At the risk of sounding obvious, pricing is fundamental to the functioning of markets. It determines profitability, it allocates resources, and it influences customer behavior, among other things. Take the example of electricity pricing.

In Ontario, we use something called time-of-use (TOU) pricing. What that means is that electricity rates vary according to the time of the day and the time of the year. In the summer, the expensive peak usage period is the afternoon (because of air conditioning) and in the winter it's the morning and early evening (because of heating and lighting when people are generally not at work).

What this pricing strategy does is incentivize customers to change their consumption behaviours. Instead of doing laundry during a peak period, maybe you set a timer and have it run during a low-peak period. In other words, it helps to flatten the demand curve. This is valuable for utility providers because peak periods are more expensive to supply and they also create the risk of brownouts and blackouts. So you worry about peak demand.

With this in mind, let's now switch and talk about highway congestion. The parallels are almost identical, and yet, most highways are free to use, which means we do absolutely nothing to manage peak demand. Instead, we encourage the equivalent of brownouts where demand greatly exceeds supply, traffic crawls, and roads become practically unusable. Why is that? Why should highways be viewed any differently?

In the case of highways, there are even alternatives such as transit (thought not always, of course). But if you need electricity from a monopolistic utility provider, you're paying whatever rates they charge. As you might expect, the answer is not technical or economic. We know with 100% certainty that pricing congestion will reduce it. The reason we don't do it is political. Free roads are preferred to functioning roads.

Cover photo by Hooman R. on

Here's a new opinion piece from the Globe and Mail talking about the importance of "early wins" when it comes to building better cities. And whoever wrote it is right.

One of the examples that is given is New York's congestion pricing program. We've talked a lot about this initiative since the beginning of the year, and one of its important features is that it pretty much started working immediately.

Travel times, in some cases, dropped by as much as 48% and, in the first two months of its operation, it brought in over $100 million of new revenue for the city. Less congestion and more money. That's what congestion pricing does.

Because of this, support for the program has risen. In December 2024, which is before the pricing went into effect, some polls suggested that around 51% of New Yorkers were opposed to the charge.

But by March 2025, more New York City residents seemed to support the program than oppose it. And again, this is almost certainly because its positive effects were felt right away.

City building doesn't always work this quickly. Many or most things take too long. But finding ways to post early wins is good practice. It also provides a quick feedback loop just in case things need to be changed.

Cover photo by Murat Onder on

At the risk of sounding obvious, pricing is fundamental to the functioning of markets. It determines profitability, it allocates resources, and it influences customer behavior, among other things. Take the example of electricity pricing.

In Ontario, we use something called time-of-use (TOU) pricing. What that means is that electricity rates vary according to the time of the day and the time of the year. In the summer, the expensive peak usage period is the afternoon (because of air conditioning) and in the winter it's the morning and early evening (because of heating and lighting when people are generally not at work).

What this pricing strategy does is incentivize customers to change their consumption behaviours. Instead of doing laundry during a peak period, maybe you set a timer and have it run during a low-peak period. In other words, it helps to flatten the demand curve. This is valuable for utility providers because peak periods are more expensive to supply and they also create the risk of brownouts and blackouts. So you worry about peak demand.

With this in mind, let's now switch and talk about highway congestion. The parallels are almost identical, and yet, most highways are free to use, which means we do absolutely nothing to manage peak demand. Instead, we encourage the equivalent of brownouts where demand greatly exceeds supply, traffic crawls, and roads become practically unusable. Why is that? Why should highways be viewed any differently?

In the case of highways, there are even alternatives such as transit (thought not always, of course). But if you need electricity from a monopolistic utility provider, you're paying whatever rates they charge. As you might expect, the answer is not technical or economic. We know with 100% certainty that pricing congestion will reduce it. The reason we don't do it is political. Free roads are preferred to functioning roads.

Cover photo by Hooman R. on

Here's a new opinion piece from the Globe and Mail talking about the importance of "early wins" when it comes to building better cities. And whoever wrote it is right.

One of the examples that is given is New York's congestion pricing program. We've talked a lot about this initiative since the beginning of the year, and one of its important features is that it pretty much started working immediately.

Travel times, in some cases, dropped by as much as 48% and, in the first two months of its operation, it brought in over $100 million of new revenue for the city. Less congestion and more money. That's what congestion pricing does.

Because of this, support for the program has risen. In December 2024, which is before the pricing went into effect, some polls suggested that around 51% of New Yorkers were opposed to the charge.

But by March 2025, more New York City residents seemed to support the program than oppose it. And again, this is almost certainly because its positive effects were felt right away.

City building doesn't always work this quickly. Many or most things take too long. But finding ways to post early wins is good practice. It also provides a quick feedback loop just in case things need to be changed.

Cover photo by Murat Onder on