TRAN Committee Meeting

STANDING COMMITTEE ON TRANSPORT

LE COMITÉ PERMANENT DES TRANSPORTS

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, March 18, 1998

• 1538

[English]

The Chairman (Mr. Raymond Bonin (Nickel Belt, Lib.)): Order. We are continuing our study of passenger rail services in Canada for the future. We welcome, from Transport 2000, Ottawa, Mr. Dave Glastonbury; from the Atlantic, John Pearce; from Quebec, Luc Côté; and from the west, Dr. John Bakker.

Thank you very much, gentlemen, for being with us and sharing your experience and knowledge of passenger rail services in Canada.

I will do as I do with other groups and set the tone at the beginning of the meeting. We are here to study passenger rail. We are here to hear your suggestions for making it a viable service for Canadians and by Canadians, we hope. Therefore, if you have a tendency to get off the track, for lack of a better word, if you have a tendency to lobby or do other things, I will bring you back to order. We are interested in your contribution to passenger rail in Canada.

Having said this, I invite you to begin in whichever order you wish.

• 1540

Mr. David Glastonbury (President, Transport 2000 Canada): Mr. Chair, if I may, I will first introduce two other confrères who are with me today: Mr. Harry Gow, who is the vice-president of communications for Transport 2000 Canada, and Mr. Normand Parisien, who is with us today from T2 Quebec.

The Chairman: Welcome.

Mr. David Glastonbury: Mr. Chairman, the tone that I want to set before I go into my remarks is one of optimism. I've been closely watching some of the people who have appeared before you and I note a strain of pessimism. I'm here to tell you that's all wrong and that in fact passenger rail has a viable future in Canada. And I have a few remarks to illustrate that.

Mr. Chairman, members of the standing committee, ladies and gentlemen, thank you for your invitation to Transport 2000 Canada and our associates from across the country. The subject of passenger rail services in Canada is one of the critical points in our advocacy efforts for economically, socially and environmentally sustainable public transportation.

As you probably know, Transport 2000 Canada is a federation of organizations from across the country, and while we agree in principle on the points I shall place before you today, like any family we may have various differences about how to attain the ultimate goal of a viable passenger rail service for Canada.

Last October we met with the Minister of Transport and presented a paper to him calling on the government to pass a VIA Rail Canada act making VIA Rail Canada a crown corporation. I won't go into our reasons for that. Some of them you've heard. I've taken the liberty of attaching that paper to the back of our package, which you have.

I'd like first to address the three suggested options that the president of VIA Rail Canada presented here last week. As I recall, they were: first of all, privatize VIA Rail; second, franchise out the services; and third, create a crown corporation.

First of all, with respect to privatization, as you can imagine, passenger rail is not known for generating large profits, and I think some of the previous guests have said that. Would a private operator continue a service for which there was little opportunity for some reasonable return on investment? It's very unlikely. Why, then, should privatization be a viable option?

And if it is not viable for the private sector, you may ask why government should then continue the operation. The answer is to be found in the opportunities passenger rail offers for environmental, social and economic considerations.

What about franchising? Franchising what? The operation of the service? The marketing? Or the overall management?

The committee's travel plans, I understand, include a visit to the United Kingdom, where this model is in operation. However, I ask you to be cautious. The British no longer have an integrated network, and a recent report to government suggests that the service is no better and is in fact worse than service pre-franchise.

Who should oversee this arrangement if we are looking at franchising?

Perhaps franchising is not a separate option. Is it not part and parcel of a wider mandate, which includes commercial management strategies aimed at increased efficiency and effectiveness of the operation?

The third option, we believe, is the venue in which to discuss franchising, and that third option is a crown corporation. We think the most obvious solution for continuing and enhancing passenger rail service in Canada is to recreate VIA Rail Canada as a crown corporation, with the full range of mandated powers to operate as a commercial venture and with authority to borrow in the marketplace. Such legislation would give VIA management the mandate to operate under business principles and practices, make commercial arrangements, and franchise where the business case warrants it.

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You're probably aware that in fact VIA does franchise now. The food services are on a franchise.

Before enactment of the Canada Post Corporation Act, the post office department was the subject of continuing financial concern to the government. Canada Post is now a viable commercial organization, able to operate in the marketplace, to consummate commercial arrangements, and to franchise those aspects of its business based on the best business case. So why not VIA? Why not let VIA operate in the real world, with a mandate that charges management to pursue the best arrangements possible with customers, with suppliers, and with bankers, in the provision of passenger rail service for Canadians?

Innovation: You would think there would be some opportunities here. We would like to explore a few with you.

You have heard, and you will continue to hear, a litany of reasons why passenger rail will not work in Canada. Hogwash. There has never been a better time to strengthen and improve the nation's passenger rail network. What we need is some imaginative and innovative thinking on the subject. Railways—and I believe I read it in some of the comments earlier this month—have complained for many years about the penalty they suffer compared with U.S. competitors in the depreciation rates for equipment write-off, over 20 years in Canada versus 8.5 years in the U.S. The subject of VIA's access to track can be addressed by changing the equipment write-off period to the U.S. standard. Railways that host passenger trains would of course benefit from the increased write-off period. Railways not so disposed to passenger service might not enjoy similar gains.

As a captive audience, Canadian railways have been subject to a mélange of federal and provincial taxes on diesel fuel. At the same time, exemptions have been granted to other modes of transport. Some formula for tax relief could be considered on those routes hosting passenger rail services.

In 1996 Canada's railways paid $140 million in property taxes, for which, in most cases, they received absolutely nothing. By comparison, U.S. railroads paid $70.5 million.

Creative solutions could reduce the railway's costs, and even VIA's user charges.

Track capacity in the corridor could be expanded with the use of rail links lying between Pembroke and North Bay for westbound freight. Currently CN routes this traffic through Toronto, an additional 150 miles.

My confrère Harry Gow will now discuss another suggestion I think you will find interesting.

Mr. Harry Gow (Transport 2000 Canada): Mr. Chairman, honourable members,

[Translation]

good afternoon and thank you for inviting me. You probably heard about the Montreal Transportation Office called Agence métropolitaine de Montréal, the Toronto Area Transit Operating Authority and the Greater Vancouver Regional District. All those authorities are managing a railway system which is integrated with a bus network. In two of those cases, namely Vancouver and Montreal, a dedicated tax finances the network and is mostly used for capital improvements.

