Do we accurately gauge economic cost of long commutes?

Vice President , The Regional Group of Companies Inc
  • Mar. 18, 2019

Commute times in Canada are getting longer, while the number of people working from home (excluding farmers) continues to hold around six per cent.

That’s what Statistics Canada reports from the 2016 census. It’s not exactly fresh news, having been reported back in November 2017, but as I have argued all along, time wasted in traffic has an economic cost. Last week, a University of Toronto professor supported my position with his study of the matter, though I believe he still didn’t quite capture its full scale.

Eric Miller, professor and director of U of T’s Transportation Research Institute, drew on the average hourly rate of a Canadian worker from StatsCan’s Labour Force Survey to conclude an hour spent each way in traffic adds up to a per-week cost of $273 per person.

Now multiply this figure by 1.5 million – the number of people StatsCan reported from the 2016 census endure a long commute. The result is $409.5 million per week.

Miller asserts in this CBC article that this only scratches the surface of the total economic impact. Traffic congestion breeds inefficiency across the board, slowing the delivery of goods and services.

Still missing the target

I submit that his assessment still understates the full impact of long commute times.

Miller used the average hourly salary rate in Canada – $27.36. But, commuting headaches are not so evenly distributed among the working population. Traffic congestion is a phenomenon unique to urban centres – the larger the urban centre, the worse it gets. “With the population increasing in urban areas, traffic congestion is also rising,” reports StatsCan.

Average income is higher in urban areas than in rural areas, notwithstanding the number of people who are working minimum-wage jobs in retail and food service. I couldn’t dig up recent data on this rural/urban income divide from the last census, but this report that’s a few years older cites an average income difference of as much as 30 per cent.

Which means the average income of the urban/suburban dweller likely to be caught in that long commute will be higher, perhaps significantly so, than the national average.

It’s not really about 2 extra hours of work time

What would people do with that time if they got it back – engage in additional productive work for a 10-hour workday? I doubt it. The true economic cost of a long commute arises from what happens between the trip to work and the trip home at day’s end.

StatsCan itself observes “various international studies show that long commutes, particularly in a private vehicle, affect people’s health and overall productivity.”

It’s not just the time lost in the car (or the bus/train) that adds up, but the soul-sapping effect it has on your entire workday.

In one of my columns last summer, Do we take the wrong approach to working smarter?, I cited a survey from the U.K. that polled some 2,000 office workers. It found, on average, a salaried worker accomplished barely three hours of productive work each day. More hours at the office didn’t help.

The article also cited research that finds most people can’t concentrate for more than 20 minutes at a time. In the office, especially those open-concept offices that have been all the rage, distractions keep from them from focusing on a task for more than 10 seconds (but I digress, that was my last column).

Some of these people are no doubt lazy, but most are likely too prone to distraction thanks in part to a commute that has worn them down.

Commuting by the numbers

Let’s take a closer look at that StatsCan data from the 2016 census.

A total of 1.5 million Canadians spent at least 60 minutes commuting to work each way, which StatsCan defined as a “long commuting time.”

Of these, 57 per cent, or 855,000 people, commuted by private vehicle – about seven per cent of all private vehicle commuters have a long commute. The average private vehicle commute in Canada was 26.8 minutes, a marginal 0.8-minute increase from 25.4 minutes in 2011, the first time this data was collected.

The longest average commutes, of course, involve public transit. According to StatsCan, longer commute times by public transit are driving the gains in average commute time overall – the average public transit commute time rose 1.9 minutes to 44.8 minutes by 2016.

So, commute times by public transit are getting longer at a faster rate than by private vehicle. That doesn’t bode well for the campaign to get people to leave the car at home and jump on a bus, or a shiny new train, especially when the cost of taking public transit continues to tick up.

One of the local media outlets here in Ottawa ran a Twitter poll recently asking people if they thought commute times would get shorter when the oft-delayed Confederation Line LRT finally starts up. About three quarters of respondents chose “No.”  Time will tell if people’s opinions are borne out by future facts.

Let’s reduce how many people commute

People are stubborn about giving up their private vehicles. It’s taken 20 years for the number of people who drive to work to edge down from 80.7 to 79.5 per cent as a proportion of all commuters. Taking longer to get to work on public transit, crammed together like sardines with strangers, no doubt has something to do with it.

The best solution is to encourage and support more remote/teleworking. Give people the flexibility to work from home.

But, when you take farming out of the equation, StatsCan’s census data shows that the percentage of people who are doing so has remained flat at around six per cent since the mid-1990s. Despite all the talk in recent years about trends toward remote workers and teleworking, the reality doesn’t match the hype.

If we want to make our urban economies more productive and efficient, if we want to reduce highway congestion that wears out our transportation infrastructure and adds to greenhouse emissions, if employers want to reduce their real estate costs and boost worker productivity, we must still focus on having fewer people wasting time, and energy, with a morning commute, in any form.

To discuss this or any valuation topic in the context of your property, please contact me at jclark@regionalgroup.com. I am also interested in your feedback and suggestions for future articles.


John Clark is Vice President with The Regional Group of Companies Inc. He has more than 33 years of experience in the real estate appraisal field, is a fully accredited…

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John Clark is Vice President with The Regional Group of Companies Inc. He has more than 33 years of experience in the real estate appraisal field, is a fully accredited…

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