Transport Committee on June 9th, 2009

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Have there been any plans at all rather than using those CN lines for the corridor or putting, for instance, a corridor to the Vancouver airport where we do have the Canada line, which would take passengers right to downtown Vancouver? Do you have to use that existing corridor?

[Geoff Meggs]

No, I think that in the 1990s, when it was an extremely preliminary and high-level concept, they decided that there would need to be a new corridor identified, perhaps on the trip somewhere saying that maybe we actually would use the alignment already created for the highway that goes through, because it's already been alienated from other uses and might be available. There's apparently a hydro right-of-way that could work, but east of the I-5 is where most of the people feel you're going to have to do a bit of a greenfield development.

Your witness from Calgary has pointed out some of the challenges that raises politically, but they feel a new alignment will be necessary to get to the higher- and high-speed rail connection. One concern we have in Vancouver, and why we have to be careful here, I think, is that when we get to the next stage we have to be sure that we bring in our existing goods carriers, because they're relying on those routes already to carry freight traffic. As I think you've already heard, you simply can't keep adding in passenger trains and expect it all to work out. At some point, you have to make a decision to create a corridor for the passenger traffic.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

I appreciate that. I just want to repeat, so that you understand the position we're in as far as the policy with regard to charging for the border security is concerned, that if those charges at that border crossing in British Columbia are borne by the rest of the taxpayers in this country, then we have to think about those other border crossings.

You have to appreciate the position we're in. I'm sure the minister wishes to work with you and try to make that crossing easier, but we do have a job to do to secure our borders and to make sure there is user-pay.

I'd like to direct my next question to Mr. Gilbert. Do I have time, Mr. Chair?

[The Chair, Conservative, Merv Tweed]

You have 20 seconds.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Mr. Gilbert, I just didn't catch your cost estimates. Was it per kilometre or per mile at somewhere between $15 million and $17 million to build high-speed rail?

[Richard Gilbert]

I'm suggesting something in the order, ballpark, of $40 million per kilometre. The range I quoted was that of the International Union of Railways, usually known by its initials in French, UIC, which was $17 million to $53 million Canadian per kilometre.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Why I asked that question is that we had a witness here who told us that the corridor from Quebec, the Montreal-Windsor corridor, is around 1,200 kilometres and would cost about $20 billion. What you're saying is actually is three times that, at $60 billion. That's why it was quite startling.

[Richard Gilbert]

Your math is better than mine on that immediate point, but there has been a lot of underestimation. The UIC range was for actual projects or some that are in an advanced state of planning. The other one, which I think is actually the most relevant one to our circumstances, is the California High-Speed Rail Authority. Theirs is almost exactly $40 million Canadian for their 1,300 kilometres--a very comparable distance--from Sacramento to San Diego. If you want to examine one in detail, I would look at their numbers and see how they differ from the estimate you had earlier.

[The Chair, Conservative, Merv Tweed]

I want to advise the committee that Mr. Gilbert did provide a sheet. We have asked for it to be translated, and when that is done, we'll circulate it to the members. The numbers are actually printed there. The sources in which the information can be found are all detailed on the back.

Mr. Volpe.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Thank you very much, Mr. Chairman.

Thank you very much to the three gentlemen for coming forward. I think I've known Mr. Gilbert and known of him from another life for decades. He doesn't know me, but I recall his days as a city councillor.

Mr. Gilbert, I don't really want to divert the discussion to the one that has just surfaced, on the estimation of cost. That's what the current feasibility study is designed to do: to upgrade and upscale and make contemporary the figures that have been derived through other feasibility studies, so that we'll have a more or less accurate figure for what the costs are.

That having been said, you really have introduced a different element into this discussion with your estimate, based on the figures you've quoted in your piece. It is an estimate that goes well beyond any estimate by any of the other feasibility studies, including the ones done by VIA, including the ones done by the railways with the help of the financial institutions and the airlines.

I'm not sure whether it's going to be helpful from here on in to talk about differing estimates--we know that's going to be dealt with before the end of the year--but I thank you for being cautious in explaining to us that the numbers are numbers, and that they differ from place to place. The value of the land will obviously be a very big one, but the cost of construction of rail, even in the orbit that you've outlined for us, still pales in comparison to the cost of construction of a four-lane separated highway once one takes into consideration the acquisition of land. I think you'd agree with that too.

[Richard Gilbert]

I would also say that Mr. Rowden's point has some merit. It has some merit for other reasons, but even if only for the reason that Alberta is pretty flat, or at least the Calgary-Edmonton route is pretty flat. The most expensive part of building any surface transport facility generally, but for rail in particular, is the tunnelling. For none of the routes that we're talking about or that I focused on, and maybe none at all in Alberta, would you need much tunnelling, so that could very well reduce costs.