[English]

So for capital improvements in the Vancouver and Montreal regions, a small gas tax finances transit improvements, commuter train improvements.

In the United States, the Intermodal Surface Transportation Efficiency Act, ISTEA—it has had various new names; sometimes they change the name to fit trendy situations—has been funding intermodal projects on a larger scale across the country, for passenger and for freight, bringing together, for instance, trucks and trains to exchange goods at places such as Chicago. This concept could be brought to Canada and Canadianized. The opportunity is currently there because of low gas prices, interrelated with the fact that Canadians consume a phenomenal amount of gasoline.

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On page 7 of the Transport 2000 presentation to the House of Commons Standing Committee on Transport there's a table. These figures are advanced for the sake of argument and could go up or down depending on the tax arrangements David just talked about. They could go up or down depending on opportunities such as lower prices of gas or restrictions such as higher prices of gas. But we're talking about a 2¢ per litre amount at the start and over five years gradually increasing it by 0.05¢ increments to 4¢ per litre.

This money would then be simply split among intercity rail, which would get a large amount at the beginning and less later; intercity bus, which would have its fares reduced because it has been dropping precipitously in volume over the years; and urban transport, which is suffering a bit as well. Urban transit has suffered. The latest statistics by StatsCan indicate that only a minority of Canadians use transit to get to work. In light of our obligations under the Kyoto accord, one way of improving our performance might be to increase the use of transit by our commuters and citizens on other trips.

This money would go to these various modes of intercity rail, intercity bus and urban transit, with a a small amount for environmental improvements such as planting trees and fixing up river banks—things usually associated with transport. One would have a reasonable sum of money. It wouldn't be a fortune, but $600 million would go a long way in a year, particularly if we consider that about one-third of that could go to improve intercity rail in the first years. It could decline in proportion later as the total amount rises to $1.2 billion in the course of five years. That's essentially it.

For transit, one would expect the provincial and regional governments to also participate, much on the same basis as the Canadian Infrastructure Works I and Infrastructure Works II plans.

In a nutshell that's the proposal. It's extremely simple. It's already in place in two places in Canada that I know of and there may be others. It's universally applied across the states by the federal government for its transport infrastructure. Some American states like California have either a regional or state-wide small gas tax to fund transit, Amtrak and buses.

That's it. I'll turn this back to David.

Mr. David Glastonbury: I have just a few concluding remarks. I think it's safe to say the performance VIA has turned in with the diminishing support it's receiving is probably the modern day version of the loaves and fishes miracle.

Transport 2000 Canada believes the key to a revitalized passenger rail service in Canada lies in the following criteria.

First is the introduction of a VIA Rail Canada act to create a crown corporation able to operate commercially and borrow on the open market. Second is a government commitment for 10 to 15 years of $170 million annual support for VIA. Third is access to track encouraged by the use of a range of incentives, which we spoke of. Fourth is innovation and imagination in overcoming the challenges.

Mr. Chairman, the timing for revitalizing passenger rail service in Canada has never been better. Let's get on with it. Thank you.

The Chairman: Thank you.

Now we'll proceed to questions. Mr. Morrison.

Mr. Lee Morrison (Cypress Hills—Grasslands, Ref.): Thank you, Mr. Chairman. Welcome, gentlemen.

Gentlemen, I think you'll find this is by and large a railway-friendly committee, but not friendly to the detriment of all other modes of transportation.

You raised some points that immediately caused my antenna to rise. You're talking about two things that to me are anathemas—a tax increase and cross-subsidization. In other words, I believe you're telling us that other means of transit should have to pay the tariff for the railways.

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I'm particularly stricken by your suggestion of adding 2¢ a litre to the price of highway fuels. Have you done any studies to give some indication of what it would do to the economy to suddenly reach in and haul out another $800 million per annum? And it would be $800 million, not $627 million, I think. Have you done any studies to see what that would do to the economy?

Mr. Harry Gow: No, we haven't studied the economic effects, sir, but we have very closely monitored what has happened in Montreal, Vancouver, and California. Visits to those places and discussions with regional authorities, among other things, indicate there has been no net effect on the regional economies where this has been applied.

In the United States their economy is booming, they have a lower rate of unemployment than we do, and iced tea is part of their prosperity. By investing wisely using this gas tax, the iced tea program has managed to steal a lot of our container traffic from the port of Vancouver and bring it to Seattle.

The Americans are investing huge amounts of money in their railways, their roads, and their intermodal terminals, and they're getting a system together that will eat ours alive unless we do something.

So in fact empirical evidence indicates that the small gas tax proposed will have no net effect on the Canadian economy. It will benefit it because it will make us more competitive.

Mr. Lee Morrison: I'm sure you're aware that this government here, the federal government, is already taking highway fuel taxes to the tune of about 13.25¢ a litre; that's excise plus sales tax. The total take is about $5 billion a year, of which something between 6% and 7% actually finds it way back into the transportation system. So highways are already cross-subsidizing, maybe not just railway, but the general economy. They're taking a terrible hit.

The same thing is happening provincially. I don't know about Ontario, but I do know that in some provinces, my own specifically, the total tax take for highway fuel taxes and licensing fees is far in excess of what is being spent on the roads. How far can you squeeze one aspect of transportation in order to benefit some other aspect of transportation?

You have an excellent idea when you say the railways shouldn't be subject to municipal taxes. However, this government doesn't have the capability of telling Canadian municipalities that they can't tax railroads. That is something that has to be done, not by coercion, but by friendly persuasion in some form.

Aside from the tax on fuel, what else did you mean when you talked about cross-subsidization? To me, cross-subsidization is economic lunacy, to be quite blunt, but how are you proposing to subsidize rail at the expense of other means of transport?

Mr. Harry Gow: Well, the mechanism is fairly clear, and it's already in application, as I say, in two important Canadian regions. We see this as a very low-profile thing. Indeed, if the government wanted, they could take part of that 13% tax that now just goes into the consolidated revenue fund—

Mr. Lee Morrison: Not 13%; it's 13¢.

Mr. Harry Gow: I'm sorry, 13¢. It's tricky.

