Transport Committee on Nov. 21st, 2011

[Mike Sullivan, NDP, York South—Weston, ON]

Thank you.

Good evening, Ms. Bütler. It's daytime here. I take it that it's evening where you are.

[Mirjam Bütler]

Yes, it is.

[Mike Sullivan, NDP, York South—Weston, ON]

You stated that the Swiss system contributes to your economic wealth. Can you tell us exactly how that happens?

[Mirjam Bütler]

I cannot give you numbers, but public transport in general is very important. A lot of people are using public transport instead of cars because it's quicker and more reliable, and you're not stuck in a traffic jam. It's much more comfortable. People appreciate being able to work on the trains, for example, and we also have business cars where you can work and use your computer. This is one very important factor.

A second thing is that the population voted to transport freight by train rather than by road, so we are investing into switching freight from roads to trains. Therefore, the government also pays subsidies. This was a decision of the population, because as you know, we have a lot of lorries, and it's not very nice for the people living in the valleys when the lorries are going through Switzerland all day and all night. Therefore, we had a vote that was in favour of transporting freight not by road but by rail. So we're investing money there.

There are different factors: investing money and also investing in infrastructure. If you have to buy new trains and if you have to build new infrastructure, that is also an investment in our economy. On the other hand, we have people's transport that is very quick. We have a system of two trains an hour between the main cities in all of Switzerland. Normally the train leaves on the hour and the half hour, and the train also arrives on the hour and the half hour, so we are always thinking about the whole transportation system. We're not thinking about going from one place to another: we are thinking about transport chains and we are planning in transport chains.

For example, if I want to go from here in Berne to Vals, which is a very nice place in the mountains on the other side of Switzerland, I do not have to look at the timetable because I know that I will have a whole transport chain from Berne to Vals. I will go from Berne to Zurich and then I will have to change. I will have the perfect time to change and then I will go from Zurich to Chur. For the second train, I won't have to wait for a long time in Chur, because in Chur, the next railway company, which is a different one, waits until the train arrives, and then within five minutes its train leaves. I will then arrive in Ilanz. This is the last station. It's a little village in the mountain. In Ilanz, I will take the bus or postal car to Vals.

So I know that when I leave Berne--for example, at half past two--I will have the whole transport chain all the way to Vals. This must not be underestimated because this is valuable. People know they can rely on public transport. They can go to work. Transportation is always punctual. We have a very high punctuality. This also contributes to economic wealth, of course--

[The Chair, Conservative, Merv Tweed]

I have to interrupt there because we have another group of guests coming in. I will thank you for your time today. We appreciate you making the extra effort to be with us today.

[Mirjam Bütler]

Thank you very much.

[The Chair, Conservative, Merv Tweed]

On behalf of the committee, thank you. If you're ever in Canada, come and see us live.

Thank you.

[Mirjam Bütler]

Thank you very much.

[The Chair, Conservative, Merv Tweed]

Thank you.

We're going to take a two-minute recess while our new guests move into their chairs and then we'll proceed.

[The Chair, Conservative, Merv Tweed]

Thank you. Welcome back.

Joining us now from the Société de transport de Montréal are Michel Labrecque, André Porlier, Marc Bélanger, and Céline Desmarteaux.

You obviously know the routine. We're looking forward to your comments and then we'll move to committee questions.

Please begin.

[Michel Labrecque, Chairman of the Board, Société de transport de Montréal]

Thank you, Mr. Chair. You have a copy of the presentation in both French and English. So I am going to do the presentation in French and you will be able to follow along with the help of the images—there's not a lot of text—that give you a snapshot of what STM is. The pictures are bilingual.

[A voice]

Ha, ha!

[Michel Labrecque]

Joining me today are Ms. Desmarteaux, Director of Strategic Planning at STM, Mr. Bélanger, Director of Government Affairs, and Mr. Porlier, Assistant to the Chair.

In a nutshell, STM is the 14th largest company in Quebec, We have 9,000 employees. The Montreal subway system has four lines, 68 stations and 759 cars. The first cars were made in 1963 and started to run in 1966; the second set of cars were made in 1973 and started to run in 1976 at the Olympics. Our bus fleet has 1,700 buses and only eight of them are hybrid at the moment. All the others run on diesel. We provide 1.2 million passenger rides each day. The STM handles 80% of all public transit use in the Montreal area, which is 70% of all public transit use in Quebec. Other companies in Quebec share this work among themselves: the transit networks of Longueuil, Laval, Quebec, Lévis, Trois-Rivières, Sherbrooke, Gatineau and Saguenay.

The company's budget for 2011 is $1.1 billion. Roughly half of the revenue comes from passengers and non-tariff revenues, around 50% that is. Montreal municipal taxes represent 34%. Government subsidies for special programs, especially from the Quebec and Canadian governments, are around 12%. We get 7% in regional contributions that come especially from the gas tax and registration fees, and the rest comes from other operation revenues in advertising and marketing.

