Transport Committee on June 2nd, 2009

[Michael McSweeney]

I'm not sure of the information he gave you, but our biggest problem in British Columbia is the Asian imports to Canada. We have three plants: Kamloops, Richmond, and Delta. We export 40% to 50% of our cement to the United States today and have done so over the last five years.

There might have been a misunderstanding there, because there has never been a problem, to the best of my knowledge, with fulfilling the demand. Today the plants are down right across the country. Asian imports are up between 13% and 15%. People are opting to purchase Asian cement because they don't have to pay the carbon tax on it. They only have to pay the carbon tax on cement that is manufactured within British Columbia.

So there must be some misunderstanding. There is no problem fulfilling the demand, because 40% to 50% of our product goes to the United States today.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Thank you.

Mayor Rosen, has your community planned any corridors through those areas 15 kilometres out of town? Have you spent any time with your association of communities looking at corridors?

A big part of the cost of this type of project is land acquisition for a corridor. You don't want a new Wal-Mart built right where you would like to see this corridor happen. Have you had any conversations or made any planning preparations for something like this?

[Harvey Rosen]

No we haven't had any discussions with our neighbouring municipalities. But at the same time, the Ministry of Municipal Affairs and Housing has some bias with respect to growth of the city of Kingston north of Highway 401. There is not a great deal of development going north of the 401 at this time, and that's why the city is moving east, west, and south of the 401. That northern area is very much undeveloped and open for any sort of transportation corridor that might be desired.

I did want to say that the situation in Kingston is much like the situation in London, Ontario, where, if you have two regional collectors and the major stops, then Windsor would be a gateway to the United States, Toronto, Ottawa, Montreal, Quebec. The collectors of Kingston and London represent our regional hubs either side of Toronto between Windsor and Toronto and between Ottawa and Toronto and would be, in a system-wide analysis, very essential to feeding the high-speed rail from those regions.

[The Chair, Conservative, Merv Tweed]

Mr. Dhaliwal.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Thank you, Mr. Chair.

My question is for Mr. McSweeney.

If I heard right, you said that you export the cement to the U.S.now. If we get this high-speed train project going, would you say that you have the capacity to deal with the situation, or do we have to import cement from outside Canada?

[Michael McSweeney]

I would say we are probably more than self-sufficient to meet this demand. In Ontario we export between 30% and 40% of our cement across the Great Lakes to the United States.

You have to understand that there are not too many cement plants, as they are traditionally located on a piece of land where there is a quarry and an adequate--by which I mean 50 to 75 years--supply of limestone. That's typically where you will find a cement plant.

We are fortunate. If you look at St-Constant, Quebec; St-Basile, Quebec; Bath near Kingston; Bowmanville; and St. Lawrence in Mississauga, all our plants are located along the Great Lakes--Lake Ontario and the St. Lawrence. Today it is very easy for them to export the material to satisfy the demand in the United States. The United States is the only country in the world that is not self-sufficient for cement. So we have in Ontario and Quebec a 30% to 40% surplus that goes to the United States under normal business conditions, which we're not facing today. In British Columbia about 40% to 50% of our cement goes to the United States.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

My next question is to Mr. Facette.

One of the major advantages that we see with the high-speed railway is that it does not require the waiting time that is required at the airport. What can be done to make it more competitive and reduce the waiting times that we have at the airports right now? Can the government be of any help?

[Jim Facette]

Yes, it can be a great help. You may want to be careful about making an assumption, sir, that there will not be a necessity to have some kind of security screening on board a high-speed rail train. I don't know if there will or will not be, but you might want to be careful about that assumption going forward.

We can have a full-day discussion about streamlining the screening process at an airport. Suffice it to say this: there are probably some business model efficiencies of the screening process that can be used to speed things up a little bit. We are constantly working with CATSA to identify new technologies for the screening process going forward.

Regarding harmonization of screening standards, right now, as you know, if you go through a screening process on a flight to the United States, by and large you are probably taking your shoes off, but you're not in Canada. Other parts of the world have other screening processes that are different. So we need to look at how we can harmonize our screening procedures. You get off a flight going from Atlanta to Toronto, and then from Toronto to Ottawa you have to go through screening again, only because you have now touched your bag at customs. There are ways where you don't have to touch your bag again at customs and you don't have to be re-screened again. So the hassle factor of going through an airport would be reduced significantly.

