Evidence of meeting #27 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was trucks.
A recording is available from Parliament.
Conservative
Ed Holder Conservative London West, ON
Why would you make that decision, with the lack of availability as it is, when you could just as easily have gone to diesel fuel?
President and Chief Executive Officer, Groupe Robert
It's like when you're pregnant: you have to go to the end.
Conservative
President and Chief Executive Officer, Groupe Robert
Once you're in it, you realize you have no way to turn back. When we made the decision initially, I don't think we were told the whole truth, but we discovered the truth, our route, going forward. Now we know that to make it a viable solution for our company, we need to have about 125 to 150 trucks running all the time.
Now we have the people from Midland and Day and Ross approaching us. They want to work with us, trying to develop a network from the Maritimes to Toronto. You've got a lot of other people. You've got the railway, which is going to have locomotives running on natural gas before we have gas stations refuelling our trucks in Rivière-du-Loup, I'm telling you.
Just to illustrate, right now we do not have the support to put in the network, so it's like the chicken and the egg. The owners don't want to buy the trucks because they don't have the gas; on the other hand, they don't want to put in gas stations because they don't have enough trucks to support them. We found out ourselves the hard way, and it cost our company a lot of money, but we were into it, so what could we do?
We begged Peterbilt, our supplier of trucks, to build more trucks, but their slots were full. They had sold 1,000 trucks. They can manufacture them at about a truck a day, and they've sold 1,000, so when I want to get 25, I have to call the president and I have to bang on the table. I told him he's selling trucks today because of me, so he ought to give me 25 more trucks. That's how I get my trucks.
That's why I'm looking for another supplier of trucks; otherwise, we are done. Even if you want to order 500 trucks tomorrow, good luck; maybe they'll be available in 2015.
Conservative
NDP
Jamie Nicholls NDP Vaudreuil—Soulanges, QC
Thank you for being here. I found your presentations very helpful.
Mr. Robert, your remarks were very heartfelt. I am quite impressed. My father was a truck driver most of his life. He always wanted the same thing as you, a better future for his sons.
Can you tell us a bit about Groupe Robert's partnership with Gaz Métro and the Quebec government?
I believe the goal of the project is to establish the first liquefied natural gas-fuelled freight transportation corridor. What did you do to get a project of this nature off the ground?
President and Chief Executive Officer, Groupe Robert
First off, negotiations with Gaz Métro were quite tough. They had a big advantage: the only liquefaction plant in eastern Canada. There aren't many in Canada, as you know. The plant is used to liquefy natural gas solely for Quebec's heating needs. It provides gas to heat Quebec. It is important to understand that the liquefied gas is restored to its natural state in the winter and delivered through pipes. That is how homes are heated. This liquefaction plant costs hundreds and hundreds of millions of dollars, but it just idles seven months of the year.
So, from Gaz Métro's standpoint, this was a worthwhile endeavour. As you know, in a year, just one truck uses as much gas as roughly a thousand homes. Gaz Métro saw a lot of potential in this. They realized it could extend beyond road transport. It could apply to ferries in Quebec, among other things. As for locomotives, it won't be long before they run on natural gas; it is simply a matter of time. Without realizing it, we opened the company's eyes to a new market. This is an important project to them, but they don't want to invest in a system without the trucks, and we won't have the trucks if we don't have the system.
Two weeks ago, I was in Quebec City with Sophie Brochu. I told her that she had to use stations to attract drivers. If you tell them that a station will open on a specific date, they might buy 10 trucks. If you have a public station, more people will fill up there, a lot more than I would at my own station. In our sector, you depend on yourself; you can't depend on others. And yet, all truckers fill up at a public station, so the gas isn't lost. Otherwise, it evaporates and that causes problems.
I am, of course, putting a lot of pressure on Gaz Métro, which will need a lot more help. My worry is that giant U.S. producers and distributors will swoop in and capture the market. As a public utility, Gaz Métro has to operate within certain parameters, just like Hydro-Québec, but you know exactly what I mean.
In the commercial and retail world, it is a completely different story. You have to adapt. This is ridiculous, but a driver is not going to get off at exit 114 to fill up and then get off at exit 122 to eat and shower. The gas station has to be in the same place as the truck stop. It is silly to say, but it's just plain common sense.
You have to give a project like this commercial appeal. If you buy a car, are you going to buy gas from a station in the middle of nowhere, where there isn't a sole around? Of course not, you will go someplace with a Tim Hortons and you'll buy a coffee and a chocolate bar. That is how people work. Truckers are people too, no different. They have to be treated as such. They want to fill up somewhere with services. Otherwise, it won't work.
You have to partner with other organizations specializing in retail. That is the only way to sell natural gas. Everyone has their speciality. If someone asks me about steel products, I cannot give an answer because I don't have that knowledge. I am better off partnering with someone who makes steel. I don't have the capacity to manufacture tires, I prefer to buy them from Michelin, whose job it is to make them. The same goes for us. The same goes for gas. We need experts in distribution, networking and so forth. That's the way to make things better. Right now, that is not happening.
Conservative
President and Chief Executive Officer, Groupe Robert
All together, we're working hard.
Conservative
President and Chief Executive Officer, Groupe Robert
The economy is slow. What is going on are the big projects like mining, this and that, but the economy itself.... A good measure is to look at the LTL, the loads that are less than a truckload. As you know, right now there are many more imports coming to Canada from the States than manufacturing from Canada going to the United States.
What is going to the United States? There are a lot of commodities—for example, petroleum from the west. Sure, there's still some lumber, there's a little paper, there's this and that, but there are very few manufacturers. In their principle of consolidation the Americans have brought back a lot of manufacturing to the United States, so Canada has lost tremendously.
