Transport Committee on June 9th, 2009

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

Thank you, Chair.

Mr. Gilbert, Councillor Meggs was saying that an additional $1,500 a day and $500,000 a year is going to create $20 million in economic benefit to Vancouver and the Lower Mainland. The Americans are the ones using the existing tracks and the existing infrastructure; all they're putting in is additional trains. For the train that already comes in, the CBSA or the government is not charging any levy.

Do you agree with Mr. Meggs that waiving this $1,500 a day in fees and bringing in $20 million is worthwhile for the people of the Lower Mainland?

[Richard Gilbert]

I didn't come prepared to answer that question. In fact, I didn't even know about this charge until yesterday, when I was reading the record of this committee. All I can say is, if what you say is true, Mr. Dhaliwal, that you can invest $500,000 and get $20 million back, I would like to put some of my money into that.

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

Thank you.

This question is for Mr. Meggs. The Oregon-British Columbia line was built in 1872, and the last time it was upgraded was in 1914. The Washington State government is willing to put about $800 million into the plan. Is the local B.C. government or the Canadian government doing anything to be a partner in the upgrade of this particular project?

[Geoff Meggs]

Mr. Dhaliwal, the provincial government has put some money in—I think that was reported earlier—toward sidings and some improvements, but there isn't a plan that I've been able to identify for a real upgrade. The main problem we face is that century-old railway bridge, which is a bottleneck for goods traffic, never mind passenger traffic. It is one of the biggest things we have to confront in terms of rail service generally on the west coast.

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

You mentioned that there could be a link between Surrey and this train, because Surrey is soon going to be the biggest municipality in British Columbia. Can you elaborate on what you meant by that?

[Geoff Meggs]

The Washington State officials who looked at possibilities would like to end up close to rapid transit. The southernmost point of rapid transit is the extension of the SkyTrain lane out to Surrey. Some of those stations cross old railway alignments and rights of way. In a very preliminary way, they have considered the possibility of stopping short of Vancouver and going to Surrey, because there would be rapid transit there. Of course, Vancouver would be disappointed, but it would be an overall improvement for the region.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you, Mr. Chair, and my thanks to you gentlemen for being here.

Mr. Meggs, if this is such a lucrative proposal, I'm surprised that the City of Vancouver hasn't already invested in it. With that kind of return on the dollar, it seems something that the city would want to get in on very quickly.

Mr. Gilbert, last year we saw a sharp rise in the cost of oil, and I believe there were other influences in the speculation that was driving it. Whether we'll get to that cost again soon, I don't know. Last week, every one of us parliamentarians were invited to participate in Frank Stronach's demonstration of his new environmentally friendly car. He has an electric car, and Magna is determined to get this into production. They see this as something happening very quickly, and they're doing the research and development on it. We're looking at electrifying rail, if we go to high-speed rail. Do we produce enough electricity to do this?

In Ontario, we're facing some constraints in electricity. In my riding of Newmarket—Aurora, there has been considerable discussion over this very unpopular peaker plant that is coming into York region. We're already under constraints for electricity. We're seeing a reduction of capacity from the coal plants, which has been a policy of the government in Ontario. If we move to electric cars, which I think will soon be coming into production, and we take steps to electrify rail, what will this do to the cost of electricity for consumers? Has a cost-benefit analysis been done on electricity and oil for the rail?

[Richard Gilbert]

These are also questions that I didn't come prepared to answer. But I can tell you about two analyses that I have been part of: one for China, and one for the United States. The United States, which has one electrified city line, has almost zero electrification. We proposed 30% electrification of the road system by 2025. These are very rough numbers. We looked at the increased amount of electricity that would be required to do that, and we concluded that it would be about 7% of the expected electricity supply in 2025. We then turned to China. The numbers were different and the circumstances were very different, but we came up with 8%—almost the same number.

These are very small increases. They could be readily accommodated by a concerted effort at conservation and a concerted burst in the use of renewables. I agree that Ontario is somewhat problematic, but it's next to two provinces that are not problematic. Circumstances are different across the country, but if our analysis for the U.S. and China applies to Canada, which I believe in broad principle it does, then this is going to be a pretty easy thing to do, with perhaps local difficulties.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you.

I'm sharing my time with Ms. Hoeppner.

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

Thank you.

Mr. Gilbert, in the research and the work you've done, do you see any place for private-public partnerships when it comes to the infrastructure or do you feel the only model that works is that of government footing the bill for all the infrastructure? Is there some room for private-public partnerships?

