TABLE OF CONTENTS

• PREFACE
• EXECUTIVE SUMMARY

• 1. NATIONAL HIGHWAY POLICY STUDY
  • 1.1 Background
  • 1.2 Study Results

• 2. NATIONAL HIGHWAY SYSTEM
  • 2.1 Criteria for Route Selection and System Selection
  • 2.2 Travel on the National Highway System
  • 2.3 Condition of the National Highway System (1988)
  • 2.4 Cost Estimates to Upgrade the NHS
  • 2.5 Resource and Recreation Routes

• 3. STEERING COMMITTEE POLICY RECOMMENDATIONS

• 4. ROYAL COMMISSION RECOMMENDATIONS

• 5. RECENT DEVELOPMENTS

• APPENDIX A CANADA'S NATIONAL HIGHWAY SYSTEM

• APPENDIX B UNITED STATES NATIONAL HIGHWAY SYSTEM

PREFACE

This report is one of a series based on an analysis undertaken by Transport Canada's Policy Group to increase the body of knowledge in Canada about the significance of highway infrastructure in facilitating economic productivity and enhancing international competitiveness.

The reports aim to increase the transportation community's understanding of highway infrastructure through four main thrusts:

1. the development of a model of traffic on the national highway network;
2. the assessment of the impact of highway infrastructure on economic productivity;
3. the review of benefit-cost analysis of highway investments; and
4. the analysis of highway infrastructure funding.

A project team within Transport Canada has undertaken this work - with the assistance, in some cases, of contract expertise, and the cooperation of all provincial and territorial governments - in the provision of highway traffic data for the purposes of modeling.

Comments, reaction and discussion of the analysis contained in this report is encouraged and welcomed. For further information please contact:

EXECUTIVE SUMMARY

In 1987, the Council of Ministers Responsible for Transportation and Highway Safety commissioned a multi-year study on national highway policy. The study was conducted by a steering committee chaired by the Deputy Minister of Manitoba's Department of Highways and Transportation and administratively supported by the Transportation Association of Canada, with representatives from Transport Canada and the provinces and territories. The findings of the study were published in four annual reports following approval by the Council of Ministers at their annual meetings. The four phases included the following information:

• Phase I: Criteria were established for the identification of a National Highway System (NHS), comprising major international, interprovincial, intercity and intermodal highway links. The identified network consists of 24,449 km and 3,534 bridges.

• Phase II: Documented road use revenues and expenditures, both federally and provincially, on the components of the NHS. It was estimated that $14 billion (1992 dollars) is required to upgrade the network to meet minimum national engineering standards.

• Phase III: Sought stakeholder input and compared the Canadian situation with other industrialized countries.

• Phase IV: Addressed some technical issues, such as priority setting, scheduling, maintenance and traffic control standards, and indicated a preferred funding mechanism based on the U.S. highway trust fund mode.

The Royal Commission on National Passenger Transportation, as part of their overall study, examined the National Highway Policy Study. The Commission made four recommendations on highways, three of which relate to the NHS.

In May 1995, the United States identified a national highway system of 250,000 km.

1. NATIONAL HIGHWAY POLICY STUDY

1.1 Background

In September 1987, the Council of Ministers Responsible for Transportation and Highway Safety recognized the potentially detrimental implications for Canadian trade and travel resulting from the poor condition of highway infrastructure in Canada. The ministers, therefore, agreed to address this challenge by creating the National Highway Policy Study for Canada in order to establish:

• future needs and standards for the Canada's primary highway system;
• benefits and costs of meeting these needs; and
• funding alternatives for meeting those costs, with a view towards recommending adoption of this policy by the federal, provincial and territorial governments.

A steering committee was established with representatives of each provincial and territorial government as well as Transport Canada, and work began in early 1988 on the policy study. The three broad objectives for the study were:

• to ensure that all regions of Canada are provided with adequate and equal levels of service, safety and efficiency in highway transportation, so as to serve interprovincial and international trade and travel, and enhance Canadian economic competitiveness;

• to bring cohesiveness, prestige and uniformity of standards to the major highway transportation linkages of national significance; and

• to provide proper emphasis and support by all levels of government to a highway network of national significance at a time of growing regional transportation needs.

To achieve these broad policy objectives, the committee outlined three principal goals for a phase four study intended to provide the basis for guiding policy development. These goals were to establish:

• criteria to be used to identify highways that serve national transportation needs;

• minimum standards of design, operation and service that should be provided by these highways; and

• a funding mechanism or mechanisms that could ensure the needs of a national highway transportation system are met.

1.2 Study Results

Each phase of the study were endorsed and approved by the Council of Ministers, and resulted in a report published by the Roads and Transportation Association of Canada (later the Transportation Association of Canada). The individual phases documented the following:

• Phase I: Criteria for the definition and designation of a National Highway System (NHS), and minimum design and operational standards (published September 1988).