So there are some regulatory issues we can eliminate that will expedite the process of going through a screening at airports. But that's a whole conversation for a whole day. We have all kinds of ideas, sir.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

On the other issue, WestJet told this committee that the fixed nature of airport security fees made short-haul flights less profitable. So to the extent that short-haul traffic could be diverted from the airports to the high-speed railway, would it be wise for the air industry to focus on the long-haul flights with their competitors, or do you think you still can compete when it comes to the short haul?

[Jim Facette]

Airport authorities have a mandate to be economic engines for their community, and their mandate says “thou shalt be self-sufficient”, which they are, but they also add to Ottawa's coffers. If you're going to introduce a major competitor between Quebec City and Montreal on to Toronto, through Kingston or whatever, you have to give that airport authority and our industry, I think, some time to prepare. The best way to prepare is to eliminate the cost that the government imposes on the aviation sector. Eliminating the airport rent, eliminating the air travellers' security charge, will go a long way towards allowing us to compete. If those charges stay in place, it's going to be extremely difficult for any airport authority, especially on smaller routes, to be able to stay in business.

[The Chair, Conservative, Merv Tweed]

Mr. Laframboise.

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

Thank you, Mr. Chair.

My next question is for Mr. Rosen.

Before I was elected to the House of Commons, I served as mayor of a municipality. Therefore, I understand the situation. When Transport Canada officials appeared before the committee, they brought with them a study prepared in 1995 by the Ontario, Quebec and federal governments. They also tabled the call for tenders for the new study which, among other things, would update the 1995 study.

Two options were advanced in the 1995 study: high-speed rail, or 200 km/h technology, and very high-speed rail, or 300 km/h technology. I wish to point out that both scenarios proposed in 1995 called for the building of a station in Kingston. According to the report, if the option selected was the 200 km/h system, with a rail line from Toronto to Kingston, the existing Toronto-Napanee line would be used and a new line would be constructed from Napanee to Kingston, as well as a new line from Kingston to Ottawa. For the 300 km/h technology, the existing rail line would be used, but with new lines being constructed from Coburg to Kingston and from Kingston to Ottawa.

Are you familiar with this study? The plan called for a station to be located in Kingston. Are you worried about the location?

[Harvey Rosen]

I'm not so concerned about where exactly it's located, but that it will be located within a reasonable distance of Kingston. As I understand it, no high-speed rail system can properly function if it's sharing the line with freight. They have to be dedicated lines. I wonder how they can use the existing line from Cobourg to Toronto when that's carrying a great deal of freight now.

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

According to the 1995 report, freight would be moved on another line. A different solution was to be found to move freight.

Now we're hearing that the 1995 study will be updated. I'm telling you that Kingston was mentioned in both studies. You appear concerned that high-speed rail will bypass Kingston. We've been informed that the call for tenders to update the 1995 study has gone out. If this proves not to be the case, then I will have to recall the Transport Canada officials and ask them what route alignment they are considering, because their decision could also affect Quebec. You have seen some proposed route alignments that bypass Kingston and that worries you.

[Harvey Rosen]

I spoke with Mayor Labeaume of Quebec City, and the SNCF report did not recommend a route through Kingston. I was under the impression—I may be mistaken—that the prior report, the one that you referred to as well, had at least an option that excluded a stop in or near Kingston. My impression is that there is some jeopardy to our community and to the region of not having a high-speed rail stop accessible to it.

I'm here today just to ensure that this doesn't happen.

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

I see.

Perhaps the Clerk could provide Mr. Rosen with copies of the 1995 studies so that he can have a closer look at them.

We could send you the documents that Transport Canada tabled to the committee and you could forward your comments to us in writing.

[Harvey Rosen]

I would appreciate that. Thank you very much.

[The Chair, Conservative, Merv Tweed]

Ms. Hoeppner.

[Candice Bergen, Conservative, Portage—Lisgar, MB]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

Mr. Facette, I appreciate your mentioning CentrePort. I think it's a very important project, and it's not located right in my riding. The riding I represent is Portage—Lisgar, but the people in Portage—Lisgar support it because they see it's a big picture investment. It's something that will not just have an impact on one part of industry or agriculture or export, but it will have a large impact on all of those sectors, and I think it will be a long-term impact. That sort of frames my question.

