Evidence of meeting #3 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was million.
A recording is available from Parliament.
4:10 p.m.
Liberal
4:10 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
Sure, I guess I'll start with VIA Rail.
I want to dig a bit into the capital requirements. There's funding to address a $20.2-million shortfall.
Could you explain where this money is coming from and if it's outside of the Montreal-Ottawa corridor, which is also seeking a large sum of funds?
4:15 p.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
The $20.2 million is a re-profiled amount that reflects the fact that the projects took more time to complete, either because of difficulty with suppliers.... In the case of the LRC and the HEP car refurbishment, one of the suppliers went bankrupt. The other one, out of the U.S., was just long on delivery, and therefore the project went over by a year. That's why the amount is being re-profiled for that one.
The other one has to do with infrastructure projects on the Guelph, Alexandria, and Chatham subdivisions. Because of the peak right now in demand for railway work by our private sector competitors—CN, CP, and others—which are also doing railway work, contractors are incurring shortages in staff and capabilities. Therefore, the project has taken more time, because contractors don't have the staff available to do the work within the time frame allocated for these budgetary items.
4:15 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
With respect to the demand on the railway work, is that mostly on the actual track itself, or on the cars? For what kind of work are you experiencing a demand?
4:15 p.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
It's on infrastructure work, and there are two types. One is steel. Rail steel is in high demand in North America because of the growth of regional passenger rail services.
In the last five years, for example, GO Transit out of Toronto, has grown by over 21%, and they have acquired 83% of their network. Therefore, they are investing heavily in upgrading that capability and they need steel. Freight railways across North America are also demanding a high level of steel for their track infrastructure.
There are shortages on component parts, mainly steel for the tracks, and the manpower. Contractors who specialize in these fields are typically independent contractors, because over the last 20 years, the major players, the big railways, have divested those capabilities. They used to own their workforce, but they have divested over time and created this industry of contractors in railway works. That group of contractors is seeing a huge growth in demand for their services, and they have a shortage of skill sets.
When I go to engineering schools today and ask a class of 200 how many are planning to be in the railway business, as you could expect, nobody puts their hand up, because for the last 30 years, rail has not been perceived as a cool future or a cool career.
There is a shortage across the board with regard to the railway build and maintenance capability, and that's a North American phenomenon.
4:15 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
You mentioned as well that there's been an increase in revenue and ridership on VIA Rail's passenger services. Is this going to be significant enough to reduce the amount requested in the estimates, or is that not coming close to impacting it?
4:15 p.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
The increase is marginal at best. We are expecting to net out 35,000 to 40,000 new passengers in 2015. That's over a base of four million, so it's insignificant. On the revenue side we'll finish around $8 million better than our revenue forecast. Again, on a total budget of $600 million, it's negligible. On a revenue budget of $260 million, it's also quite negligible. That is because the improvements we can bring to the service, where cars are outdated, the time to destination is longer than it's ever been, and the on-time performance has deteriorated from 87% five years ago to 64% last year, is just not attractive to passengers.
4:15 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
Under the transport appropriations, one of the things that I wasn't clear on earlier was that under the capital assistance program, there's $7.6 million in play. Could you explain to me what the basis of that figure is?
4:15 p.m.
Associate Deputy Minister, Transport, Infrastructure and Communities, Department of Transport
Under the airport capital assistance program, we fund a variety of airports across the country, and we pay for safety improvements, usually on the air side of the airport rather than in the terminal building. A lot of this work is done in airports that are in more remote locations, so their construction period is somewhat limited and they haven't been able to complete their work. But we have an agreement signed with them, so what we're doing is taking money that wasn't spent last year and bringing it forward to this year so that they can finish their projects this year.
4:20 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
Is it a case-by-case assessment of the capital needs of each airport?
4:20 p.m.
Associate Deputy Minister, Transport, Infrastructure and Communities, Department of Transport
They submit a plan to us. Every year we have roughly $40 million to spend and they submit applications to us. We have criteria based on what the airport has to be. They have to have, for example, more than 1,000 scheduled passengers. They have to be a certified airport. Depending on the size of their airport and their ability to pay, we pay shared funding. They put a share, we put a share, and the projects are specified. They have to be safety-related projects. Every year we get a lot.
4:20 p.m.
Liberal
February 24th, 2016 / 4:20 p.m.
Conservative
Dianne Lynn Watts Conservative South Surrey—White Rock, BC
Thank you very much, and thank you for coming and being here today.
On the infrastructure, the $12.5-million capital land acquisition, there were some comments made around environmental assessments and all of these.... Is that directly related to the acquisition of the land? I would expect that you would do due diligence if there were environmental issues initially.
4:20 p.m.
Associate Deputy Minister, Transport, Infrastructure and Communities, Department of Transport
Some of that is for the acquisition of the right of way. That was Hydro-Québec's. When we acquire the land, we do the environmental assessments, but it's also the cost of relocating the hydro pylons out of that right of way. They have to move them, and we have to compensate them for those costs.
4:20 p.m.
Conservative
Dianne Lynn Watts Conservative South Surrey—White Rock, BC
My second question comes back to the almost $50 million here. You said it's used as needed for unforeseen events. How is that number arrived at when you determine what an unforeseen event is? How do you come to precisely $49,310,925?
4:20 p.m.
Associate Deputy Minister, Transport, Infrastructure and Communities, Department of Transport
It's a little bit hard. It's an estimate that we try to come up with. We know roughly what the ongoing work is, for example, on the environmental front and how much it's costing us. Some of them we can cost. Some of it is a forecast of what could come and how much we will need per year. It's a number that's partly based on numbers we know, partly on an estimate.
4:20 p.m.
Conservative
Dianne Lynn Watts Conservative South Surrey—White Rock, BC
You're taking the existing funds and repurposing them on this front.
4:20 p.m.
Associate Deputy Minister, Transport, Infrastructure and Communities, Department of Transport
Exactly.
4:20 p.m.
Conservative
Dianne Lynn Watts Conservative South Surrey—White Rock, BC
Any time left over I'll give to my colleague, the vice-chair. My last question is on the Asia-Pacific gateway. I understand that most of that fund has been committed, so the $11 million is to manage that. Is that what I'm hearing?
4:20 p.m.
Associate Deputy Minister, Transport, Infrastructure and Communities, Department of Transport
It's to finish off the projects that aren't yet completed. They're already committed, but they're just being finalized.
4:20 p.m.
Conservative
4:20 p.m.
Conservative
Luc Berthold Conservative Mégantic—L'Érable, QC
Thank you very much, Madam Chair.
This is my first parliamentary committee on this matter and this is a very fine experience. I find it impressive to see you all here, ready to answer our questions. I thank you for being here with us.
My question concerns the Champlain Bridge and the Signature on the Saint Lawrence Group.
Earlier, you mentioned that the public-private partnership, or PPP, protocol had been finalized in June 2015. If I am not mistaken, that protocol included tolls. Since that time, there have been discussions with the firm. A contract stating the government's intention to abolish tolls on the bridge was signed.
4:20 p.m.
Associate Deputy Minister, Transport, Infrastructure and Communities, Department of Transport
Yes. We are currently holding discussions with the consortium that is building the bridge. As you know, the government announced that there would be no tolls on the bridge. Consequently, we must remove the provisions in the contract involving tolls and to do so, we have to come to an agreement with the consortium. Negotiations on this matter are taking place.