I don't claim to be an expert on these costs. I was merely reproducing other costs, costs that I have reviewed fairly carefully, and those are the numbers that other people have used. As I say, I put in my document the most authoritative ones, which are from the International Union of Railways and the California High-Speed Rail Authority.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

But they're not from the feasibility study that was done by the governments of Ontario, Quebec, and--

[Richard Gilbert]

I don't have that information. It's not available to me.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

It is now. Their estimates were considerably lower. But that's okay; at least you documented where you got your information.

[Richard Gilbert]

You say I've introduced them. I would hope that there were two stronger things I've introduced into this discussion. One is that you really have to have a sense of where the price of oil is going before you even begin to think about this. The second is that once you have that sense, then start with the premise that you want it to cost nothing in terms of subsidy, and work from that. That was my analysis. I put it in the context of the price of oil, and I said, what would it take to have a no-subsidy high-speed or higher-speed line? Then work back from there. I would hope those other two points are actually stronger than the details about the costs, which could very well be different for the circumstances we're talking about.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Speaking only for myself, I don't think my point—you're raising the point to which I made reference—necessarily deviated from those other two points as well as others, because obviously this is going to be a decision made on public policy into which a whole series of factors comes into play, not the least of which, of course, is the financial one, and the public intervention one from going down the road once the key is turned....

I was interested, as well, in some of your observations with respect to one other element. You said that high-speed--not higher-speed--passenger rail is essentially designed to move people faster or more efficiently than a car, an electric car, which you've identified as being perhaps still in somebody's dream for the long range. I noted that you avoided, perhaps studiously, the fact that once you're moving people, you're actually thinking in terms of moving mass numbers of people and transferring them off one set of infrastructure onto another. It's not just moving them out of a car, and out of an electric car, but moving them off the highway and replacing the highway with a rail highway.

That's something people have not addressed. That's why I referred to the construction of a four-lane highway. How many of those will you have to do as the population grows? Then, how will you do that efficiently in an urban environment and an interurban environment, as opposed to just an intra-urban environment? I know that you were at one time very interested in the intra-urban transportation issues. In those days, I don't think we were close to the city car or the electric car that would be perhaps a combination, as you put it, of an engine that was dragging a heavy battery or a battery that was going to push a heavy engine.

I'm not sure that some of the scientists and researchers I met today would agree with this, but I found that particular perspective interesting. Do you, supported by your studies, really think that the only area of growth is in taking them away from an automobile--i.e. highway--system and putting them on rail? If you have trains, presumably you can take more off at a time. Is that really where everybody is looking--just at taking them out of a car and off the highway?

[Richard Gilbert]

You have to look at the numbers that are required to provide even a half-decent amount of revenue to cover the costs of this. Just going back to the Calgary-Edmonton corridor, where the numbers seem reasonably clear to me, you have 25,000 people a day, of whom about 23,000 or 24,000 are going by car.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Is it individual cars? It's important to make that distinction as well. In the Toronto area, it's very rare to see two people in a car on the highway. It's usually one per car.

[Richard Gilbert]

That's a complication, and that would have to be in any detailed analysis. That would have to be--

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Really, you're taking cars off the road. You're not taking people off the road.

[Richard Gilbert]

Yes, but the thing is the numbers of fares that would have to be paid to cover the cost. I start with an analysis where things cover their cost. Then subsidy, you might say, is a way of addressing shortfalls in that. The primary shortfall is that you don't have enough passengers to do that. I mean, you can envisage a high-speed service between Calgary and Edmonton that carries 20,000 people a day for all trips in all directions. My estimate is that this would cover its cost.

Maybe realistically you're never going to get above 10,000 a day, which means, very roughly, that you have a 50% subsidy of the thing. But the big factor here, I think, is the oil price. It's not a question of social engineering and how you get the people out of their cars. Above a certain oil price, they will get out of their cars if the train is available.

The trick is to try to estimate that. My guesstimate—and I really wouldn't call it more than that—is something in the order of a $1.60 a litre. It's where I arrived at and what I presented at this Red Deer conference. It may well be wrong, but I don't think it's hopelessly wrong. It may very well be $2.30 or something like that.

It's the numbers. You have to figure out the numbers. I don't have the numbers for Toronto-Montreal and Toronto-Ottawa. I'm inclined to think that they might be a little bit better than the Calgary-Edmonton ones, but I don't have them.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Thank you.

My question is for Mr. Meggs. You said that you had requested $800 million from the federal government. If I understand correctly, the money would be for the development of the Cascadia corridor. Is that right?

[Geoff Meggs]

No, that's the estimated size of Washington State's application to its own federal government under the Barack Obama stimulus plan. They are making their submission in the United States, but they would like to forecast the extension of the service to Canada.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Did you submit a request to the federal government?