Transport Committee on May 16th, 2006

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Are these reports provided to Transport Canada? Do you share information on the inspections?

[Thomas Garlock]

Yes, the inspection reports are provided to Transport Canada, and they do regularly contact us with specific questions about the report. There are almost always deficiencies. I'm proud to tell you there are none on the Queenston-Lewiston Bridge because you just helped us update that bridge significantly, but on the Rainbow and the Whirlpool Bridges there will be deficiencies, so we will have conversations with Transport Canada about what we're doing to cure those deficiencies.

I should caution you, though, they are always minor in nature. If it's anything significant, obviously we would get to it before the inspection even occurred.

[The Chair, Conservative, Merv Tweed]

Ms. Stronach.

[Belinda Stronach, Liberal, Newmarket—Aurora, ON]

Thank you.

On clause 15, to begin with, I would support looking at that clause. And I agree that it would be a mistake if we put forward legislation that would significantly impair your ability to raise capital funds, which ideally would bring down costs. At the end of the day, we want to make sure that the operation you run is efficient; otherwise, the costs are passed on to the users and ultimately to the government and Canadians. So I think to look at wording that would give greater stability to that process is something I would support.

What I would like to understand is how does the U.S. govern the toll-setting process for their bridge operators?

[Thomas Garlock]

Ms. Stronach, that is set by our enabling legislation. In the instance of the Niagara Falls Bridge Commission, we were a creation of the United States Congress in 1938, and if you'd indulge me for just a moment, this comes from the original 1938 legislation:

In fixing the rates of toll to be charged for the use of such bridge, the same shall be so adjusted as to provide a fund sufficient to pay for the reasonable cost of maintaining, repairing, and operating the bridge and its approaches under economical management and to provide a sinking fund sufficient to pay the principal and interest of such bonds as the same shall fall due and the redemption or repurchase price of all or any thereof redeemed or repurchased before maturity is herein provided. All tolls and other revenues from said bridge are hereby pledged to such uses and to the application thereof hereinafter in this section required.

It does go on in some detail, but what I'm trying to demonstrate is that there is very specific direction to us to only collect that toll that is necessary for our core responsibility. I think that you'll find similar legislation in most of the quasi-public entities. I know that at the Buffalo and Fort Erie Public Bridge Authority, they have very similar language in the legislation.

[Belinda Stronach, Liberal, Newmarket—Aurora, ON]

The equivalent of the Minister of Transport and the secretary responsible, are they able to exercise the same kind of jurisdiction as is proposed in the legislation to override?

[Thomas Garlock]

It is the case in the Buffalo and Fort Erie Public Bridge Authority; it is not the case in the Niagara Falls Bridge Commission.

[Belinda Stronach, Liberal, Newmarket—Aurora, ON]

All right.

Just on the second point, clause 4, in a broad way it addresses, again, efficiency and harmonization between the various levels of government. I think this is something we must look towards as we go forward--greater efficiency, greater productivity--so if it can be improved without impairing the minister's ability, at the end of the day, to respect the intent of the act, I think it should be looked at.

Is there a body that acts as let's say a bilateral border commission that brings together the federal, state, and provincial levels of government, and an organization such as yours, to look at these kinds of issues towards greater efficiency, reducing costs, and greater competitiveness?

[Thomas Garlock]

Not to my knowledge. Perhaps the only binational body that I'm aware of that is devoted to that activity is the Bridge and Tunnel Operators Association. I can tell you and your colleagues that we compare notes regularly, we share information on best practices. Many times, the larger operators such as Ron's or mine will share information with the smaller crossings that don't have the wherewithal that we have.

Case in point: in the wake of the events of September of 2001, we immediately commissioned a full-threat analysis of our spans with Globe Risk Holdings, out of Toronto, and in turn shared that with our colleagues. We look at the efficient movement of traffic over the border. I could not have done the fifth-lane project, a $45-million project, last year if the Buffalo and Fort Erie Public Bridge Authority had not delayed some very important joint work. We wanted to make sure the Niagara River crossings operated very efficiently, particularly for commercial purposes, while that major construction was going on. Now, I've delayed activation of our fast lane for free and secure trade until mid-June, while Ron is taking care of the joint work at the Peace Bridge.

So if we're looking for a forum where there's cooperation and there's information-sharing, it's a little bit informal, but I think that the Bridge and Tunnel Operators Association has done exemplary work in that area.

[Belinda Stronach, Liberal, Newmarket—Aurora, ON]

I commend you for that.

I guess what I'm asking is, would it be a useful exercise to recommend such an entity to look at how we bring about greater harmonization and efficiency to promote a more efficient flow of goods and services between our two nations?

[Thomas Garlock]

I am aware that Transport Canada consults regularly with its counterparts in the United States on border issues. This has increased significantly in the last five years. I know that Tansport Canada deals with federal highways and the U.S. DOT. It may not be a formalized approach, as you may have described, but I think that the consultation, examination, consideration of approach is indeed going on.

[The Chair, Conservative, Merv Tweed]

Mr. Storseth.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you, Mr. Chair, and thank you, Mr. Garlock, for coming today.

I guess I want to dive in a little bit about the importance of these organizations to both countries. I also understand that your organization represents ten of the organizations operating eleven of the major bridges.

