Policy Forum: On the Way to a Distance-Based Tax?

Jean-Philippe Meloche, Michael Robert-Angers and Luc Godbout ()
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Jean-Philippe Meloche: School of Urban Planning and Landscape Architecture, Universite de Montreal
Michael Robert-Angers: Research Chair on Taxation and Public Finances, Universite de Sherbrooke
Luc Godbout: Research Chair on Taxation and Public Finances, Universite de Sherbrooke

Canadian Tax Journal, 2025, vol. 73, issue 1, 57-75

Abstract: This article looks at the instruments through which motorists contribute to financing the Canadian road network. Four sources of revenue are presented: fuel taxes, vehicle registration fees, carbon taxes, and tolls. A summary analysis of the revenues from these sources in Quebec and Ontario shows that they do not cover the costs of the road networks in these two provinces. In these times of technological change, revenues from fuel taxes are shrinking and those from vehicle registration fees are growing steadily and fast becoming the chief source of road financing. To redress the situation, a distance-based pricing system seems like the best solution. However, such a solution is complex to implement and could take several years to become operational. Until then, raising fuel taxes is the best way to ensure financing for road network maintenance and to facilitate the transition to a new mode of financing.

Keywords: Roads; pricing; distance-based tax; gasoline tax; green tax (search for similar items in EconPapers)
Date: 2025
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DOI: 10.32721/ctj.2025.73.1.pf.meloche

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