I have mayors in my riding who are having real trouble with railway abandonment, for example. This is maybe a bit of a rhetorical question for Mayor Rosen, but if you were a mayor in one of the communities in southern Manitoba, which are growing, thriving, and paying taxes but some of which are actually breaking down because of railway abandonment, and then across the country we want to put some very large amounts of investment into more railway--different types of railway but it's still railway investment--I'm just wondering how you would view that.

My other concern is that we're seeing right now the change in the economy and how quickly things can change. When we put that kind of investment in a particular area, if things do change, it's not like the airline where the airline can decide to look at different routes and won't fly to a certain city because things could change. This infrastructure is there. It's permanent. In layman's terms, how can we justify this kind of large investment? What would the payoff be for all Canadians?

[Harvey Rosen]

I'm mainly concerned with the Windsor-Quebec corridor. That route, especially between Montreal and Toronto, which passes through Kingston, is a very high-traffic area for all modes of transportation, whether it's air, vehicle, or rail. We don't have ships, but we could have ships. That seems to have been abandoned long ago. If you have an infrastructure for rail that is competitive and convenient, it will get cars off the road. It will allow people to have a reasonable choice to leave their cars at home and take the train. It's not that we should abandon the current VIA Rail service among the smaller communities, because that would be essential to provide the traffic to the high-speed rail through major collector points, like Kingston or London.

I don't know about Manitoba, but I know most of the lines run east and west through Winnipeg. I'm trying to remember, was it CN goes north through Saskatoon and CP goes south through Regina? If there were a high-speed stop in Winnipeg—and I don't know if that's in the cards or even being considered—you would need to have the smaller rail service maintained so that the smaller communities can take advantage of the advanced rail system, and that the major collectors can be accessed by rail through the normal rail that currently exists.

[Candice Bergen, Conservative, Portage—Lisgar, MB]

Thank you. I appreciate that you're here on behalf of your city, and you're doing a great job. Congratulations.

I'm here speaking for my constituents, and I think my concern is the huge overall infrastructure cost. At the same time, it takes vision, and sometimes those costs have to be incurred. I don't think any one of us wants to stand in the way of progress.

To Mr. McSweeney. We did have some other witnesses who talked about the standards that would have to be established in Canada for the actual rail for high-speed rail lines. My concern is, has the research gone into cement so we know it can withstand...? I know we talked about weather. This is a huge issue. Can cement withstand not just the weather but the weight, the speed? We've been told that this research has not been done.

[Michael McSweeney]

I first wanted to say, in response to Mr. Laframboise's question on the weather patterns, that for concrete roads, second only to Ontario is Manitoba, with the work that's being done on the perimeter of concrete highways in Manitoba. With so many Manitobans around the table, I thought I'd get that out, because I forgot to mention that. Manitoba, as you know, has very harsh and very long winters.

We're not reinventing the wheel here. This has been done in Japan now for 30 years.

[Candice Bergen, Conservative, Portage—Lisgar, MB]

Canada is not Japan.

[Michael McSweeney]

But standards are standards. I am sure that people want to go back and talk about Canada not being Japan. In Europe today we're incorporating 35% limestone in the cement, which means we're saving over 30% of greenhouse gases because we don't have to use fossil fuels at the start of the process. Yet we have neanderthals here in Canada and the United States saying we can't do that. If it works in Europe.... The pyramids used concrete and they're still standing.

Japan might not be Canada, but I can tell you they have as rigorous, if not more rigorous, standards. I used to be the CEO of the Standards Council of Canada, so I'm somewhat of an authority on this. All over Europe, the European norms and standards are allowing this. If you're going to say we don't have the right standards or you have a concern with that, let's ship it off to the Canadian Standards Association and ask them to have a look at this. We have three or four good standards bodies: the Canadian General Standards Board, the Bureau de normalisation du Québec, Underwriters Laboratories, and the Canadian Standards Association.

People have been trying for years to say we've got to reinvent the wheel here in Canada. We don't have to reinvent the wheel.

[Andrew Kania, Liberal, Brampton West, ON]

Mr. McSweeney, you mentioned Japan as a model. Are you saying Japan only builds with concrete at this stage?