I was at a conference today where I saw a presentation by TransLink (Vancouver, Canada’s quasi-public transit company) CEO Tom Prendergast about the state of transit infrastructure in Greater Vancouver. It was a great presentation and one that was very similar to one he gave at the BC Chamber of Commerce in October. (See a copy of that presentation below). In both of these presentations, Prendergast outlines what is, in my opinion, public transit policy 101 and makes the case for increased revenue from a variety of sources to help grow our public transit infrastructure. I agree with him that we need to spend more money on our public transit infrastructure. What caught my eye was one of the sources that he was looking at – a levy (tax) on cell phones. This, more than any of the proposed measures on his list of potential revenue sources caught my attention and my initial reaction was “that’s a terrible idea”.

There is some precedence for a cell phone levy. In India, for example, there is a per minute levy on every cell phone call placed in the country. Funds collected through the levy are used to improve India’s physical transportation infrastructure – a big stumbling block on the path to fully modernizing India. This is not unlike what TransLink would use similar funds for. TransLink, in case you’re not aware, is not just responsible for busses and the SkyTrain – it’s also responsible for major transportation infrastructure like bridges and roads. TransLink is going to run out of cash to keep Vancouver running by 2011 if it doesn’t find new revenue sources.

“Now wait a minute Aaron,” you say. “I pay fare when I go on the bus. Doesn’t that cover TransLink’s expenses?” Not by a long-shot. I had a great conversation with someone in the operations department at TransLink earlier this year and we had an invigorating discussion about what it takes to get people out of their cars and onto public transit. While we stopped short of deciding it would take a miracle, we did acknowledge that public transit infrastructure is rarely fully utilized and not appreciated when it is.

The population of Greater Vancouver continues to grow and clogged roads mean that public transit is more important now than ever. Never mind the environmental benefits. When I was doing my Public Policy degree at SFU, we talked at length about the economics of public transit. One of my professors there was a real big proponent of green transportation. The truth of the matter is that when you look at a public transit project from a pure economics perspective, they’re always money-losing operations. That’s not my opinion – it’s a fact. Why would anyone build public transit then, you ask? There are lots of reasons:

Assuming that public transit is a worthwhile investment for a community like Greater Vancouver, the money has to come from somewhere. In the presentation (above), Prendergast cites Annual Vehicle Fees, Tolls, Distance-based insurance, Parking Taxes, Carbon Offsets, Commuter Taxes and Higher Fares (amongst other options). All of these, in my opinion, are reasonable policy options to consider. Where this proposal, in my opinion, goes off the rails is when TransLink starts talking about Utility Fees and Cell Phone Levies. Where is the connection between these realms of our lives and the need to subsidize public infrastructure?

Utilities are, in BC, almost entirely publicly owned. We’ve already paid for our utility infrastructure twice – once through tax dollars when the infrastructure was built by Crown Corporations like BC Hydro and again when we pay our utility bills. Another levy on a public good is, in my opinion, unfair. Furthermore, for a policy to be effective, the affected population needs to see a connection between action and consequence. Just taxing things willy-nilly will not endear the public to TransLink’s cause.

Which brings me back to this ill-conceived (in my opinion) cell phone levy: Where is the connection between public transit and cell phones? Yes, sometimes people talk too loud on cell phones on the bus but telecommunications is practically an essential service in the developed world. It seems opportunistic and unjustified to target cell phone owners (the majority of Greater Vancouver residents). Furthermore – wouldn’t collecting all that revenue from multiple cell phone vendors on a regular basis dilute the efficiency of those dollars before they go to work for TransLink? Even India has been systematically reducing its cell phone levies to ensure that its telecommunications infrastructure is competitive internationally. [READ]

I want to see TransLink get the money that they need to make the much-needed upgrades to Vancouver’s public transit but I think going after cell phones is the wrong way to go. Focus on areas where there is a connection between transit and the levy – such as car insurance, tolls and commuter taxes.