In fact Transport 2000 has the view—and as a former Health executive I can confirm this—that many services that are paid for out of the consolidated revenue fund, such as policing and health, make a major contribution to highways.

As a social worker and as a criminologist, I can tell you that on my frequent trips to Kingston to visit the penitentiary with my university students, I see about a major car accident a week on those trips—one big accident on Highway 401 a week. That will make a nice hole in the health budget in that particular subregion. That does not show up in highway accounts.

Cross-subsidy is a fact of life. In fact in the Canadian parliamentary system we have very few dedicated funds and we have a lot of consolidated revenue fund. Maybe some of your remarks could help us refine the proposal to talk about dedicating some of the funds that are indeed already being taxed.

Thank you.

The Chairman: Mr. Bakker.

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Dr. John Bakker (Vice-President, Transport 2000 West): First of all, we're talking about a dedicated tax, rather, that comes out of what is already being taxed. If it's additional, that's a different subject. It's a dedicated tax we're talking about rather than a general tax, which goes into the general pot and then is allocated from that.

The second thing is that GO Transit originally was proposed in order to relieve the highway system in the peak hours. Providing peak-hour trains was considered to be cheaper than building an additional freeway, which was not required for the normal traffic for the rest of the day. So cost subsidization in that case was considered to be a good investment because it made use of resources that were already in existence.

The same applies frequently in city transit in peak hours, in that at midday there is no congestion, but during the peak hours there is. Maybe we can get people to drive to parking lots and then use public transport to the final work destination; I don't want you to view this as a proposal against automobiles.

Mr. Lee Morrison: Okay, that's fair. You're talking more about an integrated transportation system. I don't think you'll get too much of a battle on that. It's when you talk about killing one bird in order to help the other one fly that I begin to get a little nervous.

You say in one of your written briefs here that a high-speed train is definitely required in the corridor. I'm wondering what the basis of that statement is.

That has been studied by this committee, and it has been studied by the CPR. Nobody I'm aware of thinks that it's either required or possible with our demographics.

I'm just wondering on what that statement is based.

Mr. Harry Gow: I will perhaps attempt to answer that. High speed does not necessarily mean the European rate of 350 kilometres an hour. That would be nice.

Mr. Lee Morrison: I know that.

Mr. Harry Gow: The Canadian population is extremely concentrated. We looked at the densities every which way. In fact, in the Canadian corridor, the density of population is higher than that of the density in France's Paris-Lyon-Marseilles corridor, which was the first one they developed.

So we have densities in places. The question is in the total numbers. France has 60 million people; we only have 30 million people.

But that being said, higher-speed trains—we could argue about what that means—are desirable in our view.

For example, the United States, after taking a good look at their existing infrastructure, under the leadership of Senator Claiborne Pell, determined that they would go for an intermediate-range high-speed system, which means 125 miles an hour or 200 kilometres an hour. They have incrementally worked toward that like beavers for the last 20 years.

They used Canadian equipment, ironically. The Canadian LRC, which was developed for VIA, and the French TGV locomotives will provide such a system.

I think that, the Swedish model, and maybe the British model, which are in the range of 150 to 200 kilometres an hour, are what we could reach incrementally in Canada in the next 10 years. Indeed, VIA has already been increasing its speeds, as one can see from tables showing their speeds 20 years ago and their speeds now. There have been considerable improvements, particularly for Ottawa-Toronto, and some others. I think that, for the time being, we should be going in for incremental increases.

The Chairman: Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman, and thank you, gentlemen.

Is the Railways to the Future Committee part of Transport 2000?

Mr. Harry Gow: They're connected.

Mr. Roy Cullen: They're connected, okay. It's because I had the opportunity to meet with Mr. Ross Snetsinger in my riding, and I found those discussions quite useful.

I apologize for missing the earlier part of your presentation.

Say one looks at having a crown corporation, which is what you're suggesting for VIA, as I understand it, with the ability and power to borrow and operate commercially with $170 million annually from the federal government. This would be a subsidy for 10 years, if I heard you correctly.

What has happened now with VIA Rail is that they have managed to become more productive. They increased their productivity levels. They actually increased ridership somewhat. But as for their infrastructure and rolling stock, they haven't reinvested in that.

How would VIA Rail, other than having the capacity to borrow, get the fundamentals right so that it could be financially viable? Is the solution you're proposing the dedicated tax, or are there any ways to make it operationally more efficient?

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Dr. John Bakker: In my brief, I have a section on equipment. Basically, if you go for functional equipment, in other words so that you minimize your manpower requirement, you can reduce your costs. They found out for example when the cuts were made by Mr. Pepin a long time ago...in the west, Alberta made a submission to the federal government that if you use bi-level costs, the pay-off would be within five years and thereafter the savings would be a reduced subsidy. So it would take about five years to replace with bi-level equipment and have the same service provided, but there would be reduced cost per unit because they're far more efficient to operate. The same is true for multiple diesel units for passengers.

May I suggest that if the committee were to travel to Europe you also go across the channel, or go underneath it in the Chunnel with the train, and go to the Netherlands, because in the Netherlands you'll find a couple of examples of integrated transportation. For example, there is the railway station in The Hague, where the roof above the tracks is an LRT and regional bus station. You should also go to Utrecht, where you will find an integrated centre, which is not only a shopping centre but also a congress centre. It is a railway station. It has regional bus, LRT and city transport all in the same location for integrated transportation that feed each other.

You should do this so that we understand the function of what we are trying to accomplish in public transport rather than only the financial-economic franchising organizational structure. That should be chartered so that you know what you want to achieve, and I think you would be wise to talk to the people over there as well as in Britain, because Britain, in my view, has the worst-integrated system in Europe, and I don't think you should see that only as an example. I don't want to prevent you from talking to them, but I think you should see something else as well.

Mr. Roy Cullen: Yes. This committee wrestled with that kind of a program but—

Dr. John Bakker: I hope you take the trip. I think my taxpayer's money finally will be well spent.

Mr. Roy Cullen: Just dealing with the capital cost allowance issue, if I understood you correctly, were you not suggesting that if we were going to make any moves as a government on the write-off of equipment, we might look at options that would say for those railways that are friendlier to passenger rail that they would have access to those faster write-offs, and otherwise not. It would seem to me that to make it neutral for the railways, if we have any desire to do that, then the benefits of the CCA could have to outweigh the operational infrastructure demands that would be put on their system.

