Transport Committee on Oct. 26th, 2006

[The Chair, Conservative, Merv Tweed]

Thank you and good afternoon, everyone. We are now in meeting number 21, the Standing Committee on Transport, Infrastructure and Communities, pursuant to the order of reference of Thursday, September 21, 2006, Bill C-11, an act to amend the Canada Transportation Act and the Railway Safety Act and to make consequential amendments to other acts.

Joining us today from the Railway Association of Canada we have Mr. Cliff Mackay. He's the president and chief executive officer. Also with us is Mr. Claude Mongeau, executive vice-president and chief financial officer of Canadian National Railway Company.

I know that you've received some instructions from the clerk. Mr. Mackay, if you'd like to start, you have approximately seven minutes.

[Cliff Mackay, President and Chief Executive Officer, Railway Association of Canada]

Thank you, Mr. Chair.

On behalf of the Railway Association of Canada, let me first say thank you for the opportunity to appear before you. Our association represents about 60 railways across the country, which is essentially the whole scope of railways in Canada: the class ones, the short lines, the regionals, the inter-city, VIA, the commuters--some of whom I think you saw earlier this week--and some tourism railways.

More than six years have elapsed since the Canada Transportation Act review panel rendered its report and made a number of recommendations on moving forward with the act. We see Bill C-11 as an important part of a response to that report.

We've had a number of opportunities in the past to comment on various proposals to amend the act and we hope, Mr. Chair, that we are seeing the end of a very long and complex consultation process on this matter. Our view is that while there are a number of important amendments before you, there are also major issues facing the industry and the country, and we'd like to get on and focus on some of those in the future.

In a nutshell, the Railway Association of Canada supports most of the provisions in Bill C-11. I'm going to spend my time today speaking on the noise management issues. Some of my colleagues from individual railways do have concerns about some of the other matters in the act, in particular the public passenger service provisions, but since the business interests of our members diverge on that particular matter, the Railway Association itself won't be taking a formal position on that matter.

Let me turn to noise management. The RAC believes that the bill sets out a clear authority for management of noise related to railway operations. Since a 2000 Federal Court decision that affected the ability of the CTA to exercise jurisdiction over railway noise complaints, there has been some confusion out there as to who really has the authority to regulate noise in the national railway system. We are very supportive of this bill because it clearly solves that problem. It says clearly that the federal government and more particularly the Canadian Transportation Agency have the authority to exercise noise regulation in Canada.

We think this is important because the demand for rail services is growing, and with it the complexity of our operations and our interface with communities across the country are growing. The trend toward ever-increasing imports, particularly from Asia and the Pacific, and the rapid increase in exports, both to the U.S. and offshore, are making the relationships between communities and railways more challenging every day. We think this bill helps to make that partnership better over time.

However, I must point out to you, Mr. Chairman, that the industry has not been doing nothing in the interregnum. A few years back, we signed a memorandum of understanding with the Federation of Canadian Municipalities and other stakeholders to begin a voluntary approach to better management of noise and other proximity issues.

The MOU was signed in 2003 and supported by not only the FCM but also by the Canadian Association of Municipal Administrators. The main purposes of this MOU were and still are to gain and share a common understanding of the current issues around proximity, to improve communications between the parties, to implement a flexible but formal dispute resolution process, and to develop guidelines on such issues as land use, noise levels, and other technical matters.

The RAC and the FCM encourage resolution of issues at the local level. I must say, Mr. Chair, that we're very pleased to see proposed section 95.3 of this act does so in a similar manner. We strongly believe that the best place to solve issues is at the community level, and third parties should only be intervening if in fact we can't find the solutions there.

To achieve these common objectives, I just want to give you some idea of some of the things we and the FCM have done to date. We've established steering committees and three large working groups with equal representation from the parties. We've developed a communications plan. We've developed a good-neighbour video, which is an awareness video.

