Evidence of meeting #66 for Public Safety and National Security in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pre-clearance.
A recording is available from Parliament.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Thank you very much.
I'd like to continue along that line a bit, Mr. Chan. I'm quite familiar with your business out there and how very important it is to our tourism industry here in Canada and particularly in British Columbia. How many times a week do some of your trains cross into the U.S.?
Senior Director, Corporate Development, Rocky Mountaineer
That's what we call our “Coastal Passage” route, from Vancouver to Seattle. It was launched four years ago. This is just the start of our fourth year of operation. It's been a slow ramp-up to get to where we are today, but it's been growing by double digits, at about 20% a year, in terms of passenger growth. We currently run only 12 round trips a year within our six-month seasonal business. It's not a lot compared to our main business within Vancouver and the Rockies, with about 70 trips per year per route. It's quite a small piece right now.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Right, but will this pre-clearance in general help your customers in terms of the service and fewer headaches, if I can put it that way?
Senior Director, Corporate Development, Rocky Mountaineer
Yes, fewer headaches and more certainty, and a more seamless travel experience for sure. There will be less disruption when they get to Seattle. If they're wanting to try to catch a cruise ship from Seattle to Alaska that day, it could be challenging. It would alleviate some of their travel risks if we could implement this at the Rocky Mountaineer station.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
With everything, there's always somewhat of a cost. I presume in this whole thing, and I guess in a perfect world, although the world isn't perfect.... What would you project that cost to be on a per passenger basis? Has your company crunched any numbers on that?
Senior Director, Corporate Development, Rocky Mountaineer
The cost to the passenger?
Senior Director, Corporate Development, Rocky Mountaineer
We have not done that yet on a formal basis, but as I mentioned earlier, we know through past guest surveys and out of the research we have done that they would prefer a pre-clearance type of method versus a post-clearance method and the uncertainty of it all. Given the type of clientele we have, which is typically international and an older demographic, they want more certainty on that, and this should give them that certainty, better certainty.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Right, and I think that if we look at acceptance, for most of us who travel on a regular basis, things have been different ever since 9/11, not just in Canada and the U.S., but in the world. You can call it one of those “necessary inconveniences” sometimes, but I think that in general people will realize that not only are there some guidelines and regulations that weren't there before, but they are there and costs come with them, I think. Do you suspect much push-back there or see it hurting your numbers of travellers with this extra little cost that's added there? Do you see that as a big hindrance?
Senior Director, Corporate Development, Rocky Mountaineer
Not at this time, no. We don't.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
That's good to hear.
On this, even for Parliament Hill, when I came here 13 years ago it was kind of what it is today. It's beefed up a bit, but prior to that.... It's the same as going through airports. Things have totally changed since 9/11, as I've said, so there's that acceptance out there.
Ms. Greenwood, you made some comments business-wise and what have you. Are you getting much or any negative feedback from American businesses over this? What kind of feedback are you getting from them?
Chief Executive Officer, Canadian American Business Council
There's huge enthusiasm for any effort that makes it more efficient to cross our common border. If I might just elaborate on your earlier question to my colleague, the prediction we have is that the more efficient you make this and the easier you make this, with more certainty, travel and tourism would go up a lot. The opportunity to really grow is there, going back and forth both ways.
Businesses that operate in both Canada and the United States look for.... After 2008, after the economy collapsed, everybody was trying to squeeze out efficiencies, and they found a lot of efficiencies. Business got way more efficient in its supply chain and everything it does. The things that now cost a lot of money, those efficiencies that weren't found, are typically caused by government-imposed inefficiencies. They're usually inadvertent, so regulatory incoherence is another issue that we work on, as well as delays at the border, going either way, or unpredictability at the border.
A big idea for us is that if you're going to be deemed a trusted traveller, while we respect government's right to always have a random inspection, even for the most trusted travellers, if business is going to give up a lot of information and spend a lot of time and money complying with manifests in advance, and all sorts of supply chain certifications that what's in the truck or the railcar or the ship is actually what you say it is, the deal is supposed to be that if you do all of that, your travel back and forth across the border is more efficient. You're supposed to get a gain. That's the deal between government and business on that.
Again, our observation is that since the Beyond the Border agreement was signed several years ago under previous governments in both countries, there has been a lot more collaboration on the security side, and the collaboration on efficiency in commerce has been slower than we would like.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
You mentioned the Beyond the Border agreement. I think it was four or five years ago that it was signed. I can remember it. Do you see this bill enhancing that agreement?
Chief Executive Officer, Canadian American Business Council
Yes. We think this is an enormously important piece of legislation. The agreement was signed, but it needs the enabling legislation in order to make it real, if you will, so that Canadians and Americans can fully enjoy the benefits of a common approach to the border. We think it's enormously important. As I said, it's a top priority of ours, and we would encourage its swift passage.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
Thank you, Mr. Chair.