Could you elaborate on that idea?

Dr. John Bakker: Yes. When Amtrak was formed in the United States, the reason it got avoidable costs only—avoidable costs meaning that costs only incurred because there is a passenger train would be charged... They got that from the operating railways as a condition that Amtrak could operate on any railway line in the United States.

I think if the Canadian railways would like to go to an American-type write-off situation so that they can compete—and I think there's a certain fairness in that—then perhaps they should also take the other side of the coin and it should only be avoidable costs. That should not preclude, however, possibilities of partnership arrangements, as I'm proposing, by carrying express freight perhaps on passenger trains, particularly long-distance trains. That might further reduce these costs.

Mr. Roy Cullen: Thank you. I'd like to expand on these higher-speed trains, let's say 125 miles an hour. We've heard testimony fairly clearly from CN and CP that if you're looking at a capacity notion, then in terms of how it utilizes capacity at about five freight trains for every passenger train because of the gaps, etc... I don't know what sort of miles per hour scenario they were looking at when they said that, but 125 is pushing the envelope perhaps even more.

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How do you propose to deal with the kind of capacity question this will put on CN and CP, for example?

Mr. Harry Gow: There are two things. There's the gas tax we are proposing, or the dedicating of part of the gas tax to intermodal transport, not just railways, and the capital depreciation allowances. We have noticed that in the United States railroads such as Union Pacific have been quadruple-tracking on lines that were double, and they have been double-tracking on lines that had been reduced to single. We have noticed them putting in new signal systems and advanced braking systems, electro-pneumatic braking—Amtrak is equipping a train or two with that—which will reduce braking distance to a third of what it is now. As you do that, you automatically increase capacity.

Just as another American example, with all the programs they have down there for rail, the Stampede Pass line in Washington has been reopened to allow heavy freight to go through there, to allow the container freights and the passenger trains to use another line.

While I'm on the topic of closed lines, I understand CP wants to close down what is left of their Ottawa Valley line, which is a terrible shame, because at least three heavy freights could be taken off the lakeshore line through Kingston every day, which would open up space for, let's say, at least one moderately fast passenger train.

There are things there that have to be explored before we say it's impossible. I believe railways are going on a present-day case, with present financial and administrative arrangements.

The Chairman: Mr. Guimond.

[Translation]

Mr. Michel Guimond (Beauport—Montmorency—Orleans, BQ): To start with, I want to tell you that I particularly appreciated some comments made by Mr. Glastonbury and Mr. Gow. I think that we should include the issues they mentioned in our report. So far, you are the only witnesses who have mentioned those two issues.

You reminded us of Canada's commitment to greenhouse gases. The more we promote car and truck use, the more we contribute to a certain point to increasing greenhouse gases. Canada already made a commitment in that regard in Rio and repeated that commitment recently in Kyoto. I do believe, honourable members and researchers who are going to work hard drafting the report, that we should mention those issues concerning our commitment in the report that we will be tabling.

I found something else very interesting too. You reminded us of the social costs of car accidents. I'd rather not take an accounting approach when talking about people who have the misfortune of dying or of becoming paraplegic after a car accident, but provinces do have to incur incredible social costs, since health funding is first and foremost a provincial responsibility, although the federal transfer payments also have to do with that. I think that we should mention that element in our report as well.

What I understand from all the reports we have before us, is that we should first of all get a commitment from this government to passenger railway transportation. Our committee should just prove that it believes in passenger railway transportation.

After hearing the CP representatives yesterday, I couldn't quite fall back on my feet. I was just furious for part of the evening, although this is usually the mood I am in. The CP and CN representatives who appeared before us said bluntly that they were in business to make money. This was especially the case for CN which was privatized and has to pay for acquisitions made in the U.S. Although they did not say openly that they were in business to make money, we can read between the lines. They will have nothing to do with passenger rail transportation in Canada if it is going to decrease their profitability.

Fortunately, the comments made by the parliamentary secretary proves that he has a very open mind. Yesterday, he gave a message to the executive vice-president of CP, telling him that there might be a link between that offhand attitude from the two main railway companies in Canada and the deregulation. May be the parliamentary secretary was saying that it was a pity he could not follow what I was saying in my own language, but he's been in Parliament for a while and he should be more bilingual then that. The parliamentary secretary says that we should perhaps examine some regulations in order to have a more passenger rail transportation-oriented vision. I found that interesting and I am wondering whether it is a good omen, but we will see. Those were my comments.

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Now here is my first question, Mr. Glastonbury. You mentioned, at the bottom of the first page of your submission, a recent report to the British government on franchising suggesting that service is no better and might even be worse. Do our researchers know that report? Is that report still available? Could you have it sent to us or tell us where we could get it? I would like to read it. When we travel to Britain—and I agreed not only for the trip—, we could examine the franchising system and ask questions.

I will have more questions, Mr. Chairman. But I will come back later.

The Chairman: Could you have that report sent to us?

Mr. Harry Gow: Yes.

Mr. Michel Guimond: I'd like to have more details on that issue.

The Chairman: You could send it to clerk who would then distribute copies to everybody. I will now ask you to react to the question and comments.

Mr. Parisien.

Mr. Normand Parisien (Transport 2000 Quebec): Mr. Chairman, an agency created in Britain, the Office of Passenger Rail Franchising, made the first assessment of franchising. The report tabled at the end of the summer of 1997 indicates that the franchising endeavour had mixed results during the first tentative in 1995-96.

For example, concerning reliability and punctuality, the results were mixed as to an improvement or a deterioration of the service. For example, when analyzing the performance of the system, they noticed that the reliability had improved for 14 companies and deteriorated for 18, and that it had remained stable for 26 businesses.

As for punctuality, there was an improvement in 28 instances and a deterioration in 20 other instances. You can therefore see that concerning punctuality, in 90% of cases more or less, it is not necessarily very different from what we now have with VIA Rail. Thank you.

[English]

The Chairman: Are there any other comments?

Mr. Pearce.

Mr. John Pearce (President, Transport 2000 Atlantic): I have a quotation here from mid-January, two months ago, and it's from the office of passenger rail franchising in Britain—and this is a bit repetitive, but not entirely. A note was made there two months ago that reliability and punctuality were both down.