We've completed and published three case studies on real issues, one here just across the river in Gatineau, that will help to explain how issues can be resolved between the parties, and we've developed a data-rich website called www.proximityissues.ca. I would encourage members or your staffs to go and have a look. There's an awful lot of information there on what's going on between communities and railways on proximity issues.

Since its inception in 2004, the website has grown progressively over the years. We've taken 22,000 visits already this year on that particular website. We've also developed a robust dispute resolution protocol, and this is published on the website, if you wish to see it.

We hope all of this material will be helpful to the Canadian Transportation Agency when it begins its job of developing the guidelines that are called for under the provisions of this act.

Let me stop there, Mr. Chairman. I've left a copy of this document, which is the latest MOU progress report, with the clerk. If you are interested, you can distribute it to committee members afterwards.

We think there are a number of key advantages to the approach we've taken in working over the last two or three years, some of which are very clear already. The agreement we have is encouraging more effective and efficient land use; it's providing long-term cost savings in the resources required to deal with proximities over time; it has reduced land use incompatibilities between railways and adjacent land use, and helped the land planning process; and it has reduced noise and vibration complaints in a number of jurisdictions across the country. A good example is Gatineau. Another is Oakville. There are a number of examples we could give you from across the country.

It is also having an ancillary benefit on public safety, because in addition to talking about proximity issues, it provides an opportunity to talk about issues such as trespass and level-crossing safety, particularly in areas adjacent to schools.

Suffice it to say that we think there have been tangible benefits, and I should say, Mr. Chairman, that we are continuing to work with the FCM and others to advance the MOU, as we go forward.

In the very near future we hope to be in a position to publish a comprehensive draft of noise emissions guidelines and a land use guideline. We're in the final stages of preparing this document. It's been the subject of an awful lot of research and technical study over the last couple of years. It is now before the MOU steering committee for their consideration. I hope we'll be able to make it available to committee and other interested parties in the very near future.

I will stop there, Mr. Chair, and thank you very much for taking the time.

Just to conclude, we are in favour of the noise provisions in Bill C-11. We believe we need this kind of regulatory framework to work within, but we would very much like to continue the kinds of approaches we've been working on with FCM and others. We believe the best solution to this is at the local level, getting the parties involved with each other.

Thank you.

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Mackay.

Monsieur Mongeau.

[Claude Mongeau, Executive Vice-President and Chief Financial Officer, Canadian National Railway Company]

Thank you, Mr. Chairman.

I'm pleased to be here to address the committee.

I'm delighted to be here today to meet with committee members. I will be speaking in English, but I will be happy to answer your questions in either English or French following my presentation.

If I could, I'd like to say a few words about the CTA process, about the state of the rail industry, and also give you the details of the comments that we have about Bill C-11 as it stands today. I think having a sense of the process and the state of the rail industry provides good context through understanding to help you make your policy decisions in the right way.

It was about ten years ago that the current legislation of the CTA was put in place. The previous CTA act of 1996 was put forward with a view to bringing commercial forces and an agenda of change to the rail industry, and it's been quite a successful process. The previous legislation introduced, for instance, more streamlined rules for the abandonment and the transfer of lines. It created an opportunity for the mainline carriers in Canada, CN and CP, to significantly improve their cost structure, but at the same time it created a vibrant short-line industry.

There were a number of other commercial initiatives in the previous legislation that have paid dividends in terms of the improvement of the rail industry over the last ten years. At about the same time, the Government of Canada also decided to privatize CN, which was also a very bold agenda of change. That has also been a remarkable transformation, which I believe improved the rail system in Canada to a great degree.

I think the federal government and your predecessors as members of the transport committee should be proud of where we stand today in the rail industry. CN has transformed itself from a laggard railroad ten years ago to a leading railroad in the North American industry. CP Limited has created CP Rail, which is today a focused, lean railroad serving all of Canada. I invite you to look at the hard facts, because too often you're hearing your constituency talk about various specific points of concerns or issues they have with the railway, but not often enough do we hear the broad picture about where the rail industry is and the progress that's been made over the last ten years.

