Transport Committee on Nov. 21st, 2011

[The Chair, Conservative, Merv Tweed]

Good afternoon, everyone.

Welcome to meeting number 13 of the Standing Committee on Transport, Infrastructure and Communities and, pursuant to Standing Order 108(2), a study of the national public transit strategy.

Can you hear us now, Ms. Bütler?

[Mirjam Bütler, Deputy Director, Union des transports publics de Suisse]

I can hear you and see you now.

[The Chair, Conservative, Merv Tweed]

We lost contact for a minute.

Joining us today by video conference from the Union des transports publics de Suisse is Mirjam Bütler, deputy director.

You have a presentation to make. Then we'll move to the committee's questions.

Please proceed.

[Mirjam Bütler]

Good afternoon, ladies and gentlemen.

I have sent you a presentation. I would like to do a short introduction for about 10 minutes. Then you are invited to ask your questions either in French or English. I understand and speak both.

First of all, what does the Swiss Association of Public Transport do? We have 130 members. They are public transport associations and public transport enterprises that are organized in our association. One of our main tasks is making transport policy and lobbying Parliament and the government. This is one of our main tasks and a very, very important one.

We are also an information platform for enterprises. The enterprises meet in our association to learn how to make and experience exchanges. One of our most important tasks is that we do the management of joint tariffs and rules. We have joint tariffs and joint rules in Switzerland. I will talk about this later.

We're doing education, formation, and training, and we also do the organization of the distribution of ticket revenues. This is also one of our very important tasks.

Of course, we have services for members--for example, if they have very detailed problems concerning laws or new laws. Also, we are a think tank for future development and strategies. We are a kind of neutral association. All of the public transport companies are organized in our association. We have the big ones like the Swiss Federal Railways, but we also have very small ones, such as, for example, public transport companies in cities.

You can see on page 3 of my presentation that we have a very dense national network. This is a result of our collaboration. We're very proud of our public transport here in Switzerland. We have different actors and roles.

I would like to talk first about the different roles on a Swiss level. Then I would like to talk about the different laws on the cantonal level. As you might know, we have three different levels in Switzerland. We have the communes, then the cantons, and then all of Switzerland. This is the Swiss level. It's very important that we work together and have good coordination and communication.

When we come to page 4 of the slides, you can see the different roles we have. We have 26 cantonal governments. The cantonal governments are important because they organize public transport in their cantons. They order public transport in the cantons, but they cannot do this alone. They have to collaborate to work together with the Swiss level. I will talk about the cantons later.

We have public transport companies. You see them illustrated in the middle of the diagram. They are very important, of course, and there are different kinds of public transport companies, as I've already mentioned, both big ones and small ones. We have the railways, the buses, and the trams. We have everything.

We also have the federal Department of the Environment, Transport, Energy and Communications. We have our Minister of Transport--you can see that on the right side of the slide--and then we have the Federal Office of Transport. Of course, they are very closely linked.

On the left of the page, you can see us, the Swiss Association of Public Transport. We're also trying to influence public transport policy.

What is very important in Switzerland is that we have direct democracy. Direct democracy says, for example, that people can vote on public transport projects.

For example, here in the city of Berne, we had an extension of the tram line. Before it was built, we had a vote at the communal level. We also had a vote at the cantonal level. People have to decide on public transport. This issue is why we have such a dense net, because of course everybody wants very dense and good public transport to be offered in their regions.

The roles of the federal institutions, which are discussed on page 5, include, for example, monitoring and surveillance. They give us a framework for the question of security standards, for example, and they order public transport services, which are very important. They tell the companies and us what to do. They have the role of regulator. Of course, they are the owner of the Swiss Federal Railways and of the biggest public transport companies.

You can see that the federal institutions have different roles. Sometimes it's really a little bit difficult, because the different roles have different interests. As the association, sometimes we have the role of mediator so the different roles of federal institutions can have one common aim.