Mr. John Welsby, who is the chairman of British Rail said:

For the privatized railway, the honeymoon is very close to being over. In general, the privatized railway is hardly better than in the last years of public ownership. That is a great disappointment.

He also said that privatization has not resulted in the hoped-for decrease in government subsidies. This may give you a reference so that you can track down a little more information about what is happening in the U.K.

[Translation]

The Chairman: Mr. Guimond.

Mr. Michel Guimond: If I look at the second page of your report—I just realized that the pages are not numbered, Mr. Glastonbury—, where you talk about creating a crown corporation, you say that, in your opinion, the most obvious solution to revitalize the

[English]

passenger rail service in Canada is to recreate VIA Rail Canada as a crown corporation.

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[Translation]

I am not tearing my shirt when I hear that, but the minister asked if we thought we would be able to... Anyway, you will have to give me arguments so that I can sell this to the government, for the minister said bluntly that the status quo was not acceptable. Your proposal would perhaps bring us back to the previous situation. The status quo is not acceptable, but do you think that we will be able to convince the government to come back to a previous situation?

[English]

Dr. John Bakker: The status quo at the moment is that it is an administrative organization, not a crown corporation, and it's very much run from Transport Canada.

The only choice, if they're told to jump, is a slight variation in the height of the jump that they're allowed to make, but they are not free to make any decisions otherwise themselves, really. It's very much controlled. If they become a crown corporation, there will be far more arm's length.

In my submission, I've also added that I hope such a crown corporation would have a board of directors with expertise in a variety of fields, rather than that they become political appointees.

[Translation]

Mr. Harry Gow: Mr. Guimond, we are asking for a railway with an independent legal status. One can think of the Société nationale des chemins de fer in France, Amtrak in the United States, or GO Transit. There are several passenger train corporations in the world with an independent status which are owned by the government or by the crown, in our case, and which operate fairly well. There might be problems at times, but they are operating fairly well and they have more business freedom than VIA Rail. Therefore, it would not bring us back to a previous situation, but a move forward towards the status enjoyed by railway companies in other countries of the Francophonie, of the Commonwealth and of the G-7 in general.

I will take advantage of my having the floor to make a correction. I said that CP wanted to close down the Ottawa Valley line, but it is CN. CP is maintaining its services throughout the Ottawa Valley, both in Ontario and Quebec. CN is the one wishing to close down the critical link between Ottawa and Pembroke through Portage-du-Fort. This is a real concern for us. By so doing, CN would not really be the transcanadian railway anymore since all traffic would have to go through Toronto and, who knows, maybe through Chicago one day? For Montreal and Ottawa, this would not be acceptable.

[English]

The Chairman: Mr. Casey.

Mr. Bill Casey (Cumberland—Colchester, PC): Thank you.

I wonder if you could give me an idea of the structure of Transport 2000. There's senior Transport 2000 and then regional ones.

Mr. David Glastonbury: We're a federation, Mr. Chairman, made up of various T2 organizations across the country.

Mr. Bill Casey: What is your mandate?

Mr. David Glastonbury: We're an advocacy group for better public transportation.

Mr. Bill Casey: How are you funded?

Mr. David Glastonbury: We're funded in a combination of contributions and in membership.

Mr. Bill Casey: Okay, I wanted to get an idea of where we were going from there.

In your paper, you've said that ridership is down dramatically. Would your proposal make up for that decreased ridership, or how do you justify that?

Mr. Harry Gow: That was in the paper I presented, and basically it's this. VIA Rail has not actually lost passengers per train. For trains they run, they have a denser ridership than they did in the 1970s or 1980s. The trains have become shorter, faster and more efficient. What has happened, though, is that in 1990, as you may recall, the Government of Canada cut the number of services in half, and there was a precipitous drop in the number of passengers.

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So it was an artificial cut, and by funding VIA better and by having better tax advantages for railways and railway investment in general, we can increase the number of trains and increase the number of services by serving places that are ill served or not served currently, and thus increase the number of riders.

A demonstration of this may be found, again in the Montreal area, where, with the gas tax, the Montreal transit authority has been able to refund commuter trains, and the newest one, the Blainville train, which was supposed to be just a temporary train for six weeks, has made a major contribution to transit ridership in the Montreal area.

Through providing this new service, it was discovered that there was a hidden demand for it, and we believe there's a hidden demand for service to places like Saint John, New Brunswick, let's say, and to Fredericton, and possibly to Peterborough and Sherbrooke, major cities in Canada, some of which may even have future provincial premiers in them.

Some hon. members: Oh, oh.

Mr. Harry Gow: I shall say no more about Sherbrooke. But the idea is that there are a lot of important cities in Canada that are not currently well served. By serving them, we would get that ridership back up to what it was in, say, 1990, and it would increase after that.

Mr. Bill Casey: You also say that the cost for a ticket or a fare has gone up 500% when inflation has gone up 200%.

Mr. Harry Gow: Yes.

Mr. Bill Casey: Will your proposal also bring that price down to the inflation number?

Mr. Harry Gow: Yes. It think there are two mechanisms that will happen here. While we're not proposing any reduction in first-class prices...in fact, as the improvements take hold we would like those first-class prices on railways to go up, that is, for parlour car service, what's now called VIA 1.

So that's a side commercial element, but in general, for the coach passenger, for the ordinary person who's riding in steerage class, as I often do, or some of us do—the majority—two things would happen. First, there would be capital investment that would make the trains operate at about half the current cost. The stable federal funding from the current funds, the consolidated revenue fund, would provide a base that would not only allow maintenance of current fares, but with the efficiencies we propose, fares could drop.

A demonstration of this may be found in France, where, with the inauguration of high-speed trains, the first-class fares have definitely gone up, but the ordinary coach fares have not gone upwards at anything like the rate that they have in Canada. They tend to follow inflation. And indeed, they keep cooking up fare deals like we used to have in Canada under the CN red, white and blue or the CP fare-saver systems, whereby if you don't want to travel on Friday night or Sunday you can get coach-level fares.

Mr. Bill Casey: You referred to the Montreal experience. What percentage of the Montreal operation comes from the gas tax as opposed to revenue from ticket sales? And what other sources of revenue do they have?

