Experts want to impose $15 tax on cars to even enter downtown Toronto

A recent memo published by a Toronto-based civic initiative suggests that Toronto should introduce a congestion charge of up to $15 for drivers entering the downtown core during peak hours as a way to reduce gridlock, shorten commute times, and generate funding for transit improvements.

The proposal, put forward by Jamie McDonald, CEO of A2X, and supported by multiple local entrepreneurs and investors, was published on the Build Toronto website.

The civic movement is the first city project of Build Canada, and publishes weekly memos, written by founders, civic leaders, and policy thinkers to raise awareness about “the policies and projects that can move Canada’s largest city forward." Common topics involve housing, governance, infrastructure, and economic competitiveness.

In the memo, McDonald describes Toronto's gridlock as "among the worst in North America," and proposes congestion pricing as a way to reduce traffic substantially and reinvest the revenue in better transit and roads.

The goal of this policy would be to reduce downtown commute times by 15 to 20 per cent within two years, which means cutting a typical 45-minute peak trip by 7 to 9 minutes, while at the same time, funding major transit improvements through the charges.

"Highway 401 is one of the largest highways on earth, with more than 18 lanes at its widest point, and it remains a daily parking lot," McDonald writes.

"The province has even floated the idea of tunnelling under the 401 to add still more lanes — a multibillion-dollar project that would deliver the same failed result. Economists call this induced demand: when you increase supply of a scarce good without managing demand, it simply fills back up. No city has ever built its way out of congestion, and Toronto will not be the first."

In favour of congestion pricing, McDonald says that this method uses charges to manage demand on the most valuable roads at the most valuable times. The CEO notes that by charging a fee to enter the busiest parts of downtown at peak travel times, other cities, including London and New York, have been able to cut congestion volumes by over 15 per cent.

McDonald goes on to suggest a pilot zone covering the core south of Bloor, between Bathurst and Parliament, with pricing entry during peak hours at $10 to $15 per day, arguing that this policy would reduce traffic volumes by 15 to 20 per cent. The net revenues, he writes, should go towards transit, road up, and active transportation improvements, with annual reporting to maintain trust and transparency.

Another suggestion included in the memo is the introduction of dynamic highway pricing across the GTA, on 400-series highways and expressways in Halton, Peel, York, Durham, and Toronto. McDonald says Ontario should adopt Singapore's model of adjusting tolls in real time to maintain average speeds of approximately 60 km/h.

"Congestion pricing must be designed to improve equity, not worsen it. Exemptions for emergency vehicles and wheelchair-accessible vehicles should be standard," he writes. "Targeted discounts for low-income drivers and residents living inside the zone can follow London’s model, ensuring benefits are shared fairly across the city and region."

McDonald also recognizes that the suggested congestion pricing can only work if people have access to other ways to move. Revenues, he argues, should expand GO Transit frequency, improve TTC reliability, and build park-and-ride facilities at transit hubs.

"Toronto has reached the point where congestion is no longer just an annoyance but one of the greatest drags on the region's economy. Billions of dollars and countless hours are lost every year as highways clog and downtown streets grind to a halt. Building more lanes has failed for decades, but congestion pricing offers a proven path forward," the CEO concludes.

"A downtown zone can free up space in the core, while dynamic pricing on GTA highways can keep traffic moving at reliable speeds. Together, these policies will unlock shorter commutes, faster deliveries, and billions in productivity gains. With clear exemptions, targeted discounts, and guaranteed reinvestment in transit and roads, congestion pricing can deliver a system that is faster, fairer, and more reliable for everyone."