Evidence of meeting #35 for Transport, Infrastructure and Communities in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was alberta.
A recording is available from Parliament.
7:45 p.m.
Liberal
Francis Scarpaleggia Liberal Lac-Saint-Louis, QC
Did you say that private sector companies are not allowed to accept subsidies from—
7:45 p.m.
President, Alberta High-Speed Rail
They're prohibiting that in Alberta.
7:45 p.m.
Liberal
7:45 p.m.
Bloc
Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC
My question is for you, Mr. Cruickshank.
You are interested in pursuing a public-private partnership in Alberta. Most probably you have done a financial assessment. You mentioned that an investment of about $3 billion would be required. What percentage of the cost would be assumed by the private sector? What is your take on the situation?
Does this mean the government builds the infrastructures and you handle operations and maintenance? Have you given some thought as to how a public-private partnership would work?
7:45 p.m.
President, Alberta High-Speed Rail
The private company would buy and operate the trains. The private-public partnership towards building the infrastructure can go through very many variations of how much government owns and how much the private sector is willing to finance.
You're looking at an asset that is going to be there for 100 years and is going to have a revenue stream, and if you look at pension funds, which are looking for long-term infrastructure investment, they're looking for this kind of return that is stable and moves them away from dependence on the volatile stock market.
We are just starting to talk about this and we'll be exploring many avenues to see what combination of private and public financing could be put into this. The bottom line, as the Government of Alberta, Premier Stelmach, stated in July when he released the ridership report, is that they would buy the land. That says his minimum commitment. I'm sure when he sees that this is getting more life he'll be able to put in more funds to finance it, but we're just negotiating what our options are. We have ideas on what might work. We're just going to ask people what they would do, and move from there and negotiate and explore opportunities, because there is a deal to be made in this type of project. We have to find the right mixture.
7:50 p.m.
Bloc
Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC
France's Société nationale des chemins de fer, the SNCF, has expressed an interest in a public-private partnership and in participating in a tender process, should there be one in Quebec. The SNCF is responsible for the operation of all high-speed trains in France and of a number of other trains in Europe.
In your opinion, should the governments of Alberta, Quebec and Canada put out calls for tender to see if other major international firms would be interested in bidding on and on being financial partners in the construction of high-speed trains in either Alberta, Quebec or Ontario?
7:50 p.m.
President, Alberta High-Speed Rail
We have known that other companies from outside Canada have been interested in this project. From the start I had taken the view that as the taxpayers of Canada, in whatever shape, are going to put money into this and the taxpayers of Alberta in particular are going to be the main users of it, at some point we should have an initial public offering so the public can invest in this project.
As a banker, one of the reasons I don't like bringing in offshore companies is that there's always a question of an added exchange risk in whatever arrangements are made. This adds another factor of risk to the venture, as to whether the Canadian dollar vis-à-vis the French franc, or whichever country it is, is going to be stable over a very long time.
I always look at things and ask, how do I reduce the risk? And if I can reduce the risk and finance it within Canada, that would be my first preference.
7:50 p.m.
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thank you, Mr. Chair, and thank you to the witnesses for appearing today.
I've been chairing the all-party rail caucus for more than three years. I've been very proud of the investment track record of this government. I would argue that we've got the most pro-train government, pro-mass-transit government perhaps since John A. Macdonald committed to the Canadian Pacific Railway at Confederation. We've made significant contributions toward it.
Coming back to what Mr. Bevington was talking about with respect to incrementalism of plans, I think we're moving toward fast speed on the Lakeshore, trains that will operate at speeds of 160 kilometres an hour. For example, they're already hitting 160 kilometres an hour along the Lakeshore, but being able to sustain it for longer periods of time and much shorter travel times we think will increase ridership. That incrementalism will then build better business cases as we move forward.
I hear political will a lot. I've been working on this, I've worked on plans and I've worked on costing. Mr. Cruickshank, with due respect, sir, I'm certain you're substantially under on costs for a dual-line track with electrified fences and so forth. I've worked this out. You're about one-eighth less than what the Americans are finding out when they look at the Amtrak study along the west coast, for example. I'm not saying it would be as expensive as building in California, because there are geographical challenges, but you're under.
One of the big challenges in government, when you're putting together a federal budget, is choices. What are we trying to manage? You have presentations. This year, for example, there are almost 700 presentations to the federal finance committee for where they would like to see money spent. It's not about political will. It's about how much you have. There's never enough money. Governments only have a finite amount of money, so you're left to make choices.
I'm not surprised you found such great support, because I can tell you in Obama's stimulus plan people were asked what they liked the best of all the things in the stimulus plan, and everybody said they loved high-speed rail. But there's only $8 billion, and it's a drop in the bucket when they're talking about the number of high-speed lines that are viable in the United States over time.
