Transport Committee on June 12th, 2012

[The Chair, Conservative, Merv Tweed]

Good morning, everyone, and welcome to the Standing Committee on Transport, Infrastructure and Communities, meeting 43. Orders of the day are pursuant to Standing Order 108(2), a study of innovative transportation technologies.

Joining us today from the Railway Association of Canada is Michael Bourque, president and chief executive officer; from the Canadian Pacific Railway, Mike Roney, general manager, technical standards; and from the Canadian National Railway Company, Dwight Tays, chief, engineering technology.

Michael, I know you're going to open with comments, so I'll open the floor to you, and then we'll move to questions from the committee.

[Michael Bourque, President and Chief Executive Officer, Railway Association of Canada]

Thank you very much, Mr. Chairman.

I'm delighted to be here. I think it's fantastic that this committee is taking the time to look at innovation and technology across the transportation sector. Of course, I don't understand why you'd want to talk about any mode other than rail, but I understand.

I'm going to speak very briefly; I have the pleasure of being flanked by two real experts from our industry.

I'm going to kick things off by repeating something I have found in my short time as president of the Railway Association, and that is that we are currently enjoying a real renaissance in rail in this country. And renaissance is the right word because of our tremendous history in Canada, where we have the privilege of living in a country that was built by a railway and not by a rebellion. We now are enjoying tremendous growth and competitiveness in the railway sector that we have not seen before.

We also enjoy tremendous public support. We recently did some survey work through Leger Marketing, and fully 93% of Canadians believe the railway sector is critically important to the Canadian economy.

The Railway Association of Canada represents the industry. People always ask me if I have two railways, and maybe I've perpetuated that myth by being here with CN and CP, but in fact we have 55 railway members currently. We also have an affiliation with the whole supplier industry. It's a significant industry when you mark it all up.

We have 40 short-line railways in this country, and each and every one of them is an amazing story about how we move products.

I always like to show this map, because it really tells the story of our industry. We have a tremendous coast to coast reach. As you can see, we are moving products into the United States. We obviously represent North American integration in terms of our supply chain logistics, all the way down to New Orleans. We have 1,100 trains a day moving freight. We contribute $12 billion to the economy in Canada annually, with 35,000 employees.

On that note, I'll turn it over to Mike, who will talk about the innovation and technology of the industry.

[Mike Roney, General Manager, Technical Standards, Canadian Pacific Railway]

Thank you very much.

It's great to be here.

When I joined the railway as a young engineer in the seventies, my friends thought that was kind of crazy. At that time, of course, a locomotive would pull into a station and the locomotive engineer would pick up a piece of paper. That was his authority to move to the next station. It seemed fairly antiquated, and who would have thought you could make a 30-plus-year career out of that sort of thing? How wrong my friends were.

I have had a lot of fun over the years, being an engineer, working in an industry that always had an inherent ability to use technology. Of course, with trains there's a lot of potential for automation. I'll talk a lot about the potential for diagnostics, and of course the inherent energy benefits from steel wheel on steel rail. Obviously Warren Buffett understands all of that.

All we really needed was the 1996 Canada Transportation Act to give us revenue adequacy and allow us to invest in these various potentials, and that's exactly what the railways have been doing. We've been investing in next-generation technologies that have made us the North American leader in safety, and will continue to be; that have given us the service reliability that our customers are willing to pay for; that have continually reduced the dollars per gross tonne kilometre, which has enabled Canada to be competitive in global markets, on bulk commodities in particular; and that have given us the capacity to grow with the growth of Canada's business.

I'm going to talk about four prime technology streams that we are working on and are very excited about. The first one is trains with locomotive power distributed throughout the train. The second is automated inspection technologies that are turning our finders into fixers. The third is predictive technologies and the data management that goes with it. The fourth is electronic instantaneous application of brakes.

First, talking about predictive technologies and data management, this is the modern way to predict problems before they develop. We are trying very hard to produce an environment where we know signs well in advance of things happening that may require us to schedule to move a freight car into a depot, a locomotive into servicing, or a work order to dispatch a crew to do work on a section of track. We are trying to find things before they become service disruptions. We are trying to find things in particular before they might ultimately produce an incident.