Mr. Harry Gow: Their revenue from the gas tax—and Normand can correct me on this because he's the expert—would be dedicated largely to capital funding, and the revenue from tickets is probably less than 50%. But I cede to Normand on that one.

[Translation]

What percentage of the revenue comes from passengers?

[English]

Mr. Normand Parisien: The cost recovery of the transit system is as high as 40% in the Montreal Urban Community, but as compared with MTA's budget—the Metropolitan Transportation Agency—it's $50 million out of $170 million. It's a dedicated gas tax in the Montreal area to lower the regional fare structure so that it does attract even more people on the regional transit system. It's also a dedicated tax to attract motorists to the transit system. It's effective as of January 1996.

Mr. Bill Casey: If I have this right, all of the gas tax is dedicated to capital expenditures and improvements in equipment. Is that right?

Mr. Normand Parisien: Not specifically. It's a dedicated tax for lowering fares. Without the dedicated gas tax, for example, the regional fare would have increased from $73 to $97. It's a market incentive to attract motorists and lower the congestion level of the metropolitan area.

Mr. Bill Casey: So does the gas tax reduce the fare by half, approximately?

• 1650

Mr. Normand Parisien: Almost one-third of the average fare for the monthly pass.

Mr. Bill Casey: The last question is what did the minister say when you gave him this proposal? Has he responded at all yet?

Mr. Harry Gow: Yes. He said he didn't think this would fly with his guys. He said people are not at that point. I said, sir, just keep this thing on your desk until after the Kyoto conference. He said fine; and that was the last we said about it.

I think his reaction at the time was that he wasn't sure the country was ready for it politically. We could put it that way. So I said maybe Kyoto would help condition our thinking.

The Chairman: Mr. Mark.

Mr. Inky Mark (Dauphin—Swan River, Ref.): Thank you, Mr. Chairman.

Again, I thank you for your report and for coming before the committee.

I find it surprising you would recommend we go back to crown corporations. Since 1993 this current government has privatized most of its crown corporations, whether they be railways or airlines or harbours. By and large, some of them have been successful and it seems to have saved the taxpayer a lot of money. However, I do agree the taxes that are collected from fuel tax certainly should be returned to infrastructure upgrading and renewal.

The problem in this particular case is that VIA doesn't run on its own infrastructure. All the infrastructure it currently uses is leased or rented. That would create a problem.

We're told by former presenters the European railways cost taxpayers about $10 billion worth of subsidy to keep operating. I don't know if you know about that information or not.

There are two issues about passenger rail in this country. I'm a fan of passenger rail as much as anyone, but I think with the size of this country and the difference in regional needs we have different requirements. There are certainly different needs where I come from, Manitoba, versus for the people who live near the Pearson Airport in Toronto. Certainly we do need commuter service between the airport and the city.

Because of our small population base in this whole country, other than in the concentrated population bases of southern Ontario and Quebec, has Transportation 2000 completed a needs assessment for passenger rail? You may have answered this before. Do you see a national passenger rail system?

Dr. John Bakker: Let me first come back to your question about a crown corporation. I think you should see a crown corporation as public enterprise versus private enterprise. In other words, it should be based on enterprise. But because it gets a public subsidy, if you have it as a private enterprise with a public subsidy, you will find the requests for subsidy will keep on increasing, probably because it's the nature of the game. You get into increasing costs and you have absolutely no control over the type of service you get.

If passenger rail were profitable in the world, which it isn't, then I think your question about privatization would be a very valid one. On the continent of Europe they are not going ahead too well with privatization. They are separating the infrastructure, however, from the operations, which I felt should have been done when they sold CN. But nobody would listen to me, so I will not repeat that aspect.

On the national system, we shouldn't forget that the train that was taken out, which was the Canadian on the south line, the CP line, had an occupancy of 80% with daily service, which was the highest occupancy we had. I got a comparison with the Empire Builder in the United States, which is the line just to the south of the border—which border apparently seems to be shifting a little lately. On all aspects except for costs, VIA was doing all right. The costs were 2.5 times as high, and the cost picture in Canada was unreasonable because of the equipment, because of various rules of operation and everything else. Those costs were far too high. To some extent, VIA has addressed those costs, but hasn't done enough because the company still doesn't have the proper equipment.

• 1635

There is another aspect that I think the committee should keep in mind, and that is the culture of the railway. The railways in Canada are freight railways, and their culture is to operate on a random basis. That means they dispatch when they have a train ready. In Europe the system is a scheduled railway, and everything therefore goes by timetable. It is not random at all; it is very precisely timed, so things run on time as well—and that includes the freight trains.

What we probably need in Canada is a mixture of the two systems. That's why I'm suggesting that some freight and express freight be carried with passenger trains, on a partnership basis with the operating railways, the reason being that there is not a passenger operation that can succeed on its own. By mixing the two you would get more regular dispatches, more guaranteed dispatches, which would be very effective for attracting container and truck-trailer traffic, at which means they are not succeeding. Since I live near the Trans-Canada Highway in British Columbia, where it's a two-lane road, I can assure you that with the number of trucks that go by there, they are not succeeding at attracting the traffic that is there. Those trucks are pounding the road to pieces, by the way, so it does make you wonder.

The Europeans have a different system. Their lines are primarily for passenger rail. Freight is usually moved at night, although there are paths for freight trains. They're now constructing separate freight tracks in order to attract more freight traffic, but most of the bulk freight in Europe goes by barge. That is a very distinct difference when compared to what we have in Canada. The bulk freight in Canada goes by rail.

When the operating railways say it would interfere with capacity in the west, that is certainly true, and you could not run a very fast train. You would have to go at approximately the speed of their container trains, which do go at a reasonable speed, but not that fast. That's a fact we have to live with.

In the corridor, I think it's different. You have more parallel tracks—or there were more parallel tracks, but they're trying to get rid of them. I think that is part of the problem. You could make incremental improvements, but I think you have to have some kind of mixture.

Even Greyhound provides very good service in the west, although they don't serve airports since they no longer fly. But they basically do carry a lot of freight. The buses in the west, for example, have trailers behind them for freight. They carry express freight for courier agencies and their own parcel service. This kind of mix is needed in order to make everything pay, particularly mail, etc. My submission from the west includes that, because I feel it's the only way we can get more revenue for passenger rail, for these trains. Revenue is not all in passengers, it has to be mixed.