The last role of the federal institution is that we have someone we call “Mr. Price”. He looks at the prices. He controls our prices. For example, sometimes he also has different interests, if you compare his interests, for example, to the owner of the Swiss Federal Railways. This is also one of our challenges: to talk to him and to ask him about our prices.

That was the federal level. The roles of the cantonal governments are shown on page 6. In our 26 cantons, we also have governments and we have parliaments. They're very important because, for example, they decide on education, on public transport, and on health systems.

Cantonal governments also have the role as an orderer for transport services, so the cantons tell the companies what to do. I'm living here in the city of Berne, the capital of Switzerland. For example, if the canton says to the public transport company in the city of Berne that they need to have a bus or a tram every six minutes, they order it and they pay half of the price of it. Public companies make half of the price through ticket pricing, through the revenue coming from customers, and the other 50% is paid by the cantons.

I will talk about finance later on. It's a very complex and difficult system here in Switzerland, but as a main rule, we can say that in the cantons half of the public transport cost is paid by the cantons and the other half comes from ticket revenues.

Of course, the cantons also have a role as regulator or owner of different public transport enterprises. So what we have on the Swiss level, we also have on the cantonal level. For example, the BLS, the second-biggest train company in Switzerland, is owned by the Canton of Berne, where I am living.

I would now like to say something about the financing. I will begin with the financing of infrastructure. This is shown on page 7. We have tried to keep it simple. If we had made it to show what we're really doing, it would have been 10 times more difficult.

You can see that the money is coming from different places. We have the ordinary federal budget and then we have the cantonal budgets and the budget of the communes.

I will now change over to French because it's easier for me, if it is okay for you.

We have the regular federal budget—that is where taxes go—then we have the regular cantonal budget and the regular municipal budget. In Switzerland, we have something really great and very important. We have two funds.

We have created two funds and they're out of the budget, so this is one of the main advantages of these funds. We don't have the budget discussions every year, but we have funds made for public transport, so we have a long-term view. We have two funds. We have the fund for infrastructure, and we have the FTP, which is le fonds pour le trafic public.

These funds are very important. We also had a vote on these funds. For example, for le fonds pour le trafic public, we had a referendum in the whole of Switzerland, so the Swiss population could decide whether to make the fund or not.

What we would do with this fund was already defined. For example, we could invest this money in big infrastructure projects. The Swiss population voted maybe 15 years ago and said yes to this fund, and they said yes to how to finance the fund.

Now I will say something about the fund, le fonds pour le trafic public, which is very important in Switzerland.

At the moment we're having a discussion about it, because we want to

keep the fund.

When we introduced it, it was just for a short time. Now we would like to install it as a fund for the rest of our lives. This fund for public transport, le fonds pour le trafic public, gets the money from

taxes on mineral oils.

We have the VAT, the value added tax.

So a part of the tax, la taxe sur la valeur ajoutée, goes into this fund.

The third thing is that we have a tax

on lorries, the big lorries that pass through Switzerland.

Whenever the lorries come into Switzerland, they have to pay something. Also, part of this tax, the lorry tax, goes into the fonds pour le trafic public.

So we have a stable fund. This is an important thing in Switzerland. We don't have a bunch of discussions every year, but we finance public transport and the big projects out of these funds.

As for where the money is going, I won't say more about this. Maybe you will have some questions later. One of the main issues is that we have two funds. We have one for infrastructure, for projects in the cities and in the agglomerations of the cities, and the other is the fonds pour le trafic public, which is made for the big infrastructure projects of the railways.

Then we have the funding for traffic, the operating costs.

Here, you can see where the budgets are going. One important thing, which you can see on page 9, is where the subsidies are going. We have subsidies for regional transport at about 19%. We have city transport subsidies at about 16% overall. We have rail freight transport at 3% overall and infrastructure at 62%.