If you asked people if they would like to see substantially shorter health-care wait times or high-speed rail, what do you think they would say?
7:50 p.m.
President, EKOS Research Associates Inc.
First, I agree completely with your comments that the public has lots of wants, but when you get down to trading them off, you have to be very mindful of the fact that some of those are contradictory and we can't satisfy all of them.
By the way, I would not recommend nor would the public, because we've asked them this many times. The public has spoken on this and they'd really like to go ahead and do it. They would only like their voice to be heard as one partial input to this. They recognize there are lots of other considerations, competing interests, technical issues. They don't pretend to have that expertise. They're just saying as they understand this, they think it's a really good idea. Compared to a lot of other ideas, they think this is a particularly good one.
In terms of the question of trade-offs, we have tested trade-offs many times, explicitly saying they can pick this or that, looking at all kinds of random combinations. We haven't done that with this particular exercise. I think from past experience it would do quite well. It would certainly figure in the top half, but it would be something I would like to do.
I appreciate your sensitivity to the fact—
7:55 p.m.
Conservative
Dean Del Mastro Conservative Peterborough, ON
I would agree with you on this point. I do think that investment into rail, transit, reducing greenhouse gas emissions, and inter-city connectivity are all very high priority for Canadians, and if you can present a good incrementalized plan on moving toward that, Canadians will support it. I think that's what you're actually on to.
Mr. Cruickshank, a year and a half ago I took the Royal Canadian Pacific from downtown Calgary to Edmonton with CP Rail. It wasn't a bad ride. It was a beautiful train too, I might add.
7:55 p.m.
Conservative
Dean Del Mastro Conservative Peterborough, ON
I would suggest to you that given rail technology as we have it.... And I can tell you we have a lot of level crossings across Ontario with trains travelling at about 160 kilometres an hour with very few incidents. Why wouldn't you look at first promoting an incrementalized plan, perhaps even using the Bombardier JetTrain type of design that they brought in a number of years ago? Electrification is a big step, and it doubles the cost of building a train.
I'm just wondering why you aren't talking to the Alberta government about building a transit system that would connect those areas. One of the great things about a train is that it can stop in Red Deer, and a plane won't stop between those stops.
Why aren't we first trying to get an incrementalized plan, build ridership, build a business plan, and get to where we need to go? I think that's where we need to go. We need to continue looking at and investing into rail.
7:55 p.m.
President, Alberta High-Speed Rail
We looked at the concept of running trains at lower speeds. We looked at using diesels running at 200 kilometres an hour. One of the things we decided was that once you've established a traffic base and you have to do upgrades to the route for any reason, you do great havoc to your ridership. Look at the west coast line between London and Glasgow. They started about 12 years ago upgrading it to a higher speed and electrification. They started off with a £5 billion budget and a five- or six-year timeframe. It took them 12 years and £13 billion to do it. They found their biggest trouble was they could not get the crews on the line for a long enough time period to set up and do meaningful work; they'd have to shut it down because the trains were coming. They eventually resorted to taking it in 30-mile sections and shutting it down for a month or two. The ridership just said goodbye. They weren't going to get on a train and then get on a bus for 30 miles and then get back on a train.
You cannot treat your ridership like that. They are your most valuable resource.
7:55 p.m.
Conservative
7:55 p.m.
Liberal
Joe Volpe Liberal Eglinton—Lawrence, ON
Thank you for sticking around, Mr. Graves and Mr. Cruickshank. I want to finish off with a reference to what you said earlier on, that you have to think in terms of projecting down the road in order to really engage in high-speed rail.
I mentioned this at this conference today, that you can either wait for all the right conditions or you can plan for the conditions under which you are going to build. The Chinese, the Hong Kongese, when they built the tunnel under the bay to connect Kowloon and Hong Kong several years ago, faced the same negativity. They had the foresight then to think in terms of extending that subway rail up into the northern part of Kowloon and into the then border town of Shenzhen, now a major city. That railway track at the time was condemned by virtually everybody as too expensive, not affordable. They said nobody was going to use it, that they should go in incremental steps.
I think you're familiar with what's happened. It's a prototype for the kind of construction and foresight in planning that's required. You can go from Shenzhen down to Hong Kong Island in less than an hour. If you try to walk three blocks in Hong Kong it will take you an hour. If you try to take a car, you'll never get out of the parking lot. So was it costly then? It would be prohibitive today.
I thank you for what you have brought to the table today. It shows that the choice is not between incrementalism and high-speed, it's between making an investment today and having a prohibitive cost tomorrow.
Thank you very much.
8 p.m.
Conservative
The Chair Conservative Merv Tweed
Thank you to our guests today. We appreciate your time. We know that you had a busy last couple of days, so we do appreciate it.
Thank you.