We're doing a pretty good job of that. CN and CP are the most aggressive together of North American railways. We have 13 different types of wayside inspection detectors. Between us we represent 40% of the intelligent detection network in North America. These detectors provide early warnings of weaknesses and monitor the network for any sort of a developing condition requiring maintenance.

There are many examples. We have detectors that can detect overloaded cars or unbalanced loads. We have detectors that can tell us if a wheel is too hot or too cold—in other words, if the brakes are being applied too hard or the brakes aren't functioning as they should on any particular axle. We measure impacts of wheels on multiple locations across the property. Those give us early warning signs of potentially damaged wheels. We can measure wheel wear at track speed. We can measure brake shoe wear.

Of course, we have always been able to measure whether bearings are getting hot and potentially going to fail, but now we're a lot smarter about that, because we network these together. We have prediction algorithms that allow us to predict when an incident might occur. It gives us lots of time for planned maintenance.

These real-time data streams together in our network management centres and in our maintenance depots give us what we call a “digital railway”, where data flows continually to guide preventive maintenance and fluid railway operations.

The second technology I am going to talk about is distributed power. Distributed power means our ability to put locomotives in two to four positions within a train. It gives us much better control on that train, much better overall control of forces, the longitudinal forces that go back and forth between the train, and also reduces the stress state in general of the railway.

We find this is a very important technology for us, particularly in the Pacific gateway, because we need to lift trains through three mountain ranges to get down to the port, whereas some of our global competitors have a much gentler time of it. They release the brakes and away they go. But because of that, by necessity, we have become experts in the world in the use of distributed power remotely controlled from the lead locomotive.

It means our trains are more productive and less destructive. It gives us enhanced locomotive and labour productivity. Very important for Canada is that it enables cold weather operation, because locomotives at different points in the train help us to recharge our brakes, thereby reducing the likelihood of sticking brakes and potential broken wheels. It also improves fuel efficiency and creates capacity for us.

A final one I won't have time to talk to is ECP braking. That's the instantaneous application of brakes throughout the train. That technology is very promising. It gives us shorter stopping distances, it can help us in capacity, and it has a fuel consumption lift.

Now over to Dwight Tays of CN.

[Dwight Tays, Chief, Engineering Technology, Canadian National Railway Company]

Thanks, Mike. I appreciate that.

Mike mentioned his 30-plus years with CP. I have to say that with 34 years with CN, I'm a career railroader as well, and I certainly share his passion for the industry.

Regarding environment and sustainability, from a modal perspective, the rail industry is well recognized as a leader in environmental responsibility. As Mike mentioned, steel wheels running on steel rails experience very low resistance. This, in combination with lower grades, enables railways to achieve outstanding fuel use. A locomotive can transport one tonne of freight 180 kilometres on one litre of fuel. In addition, 280 truckloads can fit on the average train, which reduces overall greenhouse gas emissions by 75% and significantly reduces wear and tear on the nation's highways.

In spite of these already impressive numbers, railways continue to invest in research and technology to improve fuel economy and reduce emissions. The rail industry recognizes its responsibility to the environment. In addition, we realize that a greener railway makes good business sense.

Fuel is a major expense for the rail industry, and we work very hard every day to reduce consumption and maximize the value we realize from every litre burned.

From this slide you see that we continue to invest in newer, more fuel-efficient locomotives, and that we have reduced greenhouse gas emissions by 31% since 1995.

I'll talk a little about sustainability. The railways are actively investigating alternative fuel sources, and to date we have done some preliminary testing with diesel biofuel alternatives. I believe some winter testing was done by CP between Calgary and Edmonton to validate the operability of this fuel in our harsh winter conditions.

In addition, we're also actively pursuing a test to validate the feasibility of using liquefied natural gas as an alternative to diesel fuel. This evaluation is in the early stages, but if the testing proves successful, it could be a major step forward for the rail industry. We anticipate that use of liquefied natural gas would enable an approximate 20% reduction in emissions, as well as a significant reduction in particulate matter, and all at lower cost to the railways.

In addition, by using a dedicated tender tank car, we would be able to operate trains from Toronto all the way to Vancouver without refuelling, thereby delivering significant operating benefits.

These are only two examples of some of the innovative work that's ongoing as part of our sustainability drive. We believe sustainability and efficiency are not exclusive, and in many cases the more sustainable solution can also generate operating cost efficiencies.

