Evidence of meeting #20 for Transport, Infrastructure and Communities in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was railway.
A recording is available from Parliament.
4:10 p.m.
Conservative
4:10 p.m.
President and Chief Executive Director, West Coast Express
Absolutely, and the goal is to create checks and balances so that we don't have to use legislation. There's a new definition of what commercial terms really mean in a balanced playing field.
4:10 p.m.
Liberal
Don Bell Liberal North Vancouver, BC
Thank you.
Welcome, gentlemen.
I will follow more or less along Mr. Fast's questions. I was on the GVRD board and TransLink when this issue came up, and I can remember the angst and the anger that we felt at knowing what we understood were the comparative rates between different areas in Canada that the same rail line was charging for passenger rail or comparable service. We felt we were paying an inordinately high amount for this in the Lower Mainland of British Columbia.
As I understand the bill, I gather from your comments that you focused on the issue of assets and the valuation. In terms of the process for adjudication of a dispute, do you believe this would actually address...? What it provides for now is, first of all, publicity of future contracts and application to current contracts if the parties agree that the information can be released.
Do you believe there will be any blockage? I don't presume West Coast Express is going to object to the information being released. From your knowledge, do you believe the railway will oppose it being released?
4:10 p.m.
President and Chief Executive Director, West Coast Express
In the case of West Coast Express, the existing contract was released. It went to the British Columbia Supreme Court, and a ruling was made that it was to be released to the public. From a West Coast Express perspective, I think it's an excellent check and balance on me as the CEO, personally, that I'm doing appropriate business deals on behalf of the taxpayer. That includes expansion and such that has to stand up to scrutiny.
Also, under the freedom of information act--each province and federal jurisdiction has slightly different language--you can FOI, if you will, how much a bus costs, how much uniforms and fuel cost. Yet I found it ironic, frankly, that you couldn't find out how much a multi-million dollar rail deal was.
In our case--and I think this actually was debated as part of the Canadian Transportation Act review panel, where CN and CP were present--CN indicated they would have no objection to it going forward.
4:10 p.m.
Liberal
4:10 p.m.
President and Chief Executive Director, West Coast Express
In West Coast Express's case, yes, it was CP.
4:10 p.m.
Liberal
Don Bell Liberal North Vancouver, BC
The provision now provides that, if there isn't an agreement, then it can go to the CTA for resolution, I presume.
4:10 p.m.
President and Chief Executive Director, West Coast Express
Correct, but only after we attempt good commercial negotiations first. We have to negotiate commercially. If we are unable to do that, then that ability exists. I think that's very appropriate.
4:10 p.m.
Liberal
Don Bell Liberal North Vancouver, BC
Do I understand then that generally you're supporting this bill? You've had consultation with Transport Canada on the bill, have you?
4:10 p.m.
President and Chief Executive Director, West Coast Express
Frankly, Transport Canada has been just excellent in our consultation with them on this bill. We are supportive.
4:10 p.m.
Liberal
Don Bell Liberal North Vancouver, BC
That's good to hear.
In terms of the transparency issue, you're not concerned about the release of commercially sensitive information that would come out of this?
4:10 p.m.
President and Chief Executive Director, West Coast Express
If I could use the specific example of British Columbia, in some legislation there is “supplied” versus “negotiated”. If information is supplied about specific things that are damaging or proprietary to an individual, whether it be a railway...those things are able to be removed from the main information that's provided. I'll give you an example of a unique diagram that may have security implications pertaining to a railway. I would absolutely support that this not be provided to those who might make a request. But in general commercial terms, I would personally support those terms....
4:10 p.m.
Liberal
Don Bell Liberal North Vancouver, BC
You've got your costs down. Are you having problems getting additional trackage time?
I know there's the conflict, obviously, between the efficient operation of the railroad for commercial purposes and the insertion of the passenger rail within that time. The railway can't always schedule.... I mean, we have ships in the harbour costing hundreds of thousands of dollars a day just to sit there. So there's the commercial viability of getting the goods both to and from the ports into Canada and the U.S., and that's balanced against the needs to provide, in particular, peak-time commuter rail.
4:15 p.m.
President and Chief Executive Director, West Coast Express
That's a very good question, and I probably have two comments.
One is that we are very much interested in the goods and passenger movement solution--for all our respective regions. It's how you balance both, not that one is more important than the other. If we can't get the people to work on the commercial movement it doesn't help a lot, and vice versa for the goods movement.
Have we negotiated? The answer was no. As I said previously, West Coast Express will not expand until such time as we see this legislation. We have not even entertained conversation with the railway, because we know what the discussion will look like. Once we have this tool, we will then start what we hope is a new definition of commercial relationships, with more checks and balances.