Today the service is better than it's ever been. If I take CN's example, for instance, our transit time and the reliability with which we achieve our transit time has improved by more than 50% over the last ten years. We went from quoting a service, for instance, from Edmonton to Chicago, which was a week to ten days; today we measure our service one trip planned at a time, and our service from Edmonton to Chicago is 102 hours, which is four days, and we achieve it more than 90% of the time.

Efficiency has improved dramatically through cost reductions, through initiatives on asset utilization. For instance, today CN has 800 fewer locomotives to carry more business than it did ten years ago. With efficiency comes the ability to lower rates and share productivity with the shippers, our customers. Rates are lower today than they were ten years ago. Grain rates, I mentioned to your colleagues in the agriculture committee, as one example, are 35% lower in Canada than they are just south of the border in the U.S.

Safety has also improved dramatically. I'm proud to say that the two Canadian railroads today are by far the safest railroads in North America. We are 40% safer than our four peers in the industry, objectively and consistently measured using the same metric. I know it's a topic of interest and I know it's an area we have to continue to make progress on, but the facts are that the two railroads in Canada are the safest in North America. Of course we're also a lot more profitable, and that's a good thing. With profit comes the ability to invest, and we are a very capital-intensive business. CN this year will invest $1.6 billion back into its plants.

So I think it's fair to say, and I'm a bit biased, we have the best rail system in the world, and we should be proud of that. It's 100% privately funded, and it's a key asset for Canada in terms of transportation for a trading nation.

In terms of the CTA review process, it brings a lot of challenges for railroads. I'll tell you, we're a very unique business. Very few businesses touch more than 200 ridings, as CN does, and we touch every one of your constituencies. We understand the challenge. We are two of us, and there are many out there that have specific issues and have a lobbying agenda. I think it's very important that you, as members of Parliament, relay those constituencies' concerns into policy, but at the same time I think as transport committee members you have to take a balanced view and you have to focus on what's right for the transportation sector.

I think the keeping of that balanced view is very important as you review some of the provisions of Bill C-11. I will tell you from the outset that we are in general agreement with the bill.

We agree, for instance, on the role of the agency for mediation, whether it's for passenger issues or for noise. We also agree on the public interest review for mergers that the minister and Parliament should have in case of transactions. We agree on provisions such as the setting of a list for urban area sidings and spurs.

We agree with the broad goals; we have issues with the devil that is in the details, and we believe that in a certain number of areas the bill goes too far and has risks you should consider very carefully.

On noise, for instance, Cliff gave you a good outline. But there are a lot of efforts. Things can improve, but it's not as though we're sitting still and trying to be good neighbours. Often the issues are land use issues. It's about having harmonious co-habitation. When the residential areas are too close to our rail lines, the proximity creates unavoidable difficulties. The reality is we have a steel rail technology that's outdoors. It's a 24-hour operation and it creates noise.

We have to find ways to address that noise, and the fact that there is a court of appeal and a recourse to the agency with powers to enforce specific mitigation is something we agree with. We would very seriously, though, caution you against changing the wording on some of the criteria.

For instance, “unreasonable noise” is the right test. The notion of having the “least noise” approach is very difficult to manage. Least noise would be a rubber railroad, or it would mean taking the yards out of town altogether.

I think you should give a chance to this new system. Nothing exists today. I think the standard is the right one and that the agency has the power and expertise to address issues going forward.

On passenger and commuter rail provisions, we have some concerns too. We agree with the notion that the passenger or commuter could have the right to go to the agency to settle issues with the railroad, but I take exception to some of the comments I read from the transcript of my colleagues from GO Transit, AMT, and West Coast Express. The impression that CN or that the railroads are gouging commuters or passengers is simply not true. The reality is that in most instances—and there are exceptions, but in most instances—we have a fair approach to those issues.