In a public transit company, the expenses basically go to pay the staff: bus drivers, subway operators, fare collectors, mechanics who repair the cars and the buses. The 24% in goods and services include the diesel and electricity. There are also investment-related expenses. We will come back to that. Of our $14 billion in assets, the maintenance of our buses and of our transportation centres, as well as unexpected expenses, represent 11%.

On another page, I have included a graph that shows the entire history of public transit in the Montreal area since the end of WW2. At that time, there were nearly 400 million passengers in a year. There was a long decline afterwards because of Montreal households owning cars, the urban sprawl and the highway system being developed. You see a small peak in 1967; that's because of Expo 67, when the subway had just opened. There is another peak in 1976 because of the Olympics, when another section of the subway opened. And there is a big peak, a sharp rise, in the early 1980s, late 1970s when the unlimited monthly CAM pass was introduced. When you put a pass in people's pockets, they are going to use public transit. Then there were some fluctuations and you can see a rise over the past few years because of additional investments from the City of Montreal and the Quebec government in particular. This year, within a few weeks, we are going to beat the all-time record in 150 years, since the STM was founded on November 27, 1861. It has taken us 150 years to beat the 1947 record, with 405 million trips.

Our company has won a number of awards, including

the American Public Transport Association “best of the best” in North America award as a public transit society.

According to Imperial College, London, the Montreal subway is the world's most productive subway in terms of mileage.

Montreal also won the MetroRail award. Subways around the world were compared to each other and we received an award for our commitment to sustainable development. That was two years in a row. On top of that, Moody's Investors Service and Standard & Poor's gave us excellent credit ratings for our loans.

You have a graph that summarizes the 2020 Strategic Plan, STM's strategic plan for the next 10 years. The plan is available in French, and you can watch a 20-minute presentation in English on the website: www.stm.info. You will notice three lines. The green lines indicates the current trend. The blue line is Montreal's 2008 Transit Plan, including additional investments for rolling stock, designated lanes, streetcars and extending the subway. The orange line is a combination of the current offer and a new service offer, without taking into account the increase in people driving alone in cars. Based on that, with a modal shift, we expect to see 540 million trips by 2020.

You are very familiar with the other graph. It shows the population growth in Canadian cities. When we say “population growth in Canadian cities”, we mean “the dynamics of mobility and mobility problems for goods and employees”. Those are the projections for each of your regions and your cities and I am sure you know them better than us.

Let's take a quick look at another chart. Our 2020 Strategic Plan includes a scenario with 50 streetcars, mainly in downtown Montreal, in order to support the growth in ridership. We have also just purchased 468 new metro cars from the Bombardier-Alstom consortium as part of a $1.2 billion contract. We also want to increase our bus fleet from 1,700 buses to 2,100 buses by 2020. All the buses that we are going to buy will be hybrid vehicles from now on. We currently have buses that run on diesel. Our new buses are going to be hybrid, and we are slowly going to introduce electric buses as well.

At STM, we anticipate investing $11 billion over the next 10 years in the subway system, in cars and extension, even though the Agence métropolitaine de transport of the Quebec government will be fully responsible for the extension. As for buses, we are thinking about buying new vehicles and replacing the fleet. The streetcar project is estimated at a little over $1 billion.

Another graph shows the federal government's growing support for public transit in Montreal and elsewhere in Canada. You can see the progression for 2011 in this graph. The Canadian government's contribution to STM is around $73 million, which has been invested mainly through Building Canada projects. This was possible with the funding from the excise tax on petroleum products via SOFIL. The Canadian government has directly funded the Urban Transportation Showcase that involves testing hybrid buses—a research and development project—and a program you have set up, the Transit-Secure Contribution Program that contributes to national security by allowing devices and cameras, STM devices, to be installed in the Montreal subway.

Some of the STM projects that were funded by the federal government via SOFIL include: the OPUS card, a smart card making it possible to pay for the fare in the bus or in the subway; the purchase of service vehicles; the purchase of buses; and the IBUS project, a real-time information project for our clients and for managing our operating buses.

Of course, I am not going to go into details on the chart that follows, with the $11.4 billion. In broad terms, the sum is divided into two. The first amount is for asset maintenance, which is essential for us. The company's assets amount to $14 billion. Maintaining them in good operational condition is a must. The second amount, for a total of $5 billion, is for optimization and development. So a significant part of the budget, just over $6 billion goes to maintenance. The items are listed in order of importance. That is the order of priorities for our projects. If we don't have all the money we need, the funds will be allocated in that order, from first to last.

You can see the data on public transportation in relation to Montreal's economy on page 13. You will see how much money was invested in public transit and what the spinoffs were for the metropolitan community of Montreal. The data is from a study done by the Board of Trade of Metropolitan Montreal. The study shows the added value and the direct and indirect jobs that were created, the impact on Canada and Quebec's revenue, meaning on taxes, and finally the impact of public transit investment, which is three times greater than that of private transportation by car. This can be explained by the fact that public transit is three times less expensive than private transportation by car. This allows households to save money that they can invest in other areas of the economy of Montreal, Quebec and Canada.