Sustainability requires that we review and in some cases realign our entire supply chain, as well as all the processes and procedures we use to service our customers. This is a significant commitment on the part of the rail industry, but we believe this is the right path for us, and the path that best ensures a viable and sustainable future.

In addition to the many other technologically related research items we've already talked about, I want to talk a little about the collaborative railway research initiative ongoing at this time. The recent Railway Safety Act review identified a number of recommendations directed at rail research and development activities in Canada. As a result of these recommendations, the Railway Research Advisory Board, which had been in place for a number of years, was reorganized to create a separate management and technical committee.

Mike Roney chairs the technical committee and I'm co-chair of the management committee. Both committees have representation from industry, government, suppliers, and academia. The technical committee's task is identifying and prioritizing research opportunities, while the management committee assumes responsibility for setting general research priorities and ensuring adequate resources are available from both industry and government to enable the required research to happen.

Since this reorganization, considerable progress has been made in developing streamlined research, evaluation, and prioritization processes. In addition, there has been an improvement in the coordination of research activities and consolidation of funding from industry and government.

I'd like to close with one quick comment on what I think is one of our major successes. Recently we've opened a new railway research centre at the University of Alberta in Edmonton. It is jointly funded by Transport Canada, CN, CP, and the AAR, and has recently been granted an NSERC industrial research chair in railway geomechanics.

We have a number of research programs ramping up at this new facility, and I believe this is a major step forward for rail research in Canada. It will also prove to be a key venue for educating and training the next generation of railway engineers and researchers.

With that, I'll turn it back to you, Mike.

[Michael Bourque]

Thanks, Dwight.

Mr. Chairman, I'm mindful of the time, so maybe what I'll do is just skip to our last slide, which is a conclusion.

I again thank the committee for taking the time to look at innovation and technology. This has been a very quick snapshot of the kinds of investments our industry is making. We are very engaged in information technology for a range of uses. We're collaborating with government, and we want to continue to work with government in a collaborative way. The other point I would highlight is the fact that we're making these investments in a voluntary way as part of our own striving for sustainability and efficiency. In many cases, we're enhancing the use of rail, which prevents further traffic from travelling on public highways and public infrastructure. We'd remind the committee that the rail sector is a privately funded sector that pays for all of its own track and maintenance, and even policing, which is obviously a lot less of a burden on government.

Thank you very much, Mr. Chairman. We'd be happy to entertain questions.

[The Chair, Conservative, Merv Tweed]

Thank you.

Ms. Chow.

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

We know the electric train works. It works in a lot of countries. I've been on them. They are fast, smooth, clean, precise. I just don't understand why CN, CP, VIA, or any other company, Mr. Bourque, that your association represents....

What's the barrier in Canada that prevents freight or passenger services from using electric trains? Is it the tracks? We have the technology. It's made by Bombardier, a Canadian company.

Why aren't we using them?

[Michael Bourque]

It's a good question. Why don't we start from an engineering perspective. It will probably be more enlightening.

[Mike Roney]

I agree. Yes, the technology is there. We have done studies in the past and convinced ourselves that with some issues.... If you're trying to, for example, use electrification adjacent to non-electrified lines or mix commuter rails with freight rails, some things still need to be worked out there. But by and large the technology is there, and the only real barrier to us is that it's a huge capital investment. It's an investment that we haven't really had the right environment yet to do, and—

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

In terms of the right environment, I just want to drill down on that. I can understand CP, having had recent discussions with the hedge funds in the U.S., but CN has a $3 billion profit, or something of that nature; it's substantial.

In terms of the capital budget, certainly you would have the financial muscle to do that kind of investment.

[Dwight Tays]

To Mike's point, the technology is there. There is a major investment requirement to electrify a piece of track. There are also the complexities that go with trying to operate some trains electrified and some trains diesel-powered. You can't just turn the switch one day and suddenly you're electrified.

The other item that would be a concern from the industry's perspective is that we're not on an island; we're not isolated. We have to interchange with the American railroads and everyone else, so there are also the interchange issues we'd have to work our way through.

But I think the major stumbling block would be the huge cost to electrify our rail infrastructure.

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

Mr. Bourque, were you answering the last one?

[Michael Bourque]

Thank you.