Also, there are express train lines are the trains that are going very, very far. They don't get subsidies because this is the only place where we really get money. With the express lines--the trains that go far--we get money, but for regional transport we don't get money. The customers are paying for the service of express train lines and we are getting the money, but when we offer regional transport or transport in towns and little villages, we don't get enough money, and therefore we get subsidies from the state of about 50%.

So there are no subsidies for express train line services and of course no subsidies for tourist facilities.

I would like to point out one last thing, which is the close cooperation between the public transport companies in Switzerland. You can see an example on page 11. If one goes from Engelberg to Appenzell--these are two very nice tourist regions in Switzerland--and you pass through Lucerne, the cultural city of Switzerland, you have to use six different railway companies. But you have just one ticket, so you have just one price. We have a kind of subsidized price. If you were to total all the distances, the real price would be 39 francs, which is maybe 30 euros at the moment, but the real price you would have to pay is 29 francs, so it's 10 francs cheaper.

We have the idea that we have less revenue per ticket but higher total revenue through more rides. This is one very important thing. It's very easy. You have one timetable in Switzerland and you can watch all the timetables for all the companies. You can buy one ticket for everything. I think this is one of our success factors.

The last point is our challenge for the future. We have to finance more infrastructure projects and also the maintenance of the infrastructure, so we have to get more money for more projects. Of course, public transport is in competition with other tasks, so we need to have discussions. We have to convince Parliament and the government that it is necessary to invest money in public transport.

At the moment, we're discussing our policy on tariffs, because we know users will have to pay more. This is one of our big challenges. We have the challenges of liberalization and regulations. We will have bigger liberalization, but liberalization and regulation are twins: if we have more liberalization, we get more regulation.

All in all, public transport in Switzerland is a success story. It's appreciated by the people, by the customers and the commuters.

This is very brief—it's the most important points—and of course I'm ready to answer your questions.

[The Chair, Conservative, Merv Tweed]

Thank you very much.

We'll now go to Ms. Chow for seven minutes, please.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Thank you.

On pages 5 and 6, you indicate that both the federal and the cantonal governments are ordering transport service. Can you clarify what the difference would be? One would be ordering the rail lines and the other would be for local transit: is that how it's different?

[Mirjam Bütler]

Yes, that is the difference.

The federal government orders from the federal railway, which is mainly the SBB. This is the most important and the biggest company in Switzerland. It's the Swiss Federal Railways.

The cantons order from the companies they own; they order from the cantonal companies, but also the communes. Of course, they work very closely together. For example, the offices on the federal level and the offices at the communal level work very closely together. They discuss it together and they make plans together, but in the end it's the Swiss government or the cantonal government that decides about the money.

If it's a small sum, it is the government. If it's a very big sum, it's up to the parliaments of the cantons or the Parliament of Switzerland.

[Olivia Chow, NDP, Trinity—Spadina, ON]

So how does the funding work, then, not for the rail but for the...? You say that the cantonal government pays 50% of the cost and the other 50% would be from the users. On page 7, I see that you have the federal public transport fund and the infrastructure fund. I assume that the transport fund is controlled by the federal government. Or is it controlled by the...?

[Mirjam Bütler]

Yes.

[Olivia Chow, NDP, Trinity—Spadina, ON]

It's controlled by the federal government, so...?

[Mirjam Bütler]

It's both.

[Olivia Chow, NDP, Trinity—Spadina, ON]

It's both federal and cantonal.

So how are these two funds set up? What triggers the payment? If I'm a cantonal government and order a lot, am I spending mostly federal funds or cantonal funds also? This is a roundabout way to ask how you come up with a funding formula to make sure there's long-term, predictable funding.

I see that you get it through the infrastructure fund and through the federal public transport fund. Then, of course, there is the tax on mineral oils. But focusing on those two, who can access them? Is it a joint decision by the federal or cantonal government or is it just the cantonal government?