This is the second study of this kind done by the board of trade.

Let me end with our recommendations. We recommend that a national fund for public transit be created to ensure predictable and long-term funding. Predictability and long term are very important for the current strategies.

We also recommend that funds be indexed. In metropolitan Montreal, a 1.5¢ gas tax was put in place in 1996 and it stayed the same for almost 12 years. That means that the fund went down relative to inflation. So our recommendation is to index the funds, especially the gas-tax fund, which we get through SOFIL.

Our final recommendation is to ensure that public transit remains eligible for the next generation of infrastructure funds in upcoming years. In some cases, it has to do with job creation programs. In other cases, it has to do with programs developed to maintain infrastructure at a national level in order to have a competitive economy.

I am going to leave it at that and let me give you a hand for taking public transit.

Thank you.

[The Chair, Conservative, Merv Tweed]

Thank you very much.

Mr. Nicholls, for seven minutes, please.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Thank you very much.

Thank you very much for your presentation, Mr. Labrecque.

My first question has to do with the length of the system. What is the current total in kilometres?

[Michel Labrecque]

Do you want to know the length of the metro system or the bus system?

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

I would like to know the total, metro and bus combined.

[Michel Labrecque]

Our metro system has 71 kilometres, 68 stations and some 750 cars.

As for the bus network, we have about 210 bus lines, spanning 500 kilometres or so.

Our subway cars cover a combined 77 million kilometres annually. Our buses cover 81 million kilometres per year.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

I would imagine you want to expand the number of kilometres.

[Michel Labrecque]

The number of kilometres has actually gone up over the past few years as part of a program. The program is very easy to understand. It started in 2007 and it will end on December 31. It is called 16-8. The title reflects our objective to increase the service by 16% so that ridership goes up by 8%.

By the end of the year, the kilometres and the service will go up by 23 or 24% and we are going to be close to reaching a 12% increase in ridership.

So, for this year only, we are going to be close to reaching a 4% increase in ridership.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

You talked about STM's priorities. I think the expansion plans have already been submitted, and you gave out a list of priorities.

Is funding still based on your priorities? In other words, do you sometimes get funding for projects that end up being second in the priorities rather than for projects that are first in the priorities?

[Michel Labrecque]

We are currently working with the City of Quebec and the City of Montreal. We have always been asked what our priorities were since we have had a number of projects. As Chair of STM's Board of Directors, I try to make sure funding goes to priorities. It is very difficult because it is also extremely important to develop new services, to increase the service, and to launch new things. Furthermore, repairing subway tunnels, elevators, ventilation shafts and energy conversion centres is less glamorous, but it is crucial.

When a cable burns out in the Montreal metro, service stops for half an hour to an hour during rush hour. Montreal's subway cars are some of the oldest in the world. They will come to the end of their useful life at 53 years. So replacing the metro cars was the top priority.

At the moment, the money we get from Quebec and from the Canadian government via SOFIL, among others, is used for priorities, but it is not enough. The biggest challenge is finding funds to develop the service we offer. So not only do we have to take care of maintenance, repairs and replacements, but we also have to develop the service.

We are currently pretty much on the right track with our priorities.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

You have talked about creating a national fund for public transit. Could you expand on that, please?

[Michel Labrecque]

When we received the invitation to appear before this committee—and we thank you—our team thought about Canada’s future as a nation, for the next 10, 20 or 30 years. We are not talking about tomorrow because public transit in two years means tomorrow for us. Given the increase in population in Canadian cities and given the major impact that public transit can have on the mobility of workforce and goods, we feel it is necessary to have a national reading, even if each province has its own programs and even if public ground transportation falls under their jurisdictions.

Let’s talk about our vision of systems set up by a national government ensuring that workers and goods get from point A to point B. We may buy things online, but the goods are not going to be delivered through a wire. Goods will continue to pass through the highway system. Congestion has huge consequences when it comes to economic competitiveness. The national government already has a fund, consisting of the gas tax, which is redistributed via SOFIL.

So our forecasting is for 10, 20 and 30 years. What resources do we need for the development? It could be a public-private partnership, or it could be done through designated programs, together with the provinces and their programs.

We think that a country like Canada, compared to other OECD and G8 countries, should have a relatively structured plan for its vision of public ground transportation, an area we are experts in more so than other countries.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Thank you.

I really appreciated your second recommendation to index the gas-tax fund. We have actually introduced a motion to the House that asks for the same thing.

We know that the federal government takes out 10¢ from the gas tax and gives 5¢ back. So this recommendation is quite in line with our party’s values.

Could you explain how the distribution might help the Société de transport de Montréal?