Transport Committee on June 18th, 2009

[The Chair, Conservative, Merv Tweed]

Mr. Bevington.

[Dennis Bevington, NDP, Western Arctic, NT]

Thanks, Mr. Chair.

Welcome to the guests and witnesses here.

We've been at this high-speed rail discussion for a while now, and certainly one of the key issues seems to be approaching it from a visionary sense of where you want transportation to go in a particular corridor.

Mr. Iacobacci, when we talk about the Quebec-Windsor corridor, we're talking about a pretty complex transportation corridor that already has huge investments in a variety of transportation forms. In the absence of a very coherent vision for this region, how do you see moving ahead with a new transportation system like high-speed rail with dedicated lines? It is a very significant investment of $20 billion to $50 billion, as we've heard, when we already have put such an emphasis on other systems.

Maybe I could just get your comments on how you see going forward without that kind of visionary exercise.

[Mario Iacobacci]

Thank you.

I'm not sure we are in a situation where there isn't a vision. First of all, just factually, we have the continental gateway initiative, which is currently coming up to its results. This fall they will announce the results of this strategy that brings together Ontario, Quebec, and the federal government.

You also have, for the first time in a long time, a groundswell in favour of passenger rail, something we haven't seen in a very long time here in Canada and in the U.S., so there is an opportunity there. Will we need a vision? Yes. Will we need leadership? I agree with you. Will this be achieved through one big bang? I personally don't think so.

If we look at some other jurisdictions and how they have achieved it, my sense is that if we try to push this agenda forward then we have a chance to do so, and we may be able to do so in the way that Britain did. I say that because Britain went through a very long period of underinvestment in their rail infrastructure. This was an infrastructure that was used primarily for passengers, not for freight such as we have. Following that period of underinvestment, beginning in the 1980s there were a lot of initiatives that were undertaken, and the system improved. So passenger service improved dramatically in terms of journey time within the country, and it has continued to do so. These have been incremental, but they have been significant, and they have finally now connected in a real way to the high-speed rail system on the continent. It wasn't a big bang. It happened over a 20-year period.

Given the sums of money involved, other constraints, and requirements on governments, I would say that would not be a bad path if we could follow it.

[Dennis Bevington, NDP, Western Arctic, NT]

For instance, if we're reinvesting in the automotive industry on the basis that they are going to produce smaller, more fuel-efficient, perhaps even electric vehicles, in a big sense, if we make smaller vehicles, if we bring them around to using different fuels or more acceptable fuels, does that change the equation as well? We have a transportation system in place already that delivers people from their home to their business directly with that type of freedom.

On the one hand, are we continuing to develop an automotive industry that will do that for people in a clean and acceptable fashion, and then trying to layer on a high-speed rail system that will take them out of those vehicles and put them into a different mode of transportation where they will be at both ends reliant on interconnections, reliant on a number of things to get them to the high-speed rail and return?

That's why I say the vision seems to be a little scattered as yet.

[Mario Iacobacci]

I have two comments on that.

First of all, your point is excellent. That's why we believe that the vision's important but the evaluation of the option is critical, right? An evaluation takes account of what the alternatives are and what we expect the alternatives to be for passengers. That is essential. We wouldn't for one moment suggest that we move away from that fact-based approach.

The second point, however, is that we need to consider how the playing field is currently set between the modes. This is also important when we look at the European experience and the European successes underlying high-speed rail.

For example, in France, people refer to it as the great success story, and indeed it is, but on the first line from Paris to Lyons, if you decide to travel that by motorway, you face considerable tolls. That's not the case here in Canada. It's not the case in the U.S. In the U.S., you may face heavy congestion from L.A. to San Diego, but you will not face tolls.

So the playing field is not quite the same as it is in Europe, and that is something that we do need to consider here in going forward. If we just look at Transport Canada's own results since the year 2000, they conducted a full cost investigation for every mode. For road, when you take into account gas taxes and all the other fees that are imposed on users, users pay about 40% of the cost of using that infrastructure. For air, they actually cover 100% of the cost, including that of environmental emissions.

So that's actually an important part of the puzzle when you look at the viability of high-speed rail. If we continue to have the current kind of playing field, it clearly is more difficult to have a viable option. That's the second point.

