7 ROAD NETWORK

Only about a third of Canada's road network is paved - the inter-urban highways and municipal roads and streets - the remainder generally provides access to rural and remote areas. The system's value rose rapidly through major investments in the two decades prior to 1975, then slowed. Most traffic is concentrated on a small part of the network, where growth is fastest.

The Legislative and Institutional Framework

Responsibility for Canadian highways and roads (referred to collectively throughout this report as "roads"), by inference under the Constitution, rests primarily with the provinces and territories. Each has, in turn, delegated responsibility for municipal streets and roads to municipal governments, under arrangements that are specific to each province or territory.

The federal government has a limited involvement in roads through four activities: ownership of a small amount of federal infrastructure; financial contributions to other levels of government for highway construction; regulation of international crossings; and research and development.

Less than two per cent of the national network - totaling some 15,000 kilometres - is under federal responsibility. This includes roads on Indian reserves (through Indian and Northern Affairs Canada); roads on federal properties such as in national parks (through the Department of Canadian Heritage) and in the National Capital Region (through the National Capital Commission); and the Alaska Highway (through Public Works and Government Services Canada).

Since 1919, the federal government has provided financial contributions to provinces, territories and (rarely) municipalities to assist them in developing their road networks. This was done first as an unemployment relief measure, later to build the Trans-Canada Highway, and more recently to promote regional economic development.

The federal role in regulating international crossings includes co- ordinating government activities at 24 bridges and tunnels, granting permits for bridge construction, and enacting and enforcing special legislation associated with some of the crossings.

Network

The Canadian public road network ^{note 1} today extends slightly more than 900,000 kilometres (see Figure 7-1). As the network has expanded during this century, it has also improved considerably in quality. "Earth roads" have been upgraded to gravel roads, which, in turn, have been converted to paved highways. Today, approximately 35 per cent of the network is paved, another 57 per cent has a gravel surface (including "surface treatment"), and only eight per cent remains unsurfaced.

Most public roads in Canada fall under the jurisdiction of municipal and provincial or territorial governments; ^{note 2} municipal governments are responsible for nearly three-quarters of the roads in the country (see Figure 7-2).

Saskatchewan, Alberta and, to a lesser extent, Manitoba, have extensive networks that provide access to agricultural areas with low population density (see Figure 7-3). This settlement pattern demands an extended road network for relatively small amounts of traffic. For this reason, a large part of the network on the Prairies consists of earth, gravel or surface-treated roads.

The National Highway System (NHS) was defined as part of the federal-provincial National Highway Policy Study of the late 1980s. It consists of 24,449 route-kilometres of roads linking major cities, major international border crossings, and ports (see the system map at the end of this chapter). Although comprising less than three per cent of the Canadian road network, it supports the bulk of both interprovincial and international trade in goods and intercity passenger travel (see Figure 7-4).

The original2 Trans-Canada Highway - running 7,500 kilometres through all 10 provinces from Newfoundland to Vancouver Island - forms part of the National Highway System. A unique federal program designated the highway and funded its upgrading between 1949 and 1970.

Since the end of this program in 1970, the federal government's contributions to provincial highway construction have been through cost-sharing agreements of fixed duration with individual provinces.

Provincial highways are the primary roads in each jurisdiction, accounting for 26 per cent of the entire Canadian road network - some 231,000 kilometres. The municipal road network accounts for the remaining 72 per cent of the total - some 655,000 kilometres.

Capital Stock, Investment and Financing

Road infrastructure has a long service life. Roads built in earlier decades are still in use today. But roads degrade over time as a result of weather and traffic wear, thereby losing service capacity. Continuous maintenance is required to replace surfaces, markings and signs, and periodic major rehabilitation (typically every 12 to 15 years) is required to retain structural integrity. The capacity and service quality of existing roads may also be upgraded, through reconstruction combined with expansion.

To estimate at a given point the productive capability of long-term assets, economists have developed the concept of "capital stock". Three notions are essential to an understanding of the capital stock framework: investment, service life and depreciation. "Investment" is capital expenditure on new assets or the major refurbishment or expansion of existing assets. "Service life" is the expected life of the resulting assets when properly maintained. "Depreciation" is the depletion of the asset over time. The "road capital stock" is simply a measure of the monetary value of all past road investments still in use, less the amount of accumulated depreciation. If the level of road investment exceeds depreciation over a given time, the capital stock will grow; otherwise, it will fall.

In 1993, the Canadian road capital stock was valued at roughly $79.8 billion (in 1993 dollars). Of the total, roughly 17 per cent - or $13.6 billion - is accounted for by the three per cent of the network that comprises the National Highway System. Figure 7-5 shows the value of the stock in constant dollars over the previous three decades. The value doubled between 1961 and 1975, then increased more slowly, moving up about 16 per cent between 1975 and 1993.

A comparison of the road stock with the total public-sector capital stock - which includes all government facilities (including those for roads, health, education, and so on) - and with the private-sector capital stock shows that they all grew comparably until the mid-1970s, but the road stock grew slightly more quickly than the rest (see Figure 7-6).