I'll give you a few examples to explain to you where we have the most difficulty. The most difficulty comes with the notion of setting the rate on the basis of the net book value of our assets.

We agree with the concept that the agency could set the rate and also agree with the concept that the agency could set the rate with a view to the public interest and that the public interest includes a notion that does not necessarily address fair market value or highest best use. But to go as far as setting the policy on net book value would be a big mistake.

I'll give you an example from Quebec of an agreement I just recently personally negotiated with the AMT. It's for the Deux Montagnes line that goes into Montreal through the Mount Royal tunnel. The value of the land on which this railroad sits, as it is assessed by municipal authorities, is $60 million across the fence.

If we were charging or if the AMT were paying the CTA cost of capital on the value that is being assessed by municipalities, the access fee would be $5 million per year. I can tell you that the AMT does not pay half of that.

If they were to pay on the basis of net book value, the amount they would pay would be near zero. It would be a fraction of what they pay today, and there's a very simple reason for that. Net book value is an historical concept. The land we own at CN for this property was purchased in 1912. CN paid, in 1912, $225,000 for the land. That's our book value. If you applied the 8% on that $225,000, you would get thousands of dollars for the use of something that municipalities value at $60 million and tax us on using as a basis that same $60 million.

I know a lot of you have experience in the world of the municipal sector. How would you like it if railroads were paying their tax bills on the basis of historical net book value? That concept would not fly a minute, because it is just not a fair concept. So I urge the committee to think about this particular aspect very carefully.

The federal Expropriation Act recognizes the concept of fair market value. The Canada Transportation Act recognizes the concept of net salvage value if a line is to be sold to a government. The notion that net book value at historical prices from the beginning of the last century would guide the rate-setting is just not the right concept. It's not a fair one and it's not one I would encourage the committee to endorse. In my view, net salvage value would not only be more consistent with the current CTA, it would also be a lot fairer and would give a lot of leeway for the agency to decide in the matter with a view to what the public interest is.

I think you should review this carefully, because the devil is in the details. I think at net book value the provisions themselves ultimately will not succeed; they would be open to challenge as unfair expropriation.

So there is a delicate balance. We agree with the concept that a commuter agency should have the right to go to the agency for recourse, but it should not be done on an artificial measure such as historical book value, because it just doesn't work.

Members of the committee, as you can see, we agree with many of the things that are in the bill. We are asking you to consider a few areas that could be improved and we urge caution and balance in your views about the state of the rail industry.

I'm open for questions with my colleague here.

[The Chair, Conservative, Merv Tweed]

Thank you very much.

Mr. McGuinty.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you, Mr. Chairman, and thank you, Mr. Mackay and Monsieur Mongeau.

Let me go right to the question of net salvage value and net book value. Is it possible, for the sake of the committee, Monsieur Mongeau, that you could give us some kind of written brief that explains in more detail the merits of this question? It's well-established in common law and I think in civil law traditions that there is no expropriation without compensation. There's all kinds of judicial recourse available to those who feel they have been expropriated—not that we're trying to make litigating lawyers richer in this country. It would be important to get a brief to illustrate the merits of shifting from net book to net salvage as you've indicated.

I'll maybe table that, Mr. Chairman, as a suggestion, so that all of us understand the merits of moving from one to the other.

[Claude Mongeau]

We would be happy to do so, Mr. McGuinty.

The concept is very simple. The land portion, which is often the core issue for access, is at historical values. Railroads were built in the 1900s. The value of a three-storey house in Montreal 100 years ago was $10,000. If you had to do rent control, would you do rent control on $10,000 for your grandmother, who has owned the house for 100 years, and do it on $400,000 for the new property you just bought? It just doesn't work.

