Transport Committee on May 30th, 2006

[Dan Stamper]

We applied for the environmental clearance to build additional lanes over the water in mid-2004, and we're in the middle of that environmental process. We had our meetings a month or so ago with all the agencies, from the U.S. and Canada. One of the agencies that are reviewing our permit process for adding lanes over the border happens to be Transport Canada too.

But we want to build—and I'll be glad to supply a copy of this to the members of the committee—additional lanes over the water so that we can shut down the old bridge and renovate it to today's standards. It's part of our application. It's part of the discussions we've had—

[Charles Hubbard, Liberal, Miramichi, NB]

I don't mean to hurry you, but I only have five minutes.

We said that since 1999, traffic has been down by 30%. You cited certain reasons for that, but I think competition is another of them. You mentioned that you're operating right now at 50% of capacity, yet Canadian transporters would say there have been great impediments in terms of the bridge and congestion of traffic through the city of Windsor. Really what you're saying is that this is an outside restriction, not in the operation of the bridge, but more significantly in terms of the operation of customs on both sides of the bridge.

With your presentation today, I sense that you are not only dealing with Bill C-3, but you're also dealing with some consideration of alternatives to transportation, which are under active consideration by Canadians and people on the other side of the border.

I think that over the years, your operation has provided great value to Canadian industry. Without it, the city of Windsor probably wouldn't be what Windsor is today. But when you look at the idea of competition, I sense that an investment group, whether it be a family or other investors.... I know if I were sitting in that position, I'd be very much concerned.

I hope in your presentation today that you're not distorting the two issues we're dealing with. One is in terms of transportation across all the international bridges, as opposed to your own private economy and the fact that you want to maintain a viable industry or business into the future. I wonder if we could divorce those two problems. Could you give the committee the two or three major impediments that you see in terms of the bill?

Bill C-3 is certainly a very onerous bill. But what are the three main things that overlook or neglect the idea of future competition, which apparently is a very active issue in Canada, and I would think in the United States. If this competition came, I would think your vehicle numbers might be cut by say 40% or 50%--I don't know the number. But at what point could you not operate as a company if this competition became too great? I guess that's something we have to think about in terms of the future of this committee.

Maybe we don't have time to hear those right now, but I think, as a company, you should present that to our committee for consideration.

[Dan Stamper]

Let me answer part of it, if I can, sir.

On the competition issue, we're not afraid of competition; we have competition today. What concerns us is that the people who govern our applications, who govern our operation, who govern anything we propose to do at our bridge, are the people who also want to compete with us. There is an inherent conflict, and that concerns us.

Competition does not concern us. We compete with the tunnel. We compete with the barge. We compete with the Blue Water Bridge. And as Matt Moroun, and it's hard to understand, we compete with the toll road that runs between the east coast and Ohio, because some carriers use the Buffalo crossing, go through Canada, and come back into the U.S. to shorten their route. We don't fear competition.

[Charles Hubbard, Liberal, Miramichi, NB]

So for my own...and the committee, it's not competition you're worried about; it's the bill. I certainly see your point, but I think it's deeper than that. We'll have to review it.

I would like to see your three or four main points or how you could suggest the bill might be changed. Can we have 50 other bridges and yours operating too? I don't know.

Thanks, Mr. Chair.

[The Chair, Conservative, Merv Tweed]

Thank you.

I'll ask Mr. Stamper to visit with you after or provide something in writing.

[Dan Stamper]

We would be pleased to supply additional information and/or answer any additional questions from each of the members.

[The Chair, Conservative, Merv Tweed]

Mr. Carrier.

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

Good day, Mr. Stamper, Mr. Moroun.

I can understand your concern about the fact that the legislation makes provision for the government to oversee bridge tolls, particularly since, for example, the government could demand that bridge traffic increase while tolls be reduced. You say that you are currently operating at 50 per cent capacity. If we could prove to you, through studies, that lower tolls would result in increased traffic and that consequently, you would not lose any money, would you then see this as an acceptable solution?

[Matthew Moroun]

Sir, my response to that would be for the last 77 years of our history, market forces have determined the toll rates. If we raise ours too high we lose traffic and revenue. If we put them too low, in an extreme situation, we could choke the bridge or not get enough revenue to cover our costs.