[Mirjam Bütler]

Well, both of the funds, the funds for infrastructure and the fonds pour le trafic public are both federal funds, but they get money from different places. As I said before, the fonds pour le trafic public gets money from the mineral oil tax, from the lorry tax, and from the taxe sur la valeur ajoutée, the TVA.

The infrastructure fund is also a federal fund, but the cantons are paying into the infrastructure fund because it's mainly the cantons and the city that profit from this fund. They pay into the infrastructure funds, and then they make plans. For example, all the cantons make a list of where they would like to invest the money from the infrastructure fund.

The money is allocated to projects in cities and agglomerations. If you have, for example, a valley, and you wanted make a bus office in the valley, it's not paid for. The money from the fonds d'infrastructure is just for infrastructure projects in cities and agglomerations.

The cantons make a list and, of course, all the cantons are putting many projects on this list because they want to get the money. Then the Swiss Parliament discusses these projects. They discuss where they would like to invest the money. For example, is it better if it goes into this project in the city of Berne, or is it better if it goes to Geneva, which also has a big need for projects?

They discuss these projects. As you can imagine, they are big discussions, and the cantons make different coalitions because everyone wants to get the money for their project. Normally they make a list and they try to get as many projects on the list as possible. It's the cantons that are making the lists, but it's the Swiss Parliament that discusses the list and says that the money goes to this or that project.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Is the fund governed by a formula so the money naturally flows into this fund or is it subject to approval every two years, five years, or ten years?

[Mirjam Bütler]

It's subject to approval every fourth year. At the moment, we are discussing changing this formula. For example, we will have a parliamentary discussion on the Swiss level about the fonds pour le trafic public, and there will be some big changes.

The office of public transport of Switzerland wants to make packages. They're making packages for the fund; the first package is to be 3.5 billion Swiss francs. Some projects will be in this package. Now, they're taking a long-term view, so we will have a long-term view on the first package, which will be discussed next year, but we will also have a long-term view on the second and the third package. We're not only discussing money; it's very concrete, and we're also discussing packages and projects that are to be realized.

[The Chair, Conservative, Merv Tweed]

Thank you.

Monsieur Coderre.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you very much.

Madam, is your name pronounced “Bütler”?

[Mirjam Bütler]

“Bütler”.

[Denis Coderre, Liberal, Bourassa, QC]

“Bütler”, as I thought. You must have noticed my accent. I am a member from Quebec.

We are always a bit sensitive to the complexity of decision-making processes. We are not big fans of referendums here, but we believe in participatory democracy.

Does the intricacy of your integrated system, which consistently respects the principle of participatory democracy, not hinder the decision-making process when you want to initiate projects? With your very intricate system, how do you actually make things work when you are constantly under this type of pressure to set up projects?

[Mirjam Bütler]

First, I think the Swiss people are used to the democratic process.

[Denis Coderre, Liberal, Bourassa, QC]

Well, yes. Ha, ha!

[Mirjam Bütler]

In the papers and in discussions, we talk about concrete projects. Let me give you an actual example of a project in Bern. We wanted to create a new streetcar line in a developing region. The planning for that region is crucial. For example, we built a big shopping centre and we added a pool. There was a bus every two minutes in that region. You can imagine that it was very difficult to use the bus line in the city because of traffic jams, especially since the bus had to go by every two minutes. So we decided to build a streetcar line. The ideas materialized within companies. It was the City of Bern's company, Bernmobil. How should I say it?

Well, the City of Berne owns Bernmobil.

We then contacted the heads of the canton. They were as convinced that something had to be done, because there were so many people on the buses. They were really packed all day long. So the City of Bern, the canton of Bern, and Bernmobil sat down and came up with a project.

[Denis Coderre, Liberal, Bourassa, QC]

Participatory democracy is the ratification of guidelines agreed on by all the players. That's also a part of it.

[Mirjam Bütler]

I didn't understand.

[Denis Coderre, Liberal, Bourassa, QC]

I'm sure it's because of my accent. Ha, ha!