Thank you very much, Mr. Tweed.
Thank you for giving us the opportunity to address you today.
We at the Conference Board believe the time is right to move forward on the development of high-speed rail in Canada on the different corridors that we've been talking about: Calgary-Edmonton, as well as Quebec City-Windsor. If we look at the European and the Japanese experience, it indicates that it's possible to design a service that is both attractive and competitive relative to the other modes.
What I want to focus on today is really the aspect of how we evaluate the high-speed rail options that are before us, because it's important to realize that these options cannot be evaluated in terms of commercial or financial benefits alone. There is, in fact, no high-speed rail service in the world--that I'm aware of--that covers its costs through the fare box. Maybe the Japanese one does, given that the infrastructure is already all depreciated, but that's about as close as you'd come.
The reason we can't use those evaluation measures alone is that there are important public benefits at stake: environmental benefits, social benefits in terms of accident savings, and economic development benefits as well. What drives these public benefits? We like to think of it in two ways.
There are two things that happen when you introduce a major improvement in a rail service. You have a potential switch from other modes, and this mode-shift effect drives a lot of the savings, both in terms of reduced accidents for those shifting from road and in terms of reduced GHG emissions for shifts from road and from air as well. So on the one hand, you have the mode-shift benefits that are very important and speak to a lot of the overall environmental and social cost savings.
The second set of benefits is made up of those that are driven by the additional passengers. The fact that we're actually introducing a service that improves mobility between two or more points means that you're likely to see a very substantial increase in overall traffic.
By way of comparison, if you look at the introduction of low-cost airlines on a number of routes, whether it's here or in Europe, those routes often saw a doubling of traffic because the service was both improved and much more cost-competitive. If we are able to introduce a much more competitive service, I wouldn't be surprised to see that order of magnitude of improvement in rail traffic between Montreal and Toronto, for example.
It is these latter benefits, the new trips, that drive the economic development impacts of this kind of infrastructure. Here we're talking about impacts that are driven by the fact that we can do these trips and reduce journey time, but these are impacts that drive how labour markets work, because they are able to make labour markets work much more effectively by ensuring, essentially, that people can get to and from their places of work more easily and so on.
They also drive trade and investment opportunities, which rely on people being mobile. This is not something we talk about very often, but it is a very real effect of improving connectivity.
To summarize, we believe that when you look at the public benefits of some of these projects, it is these that actually justify the public investment--that is, the government spending that will be required in any of the options that are evaluated going forward.
I would just end by saying that we are looking forward to the current study that's reviewing or updating the Quebec City-Windsor studies of 1994-95. We're looking forward to those results, but we'd like to say that continued delays in improving this infrastructure are unlikely to improve our capability to deliver on this vision. In fact, it's actually quite the opposite. Over the last 20 years or 10 years, what we've seen is a cost escalation--a construction costs escalation. There's a dip now possibly due to the recession, but this is a long-term effect that you're likely to see continue to evolve, and that works against these kinds of infrastructure projects.
Second, as we see communities continue to develop within the rights of way we're talking about, it makes the environmental assessment processes for these options also a lot more difficult to get through over time. This is particularly relevant, for example, for the Calgary-Edmonton corridor. These are all factors that potentially work against us if we delay further.
I'd like to leave any other questions for you.