I simply want to make sure that I have this straight.
Ms. Greenwood, you said that Canada hadn't exercised its pre-clearance right on the American side. I may have been wrong to assume the situation was relatively new. Perhaps pre-clearance was already allowed, and Canada could have taken advantage of pre-clearance on the American side if it had wanted to do so. However, pre-clearance isn't done anywhere else at this time. Can you shed light on this issue?
Chief Executive Officer, Canadian American Business Council
Canada has had the right to have pre-clearance facilities at U.S. airports as long as the U.S. has had the right to have them in Canada, and I don't actually know why it hasn't been done. If I had to guess, I would say that it's probably due to resource constraints, because it's expensive to locate a facility. Or maybe there just wasn't a demand.
As I said in my testimony, I think it would be terrific, particularly in places such as Arizona and Florida, where you have a large population of snowbirds who go down there for the winter and come back here for the summer. That would be a tremendous convenience.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
I wanted to ask why Canada isn't exercising its right. You have some ideas, but we can only speculate. We don't have the answer.
Let's look at the Quebec City airport, for example. One of the concerns raised is that, for the Montreal and Toronto airports, part of the costs were recovered as a result of different agreements with the government. The new agreement says that airports that choose to set up pre-clearance—this also includes stations—will cover the related costs.
Let's take the example of an American airport in Arizona or Florida. Perhaps the airports don't want the system because they find it too expensive and they don't see the benefit?
Chief Executive Officer, Canadian American Business Council
I don't think there is specific opposition to Canadian pre-clearance in the United States. I don't think anybody has tried. We would have to go back and check. We could ask somebody who was in government. Monsieur Chrétien might have a view on this. I don't know.
The costs are something that are typically negotiated between the governments and the private sector. We find that private sector players are often willing to pay for the government function if it means more efficiency. If you were to propose opening up a facility in Florida or in Arizona, there would probably be a negotiation between the air carriers, the governmental authority, and the federal budget that pays the salaries of the Canadian customs officers involved.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
I'm asking the question because it may not necessarily be Canada that didn't want the system. It may also be the other party concerned.
A port or airport authority may decide that, even though Canada wants to set up the facilities, it doesn't see the benefit under the current agreement.
Chief Executive Officer, Canadian American Business Council
That's possible, sir. I have been working on Canada-U.S. for only 20 years, so my knowledge doesn't go back before that, but in the last 20 years, to my knowledge, there hasn't been a Canadian desire, so it's hard to know if it would be opposed if you have never asked the question.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
Okay.
Mr. Chan, I might have asked you this question the last time you were here, but we all had to flee rather quickly, so I'll apologize if we have to rehash some of this stuff.
Monsieur Picard asked a similar question about how it all works security-wise and everything. I just want to understand the efficacy for a train. It's very obvious for flights. It has been well explained that it changes the number of destinations you can go to, but for a train going from Montreal to New York on Amtrak let's say, or, for you, from Vancouver to Seattle, the destination remains the same. Where does the efficiency of having pre-clearance for travel by rail come from?
Senior Director, Corporate Development, Rocky Mountaineer
I'll first speak to Rocky Mountaineer and then I can speak on behalf of our Amtrak colleagues and also some of the ferry operators operating in B.C.
As I mentioned earlier, for Rocky Mountaineer, our guests tend to check into our station. For an 8 a.m. departure from Vancouver to Seattle on a Saturday, the guests would be there around 6:30 a.m. Most of them would be there by seven o'clock. It takes about 15 seconds to check them in. To process them, we take their luggage, and then they are lounging in our waiting area. That would be an opportune time—an hour of time—to conduct pre-clearance activities if we could implement that. We could board them on our train, and they could be off on their way, and then they wouldn't have to do the post-clearance in Seattle. They would arrive and be out the door. Right now if you're the last guest to depart from the train in Seattle, there is 45 minutes of post-clearance time. That would be a huge efficiency for us.
In terms of the overall rail industry, on the passenger side, Amtrak does have a couple of trains that cross the border. In B.C. and Washington state, they have to stop at the border right now, which actually causes congestion overall in the rail infrastructure. Whether for a passenger train going southbound or northbound, or freight going southbound or northbound, the more we can do pre-clearance to move commercial goods more efficiently, the more we could free up rail infrastructure for all parties that use and leverage that infrastructure.
Additionally on the ferry side, there are a couple of ferries that go across the border between Victoria and Seattle, for example, or Victoria and Port Angeles. They move hundreds of thousands of passengers, and they are currently on a pre-inspection, post-clearance basis, and that takes a lot of time and has inefficiencies as well.
The tourism, commercial movement, and freight operators would value this to free up infrastructure and time.