[The Chair, Conservative, Merv Tweed]

Mr. Paddon, do you have a comment?

[Robert Paddon]

Yes. Thank you, Mr. Chair. I appreciate the opportunity to add a comment on this.

As we have developed our long-range strategy, what we've tried to focus on is analyzing the situation as it is today, which is our starting point, and then we look forward and ask where we want to be in the future.

While I've mentioned primarily environmental benefits and some of the economic benefits, one of the things that we have concluded, and one of the reasons we're moving in the direction of more public transport in our region, is that we will be unable—or it will be extremely expensive—to meet the mobility needs of a million more people. We're estimating that with a million more people could come another 600,000 to 700,000 vehicles, if that is their primary mode of travel.

We recognize that the automobile will always be needed. What we're looking at is saying, however, that it's not necessarily needed for all trips. Ultimately, we would like to see zero emissions--to reduce to smaller and zero emissions--but what we're looking at it for is for longer trips, for longer commutes, in our case, or for inter-city travel. Do you want to pour more money into highways, which are extremely expensive to build and have a very large footprint when you put them in place, or would you like to try to move people to a tighter, narrower footprint and something that may be more economical in the long term, whereby the automobile becomes something that you utilize for shorter trips?

You won't necessarily change what people are doing today, but if we are looking out 10, 20, and 30 years--and I think that at a minimum we need to be looking two decades and beyond for truly realizing the benefits if we are to move into investments into high-speed rail--then we'd have to say that we have things today, but perhaps we can build and change the direction we move in, not displacing what we have or impacting some of our industries, but complementing them as we move forward.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Mayes.

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

Thank you, Mr. Chair.

Welcome to the witnesses. I appreciate your taking the time.

As a member from the interior of British Columbia, I'm going to direct some questions to Mr. Paddon.

I spent my youth in Vancouver, so I experienced the building of the freeway out to Hope. That was a big challenge for Vancouver at the time. That was many years ago, so you can get an idea of how old I am.

First of all, thank you for acknowledging our government for the investment in the Canada Line and also, of course, the Evergreen Line. We are committed to Vancouver and those transportation needs, so thank you for mentioning that.

One of the challenges that I think we're facing in that corridor between Seattle and Vancouver is the fact that we could be hurting another mode of transportation: YVR, Vancouver International Airport. Our B.C. caucus met with the cruise ship lines, and of course they're moving half their business out of Vancouver down to Seattle. The reason they're doing it is that some of their passengers can fly into Seattle $300 cheaper than flying into YVR. That is a challenge.

If all of a sudden there is this cheap high-speed rail from Seattle to Vancouver, do you think it would compromise YVR in terms of some of the residents in the Fraser Valley travelling to Seattle to use their airport? Also, would it further compromise maybe the cruise ship lines into moving all their operations there?

[Robert Paddon]

That's an excellent question.

I certainly can't speak on behalf of YVR, but I am somewhat familiar with some of their challenges. We work closely with them, and have been on the development of the Canada Line.

I think there are some specific issues they're facing with the cruise industry and how that works with air travel. I'm not sure that high-speed rail....

I can't imagine, even if we were to say today, definitively, “Let's move on it”, that we would see anything even in place for a decade. It takes pretty much a decade just to build a 15- or 16-kilometre rapid transit line, so you're talking a significant infrastructure project.

So you're very likely looking at, from the point in time that you make a decision to go forward, ten years at a minimum, possibly twenty, before you'd see it come online. That said, I think over that timeframe, you would have an opportunity to work with....

One of the things you want to look at is working with those industries and those sectors that could be negatively impacted by this to see how you could develop some things that would complement it.

My own experience today with greater Vancouver is that although I can't speak to the number of people going from here to Seattle to use the airport, I know that the Abbotsford airport has been growing quite significantly. We're seeing a future where YVR and Abbotsford will become two significant points of entry for air travel in our region.

Unfortunately, I really don't feel I can speak to the details of the cruise industry and what's happening right now. I know that there are some complications with flights and some of the other barriers that are in place in bringing people in. We've heard that from a number of people.

