Transport Committee on Nov. 30th, 2022

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Cassidy, where should the leadership lie?

[Michael Cassidy]

It should be a working collaboration, done no differently from what we've done here in the maritime provinces. We have the four provinces speaking to the federal government on what kind of model can we have for the Atlantic provinces. It's a “working together” model.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Okay.

Dr. Alhassan, who should lead this conversation?

[Dr. Jacob Alhassan]

I would say the federal government needs take a little bit of leadership and work in collaboration with the provincial governments to identify communities that are clearly missing out and make sure we have a national system so that wherever you live within Canada, you are not completely excluded from accessing very basic services, as we have seen through the research we've been doing.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Bachrach.

Thank you, Dr. Alhassan.

I believe I referred to your earlier as “Mr.” and I want to apologize for that. My wife would never let me forget about that, given that she's also a doctor.

With that, I'll turn it over to Dr. Lewis.

The next line of questioning is yours. You have five minutes.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Thank you so much.

I want to thank all the witnesses for the testimony today. It's been very informative.

My first question is for Mr. Gemmel.

You spoke about a zero-emissions transport system. You stated that it is something you wish to reach by 2050. You also spoke about a national transportation system and a rural transit fund.

I believe Mr. Cassidy stated that an electrified system would not be financially viable for passenger coach transportation, so how is it that you propose you will reach a zero-emissions transport, a carbon-neutral system, by 2050? Can you give us some insight into that?

[Matt Gemmel]

Sure. I think that question is for me.

I have a few points on that.

Under the Paris climate agreement, 2050 is recognized as the target for reaching zero emissions for the globe to be able to limit the global temperature increase to no greater than 1.5° Celsius. That's why there's that the target.

In terms of the technology and the economics of reaching that, I'll draw another parallel to urban transit.

In recent years it was not economic for urban public transit systems to adopt zero-emission bus technologies. The cost of batteries has come down immensely. The cost of the bus and the total cost of ownership, because of the lower operating costs of electric buses, has come down significantly, and as a result of increased leadership from the federal government through the zero emission transit fund that was announced two years ago, we're seeing a lot progress in urban transit shifting to 100% zero emissions.

It's important to note—and I think Mr. Wabinski mentioned this earlier—that transit inherently produces lower emissions than a single-passenger vehicle regardless. The near-term objective is get more people on buses in an urban context or in an inter-community context, but as we look ahead in the decades to come, I think it can be expected—and Mr. Cassidy alluded to this—that the cost of battery technology will come down and will enable longer ranges for electric buses in a intercity coach context. Then other technologies—hydrogen most promisingly, which has a big upside for the Canadian economy as Canada positions itself to be a world-leading hydrogen producer—also come into play and have particular promise in a longer-range, heavier-duty transportation context.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

My next question would be for Mr. Wabinski.

You stated that you operate at a loss in rural communities and gave some explanation for why. I myself am in a rural community. There is absolutely no public transportation in Haldimand—Norfolk, my community.

How do we overcome that loss and how do we move away from the economic factors that are constraining that development?

[Kasper Wabinski]

I've proposed a model of subsidy specific to the route, as they do in America with the feeder lines and the essential air service program, but converted to a bus system. If there are routes that have to be built up, routes take time to build up. When you start a route, you may be losing money for eight or 10 months. You're not just failing to break even; you're not making enough money to pay the cost. There may be very few people on that bus initially, especially going to small communities. You need to be able to run that service long enough and reliably enough with the right-sized vehicle with the right frequency long enough for people to trust it. Once they start trusting it, people will start getting on board.

I think I'm the master of running low-volume routes. I have the lowest-volume routes in Canada, and I can make them work. It's a very simple formula. The cost of running has to be recovered in the ticket cost. If it can't be recovered through ticket cost, then it has to be subsidized on a pay-per-route basis. I think that's the quickest, easiest solution to solve this problem of some routes not generating enough revenue.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you, Dr. Lewis.

Thank you Mr. Wabinski.

Next we have Mr. Rogers. Mr. Rogers, the floor is yours. You have five minutes.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Chair.

Welcome to all of our witnesses today. It was good to hear different stories in different parts of the country.

Being from Newfoundland and Labrador, I'm going to focus on Mr. Cassidy and Atlantic Canada.

I had numerous conversations with the owners of DRL during the COVID period. They went through some very challenging economic times, and it was a very challenging environment for their bus line. I'm sure you probably experienced the same.

You've been in business for 10 years. You're obviously in a very spread-out area, with low ridership at times. Were you able to take advantage of any of the COVID supports that were offered during that period just to survive?