To the second part of the question in terms of how you balance goods movement on a track that's perceived to be busy--I use the word “perceived”--in the case of West Coast Express, I think this is where this legislation is really crucial. West Coast Express and, I'm sure, GO and AMT have all brought significant capital to the table. That benefits the goods movement beyond when we don't even run. For example, in West Coast Express's case, I actually retained the ex-CEO for BC Rail to give me some advice about our Mission-to-Vancouver corridor. He's also the ex-general manager for Canadian Pacific Railway who was actually involved in the start-up of West Coast Express. So I had a pretty good idea of what our circumstances would look like.
We found, with the $64 million of upgrades, putting in centralized train control systems--we double-tracked a significant portion of it and increased a lot of crossings, which brings a lot of very important strategic flexibility--in fact, we actually brought more capacity over a seven-day period than we consume. That benefits the goods movement. We don't run on the weekends. We'll do freight railways, and the goods movement gets the benefit from that. We only use one track; most of it is two tracks. Goods movement gets the benefit. When you put in centralized train control, you fundamentally get a step change in capacity versus a manual type of train movement. Just the capital alone brought us capacity far beyond what we consumed. That would be allowed to be contemplated in the future as part of this legislation.
4:15 p.m.
Conservative
4:15 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Thank you for being here with our committee. I'd like to add to the answers Mr. Bélanger provided earlier, in view of the fact that these facilities, particularly in the Montreal region, are of great concern to us.
As regards sidings, which the bill addresses in clause 42, or proposed section 146.2, it seems to me this is quite weak on the matter of making lines available. It states that “a railway company shall prepare and keep up to date a list of its sidings and spurs that it plans to dismantle.”
You contended earlier that you had even identified one railway line that could be of use to you, but that is not on the list of available lines. I'd like to hear you say more on the subject.
I would also like you to make me a recommendation as to what we could add, that the railway company should determine the availability of certain lines. Even if they aren't to be entirely dismantled, the company could keep an up-to-date list of available lines.
That would be important, if we want to think about development. I'll leave you with that.
4:15 p.m.
Vice-President, Trains, Agence métropolitaine de transport
The idea is to determine how the companies could be forced to make them available, which isn't a simple or easy matter. They can always argue that a potential mining project somewhere will be developed in 30 years.
To retain something, they have all the tricks of the trade and all the arguments. How could that be imposed on them? The AMT definitely couldn't do it; the Canadian Transportation Agency could look into it. We could make a request to determine whether the railway company is actually abusing the situation by not wanting to make a railway line available to us.
We didn't dare go that far when we reviewed the act. We thought that, as with anything, if we asked for too much, we'd lose everything we had.
Perhaps we should view this more as a matter of stages over time. There will definitely be another review of the act in five years. There will be another one five years later. Perhaps we can be more particular at that time, but, for the moment, we haven't felt the need to go further.
4:20 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
However, you think it's possible to turn to the agency so that you can use a line temporarily or during part of the day, even if the line isn't dismantled?
4:20 p.m.
Vice-President, Trains, Agence métropolitaine de transport
We could do it at that point, but if the agency doesn't have the authority under the act, it can only try to make the companies understand that, but they can get around it. As I said, that will happen at a future stage.
4:20 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
I wanted to ask you about the clause concerning the noise caused by the railways. I wanted to know whether these are clauses of the bill that can affect you in some way. It seems to me we've previously heard complaints from citizens living near your commuter train services.
Do you think this clause could affect you?
4:20 p.m.
Vice-President, Trains, Agence métropolitaine de transport
In fact, we have to be consistent. The bill gives citizens an arbitrator, which is the Canadian Transportation Agency. As regards noise, the Canadian Transportation Agency is now responsible for deciding these matters.
We can deal with that and agree with people to find solutions. Moreover, I can give you a host of examples on this subject. This kind of disturbance mainly arises when you introduce a new service.
In overall terms, passenger trains are much less noisy than freight trains or than cars moving around switching yards. When a two-mile long freight train passes by, it generally makes a lot of noise.
With regard to our railway operations, we have locomotives that are not very noisy. These are trains that have 10 cars and therefore pass by quickly. The train passes a level crossing in 10 seconds, so that you don't hear it any more.
So we realize that, with time, people learn to live with the noise. Often, when we establish measures, we realize that the environment produces more decibels than the train. We see that often, particularly in the Montreal region, where there are a lot of highways. People are used to the ambient noise of highways. When we measure sound or noise levels, we realize that the highway often makes more noise than we do.
4:20 p.m.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
I have another brief question. Earlier you talked about negotiations on costs which you've already started with the railways. You seemed optimistic: you always reach good agreements, since people want to agree.
However, the bill clearly states that it's the net book value of assets that will be considered. Based on the reaction we're hearing from the railway companies, they don't agree with those valuations. Consequently, will this bill, in any case, help you even more to reach agreements?
4:20 p.m.
Vice-President, Trains, Agence métropolitaine de transport
Yes, because, as I explained, we currently still have the net book value; in some cases, it's higher.
As I explained earlier — I think that's in the writing on the wall — their objective is to arrive at replacement value, and if one day we're dealing with replacement value, it will be over. Imagine the replacement value of Victoria Bridge, for example.
4:20 p.m.
Bloc