You asked also about commuter rail. It's an interesting history we have. When my grandfather was the mayor of Ottawa, he was instrumental in purchasing the Ottawa Electric Railway, which became OC Transpo. We went into busing, ripped up all of our rail lines. Now, back to the future, we're putting them back in. I spoke to the general manager of our only light rail here in Ottawa, and he's also working on the project to bring in the new rail system here. Believe it or not, his biggest concern is that they'll be at passenger capacity on opening day.

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

Wow. That's a good problem to have.

[Michael Bourque]

Yes, it's a nice problem to have. I think it shows the support for rail.

But just to answer your question specifically, I believe there's a lot more scope for electrifying commuter rail first, but of course those things require public investments. Part of the importance of looking at the rail industry and at the innovation and the technologies available, certainly from a public policy standpoint, is for people to understand that when we make those investments as a society, there are benefits that flow to all of society.

First of all, people will use the trains when they're built. If you talk to the general manager of GO Transit, he'll tell you that when he puts a new car on, within two weeks it's full, and the complaints start up again that there's no room. He has gone, in 10 years, from a capital budget of about $100 million to over a billion dollars in capital budget.

So when you build it, they will come. I think where you want to look for electrification to the extent possible, there are also a lot of challenges there with interchange and everything else, but that's probably the place to start.

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

If I'm looking at the direction the Americans are going in—and I know that increasingly at CN you're doing more and more train services in the U.S., and that's in fact where a lot of your profit comes from—I see that they are going towards electrification more and more. There seem to be quite a lot of capital budgets being put in to do that. Do you foresee that in a few years' time there would be electrification, at least in freight services, in the U.S.?

[Dwight Tays]

I really can't speak too much for the U.S. railroads. I know there's a lot of push for electrification on passenger lines. The northeast corridor is a good example, with Amtrak. I'm not aware of a lot of major freight traffic or freight roads or rights-of-way that are being electrified in the U.S. They face the same hurdles we would face in terms of the infrastructure investment costs to make it happen.

But to Michael's point, I think that on the commuter side, if you have a dedicated right-of-way, which seems to be more and more what's happening, the opportunity to electrify does make some good sense.

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

So really it makes a lot more sense to start with the passenger, right? All three of you agree that—

[Michael Bourque]

Within cities.

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

In cities rather than freight?

[Michael Bourque]

Yes. The other thing to keep in mind is that in freight our story in Canada is that we are moving 72% of everything in this country, and yet we have 3% of emissions for the transportation sector, so we're already a tremendous sustainability story. If anything, what we need is to move more freight onto rail and off our roads, which are more polluting, more costly to the taxpayer, and represent a higher safety risk.

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

Speaking of safety, your favourite subject—railway crossings. It's a joint responsibility between municipalities and rail companies. Do you have any insights as to what kinds of improvements can be made to improve the safety components of the crossings, like providing more warnings to motorists, thereby possibly avoiding accidents, deaths, and collisions, especially given that you have some technologies that could be used for advanced warnings of some kind?

[Michael Bourque]

Thank you.

I actually really appreciate that question. I'll say again that I'm relatively new to the rail sector. There's a tremendous safety culture within the rail business and our safety record is fantastic, but where our safety record is not great is really in those crossings and in trespassing, where the public intersects with rail. It's very difficult for us to control. I think the simple answer to your question is that we need a lot more closings of crossings in this country.

In the old days.... Part of it is our own understanding of rail and the way we think of it, and what it used to be like when you were using a piece of paper to go from one place to the next. It's no longer a back road. It is a highway. It is a superhighway. We need to get people to think that they shouldn't cross the tracks nonchalantly any more than they would walk across the Queensway.

So if we can close more crossings, then we can invest in the crossings that are open and make sure that they're properly signalled, that they have good visibility, and that people are aware of them. If we do that, we're going to see a significant decrease in accidents.

[The Chair, Conservative, Merv Tweed]

Thank you.

Monsieur Coderre.

[Denis Coderre, Liberal, Bourassa, QC]

I'll come back to that. Don't worry. Safety is also a major issue for me.

You have many types of detectors, as we see in your slides. Do you have a fatigue detector?

You referred to human resources. Human resources management is important. Without getting into the labour dispute at Canadian Pacific, I would like us to discuss the human aspect. You cannot just have detectors all the time. What are you doing?

Mr. Chair, people are constantly chatting when I am asking questions. I am starting to get sick of it.