[Michael Cassidy]

We've had 18 years in the bus business. Our line run anniversary tomorrow is ten years. If it wasn't for the federal government's wage subsidies and rent subsidies and their government guaranteed loan and working capital programs that were put in place—and Mr. Rogers, if it wasn't for the Province of Nova Scotia, the Province of New Brunswick and the Province of Prince Edward Island subsidizing and assisting Maritime Bus in 2020-21—our operating losses would be much greater than what they were in that two-year period.

We're thankful to the federal government, but in the Maritimes, our three provinces are committed to line run operation. They showed it in COVID, and now Newfoundland and Labrador has joined them in suggesting that they would be interested in discussing a capital infrastructure program here in the Atlantic provinces.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Mr. Cassidy.

You've answered my second question, but I'll go on to this question. I know you offered some solutions there in your testimony. I'd like for you to take the opportunity to do that again in terms of moving forward.

We went through a very difficult time. What would you need to ensure long-term viability for your business? What are the things you specifically need done?

[Michael Cassidy]

We had these challenges, Mr. Rogers, well before COVID. Well before, if you consider labour shortages. These items have been discussed for years. Jason Roberts of DRL and I have spent time together. We can talk about Canada and we can talk about national systems, but we are regional in our country.

In the Atlantic provinces, we are running expensive buses. We are providing an essential service, and as operators, Jason Roberts and I are asking that rather than having annual operating subsidies, perhaps we could change the language in a new generation of funding for capital infrastructure programs. We are asking for intercity busing to be an eligible project within the funds, no different from municipalities being eligible for projects.

We're also suggesting that carriers like ours, which are committed to Newfoundland and Labrador and the Maritimes, could, as for-profit carriers, be eligible recipients of infrastructure funding. It's a an eligible project, Mr. Rogers, and its eligible recipients could receive assistance on a capital basis.

Newfoundland and Labrador, Nova Scotia, P.E.I and New Brunswick, for what Mr. Roberts and I are asking for, may cost an investment in capital of $8 million shared by four provinces. The federal government might be at an $8-million to $10-million contribution, and Mr. Roberts and I could be at close to $8 million.

That is a regional solution to intercity busing, because you can't have a national system, Mr. Rogers, unless there are sustainable bus carriers in each region. That's what we are trying to suggest through DRL and Maritime Bus.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you for that, Mr. Cassidy. You certainly made very clear what your position is and what you need going forward.

In terms of your relationship with DRL, have you ever considered or talked about how you could support each other and whether it would be some kind of linkage in the business sector or some kind of merger? Has any of that stuff ever been discussed?

[Michael Cassidy]

No. I think when we do discuss it.... We are just two committed individuals in this business. Our sole intent is public transit on provincial highways. From DRL in your province of Newfoundland and Labrador, we do get passengers getting on the ferry. We can meet in North Sydney and we can transfer back and forth.

Sometimes, Mr. Rogers, it's moral support talking to another carrier that believes strongly in what we do each and every day before COVID, during COVID and post COVID.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Rogers.

Next we have Mr. Strahl. The floor is yours. You have five minutes.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you very much, Mr. Chair.

My first question is for Mr. Gemmel.

To achieve the program or the service levels that the FCM is looking for.... I can't recall in your presentation if you talked about a national public transportation system or a national bus transportation system. Whichever one it is, what are the ballpark initial costs for the federal government and what would be the annual cost?

I assume that if we're asking for this type of investment from the federal government, that ballpark number at least is available.

[Matt Gemmel]

Thanks for the question, Mr. Strahl.

FCM hasn't done an estimate of the cost. I think a large part of what would go into that number is whether you are talking about capital funding from the federal government, as Mr. Cassidy was suggesting, or broader support in terms of capital and operating costs. The model is another factor as well, as we've been talking about. There are a number of different models.

I would like to say that with the commitment to the rural transit solution success—$250 million over five years—we're seeing strong interest from municipalities and from non-profit and for-profit transit providers in that immediate regional context for that funding. We are calling for that type of program to be continued going forward.

The federal government has committed $3 billion a year for the permanent public transit fund. Currently it's scheduled to start in 2026. We would like to see a rural transit element of that.

What is clear is that the amount—

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

I'm sorry. I only have five minutes. I'm going to have to go back.

Mr. Wabinski, perhaps I'll go to you now. You mentioned tax incentives and tax rebates on fuel.

Can you give us an indication of perhaps the amount of carbon tax that you pay on fuel every year? Can get us that figure and include the amount you receive in a rebate from the federal government?

You mentioned tax incentives. I'm interested to hear if you have fleshed that out at all. Do you have any specific tax incentives in mind to help incentivize that private investment?

[Kasper Wabinski]

I don't have that exact figure. Fuel taxes are a big part of the fuel costs. Fuel is a major cost of operations right now, until there is electrification technology that we can use.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Do you receive any rebate for the carbon tax that you are charged?

[Kasper Wabinski]

No, I don't ever receive any incentives right now in taxes or fuel rebates. It would be nice if we did.