Transport Committee on May 26th, 2009

[George Haynal]

Thank you for your question, Mr. Laframboise. My colleagues will probably make some comments too.

Certainly, this mode of transport is a success. The great urban transportation corridors are heavily populated and passenger demand has increased. One mode of transport has not replaced another; a social change has clearly taken place.

In my view, rail transportation between some metropolitan centres in Canada offers great possibilities. It would be possible to move towards the same kind of transformation as has taken place in Europe. In the United States, a lot of effort has been made in this area, and we can do the same here. Fifty per cent of passengers travelling between Washington and New York now use the Acela system, which is a huge increase in demand. This is not simply replacing the demand for air transportation, it is a significant increase in the demand for rail transportation, as Mr. Langford pointed out. And there was no need for major state investment.

Let me show you a diagram showing United States investment in the three modes of transport between 1949 and 2006. The portion in yellow is air transportation, the portion in blue is road transportation and the portion in green is rail transportation. You can see that the last one is almost non-existent. I want to stress that the demand is there. All that is needed is to invest for success.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Péloquin.

[Mario Péloquin]

I can echo Bombardier's comments; it is well known around the world that, when the state decides to build a new high speed train, the public accepts it immediately, if it had not been demanded already. Ridership is always greater than the studies predicted. In Canada, we often talk about strategic corridors such as Calgary—Edmonton and Quebec City—Windsor. I think a high speed train in those two corridors would be viable.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

You seem to be afraid about the effect of temperature on the technology.

[Mario Péloquin]

We are not afraid, but we cannot overlook it as a factor. My experience in rail transportation tells me that it is often overlooked. That causes a number of problems when a new rail system begins to operate. It happens a lot. Temperatures below 20^o are not considered really cold in Canada, but with steel, that is the point at which problems begin to occur. Any company's technologies, cars, trains, can be adapted to handle temperature. That is not necessarily what causes the most problems. It is mostly the other technologies that support the system.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Langford.

[Ashley Langford]

I would echo many of the comments of my competitors, my friendly competitors. I think there were a couple of questions.

On the cold temperature question, all three companies can deal with cold temperatures. We have our Helsinki-St. Petersburg project with the Pendolinos, which are tilting trains. We're meeting the challenge for the Russians. Siemens is doing the same thing and I'm sure Bombardier has that same capability.

In terms of going back to the fundamental question about what kind of investment it would take, I'm not really sure. I'm not sure what the mandate of the current study is and whether or not it's to look at a ridership coverage that would have to carry the capital costs.

Generally when I look at governments, capital costs in land and infrastructure are costed or carried on the books as assets, so it doesn't really make intuitive sense to me that you would say that these fixed asset costs are something we have to recover out of the project. I don't see them doing this in highways. I see highways as transportation infrastructure in the same sense that I say passenger rail is, so then you're looking at only the marginal cost, which is the vehicles, the electrification, and perhaps the stations.

On the stations, look at Union Station. How long has that lasted? It needs a facelift, by the way, but it's been around for a little while.

So for those costs, if you look at SNCF or Deutsche Bahn in Germany, they operate as profit-making entities and they reinvest their profits each year in expanding the rail network and upgrading it. I think that is the situation we could be in if we go forward with a high-speed rail line.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Have your companies entered into partnerships with governments? As you know, partnerships between the public and the private sector are in fashion.

[George Haynal]

Partnerships are clearly essential. The state sets the direction and provides the funds required and the private sector provides the technology and looks after carrying out the project. It is always a partnership. The form of the partnership varies with the situation. There has never been a completely private project in this line of work, to my knowledge.

[Mario Péloquin]

It is true that public-private partnerships, P3s, are very popular; at least, they were popular before the economic crisis. But a lot of banks are more careful about who they lend money to now. But, yes, large companies like ours are involved in P3 projects all around the world, because, these days, that is the way in which we have to work.

[The Chair, Conservative, Merv Tweed]

Thank you.

[Ashley Langford]

I agree with what the other two companies have said. In essence, you can apportion risks between the private sector and the government in a way that you transfer the risks to the party that can carry them the best, so acquisition of land has to be within the realm of government. For the construction of the system, the design of the system, and the equipment supplied, those risks can be allocated to the private sector more efficiently. Those are things that can be handled by the private sector better, and then in terms of ridership risk, generally that's carried by the government, at least initially, much as for a highway project. You get a lot more, as a government, if you establish what the base line is of the ridership and then you sell that operational value to an operating company than if you try to do that when you haven't proven any ridership at all.