Do these organizations consult with each other voluntarily in the operation and use in order to improve efficiency on some of these things?

[Thomas Garlock]

Regularly, Mr. Storseth.

As I say, consultation usually happens with bridges that are in close proximity to one another. I know that the crossings between Ontario and Michigan speak regularly. I tell you that the personnel from the Buffalo and Fort Erie Public Bridge Authority and the Niagara Falls Bridge Commission speak daily. In fact, we operate an operations centre that is up and running 24 hours a day, seven days a week that reports border conditions on the Niagara River, not only for the Niagara Falls Bridge Commission but the Peace Bridge as well. When you're in our area, please dial 1-800-715-6722 and we'll make certain you're directed to the bridge with the least congestion.

I'm not worried about losing $3.50 to Ron, and Ron is not concerned about losing $13 for a truck toll to me. We understand very clearly what our mission is: it is to manage the Niagara River crossings to the benefit of Canada and the United States and to move people and commerce safely and efficiently. And I think that you see a lot of that among BTOA members.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Going a bit further into that, we talked a little bit earlier about the class of traffic and manoeuvring different types of traffic. Would you guys look at that voluntarily as well, among yourselves, to ensure financial liability for all crossings?

[Thomas Garlock]

We do that in terms of managing wide loads and heavy loads. There are some loads that I will permit but Queenston-Lewiston does not accept, and vice versa. We coordinate that so that commerce will be able to flow over one bridge or the other.

I'm not sure if this is your question or not, but in terms of establishing some areas for commercial, some areas for passenger, I think this really cropped up historically. Carriers don't use the Queenston-Lewiston Bridge because of toll or because there's a Tim Hortons on the Lewiston side. It has more to do with where they're coming from and where they're going. In Ron's instance, you see a lot of traffic between the General Motors plant in St. Catharines and the engine plant on River Road in Tonawanda, New York. There would be no interest on the part of that traffic to take the Queenston-Lewiston Bridge. Conversely, we've become an agricultural crossing of choice at Queenston-Lewiston for both plant and animal material.

I think historically, over many years, different economic sectors and different users have gravitated to different crossings because it suits their purposes, not ours, and that is as it should be.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

When you look at this legislation, then, do you think this legislation will create greater cooperation within the authorities themselves, or is it pretty much there already?

[Thomas Garlock]

I'm not going to portray this as a BTOA position, but I will tell you that it is my personal opinion that this is, indeed, necessary legislation to clarify orders of federal interest and importance. It could conceivably encourage greater communication and cooperation, but I'd be remiss if I didn't tell you that this already exists between the operators and Transport Canada. I think that the agency has been very responsive to the crossing operators, and that goes back to before the days of September of 2001. But the cooperation has grown even closer and more frequent in the last five years.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you.

[The Chair, Conservative, Merv Tweed]

Mr. Scott.

[Andy Scott, Liberal, Fredericton, NB]

Thank you very much.

Welcome.

I'd like to inquire about the policy development process. You mentioned in your opening remarks that others from within the organization might discuss other parts of this. For the purposes of narrowing our analysis, what did you mean?

What I'm trying to get at is, to what extent can the discussion that we're going to have around this legislation be characterized by what you've presented today, and to what extent would you anticipate that other members of your organization, were they here, might speak of other things? How broad is that?

[Thomas Garlock]

Mr. Scott, the two issues I brought to your attention this morning were issues of consensus among the BTOA members. It is simply a statement of fact that nine of us are quasi-public-benefit corporations and one is privately held. It's expected that the privately held operator may have some additional issues to take up with you regarding the legislation.

You will also find in the materials I have left with the clerk a letter from the bond counsel for the Thousand Islands Bridge Authority. That counsel suggests that it doesn't think any further regulation might be necessary. I will tell you that personally I would not agree with that statement.

There may be a bit of disparity and opinion between the members, but on the two points I have spoken to this morning, I believe there is broad consensus.

[Andy Scott, Liberal, Fredericton, NB]

So the space between what is necessary to give the minister the power to take the actions they are wishing to secure in this legislation and what is necessary for you to satisfy the people who are looking at your revenue flow in terms of you being able to float bonds is narrowing. That's probably where you would suggest that we place most of our attention. And as Ms. Stronach has said, we would wish to accommodate it--not at the expense of the ultimate outcome, but to accommodate as best we can.

According to your comments, I understand this is the sort of discussion that has taken place. Is that taking place to your satisfaction?

[Thomas Garlock]

I believe it is. I think I've heard a clear understanding of our issue from the members this morning, and I'm optimistic that it will be addressed.

I think your observation, Mr. Scott, is right on point. That is the key, the critical issue for us. We don't want to diminish the minister's authority to step in during a serious situation, but we don't want the unintended consequence when that might not be necessary, that the language in law would have a chilling effect on the rating agencies and potential bond purchasers.

[Andy Scott, Liberal, Fredericton, NB]

As we are trying to outline the relative roles here, to bring more certainty and stability to this in terms of everyone's interests, to what extent is your organization engaged with municipalities? It isn't necessarily for you to answer for the consultation process as it relates to municipalities, but to what extent can you offer an opinion as to how engaged they have been?