We're looking for a way for the agency to have the proper facts to make a decision that is fair to the commuter and in the public interest. We're not looking to get replacement value. We're not looking to get fair market values that are grossed up for highest best use. We are looking for something that's sensible.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Mackay, let me go back to a couple of comments on the noise issue.

My recollection is that we've had a number of issues raised around noise. One is sanctionability for failure to comply and what will be made available to the agency. Two is the enforcement of municipal by-laws. Three is the reasonableness test versus a decibel test. Four is that we're going to count on the CTA to actually devise and backfill the guidelines for dispute resolution. Isn't that right?

That's a big step already, I think, as you rightly indicated, that we're taking dispute resolution into the CTA. It's a very big step, post Supreme Court of Ontario decision.

Can you just help us understand here? You've done some wonderful work, I hear, with the FCM and the Canadian Association of Municipal Administrators. You have a flexible but formal dispute mechanism protocol on your website. Do you think we should be going further in this bill to try to backfill more of the bill, to prescribe more clearly for the CTA how this dispute resolution should occur, as opposed to giving them the discretion to find the guidelines?

[Cliff Mackay]

In a nutshell, I don't believe you need to go further, for two or three reasons. The first is that we've already developed some experience on how to make this work, and it's starting to work well. The bill already enjoins the CTA to put together its procedures to start at the local level and work up, and there's already some good practice out there that will help.

Second, the CTA has a very, very long history in its various incarnations--it wasn't always the CTA, but in its various incarnations over the years--of coming up with procedural and regulatory approaches on dispute areas in transportation. So there's a highly developed body of expertise in the agency itself, and I'm not sure, if parliamentarians tried to second-guess that expertise, whether it would add much value, frankly.

The third point I would make to you is that it's extremely important that there be consistency in the approach to noise management across the country. My colleague mentioned that CN touches 200 constituencies in this country, and if you add the short lines in and CPR, you touch almost every constituency in the country. There are a few exceptions, but not a lot. And if we attempted to manage noise by enforcing municipal bylaws and that sort of a patchwork approach, we would rapidly do major damage to the economic efficiency of the country, and frankly we would probably be very unfair in our applications across the country.

I would argue very strongly that it's in the national interest to take an approach that allows for consistency in the way we manage noise across the whole network. We run very, very big risks if we don't do that.

[David McGuinty, Liberal, Ottawa South, ON]

That takes care of the bylaw question. Let's go back to the reasonableness test versus decibels.

You would agree that whether the trains are running through 200 ridings or all 308, there is a consistent feature among all those: we all have the same ears and the same hearing systems. Would you agree we should be looking to move from a reasonableness test to a decibel-based test?

[Cliff Mackay]

I think if you give the guidance to the agency that the test is “reasonableness”, that test will translate itself into technical numbers over time. I'm not at liberty today, unfortunately, because the technical guidelines haven't been approved yet by the committee under the MOU, but when we get a chance to circulate it you will find that as a matter of pragmatism many of these things have been converted into measurable technical standards; for example, set-back distances in various kinds of operational environments, time and decibel numbers in terms of the density of population where things are being operated, and those sorts of things.

Just as a matter of pragmatism, when you get to the point where you are actually running operations, you pretty much have to do that anyway, sir. The problem with enshrining it in a legislative context is that you build inflexibility into the system that becomes very difficult to manage over time, because technologies change, the nature of operations changes, and—one of the biggest things we've been dealing with, and I think it was mentioned by some of our colleagues the other day—the pace and nature of the development, particularly in urban areas, is changing dramatically. That is going to shift, over time, the difficulties in the management of noise.

If you try to set a baseline that is locked in legislation, I think you're going to take a lot of flexibility out of the system. I'm not sure that's in the best interests of the public.

[David McGuinty, Liberal, Ottawa South, ON]

To help us understand as members of the committee, then, Mr. Mackay, are we wrong in assuming that so many other jurisdictions have graduated from a reasonableness test to a decibel-based test? Is the European Union now not looking at a 26-country standard for noise levels for their European train systems?