For the trucking industry, all the concerns we used to have about export borders and things like that are not present. I hope manufacturing will come back; manufacturing has to start a comeback. We need to process our goods in Canada. We need to process our aluminum, our zinc. We need to add value in Canada in all the commodities. We need to stop exporting all these goods. It looks good on the balance, but in reality this does not create jobs for the service industries like us.
Conservative
President and Chief Executive Officer, Groupe Robert
We used to have over 40% to 45% in the U.S. We are now down to about 20%, and the rest we have diversified to go into other industries. We were able to concentrate on truckload and LTL going to the United States and Canada before, but today the truckload and the LTL represent less than 50% of our gross sales. It's specialized tankers, dump trucks, flatbeds.
It is stupid. We used to have three glass companies in Canada, but if you want to break a glass, you know you're going to break an American glass. It's clear, because they shut down the three plants. We carry glass, but now we pick up the glass in the United States. All the glass you use in Canada comes from the United States. There is some from Europe; it's very specialized. Other than that, there's no glass in Canada.
It's the same for a lot of things. That's a little picture of what's going on.
Conservative
President and Chief Executive Officer, Canadian Trucking Alliance
We have more than 4,500.
Conservative
Mark Adler Conservative York Centre, ON
Has that gone up or remained steady over the last few years?
President and Chief Executive Officer, Canadian Trucking Alliance
It's remained more or less steady. People who belong to trade associations or companies tend to be a little better at running their businesses than those who don't. The industry has seen a lot of capacity leave the marketplace through business failure and, in the last year, through merger and acquisition activity.
From a business perspective, Claude is absolutely right in saying that things are slow, but there is more of an equilibrium in terms of the capacity and the volume than perhaps there was in the past. Because we've gotten rid of capacity, we're hanging in there.
I think we can remain optimistic about trucking. It may shrink as a sector, and it certainly has in the last few years, but whatever moves, whatever people consume, we will ship.
For 20 years our growth was stateside, moving south, and that market has.... Well, it started prior to 2008, when we saw the dollar appreciate by about 20% six or seven years ago. We could see the shift in the economy before the economists did, and it's going to be hard to come back.
The northbound marketplace is, oddly, relatively strong. Things have sort of turned on their head because the Americans are producing, and Canada's been a good market for them with the problems they've been having in their own marketplace. As a result, there are opportunities to bring freight back from the U.S., but you have to have a truck down there in the first place, and we still operate under some very archaic cabotage laws in terms of what you can do in the other country. To have a truck that just happens to be within 50 miles of that load that's coming north is problematic.
Conservative
NDP
Mike Sullivan NDP York South—Weston, ON
Thank you, Mr. Chair, and thank you to our guests. It's been a very lively and engaging discussion.
Monsieur Robert, looking through your windshield, you correctly pointed out that liquefied natural gas is perhaps the next thing, but what comes after that? We have to reduce our greenhouse gas emissions by not 25% but 75% by 2050. I'm intrigued by the notion that we can take liquefied natural gas and extract hydrogen from it before we burn it, which then produces zero greenhouse gases.
Do you see that as the natural evolution of the vehicles, from taking liquefied natural gas and burning it with carbon dioxide to taking natural gas and extracting the hydrogen? Is that 30 years ahead?
President and Chief Executive Officer, Groupe Robert
I would like to tell you that it's not that far. To be frank, the technology is coming fast. That's why I keep telling my counterparts in my industry we have to move now, because there's going to be a new technology tomorrow. If you don't move now, you're stuck for the next 15 years with an old technology. We can't afford to trade in the trucks and trailers every two or three years. Our business does not allow that.
Carrying cryogenic gas on our trucks is one way to get to tomorrow. Maybe tomorrow will be more creative. Right now, we have a problem of autonomy. We don't carry enough gas on our trucks. Maybe eventually we will have a tank under the trailers that we can plug into the truck, which will allow us to get the natural gas into the truck so that we can carry more and have greater autonomy, and that way we can get into the boonies without a refuelling station. Right now, we can't do that.
To answer your question, I strongly believe that with the creativity of the research people doing this, from what I've seen it's not that far away. It may take longer to commercialize it, but for a lot of people, unless you have to change, you don't change. People are not enthusiastic about changing for the sake of changing. They want to change because they are forced to change. Eventually, I believe, I will have a museum of old trucks; maybe one of these days I won't be able to run them anymore because I won't be able to get fuel to put into them. You understand? They may be worth nothing.
I used to have an iPad 1. My grandson took it. I got an iPad 2, but now my granddaughter wants it, so I'll have an iPad 3 soon. Just to illustrate, in a year's time, we went through three iPads. What are we going to go through in terms of technology is a very good question. My feeling is that natural gas is the first step to get into a new type of gas. As soon as you get into cryogenic tanks, you have gone to step number one. Are we going to have combustion engines tomorrow? Are cars going to be like a locomotive, just an engine running on generators and batteries, with electricity powering the wheels? Probably.
If you go to Europe, you can see this. If you go to Hanover, you will see buses running 100% on electricity, with a small engine at the back that starts if they need it. It's a small generator. They just recharge the batteries so that they never run out of power. The engine is that low. That's all it takes.
President and Chief Executive Officer, Canadian Trucking Alliance
We're not far from the hybrid electrics now. Class 6 and 7 trucks are pretty much there; the class 8s will come.
President and Chief Executive Officer, Canadian Trucking Alliance
Well, class 8 is your big, heavy tractor-trailer. As you go down classes, it's a weight class, so they're the smaller trucks.