[Richard Gilbert]

There are several questions wrapped up in that. I prefer to start with the situation in which things pay for themselves and to try to devise solutions whereby things pay for themselves. A couple of years ago, I had an article in The Toronto Star, which you probably didn't see, about how the Spadina subway extension could be made to pay for itself. This is my initial working philosophy. I'd be happy to distribute it.

This is my approach to high-speed rail in Canada. First of all, start figuring out how it could pay for itself. Then, if you find that you really do need subsidy, apply the subsidy. Where should the subsidy come from? Well, I don't really care myself where the subsidy comes from. If it's a real subsidy, it's going to come from government, because no private sector organization is going to donate it.

If it's one of these things where the real issue is the risk rather than the actual amount of money, I don't mind the private sector doing it. But I must say that the private sector ventures I have examined in some detail, including the London subway, the London Underground, have not provided a lot of useful arguments for the people who support the P3 principle.

I don't have an ideological position against it. I don't think the data are in their favour, though.

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

If I look at the whole issue of whether people are going to use the high-speed rail, part of it is that it has to be a good scenario. For people to give up their cars, get on a train, and get to their destination, it has to be a positive experience and it has to provide flexibility. I think the private side will want to see that happen as well, so they might look at having a larger-picture solution, where transportation within urban centres also.... There's going to be an interest for them to make sure that's happening so that people will give up their cars and use the high-speed rail.

I'm just interested. Have you seen examples of that? You're citing London and you're not impressed with it.

[Richard Gilbert]

Well, yes, it is the case that there are not many examples of passenger rail systems that are operated privately.

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

Thank you.

[The Chair, Conservative, Merv Tweed]

I think what I'm going to do, if there are any other questions, is allow two minutes for each party.

Do you have anything, Mr. Dhaliwal, a comment or a question?

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

Thank you, Mr. Chair.

I'll go back to Councillor Meggs. Again, on this issue of high-speed rail or the additional trains you are looking at coming into the Lower Mainland region, have you talked to the provincial government? What was their attitude? What should each government do, the local, the provincial, and the federal, to make this project viable and to make it happen?

[Geoff Meggs]

The whole opportunity really only became a live one when Barack Obama put forward his stimulus package. We were suddenly contacted by the American side at the municipal and state levels. We do want to go forward and have that discussion on our side.

I think our obligation at the city level is to talk to the other people in the Lower Mainland, but also to bring together the groups that are very concerned about the development of rail traffic, so that we don't start down a road that frustrates the goods carriers and isn't taking into account the expenditures necessary to improve the crossing of the Fraser River and things like that.

But what I'd like to see happen from Ottawa's perspective is for it to say that we need a national strategy for passenger rail and we need to find cost-effective ways to indicate that and support that, because we haven't had it for a long time, and I think we're paying a price now. I think Mr. Gilbert's comments highlight the tremendous pressures we're going to face to catch up in the near term.

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

When we see the economic opportunities this is going to create, the federal government will get in the range of 45% to 48% of the taxes, the provincial government will get in the range of 45%, and the cities will get 8%. What are your feelings if we have to download the whole half a million dollars a year on Vancouver when the whole region of the Lower Mainland is going to benefit out of this $20 million? What is your feeling about how the people in Vancouver will feel about taking on this obligation?

[Geoff Meggs]

I know there's some skepticism about the numbers. I made it clear that they're cited from the Washington State Department of Transport on the Lower Mainland's benefits from this service. I'm happy to try to identify the specific study and go back and look at it. I don't think anyone is arguing that there will be no benefits from it. We have to do our part to pay for rapid transit, buses, and so on. We're going through a debate in B.C. right now, on the Lower Mainland, about trying to raise $4.5 billion over the next 10 years to make investments in partnership with senior levels of government.

So I don't make any apology for saying the City of Vancouver has not allocated the money for a high-speed rail corridor. All I'm saying is that I think the City of Vancouver and its partners with the province and with Ottawa should be saying that's where the future lies and we've got to take coherent steps now to get there. As Mr. Gilbert has pointed out, if we don't, we're going to be in a serious problem.

[The Chair, Conservative, Merv Tweed]

Thank you.

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

Thank you, Mr. Chair.

Thank you, again, to all of the panel members.

[The Chair, Conservative, Merv Tweed]

Is there any other comment on this side?

Okay. With that, I'll thank our guests for being here—and not being here. It has been very informative.

[Dennis Bevington, NDP, Western Arctic, NT]

You've saved a lot of transportation costs.

[The Chair, Conservative, Merv Tweed]

Thank you very much. We appreciate your time.

For the committee, come early on Thursday to see Moya Green from Canada Post. She'll be leading us off first thing at the meeting.

The meeting is adjourned.