December 1998

Undertaken jointly by the federal, provincial and territorial transportation departments, the National Highway Policy Study report updates work originally undertaken in the late 1980’s to determine the costs of improving the condition of, and reducing congestion on, the 25,000 kilometre network of key interprovincial and international road linkages. 

These reports are: 

1. The National Highway System: Condition and Investment Needs Update 1997; 
2. The Economic Context of an Efficient National Highway System: A review of the Literature and International Experience September 1998 (includes a separate Executive Summary and Annotated Bibliography); 
3. Highway User Benefits Analysis of the National Highway System (includes a separate Appendix). 

The key findings of the study were: 

• Governments have invested over $8 billion in capital improvements and $3 billion in maintenance in the National Highway System since 1988; annual expenditures on the system are currently twice the levels reported in 1988.
  
• While increased investment has corrected some of the deficiencies in the system, overall, the state of the National Highway System has not improved since 1988. When measured against the minimum design and operational criteria set in 1988, the length of the system with deficiencies in the areas of pavement roughness, operating speed/capacity has increased about 30%.|
  
• The estimated cost of correcting all current deficiencies of the National Highway System is $17.4 billion (1997 dollars). Departing from the procedure used in 1989, this updated estimate includes costs associated with required capacity improvements on existing freeways which have 4 or more lanes. 
  
• While estimated needs have dropped slightly in eastern Canada, cost estimates in central and western Canada are generally 30 to 50% higher than the estimates prepared in 1989. 
  
• The impacts and benefits which would be associated with an upgraded National Highway System (NHS) have increased significantly, due in large part to increasing congestion on key linkages in the system. Over a 25 year horizon, the expected present value of benefits of the NHS investment program were estimated to exceed
  - $30 billion, comprising: 
  - $22.0 billion in travel time savings 
  - $5.8 billion in highway safety improvements 
  - $2.9 billion in reduced vehicle operating costs 
  - $1.3 billion in network benefits
  
• Using a 25 year horizon for evaluation of benefits and a 5% discount rate, the expected net present value of investing the required capital in upgrading the National Highway System was estimated to be in the order of $13.1 billion. 
  
• Reduced congestion and improved highway standards could be expected to reduce the number of fatal traffic accidents by up to 247 per year and injury accidents by up to 16,000 per year. Reducing congestion and improving the level of service provided by the NHS is expected to reduce fuel consumption by up to 236 million litres per year. 
  
• A review of literature and international experience provides strong evidence that investments in highways can generate significant productivity growth and support economic development. Canada’s annual productivity growth has been steadily declining since the 1960’s, dropping from 2.4% during the period 1960-69 to -0.08% from 1990-96. 
  
• The findings of the reviews of the literature and international experience go far in explaining why nations which are major competitors of Canada are allocating increased funding to highway construction and maintenance to support economic growth. 

Copies of the report and supporting documentation are available from the Secretariat for the Council of Ministers Responsible for Transportation and Highway Safety. 

The report is available on the web site located at www.comt.ca/reports/sumrep.pdf.