Mr. Chairman, with me today is Mr. Stuart Kendrick from Greyhound Canada. He is their senior vice-president and he's also treasurer of the Canadian Bus Association.
I'm the president of the Canadian Bus Association and the president of Groupe Orléans Express, based in Montreal, which operates intercity lines throughout the eastern provinces of Canada.
On behalf of the Canadian Bus Association, I first want to thank you for the opportunity to appear before you today to give you our views on high-speed rail and whether and how such a transportation system should be introduced in Canada.
First, it would seem appropriate to give you a word or two about who we are. We represent the major scheduled intercity bus carriers in Canada, and our members carry upwards of 75% of all scheduled bus passenger trips across Canada, equating to approximately 10 million bus passenger trips annually. We are an advocacy organization, in the sense that our raison d'être is to speak and act on behalf of our members on all matters pertaining to public policy that impact on us and our customers, the travelling public.
The scheduled bus industry has two central messages that it wishes to impart to the Committee today.
First, any future funding commitment of taxpayer monies to a high-speed rail system must be fair and should not be used to create a more uneven playing field among completing passenger modes. In particular, there must be a meaningful fare gap between subsidized high-speed rail travel and unsubsidized bus travel. Government should not grant billions in taxpayer subsidies in order to reduce rail trip times by 50% between cities and then allow the rail operator to charge passenger fares at the same levels as unsubsidized private sector bus operators operating on the same city-pairs. In other words, high-speed rail passenger fares must be set at levels that are reasonably compensatory in relation to costs.
The underlying imperative here is that we must have a seamless transportation system that serves all segments of the travelling public. That means that the public policy environment that Parliament creates must accommodate air, rail, and buses because each of these modes responds to the needs of one segment or another of our population. Policies that disadvantage one mode at the expense of another only have the effect of disadvantaging the travelling public. If, for example, rail is publicly subsidized in high-density population corridors to the extent that the bus mode cannot compete, who will carry passengers to and from communities where rail does not go?
It seems self-evident to us that, given our geography and our demography, we need a policy framework that enables a cost-effective but integrated transportation system that does its best to meet everyone's needs.
If government decides to proceed with high-speed rail, some CBA members and their respective ownerships will actively seek the opportunity to join the public-private consortium. Our shareholders, Greyhound and Orléans Express, are major players in the world of transportation in Europe and North America, and through them, we have extensive experience in operating both conventional and high-speed rail systems. Of even greater importance, we have experience in operating multi-modal transportation systems that integrate rail with bus and with transit.
Our two respective bus companies are owned by two of the largest transportation conglomerates in the world. Greyhound Canada is 100% owned by FirstGroup plc of Scotland. To provide an indication of comparative size, the annual passenger service revenues of FirstGroup exceed $10 billion Canadian and are four times greater than those of Air Canada. FirstGroup has 2.5 billion passenger trips annually and has some 136,000 employees.
Orléans Express is 75% owned by Keolis of France, the national passenger rail operator in France, which is in turn partly owned by SNCF and the Caisse de dépôt et placement du Québec. The annual passenger services revenues of Keolis exceed $5 billion Canadian and are two times greater than those of Air Canada. Keolis transports 2 billion passengers annually and has some 39,000 employees.
FirstGroup and Keolis are each involved in operating intercity rail networks, transit networks, and intercity bus networks. We know the problems, we know how to solve them, and our parent companies each have the financial resources to participate in major public-private partnerships. Indeed, both ownership groups have gained already amassed considerable experience with 3-P consortia in other countries.
We appreciate that the federal provincial feasibility study now underway for high-speed rail still has a number of issues to address before the findings of the 1995 feasibility study can be updated. Demand forecasts need to be recast. Newly available technology must be analyzed, with a particular view to Canadian climate concerns. Cost estimates need to be reassessed. Some form of a preliminary environmental assessment must be performed.
If the results of this current study are deemed to be sufficiently positive by the three governments, this will then trigger detailed technical studies that will require time and money to complete.
Final routings for a selected technology have to be decided together with the associated construction and land assembly costs. As required by law, a full-blown environmental assessment study must be performed according to these final routings. The firm costs of the technology chosen, the resulting costs of the track-bed that must be laid, and the attendant infrastructure costs will all be established.
The ridership demand forecast can then be completed after the precise trip times and the fares to be paid by high-speed rail passengers have been specified.
High-speed rail trip times will depend upon which technology is chosen, upon which routing is chosen, and upon the number of intermediate stops, if any, along the way. Ticket prices to be paid by high-speed rail passengers will depend on ridership, the final costs established in the detailed engineering studies, and on how much the capital and any subsequent operating cost shortfalls have to be captured by taxpayer subsidies.
Once this preparatory work has been completed, each of the three governments will then be in a position to commit funding over the project's lifetime, assuming they can reach agreement on their respective funding shares after the private sector funding commitment has been established. Once these agreements have been reached, physical construction of a high-speed rail system would then commence.
In conclusion, I want to reiterate that considering the role of the Canadian intercity bus industry and moving Canadians from all regions of the country, we will vigorously oppose the introduction of a high-speed rail system in Canada that does not compete fairly with other modal passenger carriers. However, given the experience that two of our members have in operating integrated passenger transportation systems in other countries, we understand how it is possible to design sophisticated passenger transportation systems that serve the public interest, while making it possible for private sector operators to participate and to thrive. If the committee recommends a public-private partnership to operate such a system, I think you will find a willing partner within the ranks of the Canadian Bus Association.
Thank you. We'll be very happy to answer your questions.