Evidence of meeting #7 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 services.
A recording is available from Parliament.
3:50 p.m.
NDP
Isabelle Morin NDP Notre-Dame-de-Grâce—Lachine, QC
On another topic, you have asked for provincial subsidies for your company. I guess you are in favour of federal grants from the gas tax fund. I also understand from your report that you want the Department of Finance to take action in order to guarantee services where there is a demand.
Could you tell me what your take is on the federal government's role in establishing regulations for a project like that?
3:50 p.m.
President and Chief Executive Officer, Motor Coach Canada
I want to clarify that. I don't think we asked for a subsidy. We're not asking for a subsidy. We're actually offering to return a subsidy to the government. We would operate it at a lower cost than the currently subsidized system. We're not looking for a subsidy or a break on fuel taxes. That's not part of what we're asking for.
October 19th, 2011 / 3:50 p.m.
Liberal
Denis Coderre Liberal Bourassa, QC
Good afternoon, gentlemen.
Earlier we were talking about safety. Are you saying that the public transit system puts people's lives in danger? Are you telling us that there is currently a safety issue with public services? I'm a bit worried about that.
3:50 p.m.
President and Chief Executive Officer, Motor Coach Canada
No, I don't think we're saying that at all. We're saying that we're comparable to the public systems.
Safety is always a relative thing. There's no such thing as a perfectly safe system. Today, as we speak, in the city of Toronto a debate is occurring about having mandatory drug testing for TTC drivers because of an incident in which a TTC driver allegedly under the influence of a narcotic caused an accident that killed a passenger. Would I say that it's an unsafe system? No, but I would refute the argument that it's any safer than a privately run company.
3:50 p.m.
Liberal
Denis Coderre Liberal Bourassa, QC
I am trying to understand, Mr. Switzer. I know that your role is to make a profit, and that's fine. Your job is to say that things will cost less with you, that you are going to give us more, and that you are much more competent than the current public system in terms of safety. That is what you said.
It is important. Your company's role and that of other transit companies is first and foremost to provide good service. So the issue of safety is extremely important.
Do you have any studies with you to show us that, if we chose to use your services under a PPP—public-private-partnership—your services would be much safer than those currently provided by the public sector?
3:50 p.m.
President and Chief Executive Officer, Motor Coach Canada
We can certainly give you information that they are as safe. I frankly don't want to get into a debate about which is safer than the other--
3:50 p.m.
President and Chief Executive Officer, Motor Coach Canada
No, actually she started it, by accusing us of being less safe.
3:50 p.m.
President and Chief Executive Officer, Motor Coach Canada
The point is that I don't think there is anything particularly ennobling about being paid out of the public purse or particularly demonizing about being paid by a private company.
3:55 p.m.
Liberal
Denis Coderre Liberal Bourassa, QC
I'm a Liberal, which means I'm at the radical centre, so I don't have any problem with profit and I don't have any problem with services. I want to make sure that the person who is receiving that service is safe, and if your goal is profit, I want to make sure that the service is inclusive, that everybody using a service has the capacity to have that service.
So the discrimination is not just based on your tax issue; it's a question of whether, if you have a monopoly or you are taking over a service, you will eventually have the capacity to raise those prices so that you will provide fewer services for those who are supposed to have them through public transit at a certain level. Okay?
3:55 p.m.
Liberal
Denis Coderre Liberal Bourassa, QC
And I'm not in philosophy, so we're talking about the real thing here.
3:55 p.m.
President and Chief Executive Officer, Motor Coach Canada
Absolutely, and again, we can provide the committee with information on the safety record.
But again, as part of our presentation, too, one of the areas of inequity, which I want to touch on just briefly, is that right now many of the public systems operate on lower safety standards than private carriers do. We have to do things that they don't. Basically, they have exemptions from some of the requirements--
3:55 p.m.
Liberal
Denis Coderre Liberal Bourassa, QC
That's an important issue, because at the end of the day the public sector is accountable. It's not the same accountability at the private level as at the public level, and that's why it's important that.... It's a kind of hybrid way now; it's not just a private thing or a public thing. If there's a PPP, there are some regulations that you have to take a look at and that you are bound by.
I want to make sure that everyone has access to the appropriate service so that there is no discrimination. I think that is what you mean.
What's the difference between service and profit? If you're saying you want to have the same fiscal approach as the public sector, you will still have a profit. You'll have a bigger profit. How do you guarantee that the money you make because of that will truly be reinvested in the services so as to have an impact on ticket prices for future users?
3:55 p.m.
President and Chief Executive Officer, Motor Coach Canada
Actually, I would answer that by going back to the accountability issue for a moment. The way you guarantee it is through the contract.
The process, to simplify it somewhat, is this. A municipality is currently operating a system that costs them a million dollars a year to run. They put it out for tender, companies bid on it, and they will now operate it for $800,000 a year. The municipality, in that contract with them, will set out the standards they must meet in terms of routes and fares. All of those service issues remain in the control of the municipality running the service. The municipality tells the operator that they must do this and they must do that. They set those service standards.
As to where the money is reinvested, the money isn't going into the bus company's pocket. The extra $200,000 in savings stays in the municipality's pocket. That's why I said the way that you spend the $200,000 is up to the government. You can use it to reduce your—
3:55 p.m.
Liberal
Denis Coderre Liberal Bourassa, QC
I'm new in this portfolio. Are there any studies already in existence or are there any examples of cities or areas in which you already have a PPP that is working?
3:55 p.m.
President and Chief Executive Officer, Motor Coach Canada
Yes. Trevor's firm operates—
3:55 p.m.
Liberal
3:55 p.m.
Chair, Board of Directors, Motor Coach Canada
As you know, we have intermunicipal transport boards or CITs in Quebec. That is exactly what happens in all Montreal CITs. The CITs say what service they want. They call private companies and ask for bids to find out who is going to offer the service at the lowest cost. At the same time, they are the ones deciding on the service they are requesting.
The private company has a three-year or a five-year contract, depending on each case. The company had better do a good job if it still wants to be there in five years. Otherwise, another company will be called in. Yes, it must make money and survive, but it also has to provide the service. If all it does is pocket the money without providing the service, it is not going to be there in five years. That is not the objective of a private company. The objective is to be there in five years and to keep on being there.
That is exactly what is happening right now, and those models are working very well.