[Cliff Mackay]

Yes, they are, but if you look at North America, it's very rare that you find those sorts of systems. Even in Europe, while they're looking at those sorts of standards, they are still very much recognizing the need to be flexible, depending on what part of Europe you're talking about and the nature of the rail operation and the nature of the urban interface they're dealing with.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you.

[The Chair, Conservative, Merv Tweed]

Mr. Carrier.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Good day, gentlemen.

Regarding the noise issue, I was interested to hear you say that you agreed with the noise standard in the bill. Since you're responsible for causing the noise, one would have thought that you might not be so ready to admit that there is a noise problem. All of the witnesses and the general public as well have complaints about rail-related noise. Most have told us that the definition of “unreasonable noise” is not adequate enough to reassure the public. That's why some talk about “the “least noise” approach. However, Mr. Mongeau said that this could potentially create a problem since it can mean both “no noise” as well as “the least noise” possible.

As Mr. McGuinty noted, many people have asked us why we don't set standards in terms of decibels, as is the case in most municipalities and countries, in order to keep noise levels to a minimum.

With an eye to improving this bill, what kind of standard would you like to see?

[Claude Mongeau]

At present, there is no possible recourse with the agency. We're going from one system where there is no possible recourse to one in which the agency will have full powers to examine such matters and mediate the situation, so that a decision can be made and implemented by the rail companies.

This represents a major step forward. Rail companies are on board with this approach. In my opinion, the “unreasonable noise” standard is the only one that is feasible, from a pragmatic standpoint. Barring economic constraints or parameters, the “least noise” approach can only bring us closer to the “no noise at all” criterion.

The main issues in terms of noise are people living close to railroads and site development. Some provinces, Ontario in particular, have a much more formal process in place whereby railways can intervene prior to residential development construction and argue in favour of setbacks. In my view, this is the best way of handling these problems.

Quebec does not have a similar law on the books. No prior indication is given that a residential development is being planned. This only becomes apparent when construction begins. Unfortunately, houses are built much too close to the rail lines and inevitably, over time, residents complain about the noise. To my way of thinking, giving the agency the power to look into the situation and to sanction rail companies for unreasonable noise levels is a positive step. And that's why I recommend that you adopt this bill. We'll be able to put the law to the test and to fine tune it as needed.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

A similar definition might give the impression that you have some bargaining power with the Agency. If we keep the word “unreasonable”, who will be providing a definition? In your case, it's a certain noise threshold, because you have no choice, whereas to others, a different definition may apply. By forcing you to change your operating methods, we'd be back in the same situation where the most convincing arguments and negotiating team would win the day. The Agency would be bound by a definition that would tie its hands.

[Cliff Mackay]

The process the CTA goes through to come to these judgments is exhaustive. I've been involved in a number of them personally. They go out, hold public hearings, see witnesses; they do all of those sorts of things before they arrive at a judgment. And it is a judgment: it's a very quasi-judicial type of process. They can order us to do things, and they do quite often.

The advantage of that approach, as opposed to a number, is that it allows a process of analysis to be gone through whereby you can come to a reasonable judgment as to what is reasonable from a noise management point of view and what is not. It is an entirely different situation, for example, if you're dealing with an issue in a highly dense urban area, as opposed to where there's been condo development all around the proximity of the tracks and whatnot, or where you're dealing with an issue that is perhaps a yard operation somewhat adjacent to an urban setting but quite a bit further off, or where you're dealing with an issue in more of a rural environment.

It's very difficult for me to conceive of how anyone could reasonably set a number in all of the different areas and permutations and combinations. I think what is being proposed is by far the most fair and the most effective way to deal with these issues.

