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.
Vice-President, Trains, Agence métropolitaine de transport
We have to stop fighting over that subject. You have no idea of the energy that's spent on that point. It's astounding.
Conservative
Steven Blaney Conservative Lévis—Bellechasse, QC
Thank you, Mr. Chair.
Welcome, everyone.
I was a bit distracted during your presentation, but I understand that this is a bill that can potentially have beneficial effects for the companies you represent. Let's hope that, with the support of parliamentarians, we'll be in a better position to serve your users and the citizens of this country.
That leads me to ask you the following question. Once this bill is passed — if that's the will of the House — do you expect to save on your operating costs? If so, by what order of magnitude?
We can start with Mr. Bélanger.
Vice-President, Trains, Agence métropolitaine de transport
Definitely, but that will probably start when the time comes to renew the contracts. At each renewal, we don't think about trying to open existing contracts.
Furthermore, five years ago, we adopted the strategy of entering into short-term contracts. We were still waiting for this bill. For a period of time, we renewed contracts for one year at a time; we stretched them out. They obviously wanted to negotiate 10-year contracts with us; that's obvious.
However, the last time, we lost the battle. We were forced to sign a four-year contract. We now have a four-year contract for the Deux-Montagnes line. We couldn't continue the strategy because it was becoming excessive. So we had to give in and sign a four-year contract.
Conservative
Vice-President, Trains, Agence métropolitaine de transport
That depends on the lines. The contracts don't all expire at the same time. With CP, the expiry date is 2007-2008. That's approaching. We have to start negotiating those contracts one year ahead of time. Since it ends in July 2007, we have to start right away.
Conservative
Steven Blaney Conservative Lévis—Bellechasse, QC
It's important to tell members supporting the bill...
Vice-President, Trains, Agence métropolitaine de transport
It has an impact. Merely delaying for one more session would represent a lot of money for us.
October 24th, 2006 / 4:25 p.m.
Conservative
Steven Blaney Conservative Lévis—Bellechasse, QC
That entails major costs, yes.
Mr. Kelsey, in your case, do you have a number of agreements or do you have only one?
President and Chief Executive Director, West Coast Express
Yes, 2015. However, this legislation would apply to any new services immediately, once the legislation is enacted. So if we look to expand, existing agreements would be protected until expiry. New services would be part of this, going forward.
Conservative
Steven Blaney Conservative Lévis—Bellechasse, QC
So there wouldn't necessarily be any short-term impacts following passage of the bill, but that would provide a little security... There wouldn't necessarily be any short-term impact?
President and Chief Executive Director, West Coast Express
It wouldn't on the existing contract, but we would start to work, I suspect, with the regional transportation authority in Vancouver region to consider a new economic relationship on which expansion would be based. And that, I suspect, would start very quickly.
Managing Director and Chief Executive Director, GO Transit
We have two contracts, one with CN that expires in 2010, and one with CPR that expires in, I believe, 2007. For us, we're really not doing this to save money. We would immediately put out more service. We already have plans on the books to double our off-peak service, which really is being held back right now because of the high operating charges from the railways. So we know that right away we would be putting out more service for the same amount of money. Our main focus is getting the service out.
Vice-President, Trains, Agence métropolitaine de transport
It's the same thing for us.
Conservative
Steven Blaney Conservative Lévis—Bellechasse, QC
That's correct. It's not necessarily savings, but it's more cash to allocate to your company's other expenditures.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Thank you for making your presentations today.
I'm interested in the issue of replacement cost versus net book value. I can assure you that net book value is always more appreciated from a buyer's perspective, especially with depreciation.
I'm wondering if you've looked at other fairer methods that may be able to satisfy both parties in this particular case, such as replacement value less a nominal rate of return over the life of the investment, such as 10% or something like that. Have there been any discussions as to what would be a fair value, for both parties, at which to purchase it back?
President and Chief Executive Director, West Coast Express
I think the only comment I would make on this is that we are just looking to participate in the same type of acknowledgment of net book value of assets as all other CTA rulings are based on for other types or modes of travel. They're typically all based on the net book value of assets as well. So we're not trying to create anything new; we're just trying to tack on to the other agency types of decisions.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Have you looked at any other types of evaluations?
President and Chief Executive Director, West Coast Express
No. I know there can be others, but we think this is the most consistent application. I know there have been extensive reviews on replacement versus net book value of assets, and it consistently comes back to using net book value of assets each time. We are looking to follow that rather than recreate a whole new mechanism that doesn't need to exist.
