Thank you very much, Mr. Chair.
The Railway Association of Canada represents 50 freight and passenger railway operators, consisting of the six class I carriers including CN and CP, 40 local short-line railways, as well as passenger and commuter service providers, including VIA Rail and GO Transit as well as such tourist railways as the famous Rocky Mountaineer.
Although I'm going to focus on the movement of freight and the importance of a robust supply chain infrastructure, I would like to remind the committee that more than 80 million people use passenger rail every year to go to work or take a holiday, reducing emissions and congestion as well as wear and tear on Canada's busiest roads and highways. We hope the government will give the green light to VIA Rail's high-frequency rail plan, which seeks to establish dedicated tracks for rail passenger service between Quebec City, Montreal, Ottawa, and Toronto.
For the movement of freight, Canadian railways are an economic enabler, allowing Canadian businesses to compete globally. Last year they carried some $280 billion of Canadian goods across Canada, the United States, and to international markets. Last year alone, Canadian class I railways invested more than $4 billion in their continental networks, representing approximately 22% of their revenues. This is a greater share of revenue reinvested into their physical plant than that of any other industry I can think of.
These investments are critical to maintaining safety, velocity, capacity, and service of the network. More importantly, these investments benefit rail customers. As mentioned in our written pre-budget submission, we recommend that the government introduce an accelerated capital cost measure to encourage railways to invest even more in track and related property as defined under class 1 of the Income Tax Regulations.
Today I would like to draw your attention to a specific part of our sector, and that is the short-line railway. These are railways that typically operate on less than 100 miles of track and whose revenues are less than $250 million. Short-lines are an integral part of Canada's railway network, providing vital services to regional and remote communities. They operate on low-density rail lines, feeding traffic to class I railways. They provide service to many customers, from pulp and paper mills to automotive manufacturers, with a critical link to global markets via class I railways. Moving over relatively short distances, short-lines compete directly against the subsidized trucking sector, which has access to publicly funded infrastructure.
I would ask you to consider short-lines from a public policy perspective. They are largely self-financed, operating on private track and infrastructure, including their own bridges and crossings. Their competition, mostly trucking but also marine shipping, operates on publicly subsidized highways and waterways. Water transport is extremely sustainable, but railways are much more efficient than trucking. On average, rail is four times more fuel-efficient than truck, with lower greenhouse gases and other pollutants.
Rail is also safer than trucking. Shifting freight from truck to rail will take trucks off the highway and save money on roads. A single freight train will displace about 300 trucks from our road and highway network, and yet trucking is subsidized, because trucks drive on public infrastructure, and now they are planning to run trucks in platoons on our highways.
Again, from a public policy perspective it seems to me that society is asking government decision makers to facilitate the move to a sustainable future. Creating a level playing field for short-lines to compete with trucks is a sensible way of doing so. Moving ahead with VIA's high-frequency rail plan is another.
The Honourable David Emerson, in his recent Canada Transportation Act review, recommended the creation of a funding program dedicated to short-line railways, and just two weeks ago, before the Standing Committee on Transport, reiterated the urgency to invest in short-line infrastructure to maintain that vital link in the supply chain.
For this reason, the RAC recommends that the government create a capital funding program to support short-line infrastructure investment. In our written submission we suggested the amount and some modalities of the fund. We also provided other suggestions in our pre-budget submission, on which we would be happy to elaborate.
Thank you very much.