Transport Committee on Feb. 24th, 2016

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

The Parliamentary Budget Officer estimated that the cost of this project, including the design and construction, would be between $3 billion and $5 billion. He also mentioned that those costs included construction costs, approaches and so on. He estimated that for the business, cost recovery in the context of the PPP, based on government estimates, would also be in the order of $3 billion to $5 billion.

Currently, in the budgets, do you have funds to offset this missing $3 to $5 billion? If I understand correctly, in fact, that money is nowhere on the books.

[Helena Borges]

When the government announced the agreement with the consortium, we included amounts of almost $4 billion in the fiscal framework. So this has already been included in the fiscal framework. Since there will not be any tolls, the government has to pay for all of it.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

So we are talking about the $4 billion estimated by Transport Canada.

[Helena Borges]

Those are not the estimated costs, but the ones in the contract.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I see.

The business was going to obtain $4 billion through the tolls, but the government is now going to have to foot the bill for that amount.

[Helena Borges]

According to the contract, the government assumes the liability regarding the tolls. It committed to paying that amount after having signed the contact.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Will that amount have to be paid in one lump sum, or will it be spread out over a 10-year period?

[Helena Borges]

It will be paid over 34 years.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

In other words, funds will have to be paid every year to the business to offset the shortfall due to tolls not being collected from the motorists.

[Helena Borges]

Yes. The construction costs, the largest amount, will come first. When the construction is complete, the government will have to pay a certain amount every year to the consortium.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Berthold. You've completed the sharing of your time with Ms. Watts, and it is now your own turn.

Mr. Berthold, it is now your turn.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I see.

It had been estimated in planning the project that the tolls would cause a reduction in greenhouse gases. When the new bridge was being designed, it was assumed that there would be fewer vehicles using the bridge. However, since there will be no tolls, it is now estimated that there will be numerous vehicles using the bridge. Has the impact of that change been assessed by Transport Canada?

Will this new bridge improve the situation for motorists in Montreal and the region, or will it worsen the current situation, which is quite problematic?

[Helena Borges]

This bridge is being built for the sole purpose of improving the situation. The new bridge will have six lanes for cars and trucks and two lanes for public transit, for buses. Quebec may also want to introduce light rail transit on those lanes.

This is going to improve the situation considerably.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

It will improve it, but greenhouse gases will not necessarily be reduced. There are going to be more lanes, and so there will be more vehicles in circulation.

[Helena Borges]

Perhaps, but congestion also produces greenhouse gases. When cars are immobilized they produce emissions. With the new bridge, circulation will be more fluid than it is currently.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you.

I have a little time left to ask one last question.

Earlier you mentioned VIA Rail. You made our mouths water with talk of the Montreal-Toronto corridor, where one track would be reserved for a passenger train. What are the intentions in this regard? The possibility of extending the corridor to Quebec City was also mentioned. Is that included in the plan? Are there any studies being done on that? Is the Montreal-Toronto corridor the only one being studied at this time?

[Yves Desjardins-Siciliano]

The objective of the work was to determine the minimal investment for a maximum return in the shortest possible time. That is how we came up with the project for the Montreal-Ottawa-Toronto corridor, to be built over a period of less than four years, at a cost of $4 billion. The idea was to modify the public notion of devoting 30 years to studies on a high-speed Quebec-Windsor train that would cost $22 billion, take 12 years to build, do nothing for regional services and compete with air transportation, and cause a lot of distortion in transport modes. The objective was to focus public attention on a solution that would be quicker to deploy and more affordable.

Now that that has been done, the addition of other segments, for instance Quebec-Montreal or Toronto-London, or another segment, is entirely feasible. It is a matter of ridership and cost. To the extent that the additional cost would increase ridership and maintain the profitability of the project, anything is possible. We studied the Montreal-Ottawa-Toronto project and are now considering an expansion to Quebec city and southwestern Ontario. Other discussions will have to be held to decide where we will begin.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

If I understand correctly, the study on the segment to Quebec is being considered, but it has not begun.

[Yves Desjardins-Siciliano]

Absolutely.

Montreal and Quebec are two markets that have cultural and commercial affinities, in addition to linking the Quebec metropolis to the capital of Quebec. These are two natural markets, consequently. As for the potential ridership between Montreal and Quebec, you have only to travel on highway 20 or 40 to see that millions of cars travel there every year. We are doing that study and when the time comes to make a decision, we will have all of the information needed to maximize the return on investment and minimize the impact on the Canadian taxpayer.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

You just said words that struck a chord with me: “when the time comes”. When do you think that will be, Mr. Desjardins-Siciliano?

[Yves Desjardins-Siciliano]

We think we have already put in place the minimal parameters for the Montreal-Ottawa-Toronto corridor, i.e. an investment of $4 billion and an increase in ridership from 2 million to 7 million. This project will be built in four years and it can be financed with a contribution from the Canada pension plan, which invests in rail passenger transport throughout the world. They have already indicated their interest in this project. We think the project could begin in the course of the coming year, if all of the conditions are met, which of course includes the VIA Rail fleet we referred to earlier, which needs to be renewed.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Are there any further questions of the witnesses?

Ms. Duncan, if would you like to..., you have three minutes.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thanks.

I have a quick question. This is probably for Ms. Borges, but I'm not sure. I'm looking under transport. In terms of funding to support regulatory reviews for major national resource projects, I'm puzzled trying to find what in budget 2015 this is related to. Is it the funding to support aboriginal northern communities to participate in tanker traffic issues? Maybe you can tell me what precisely this is for, and why the Government of Canada would be paying some of the costs for assessments of resource projects.

[Helena Borges]

As you know, there are several pieces of federal legislation that require the government to review these projects, such as the Canada Environmental Assessment Act , for example, the Fisheries Act, and the Navigation Protection Act. When projects have implications for transportation, we collaborate with the Canadian Environmental Assessment Agency in doing the assessment of those projects, because we are considered a technical expert on the transportation side.

That's what these reviews are. They are reviews for any projects across the country that are subject to a review under that act.