We face competition with the Detroit-Windsor Tunnel and the Blue Water Bridge and the U.S. toll roads to the east coast every day. We're very aware, as are those two other crossings, of what their tolls are vis-à-vis ours and what our traffic count is vis-à-vis theirs. Traffic counts are published monthly by the Bridge Tunnel Operators Association. Transport Canada sees them. Everybody sees them.

People fight for market share in our industry every day, so I'd just like to leave things as they are, because it's been quite successful over the last 77 years.

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

If, in a show of good faith, the government were to lower charges and pledge to reimburse you for any losses incurred, would that be acceptable to you?

[Matthew Moroun]

You're right. If the government were to infringe on the toll rates, there would be a disenfranchisement that would require compensation.

I have to ask why they would want to hurt us like that.

[Dan Stamper]

I would add that the current system has been and continues to be user-pay. There is no subsidy involved in our operation, as there may be in other bridges. Today the market rates control where we set our tolls, and at the rates today, we've grown to be the number one border crossing. I think that's due to two things: the service we give our customers, and the reaction we have to any problems they bring to our attention. We do a very good job of serving our customers.

[Matthew Moroun]

As a follow-up to that, enough cannot be said about service with regard to wait-times and adequate infrastructure and facilities. As you know, commercial drivers are paid by the hour or by the mile. The cost for the driver and the truck is in excess of $50 an hour. As a bridge operator, if you can get that truck through your facility faster than the rest, by providing over and above the minimum required customs inspections facilities and resources, then of course you can grow your market share, and you can increase demand for your bridge. That's what we try to do all the time.

We've erected more plaza inspection area and more customs inspection booths than all the other border crossings combined since 9/11.

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

You seemed to say that you were in favour of the proposed legislation, since the government was assuming responsibility for security reasons, but that it went too far.

Isn't the problem the fact that you are a private owner, not a public company?

[Dan Stamper]

We said clearly we're in favour of health, safety, and security issues. We support what the government wants to do in those instances. We believe we currently go beyond that compared to all the other border crossings. We have armed security on both sides of the border 24 hours a day. None of the other border crossings does that. We do it at our expense; we have done it since 9/12.

We've said clearly that we don't have a problem with the security, health, and safety issues within the bill; we do have issues when the bill goes way beyond that.

[The Chair, Conservative, Merv Tweed]

Before I go further, have you ever increased the toll and then had to reduce it?

[Dan Stamper]

We had one issue in the 1980s. We increased the commuter rate and had to put it on hold for about 90 days and justify it to...I can't remember which.

[The Chair, Conservative, Merv Tweed]

It was process more than anything.

[Dan Stamper]

That's right. We justified it and put it into effect.

[The Chair, Conservative, Merv Tweed]

Mr. Blaney.

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

Thank you, Mr. Chair.

We are discussing the safety and security issue. I was wondering if, since 9/11, an assessment has been done on the risk that could occur to the bridge.

[Dan Stamper]

The answer is yes. I think it was on 9/12 or 9/13 that we had security people in, implementing our own security to protect the bridge. We created a whole department to work with all of the agencies. We have one of our own people who meets with all the agencies in the U.S. and Canada on security issues.

We've continued to do the things we thought were important. We closed roads around the bridge on the U.S. side. We fenced it off; under the bridge we now have lights and cameras that we installed at our own expense.

I think we've done more than any other border crossing in North America to protect our bridge. We've engaged engineers to look at how to protect certain pieces of the bridge. We don't make those things public. We hope we don't have to, but we continue to do things we think are pertinent.

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

I understand you may not be willing to make those assessments public, but would you share them with Transport Canada, as the authority, to make sure everything is...?

[Dan Stamper]

Yes. I think Transport Canada belongs to some of the security committees implemented since 9/11 that our people belong to also.

[Matthew Moroun]

Dan, you can correct me, but I don't believe Transport Canada has ever visited us to ask specifically about those measures at the bridge, but we'd be happy to advise them, work with them, and cooperate with them if they were interested.