• Phase II: Road use revenues, NHS spending history and the estimated cost of upgrading the system to minimum national standards (published September 1989).

• Phase III: Stakeholder input and an assessment of the situation in other countries (published September 1990).

• Phase IV: Technical issues, such as priority setting, scheduling, maintenance and traffic control standards, and a recommended funding formula (published September 1992).

2. NATIONAL HIGHWAY SYSTEM

2.1 Criteria for Route Selection and System Selection

The criteria adopted to select the national highway network were as follows:

"A national highway is any existing, primary route that provides for interprovincial and international trade and travel by connecting as directly as possible a capital city, major provincial population or commercial centre in Canada with:

• another capital city, or major provincial population or commercial centre;

• a major port of entry or exit to the U.S. highway network; and

• another transportation mode served directly by the highway mode."

The application of these criteria to Canada's existing highway system identified a network of 24,449 km of highways of national significance. The length of the adopted national highway network in each jurisdiction is outlined in Table 2.1 below. Appendix A illustrates this network in the form of a map.

TABLE 2.1

Several highways of local, regional and, in some cases, provincial or territorial importance are excluded from the system. However, these routes were not considered of national significance, according to the criteria, as they did not form a primary interprovincial or international link nor did they directly link, major population or commercial centres. Additional routes, primarily those serving recreational areas or resource development areas, could be added to the system in the future, subject to approval by the Council of Ministers Responsible for Transportation and Highway Safety.

The National Highway System, in 1988, was comprised of 3,317 km of freeways, 2,733 km of multi-lane arterials, 17,722 km of two-lane paved roads and 587 km of gravel roads, as illustrated in Figure 2.1 below.

2.2 Travel on the National Highway System

To appreciate the significance of the NHS to Canada, travel on the system is illustrated in Table 2.2. It can be seen that approximately 26 per cent (72.3 billion vehicle-kilometres) of all vehicle travel in Canada takes place on the national system. The largest share of the remaining travel (approximately 64.5 per cent) takes place in urban areas. While some urban travel is represented in these statistics, the NHS carries the majority of intercity, interprovincial and international vehicle travel in Canada.

2.3 Condition of the National Highway System (1988)

In 1988, the NHS was compared against minimum engineering standards to provide an assessment of its condition and deficiencies. The intent was to develop a consistent needs assessment in each region of Canada, using similar criteria, while recognizing that regional terrain and travel patterns often result in different local highway engineering practices. The deficiencies within each jurisdiction were then aggregated to arrive at the total NHS needs.

TABLE 2.2

* Based on original work of National Highway Policy Study.

** Based on work of the Special Infrastructure Project and data provided by provinces and territories.

In total, 38 per cent of the NHS was found to be deficient, relative to minimum geometric design, serviceability (based on a 10-year projection of traffic), structural strength or riding comfort. Additionally, of the 3,534 bridges on the system, 790 were identified as requiring major strengthening or rehabilitation within the next five years.

2.4 Cost Estimates to Upgrade the NHS

During Phase II of the National Highway Policy Study, the federal government and each provincial and territorial government provided estimates for upgrading their portion of the NHS to the agreed engineering standards. These standards corresponded to a minimum two-lane paved rural highway with partially paved shoulders and a maximum of four-lane divided highway with full access control, based on a 10 year projection of traffic volumes.

The estimated capital costs to upgrade the deficiencies of the NHS, in its 1988 condition, was $12.7 billion (1988 dollar). The federal, provincial and territorial needs are compared to their percentage of the NHS in Figure 2.2.

Since the NHS assessment in 1988, many of the identified deficiencies have been corrected through provincial capital construction, while many adequate sections of the NHS in 1988 have since become deficient, through increased traffic and shrinking highway capital funding.

2.5 Resource and Recreation Routes

After the NHS was identified, the Council of Ministers requested that principal resource and recreation routes that link directly to the national system be identified. While the NHS is the principal national economic highway system, the importance of routes to major resource and recreation areas is emerging. These routes currently provide a transportation service of sizeable regional significance and can be expected to play a future major role in the nation's economic development.

3. STEERING COMMITTEE POLICY RECOMMENDATIONS

Phases I through III of the National Highway Policy Study presented a number of technical facts concerning the condition of the NHS, an estimate of the cost to upgrade the system, how other developed countries around the world have approached their highway networks, and input from Canadian stakeholders.

In the fourth phase of the study, the steering committee made several recommendations on technical issues that could be associated with a cooperative federal-provincial-territorial program. These recommendations are:

• a framework for priority setting, within the identified needs of the system, based on the key criteria of safety, highway strength, highway service, and economic development, competitiveness and productivity;

• detailed design and maintenance standards for routes on the NHS, including such aspects as geometric design, bridges and overpasses, traffic control devices, and rest areas; and

• expenditure categories that could be eligible for cost sharing whereby capital works and associated costs could be shared, and right-of-way acquisition and maintenance costs would be borne by the provinces and territories.