I need to reinforce again, sir, that it is our intention in managing noise to get before the CTA as few times as humanly possible. It is not in our best interests to have bad community relations. We want to have good community relations, and noise and other proximity issues, and working with our colleagues at FCM and others, is the right way to go. So I would strongly urge the committee not to impose too prescriptive an approach on decibels and noise, because I think you will find very quickly that it becomes very unmanageable across the country.

[The Chair, Conservative, Merv Tweed]

Ms. Chow.

[Olivia Chow, NDP, Trinity—Spadina, ON]

How are orders from the CTA enforced? I know, for example, that there has been an increase in accidents. Between 2002 and 2004, there were 11.67 accidents per million train miles, but by 2005 that number of accidents increased to 13.04, so there seems to have been a percentage increase of 18%.

I don't know precisely what kind of investment you're making in keeping our trains safe, and I'm really quite concerned. Perhaps it's because of train maintenance, or perhaps it's because the trains are longer or the weight is higher—I don't know—or the speed is higher when you're doing a crossing or when there's a mountainous situation. I'm really quite concerned as this connects to environmental degradation because of sodium hydroxide being dumped into a river, for example, in B.C.

How would you enforce CTA orders, because it's not clear from this?

[Cliff Mackay]

Let me try to answer you. You've asked two or three questions there.

Let me first clarify the role of the CTA. The CTA is essentially the regulator under the Canada Transportation Act, which is essentially the act that regulates our commercial relationships and also areas such as accessibility, disabled accessibility, and those sorts of things. There's a separate piece of legislation that regulates us for safety, which is called the Railway Safety Act. It is operated in an entirely different context. The CTA does not involve itself, in normal circumstances, in safety regulatory matters.

But how does the CTA enforce its rulings? It has the legislated power to do so and can order us and has ordered us in the past to do a number of things. And that has strength. They also have a number of sanctions they can impose in terms of the way in which licences are issued in the country and those sorts of things. So they have a number of remedies, and frankly, you would defy a CTA order, if you were a company operating in the transportation system in Canada, at your peril. They have significant powers.

[Claude Mongeau]

On the issue of safety, 2005 was a year when the number of incidents was higher, so 2005 was not a good year from a safety standpoint. The number of incidents, though, is not telling the whole story. In the case of CN, 2005 was a mixture of two very significant, unfortunate, and dramatic accidents, one in Wabamun, one in the Cheakamus River, which you mentioned, and also a number of small incidents, which count in the count of incidents but sometimes involve one wheel or one small matter.

When you look at the long-term trend of the safety performance of both CN and CP, it has been one of consistent improvement over the last several years. This year alone, on the TSB measure, we are down more than 20% year over year, which proves that 2005 was a bit of an oddity.

Now, 2005 was a very unfortunate year in terms of very significant accidents that cost CN hundreds of millions of dollars. The Wabamun accident alone cost CN and its insurers more than $100 million. You can rest assured that CN does not have any business interest in seeing any more of those accidents. Unfortunately, sometimes rails break, and if they break right beside a lake, sometimes it does cause environmental damage. On balance, though, rail is the safest mode. That's why some of those dangerous products are there in the first place.

[Cliff Mackay]

Just to give you an update, the Transportation Safety Board publishes a monthly report on safety for the industry. In its most recent numbers, which were for September of this year, the accidents per million train miles were 11.7, so we're down below the five-year moving average. It's never good enough, but we're very encouraged that we're back on track and are moving in the right direction: we're trending down again.

[Olivia Chow, NDP, Trinity—Spadina, ON]

On the whole notion of what's reasonable and what's not reasonable, do you have any sets of guidelines to say that in a dense urban area such as you talked about—for example, downtown Toronto, which is surrounded by condominiums that happen to be in my riding—you would have a certain noise level that says, “Since we were there before you moved in, this is the kind of noise level we believe is reasonable”, whereas in a smaller community, where the houses are very close to the track, there would be a different standard? Do you in fact have these kinds of standards so that you can define what “reasonable” and “unreasonable” would be in this bill?