Longer term, I think we could develop high-speed rail in a manner that would not compete with the market that YVR is pursuing today, or Abbotsford for that matter. I think we could work some of that out.

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

Would it be practical to put a high-speed rail from Hope, let's say, or Chilliwack into downtown Vancouver? It's not a great distance. It's maybe 120 or 150 kilometres.

[Robert Paddon]

When we look at that distance, I'm not sure a high-speed rail would, given the cost of high-speed rail.... You're looking at heavy rail, so you're going to need a lot of infrastructure there. I'm not sure that would be probably the best area to pursue a project there.

I think incrementally where we're going to see ourselves moving.... We've already commenced discussions with the City of Abbotsford. We'll potentially talk to others in the Fraser Valley. They are looking for options to the automobile today to be able to move. We're pleased we just opened a new major bridge in our region on the weekend, but even with some of these investments and where things are going with the Port Mann, in time, people want alternatives.

For example, on the Port Mann, we're going to be working with the province and others to put in high-speed bus corridors. The buses will have large park-and-rides and quick access, and will be able to move much faster than you'd be looking at for cars.

In the next 20 years or so, I don't know that there would be a market large enough between Hope and Vancouver that could support the infrastructure costs of moving to high-speed rail. Now, maybe at the end of the century that could all change. I think the first step, though, is building public transport or an alternative to the automobile. Once you have corridors in place, once you build some of those behaviours, then you can increase or change your technology to meet growing market needs.

That would be my perspective on that, at this point, between Hope and Vancouver.

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

Our B.C. caucus met with five of the mayors from the greater Vancouver regional district to discuss transportation and TransLink. Our government has doubled the amount of gas tax funding to municipalities. The message we got from the mayors was that they receive over $100 million a year from the gas tax funding, and they've bought all the buses they need, and they feel that their capital expenditures are great, but the operation and maintenance is what's hindering the further build-out of their transportation system. Can you comment on that? Is it because you're not charging enough in fees for the use of transit, or are there some other challenges that need to be met?

[Robert Paddon]

First, I'd like to comment again that it has been very helpful to have the support of the gas tax program for purchasing buses. We purchased well over 200. We're getting close to 300, and we'll need more. Our forecast into the future--and we're literally working on this right now; we're consulting with the public this month, and we'll be making some decisions this summer--is that we will need more buses. We have anticipated that into the future, through the gas tax program--which coming up next year will be close to $120 million and will be growing in the next decade over that--we will fully use all of that to acquire the buses we need. We estimate we will need 400 more new buses just in the next decade alone.

The challenge we have with buses is that the purchase price of a bus is about 10% to 15% of the total cost of a bus over its life. It varies depending on whether it's electric trolley or diesel--you'll get a few more years off a trolley--but when you purchase a bus, you have to then bring on operators. If it's diesel, you have fuel costs. You have maintenance costs. You have to rebuild the engines.

For example, to purchase a hybrid diesel today costs about $650,000. Today about 80% of the purchase price is coming off the gas tax transfer program, so it helps us a lot to reduce our capital cost. We know we're making a commitment of about $6.5 million for that vehicle over its lifespan, which we hope will be about 13 years, or maybe we could push it to 15 years before we had to replace it. So those are significant costs.

We have moved over the past five years to increase our bus fee quite significantly, and as I mentioned, we've increased service by 43%. That's only been possible with a lot of new buses. We get very positive feedback from our customers. They love the new vehicles. They're moving to it. We have found in this region we can't keep up to demand. Every time we add a new service, it fills up. People are demanding more.

We have the challenge of finding local sources to cover the costs. In our region, the fare box covers about 52% of the transit costs. That is very high. There are very few cities in North America that come close to that. In most cities in the U.S. it's 25% or 30% at best, setting aside New York or Chicago. So we intend to maintain that cost recovery. Ultimately, your bus service is going to be a subsidized service. So our challenge locally is how we will support that and how we will be able to take advantage of the capital programs that have been proposed by the Government of British Columbia, with support from Canada, to be able to meet the vision that most people over here have--which I know is shared by senior government--to become a region in which you don't need your car to get around, where you can make your trips, have mobility and have a clean environment, and ensure that as we become seniors we can get around.