Subsequently, when growth in the value of the road capital stock slowed, private capital stock continued to grow at its previous pace, and the value of the rest of the public capital grew much faster than the road stock.

Since the mid-1970s, the provincial highway capital stock has remained stable, while the municipal road capital stock has continued to grow, contributing a growing proportion of total public road capital stock. The federal road capital stock accounts for a small share of total public road capital stock and has remained at a similar level for more than 20 years (see Figure 7-7).

Slower growth in the Canadian road capital stock means that the network is aging. From 1961 to 1993, the average age of all roads in Canada (excluding bridges) increased to 14 years from nine. During the same time, the average age of the bridge infrastructure climbed to 23 years from 11. With only a few exceptions that took place in the 1960s, the aging has been steady.

Expenditures on Roads

Public road expenditures in Canada ^{note 3} reached a peak of $11.3 billion in 1993 (see Figure 7-8). Municipalities and provinces are responsible for most road expenditures, with total spending of $6.5 billion and $4.7 billion on their respective networks that year - road expenditures by municipalities now surpass provincial road expenditures by 40 per cent. When transfers between jurisdictions (conditional and unconditional contributions from one level of government to another) are taken into account, however, the provinces emerge as bigger spenders ($5.8 billion compared to $5.2 billion).

During the same year, the federal government spent $100 million on its own network. Operating and maintenance expenditures have continued to rise since the late 1970s and now surpass capital expenditures ($7 billion compared to $4.3 billion in 1993).

Relative to road traffic volumes, however, road expenditures have declined by about 50 per cent since the mid-1960s (see Figure 7-8).

Road expenditures also account for a declining share of municipal and provincial government spending, most noticeably at the provincial level. In 1965, provincial governments spent 20 cents of every dollar on roads; in 1993, the percentage was only 3.3. This adjustment also reflects the growth of other public expenditures (welfare, education, health, interest payments, and so on), as well as the transfer of some responsibilities to local governments.

Federal Contributions

Transport Canada provides funding to the provinces and territories for primary and secondary highways, as well as for access roads to assist in the provision of a more efficient and effective transportation system. Its expenditures have increased over the years and the distribution of funds among recipient provinces and territories has varied (see Figure 7-9).

Transport Canada is currently a partner in five highway contribution programs involving 24 cost-shared highway/transportation agreements with all 10 provinces and the two territories:

Strategic Highway/Transportation Improvement Programs - $845 million over five years (1993/94 to 1998/99)

Highway Improvement Programs - $306.8 million over 10 years (1987/88 to 1997/98) with Nova Scotia ($98.5 million) and New Brunswick ($208.3 million)

Newfoundland Transportation Initiative - $702.5 million over 15 years (1987/88 to 2002/03)

Atlantic Freight Transition Program - $326 million to the four Atlantic provinces and Quebec over six years (1995/96 to 2000/01)

Fixedhjkjkl Link Agreement - $43.04 million to New Brunswick and Prince Edward Island over three years (1994/95 to 1997/98)

Network Traffic

Road traffic in Canada has increased substantially over this century, reaching nearly 270 billion vehicle-kilometres in 1994 - more than 20 times its level at the end of the Second World War. The growth of Canadian road traffic has been virtually uninterrupted since 1930, with the exception of two periods: the Second World War and the recession of 1982.

In the absence of any routine inter-jurisdictional compilation of traffic levels on the entire Canadian network, a recent study by Transport Canada of a subset of primary highways has been used as a basis for describing traffic volumes. ^{note 4} The network concerned extends 45,000 kilometres, linking all metropolitan areas with a population exceeding 10,000. Average daily traffic statistics on each link of the network were compiled for 1986 and 1993, allowing total volumes and growth rates to be analysed. Table 7-1 shows results by jurisdiction; the notable concentrations of traffic are in Ontario and Quebec.

A small part of the inter-urban network supports a disproportionately large amount of traffic. Table 7-2 shows traffic on this inter-urban network classified by average daily flow in 1993. It shows that three-quarters of total vehicle-kilometres take place on only one-quarter of the network, and that the busiest 5.2 per cent of the network carries 45 per cent of the traffic. This is particularly concentrated in the "Quebec City- Windsor corridor"; on highways 401 and 417 and on the Queen Elizabeth Way in Ontario; and on highways 10, 20 and 40 in Quebec. Significant concentrations also occur in British Columbia in the lower mainland and Okanagan Valley, in Alberta between Calgary and Edmonton, and in Nova Scotia between Truro and Halifax.

Conversely, at less than 5,000 vehicles a day, traffic is relatively sparse on three-quarters of this inter-urban network (the capacity of a two-lane highway is about 3,000 vehicles per hour).

Table 7-2 also shows that traffic growth has been highest on the busiest highways, at more than four per cent annually between 1986 and 1993. (Where average daily traffic has exceeded 100,000 vehicles, however, growth has become constrained by congestion.) It can be anticipated that the growing travel demands represented by these growth rates will lead to more widespread congestion in and around main urban areas.

Figure 7-10 Source: Transport Canada, Economic Analysis

Endnotes