Commuter fee could help pay for Winnipeg infrastructure, researcher says
New report says city revenues could increase by $40 million a year if a fee is levied
A new report says about 25,000 commuters use Winnipeg roads every day, but don't pay to maintain them — and that should change.
The Canadian Centre for Policy Alternatives' study "The High Cost of Free-Riding and How We Fix It" suggests a commuter fee to charge exurban commuters — people who come from outside of the city to work but don't pay property taxes there.
"There is a significant problem here in that the city's property taxes are being forced lower and it's hurting city services," said Riley Black, the author of the report.
On average, Winnipeggers pay higher property taxes than those in the neighbouring communities. That differential encourages people to move out of the city and commute into the city. It also puts downward pressure on Winnipeg's property tax rates.
It also means the city needs to look for revenue in other places, Black said, which is where a commuter fee could come in.
On average, about 50 per cent of the workforce in communities surrounding Winnipeg commute to the city, according to the report, but those people aren't paying into the tax base.
"Every day they're using city services like roads, water, potentially at some points even the police and fire. But at the end of the day there's no contribution to taxes whatsoever that pays for the services that they use on a daily basis," Black said.
The report also noted the average household income in Winnipeg is lower than in the neighbouring communities. In 2016, the median total household income in the Winnipeg Census Metropolitan Area ranged between about $87,000 (in St. Clements) and $130,500 (in East St. Paul), while Winnipeg's median total household income was only about $68,400.
Black said the bulk of the workforce in these communities go to Winnipeg, and he's suggesting the highest income earners should pay a commuter fee.
"You've got people in low income neighbourhoods here (in Winnipeg) that are paying paying their fair share of property tax rates and they're effectively subsidizing wealthier people to come into the city and use the same services that they do and they don't pay for them," he said.
Black doesn't recommend a figure for the fee, as that's up to the city and the province to determine, but he did say there are a couple of ways it could be implemented.
How would it work?
One such way is through a cordon tolling system, which would use licence plate recognition software to charge only exurban residents who come to Winnipeg to work.
Another way a commuter fee could be levied would be through a payroll charge, the report said.
"Let's say your postal code was outside the city, but you worked at a place inside the city. Your employer would be expected to deduct some portion of your income that's proportionate to, say, the amount that you'd normally be paying in property tax, assuming you hit a certain income threshold," Black explained.
The report says other cities with a high number of commuters coming in from outside — including Vancouver, New York, Stockholm and London — have implemented, or are in the process of implementing commuter fees.
These cities had more money for public transit and better managed traffic.
If 25,000 people were charged property taxes to the city on a $350,000 home at 2016 rates, the city would be generating $40 million, Black estimates.
CBC News reached out to the City of Winnipeg for comment, but it was unable to accommodate the request Friday.