If you look at this kind of model, you can break it into the fundamental project itself, structuring that. Then you allocate a project for actual construction and design to the private sector. Then for operational, you can have an operating contract. You can have three major pieces to it.

[The Chair, Conservative, Merv Tweed]

Ms. Chow.

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

I just came back from Beijing, Shanghai, and Tokyo, where the high-speed train system is phenomenal. Even four or five years ago, when I was in Hong Kong, my girlfriend was driving me to the airport and as we were driving on the highway I saw this high-speed train going to the airport from downtown, and I asked why I was on the road. I should have been on that train.

In Canada, we are so far behind it is phenomenal. Asian and European countries see rail transportation as the fastest-growing mode. We're just behind.

I'm from Toronto. Every holiday weekend I see a lot of reports about the carnage on the roads from accidents. I often wonder if there were a high-speed train how many of those drivers coming back from cottages or visiting would be taking trains and then perhaps a friend could drive them or they could leave the car near the cottage or something like that, and how much safer that would be. What kinds of reductions would we have in the traffic jams and the congestion on the highway? What kind of convenience and improved mobility would we have if there were a high-speed train from Quebec City to Windsor, including from Toronto to Ottawa? I go back and forth every week.

I do have a very specific question. I see that transport involves greenhouse gas emissions. In terms of percentage of greenhouse gas emissions in this country, about one-third of it comes from transportation. The rest is from industry. Of that, about 77% is generated by drivers, by road. The rest is made up of 9% by air, 6% by marine, and 4% by rail. Has anyone done a study to show that maximum ridership--assuming it is not too expensive to travel in this corridor, assuming it is very affordable, assuming that the federal government sees the light and has the vision to build high-speed rail, and does it soon and forgets about the 17 studies that have been done in the past and just goes ahead because we know it is good for Canada and good for the environment...? How many passengers are we looking at in terms of greenhouse gas emissions reduction? What are we looking at? If we are to meet some of the greenhouse gas reduction quotas that we are supposed to meet, surely this would be good for the environment, good for people's pocketbooks, and good for our safety. Do those of you who are experts have some of those figures?

[Ashley Langford]

There's a bigger question here in terms of moving people by GO Transit or in AMT out of diesel-driven passenger trains and into electric trains.

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

Electric trains, yes.

[Ashley Langford]

Because there you have a huge number more of passenger movements or train movements every day, and if you can move those into electric trains, then you're taking far more commuters off the road. You could probably take maybe 15% of car users out of their cars and put them in trains.

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

Fifteen percent?

[Ashley Langford]

Yes.

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

Is that the general industry standard?

[Ashley Langford]

No, that's just a rough estimate. I've been looking at the GO Transit stuff for a while. You look at the whole direction that Metrolinx is looking at in terms of more ridership on passenger trains. How do you achieve that? You have to have more frequency. You have to electrify in order to have that frequency.

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

That's the argument for Metrolinx to go to the Pearson-Union Station link. We won't go there to that discussion, whether it should be diesel or electric.

[Ashley Langford]

Maybe Paul has an answer now.

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

I realize with rail, we can talk about that too, but if we're talking about the corridor, rather than just the Pearson link.... By the way, that has been discussed for about 25 years. I remember moving motions of every kind to say let's build it, let's build it. The same thing happened with the corridor discussion.

We have some figures coming forward?

[Paul Larouche]

When we updated the tripartite study back in 1998, we were talking about starting the first year of operation carrying 11 million passengers a year, and reaching 16.4 million passengers by the twentieth year, which was expected to be 2028.

I'm also looking for the corresponding greenhouse gas reductions. We had done a certain calculation of that: 41% of the ridership was being diverted from automobiles, according to that study.

The importance of updating these studies also becomes evident. There are so many things that have happened since 1998. It takes an awful lot longer to get through an airport. Fuel costs have gone to levels that we never expected. There are a great many factors that make the case for high-speed rail even stronger, but you need to update the numbers to be able to design a system properly.