In addition, the steering committee made recommendations on a number of funding issues, as follows:

1. Funding Source: That a National Highway System Fund be established by the federal government based on an amount equal to the revenues generated by two cents per litre of fuel consumed for road use nationally;
2. Funding Allocation: That the National Highway System Fund constitute the federal share of capital works projects on the National Highway System, to be allocated in the following two components:

• Base allocation: Eighty per cent of the funds to be made available to provinces and territories in proportion to the percentage of national road use fuel consumed in each jurisdiction. The annual allocation of these funds would remain available to each jurisdiction for up to four years, after which they would be transferred to the Pool Allocation.

• Pool allocation: Twenty per cent of the fund to be made available for projects proposed by jurisdictions, after their base allocation is exhausted.

1. Federal-Provincial/Territorial Cost Sharing - Base Allocation Funds: That projects undertaken with federal funding from the base allocation be subjected to a cost-sharing formula of 65 per cent federal and 35 per cent provincial/territorial.
2. Federal-Provincial/Territorial Cost Sharing - Pool Allocation Funds: That projects undertaken with federal funding from the pool allocation be subjected to a cost-sharing formula 90 per cent federal and 10 per cent provincial/territorial.
3. Research and Development: That an amount equal to half of one per cent the total cost of capital works funded under the base allocation program be dedicated to the conduct of cooperative research projects in support of enhancing the quality of design, construction, maintenance and operation of the NHS.
4. Policy Implementation Process: That jurisdictional devices, instruments and agreements familiar to all jurisdictions be used to move through the implementation phases.
5. Program Monitoring and Review: That an ongoing monitoring and review process be carried out under the auspices of the Council of Ministers of Transportation and Highway Safety.

4. ROYAL COMMISSION RECOMMENDATIONS

The Royal Commission on National Passenger Transportation, as part of their overall study, examined the National Highway Policy Study. The commission recommended that governments assess the NHS proposal using the commission's principles for investment decisions, and only provide financial support for component projects if the benefits exceed the costs. The commission also recommended that approved NHS projects should be financed by charges to road users.

The commission made four recommendations relative to highways, three of which relate to the NHS. The recommendations are as follows:

6.3 Each provincial and territorial government establish a Crown corporation, supplemented by an advisory group, to provide roads more efficiently and to make road pricing and investment decisions more transparent.

6.4 The extent of restoration and upgrading of the national highway network be guided by comparison of benefits and costs on individual projects, rather than by uniform engineering standards.

6.5 A National Highway System be identified by the Council of Ministers Responsible for Transportation and Highway Safety, and the system be operated and maintained through cooperative action of provincial and territorial governments and/or their road agencies.

6.6 Provincial and territorial governments meet the costs of their highway system, and any agreed upon National Highway System projects within their borders, through fuel taxes and other charges.

The vision of the commission is that the NHS would be operated and maintained through cooperative action of provincial and territorial governments and/or their road agencies. Each jurisdition would be responsible for funding the projects within their borders, through fuel taxes or other charges.

5. RECENT DEVELOPMENTS

Subsequent to the National Highway Policy Study, ongoing discussions were held among the provincial, territorial and federal governments on national highway policy.

At the October 1994 Council of Ministers' meeting, the federal Minister of Transport requested that his provincial and territorial counterparts provide details on their level and duration of funding available for the NHS. The responses did not provide a compatible basis to fund the development of the system.

In December 1994, after long and protracted negotiations among the federal, provincial and territorial governments on funding issues, no consensus was reached on how to fund a national highway program. As a result, the federal Minister of Transport informed the provinces and territories that there would be no national highway program at that time.

Since that time, the prospect of a national highway program has been raised at various meetings of ministers, premiers and first ministers. There remains an absence of consensus on how to fund such a program.

APPENDIX A

CANADA'S NATIONAL HIGHWAY SYSTEM

APPENDIX B

UNITED STATES NATIONAL HIGHWAY SYSTEM

The United States Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), directed the Secretary of Transportation to develop a proposed National Highway System. The 250,000-km system was to include the interstate highway system, the strategic highway network, major connectors, congressionally designated high-priority corridors, and other rural and urban principal arterial routes that provide access to major ports, airports, international border crossings, public transportation facilities and intermodal transportation facilities.

The proposed NHS was submitted to Congress in December 1993, as required by ISTEA. The NHS represents only about 4 per cent of the nation's total public road mileage, but carries over 42 per cent of the travel. A majority of the travel on the NHS takes place in urban areas, even though there is about three times as much NHS mileage in rural areas than in urban areas.

The routes that comprise this system are essentially in place, but are in need of major improvements to meet expanding transportation needs. When improvements are needed, the design standards that will be chosen will be appropriate for expected traffic. Safety will remain a top priority in improving NHS routes.

TABLE B.1