I hope that addresses your question, sir.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Rae.

[Bob Rae, Liberal, Toronto Centre, ON]

Thank you, Mr. Chairman.

One of the realities of life is that I have memories of this discussion from a very different movie. One of the great things is it seems to me we have more cooperation today between levels of government than we had at that particular conjuncture.

I take it, though, that the sense is if we're talking about real high-speed rail, we're talking about a new dedicated track, as opposed to simply upgrading the existing track. We've had some estimation from Mr. Paddon about the length of time this kind of decision can take. With respect to the Quebec-Windsor corridor, which I'm more familiar with, what sort of timeframe would it require? Clearly it requires a point of decision. From the point of decision to actually getting on the train, what sort of time do you think we're thinking of?

Mr. Iacobacci or Mr. Paddon, go ahead.

[Robert Paddon]

In our experience in this region--and I'm looking at it just in a large urban region--it has taken us close to ten years. You can do it in about seven years, but it takes closer to ten years to work through the complexities. The actual construction is probably the shortest part of that timeframe. The most difficult part is agreeing on where should it best go and then doing the analysis that you have to do there, and then working through the various competing interests that may be there and trying to resolve how to land on a corridor.

From our experience here just on rapid transit, or even on.... Well, Golden Ears Bridge is a good example. That's a bridge everybody wanted. Please get on with it, they said, and build it as quickly as you can. That took us about seven years from start to finish. That's a project that was an easy route. We moved it quickly.

In looking at this with high-speed rail, you'd need to do an assessment of your existing tracks and what you have. When you move to high-speed rail and the type of technology you're after, certainly with the experience in Japan when they first introduced it, they just created a whole new corridor to bring it in and to have the technology work. I think that would be one of the very early decisions: is there merit in looking at the actual alignment where the tracks are, or do you really want a change and look at a different corridor?

High-speed rail is a very different type of transport from the current rail service we have today, which in many cases is trying to service many communities in a corridor. There's a need for that, but when you move to high-speed rail, the real economies of that are being able to get it up to speed and move large distances quickly with relatively few stops. At that point within the corridor, we'd very likely be looking at very different alignments as to where you'd want to go and study that.

But, sir, I can't imagine that you could do anything from start to finish in much under ten years to bring this on and to put people on.

[Bob Rae, Liberal, Toronto Centre, ON]

Mr. Iacobacci.

[Mario Iacobacci]

I would agree with Mr. Paddon. I don't think I have anything to add to that.

[Bob Rae, Liberal, Toronto Centre, ON]

But have you done any work on the question of upgrading the existing track and trying to apply new technologies to that existing track, as opposed to the classic high-speed rail in Japan, France, and Germany?

[Mario Iacobacci]

We haven't done any work in that area. I personally come at the issue from a kind of commercial or economics angle, so I wouldn't be able to comment on the technical issues.

My comment from a commercial angle is that the obstacles of making this big leap are enormous. I think they've just been summarized. If we try to make that full leap, we may never make it, which is why it's important to make substantial leaps based on the infrastructure we currently have. Some things are already happening. There are small investments being made on VIA right now to improve it by half an hour. Half an hour is significant. And I'm sure there are more improvements to be had.

I think that incremental avenue is worth pursuing, just given that there are many fewer obstacles to pushing that forward. We can test whether improvements in the service actually attract more traffic. They should. In principle, it should work. Last year, I think VIA had an increase in traffic of 9%. That's historically great.

I think the vision's important, but at the same time, because we're not likely to make this kind of big decision for a few years to come, I think we need to push ahead incrementally as well. I doubt that it would be a waste of funds to do that.

[The Chair, Conservative, Merv Tweed]

Mr. Jean, do you have any final comments?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, no, Mr. Chair. I appreciate that.

[The Chair, Conservative, Merv Tweed]

Is there anyone else with a small comment? We have about three minutes.

Mr. Bevington.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Paddon, a number of years ago I joined in with the City of Vancouver when they were doing an exercise on the future. I can't remember the precise name of it. It was part of an international competition on how Vancouver would look. Do you use that in the work you're doing now and in the way you approach the transportation system in Vancouver?