The Chairman: I will invite shorter answers, please. We'd like to have as many questions as we can.

Dr. John Bakker: Sorry.

The Chairman: I think he took up your time, so we'll have to move to the next questioner.

Mr. Mark.

Mr. Inky Mark: I'm glad to hear you talk about culture. We're reminded constantly that we live in the culture of the automobile in North America. We're also reminded that perhaps increasing frequency on the rail side may not increase ridership. My question to you is how you get people to ride on railroads.

The Chairman: Mr. Gow.

Mr. Harry Gow: I think what you have to do is offer trains. When the trains are offered, they get filled. The Canadian was removed, but it was 101% full in the summer. I worked for Canadian Pacific for several years, and our most successful train was the Canadian. When it was turned over to VIA, it was their most successful train. It was removed maybe because there weren't enough cabinet ministers of the government of the time on the southern line. There were a number of them on the northern line. I hate to say it, but I think that's what in fact happened.

• 1640

I should like to return to an earlier question. You asked about crown corporations. We could call it something else; we could call it a commercialized mixed corporation. You could even make stock in it available to the public and to the railways, but the government, in our view, should maintain the golden share, whatever is done. We're not talking about a rigid, old-style crown corporation like Royal Canadian Mint, run practically from London, but something modern that would resemble our airport commercialized corporations, something that would resemble the American Amtrak as it has been recently reformed.

As to the social need, I can cite three sources as to where this has been studied and proven out. The Canadian Transport Commission held extensive hearings across Canada over several years and came to the conclusion that passenger train service was a basic social necessity. I'm sure you'd agree that there are few options for getting into Churchill, for example. In fact Churchill has these mixed passenger and freight trains that Dr. Bakker just mentioned.

Also, Hillman and Whalley, in a study for the Public Policy Institute in Great Britain in about 1978, did a study of 12 abandoned rail lines and found that many of the needs that the railway had served had never been served by any other means, including the automobile and the bus. The bus lines eventually disappeared and the automobile does not very well serve those people who do not own cars. In Britain at the time about 25% of the population had no cars. It's probably reduced to around the Canadian 17% level of carless families now.

Finally, Transport 2000 Atlantic, under the leadership of John Pearce and Marcus Garnet, an urban planner, carried out in the maritimes a scientific study based on Hillman and Whalley's methods to see the effect of the removal of a passenger train down there. They proved without a doubt in their study that a number of social needs are no longer met. Many people, as in Britain, simply stay home because they can't face the extensive drive from, say, Sydney to Halifax; they can't pay for the plane; and they're not up to hitchhiking at, say, 55 or 60 years old—that's no longer an option. So they stay home.

The Chairman: Mr. Calder.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thanks very much, Mr. Chairman.

I was just reading through some of your stuff, and I'll go back to the franchising model. At the bottom you say that perhaps the Amtrak legislation and operational strategy would be a better model for VIA. How long has the Amtrak legislation been in place?

Mr. Harry Gow: Since 1971.

Mr. Murray Calder: So obviously this would be a good example for us to take a look at. Is Amtrak making money?

Mr. Harry Gow: Amtrak is not making money on most of its services. There are services that apparently, like the Ottawa-Toronto service, cover their operating costs.

Amtrak also has contributions to its operating costs that we do not have in Canada, and those might be looked at. For example, in a GO Transit-like arrangement, Amtrak operates trains for the state of California, the state of Michigan, and the state of Vermont, and these are not paid for out of federal funds. So there are some models in the States that might help relieve the crown of some of its obligation, in a sense, by creating further business opportunities for VIA and providing further service for Canadians. As far as the crown is concerned, it's not a cost. The American model therefore is a very diverse and interesting one, which should be looked at closely.

I should point out that Mr. John Delora, the president of the Michigan Association of Railroad Passengers, produced for the Canadian Senate Committee on Transport, as a consultancy project about 10 or 15 years ago, a model VIA Canadian Rail act based on the American legislation. It was well received by the senators and should still be on file in the parliamentary library.

Mr. Murray Calder: Okay.

Mr. John Pearce: I'd like to add something, if I may.

Mr. Murray Calder: Sure.

The Chairman: We'll have to shorten the answers, because I have to cut in every time. Please shorten your answers.

Mr. John Pearce: I just wanted to say that one of the ways in which Amtrak has strengthened its bottom line is the carriage of mail and parcels in connection with the U.S. postal service. Their revenue was $69 million U.S.—that's almost $100 million Canadian—in 1997 from carrying mail and express parcels through the post office.

That's just one example of ways in which VIA could improve its bottom line if it were encouraged to do so through a VIA Rail act. Up until now there has been no action and apparently there has been a feeling that this is not a mandate of VIA. A definition of VIA's mandate might encourage this sort of opportunism.

• 1645

Of course there are a number of other things VIA could do to improve its bottom line, but that's a good point, following the Amtrak model. I think in the automobile-oriented North American situation the Amtrak model might be a very good one to look at, in many aspects.

Mr. Murray Calder: It would be one in which I would be very interested, since this legislation has been in place for 27 years. If they were going to make money, then obviously this is what we should take a look at—and because you have recommended it to us.

The United States being as diverse as it is, obviously there have to be a few examples there that we can take a look at. They will be almost identical to what we are trying to do here, and we will find out whether or not they are making money, what they are doing, and how long it took them to be in operation before they started making money. These are the questions we're going to have to get answered, and if we can find an example, that's exactly where we should go.

Mr. John Pearce: The preoccupation with making money is a difficult one to deal with. I think we have to look at making money in a global accounting sense, because, for instance with Kyoto, we have to find a way to reduce our environmental emissions and our energy use, and one of the ways in which we can do that, replacing some of the short-haul air traffic, and particularly automobile traffic, with rail service, which is very attractive in bringing people out of automobiles, is in fact by an improvement in rail service. But a lot of items go into this global costing. Certainly one is environmental, but we've had examples through your constituency, your area. Bringing people into Toronto from the northwestern sector of Toronto does a lot of things for the economy and for social and environmental considerations.

I guess I'm just arguing for a much broader consideration as the bottom line, to include environmental and social conditions, as well as the economic conditions that involve building Highway 401 to 12 or 18 lanes.

