution costs, and we can convert registration fees and insurance premiums to distance-based fees,” he says. “At the same time we can improve walking and cycling conditions and public transit services. This will reduce municipal costs, traffic congestion, energy consumption, and pollution – and at the same time we'll improve public health, reduce urban sprawl, save consumers money, and improve mobility options for non-drivers.”

In releasing its report, GPI Atlantic welcomed the announcement, last Friday, November 24, that the Government of Canada is investing $37.5 million investment in Nova Scotia 's public transit systems. This investment is directly in line with the need for improvements in public transit described in The GPI Transportation Accounts report.

Mr. Litman notes that these pricing reforms are not a tax grab for government, but simply a shift in the way we pay for transportation. Motorists who continue their current mileage will pay the same as they do now, on average, but those who reduce their mileage will receive financial rewards. These reforms will end up costing Nova Scotians less, not more, than at present.

“Improving the diversity and efficiency of our transportation system prepares our communities for the future,” says Mr. Litman. “The improvements address the needs of an aging population, reduce the economic risks from rising fuel prices and climate change, support economic development, and allow individual consumers to choose the lifestyles they prefer.

“These strategies don't require heavy-handed government intervention, and they provide many benefits to consumers and society. It's just classical market economics that simply matches prices to the full costs of production – which leads to a more efficient and equitable market economy. There really is no reason not to do it.”

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For more information, or to arrange an interview, please contact:

Ronald Colman
Executive Director, GPI Atlantic
902-823-1944 (work)
902-489-7007 (cell)
colman@gpiatlantic.org

Todd Litman
Executive Director, Victoria Transport Policy Institute
250-360-1560 (work)
250-588-1581 (cell)
litman@vtpi.org
** Please note that Mr. Litman is in British Columbia, 4 hours earlier than Nova Scotia . He will be available for telephone interviews between 4 – 5 pm on the 29 th (by cell phone) and all day on November 30 th (at his office phone).

Clare Levin
Managing Director, GPI Atlantic
902-489-2524 (work)
clevin@gpiatlantic.org

For data questions, please contact:
Aviva Savelson
604-708-9405
asavelson@gmail.com
** Please note that Ms. Savelson is in BC, 4 hours earlier than Nova Scotia