Mr. Murray Calder: I hear you, John, because I was involved in the retention up in Collingwood of the Orillia-Barrie-Collingwood line. I'm currently involved in the retention of the Streetsville-to-Orangeville line too, which we're going through at present. But the bottom line to every one of these things is that we have to come back with some sort of strategy to show that these lines are profitable. It's the same thing with VIA. It has to make some money somewhere just to be able to replace its rolling stock, which is a big issue right now. That's what I think we partially have to look at as a committee.

The Chairman: Now we will begin the second round. Mr. Cullen, three minutes.

Mr. Roy Cullen: Thank you, Mr. Chairman.

Mr. Pearce, your comments about customer satisfaction in Britain... I have read similar surveys. I'm not sure I would go to British Rail to get an interpretation of them.

In fairness, I think what you're saying is right. If we go to Britain, we need to look at those railway lines that are working successfully and those that are working not so successfully, because as I understand it, it is a bit of a mixed bag. Some are working quite effectively and some of it may be tied to the way the franchising agreements have been put together.

You raise a good point. We need to look at that situation very carefully.

A lot of ideas are coming forth from this group, and if we're going to think outside the box to make passenger rail service work in Canada, it's encouraging to me to see that sort of thinking coming out. We talked about things such as bi-level cars, quadruple tracks, integrated systems. The minister is quite interested in more integration, more intermodality, etc. You have the ideas, but they have to be married, I suspect, to some commercial people who are prepared to put their money behind those ideas.

• 1650

If we were to get those ideas put into action to make the passenger rail system in Canada work, is there that kind of entrepreneurial interest or that kind of talent in Canada or would it have to come from outside?

The Chairman: In one and a half minutes, please.

Mr. John Pearce: I could just mention the example of Amtrak again. Amtrak, for its northeast corridor, and in a previous purchase of hundreds of Superliner cars and some other Horizon coaches and so on, has gone to Bombardier as a manufacturer. Bombardier has been financed by the Canadian Export Development Corporation, I believe.

Bombardier has built these cars for export and use by Amtrak, and Amtrak is doing a lease/purchase arrangement for them. They're running them now. With more modern equipment and bi-level equipment they are able to improve their revenues, get more passengers and cut maintenance costs. So Bombardier is a private operator that's been interested in providing this equipment for Amtrak, and that's actually been financed by the Canadian government. It's worked well for Amtrak and I think that sort of thing could work as well for VIA, but up until now I think VIA has not had the opportunity to borrow money and to finance new equipment in that way.

The Chairman: Monsieur Guimond.

[Translation]

Mr. Michel Guimond: I am not going to comment on the dream of becoming the premier of Quebec the member for Sherbrooke has.

In your second conclusion, you say:

[English]

“a government commitment for 10 to 15 years”

[Translation]

of $170 million per year. We could of course wish for that. I do not want to challenge you, but one knows what it means. One knows what a government commitment means. It is wishful thinking. You are only making a wish there. We know what the value and the scope could be, especially in 10 to 15 years. Since governments change over time, would they all be tied by that commitment?

Secondly, I'd like to have your view. The key is always the government commitment to passenger rail transportation. Mr. Mercier said to Mr. Tellier from CN last week: Is it normal that in Canada passengers have to wait on a side track for 45 minutes, an hour or an hour and 15 minutes to let cars with cattle, lumber or Volvo cars from oversees go by?

Thirdly, dear colleagues, we are going to work to write a report. We have a good example of profitable privatization in Canada. That of the Rocky Mountaineer. I am the only member of the 1995 Committee on Transport—and I am proud of it—who criticized VIA Rail for their vision, because they had let go of the scenic train market in the Rockies. We are far from the sovereignity of Quebec. We are in the Rockies. I am the only one who said that VIA Rail had no business going there to compete with the Rocky Mountaineer. This is an example of privatization that seems to have worked well.

Mr. Harry Gow: We are talking of several things here. Lets first talk of the Rocky Mountaineer. It was making money under VIA. It was taken away from VIA and not to be privatized in that manner. It was simply offered to a company that agreed to take it over. But I must tell you that the search for other competitors was not very thorough.

The Rocky Mountaineer is working well, but it was also working well under VIA. The company was successful in that regard and it could still offer services in that corridor, serve Canadians where they are.

What was your initial question again?

Mr. Michel Guimond: What is the moral value of a government commitment to $170 million for 10 to 15 years? What is it worth?

Mr. Harry Gow: A company that has its own identity, that is a legal entity, like the Ottawa Airport Corporation, the Ancienne-Lorette Airport Corporation or any other corporation, can sign agreements with, among others, the government of Canada. The government of Canada after signing an agreement, normally meets its commitment.

• 1655

We have a good example of a humongous funding, that of the TransCanada Highway in Newfoundland. We wanted to do away with a railway that was too old and we offered to build a much bigger highway. Hundred of millions of dollars were promised to Newfoundland, a province with a legal entity. The agreement is still valid and the government is meeting its commitment.

I think that the Canadian government, as any government worthy of its name, after giving its word and signing a document with a legal value, has to meet such a commitment. Given the Newfoundland example, I think that it would do the same in that case too.

[English]

The Chairman: Mr. Morrison.

Mr. Lee Morrison: Gentlemen, one thing that strikes me is that I guess you would have to accept that you are social engineers, if you will; you want to change the way people live.

About 20 years ago another generation of social engineers, in concert with a lot of predatory real estate brokers, drove the railways out of the centres of the cities. Those areas are now so built up that the mere thought of bringing the railways back in boggles the mind. You have 50-storey buildings sitting where the railroads used to be. You can't do it. So what is the solution?

How are you going to get the trains back into the city, unless we have a war? They were able to do this quite effectively in Europe. They have railways downtown because they destroyed the downtown. How are you going to do it?

Mr. John Pearce: I think the GO Transit in Toronto is a good example, over the last 30 years, of how we have developed the transit lines in the downtown area. We were very fortunate that very few of those were abandoned, because now almost every rail line out of Toronto is being used for commuter rail service.

Thirty years ago the thought was that at the same time as the Ottawa station was moved out of downtown and the Quebec City station was moved out to Sainte-Foy, we were going to tear these rail lines out of downtown. I think this is something we have to stop doing if we're looking to the future.

On my remarks under commuter rail, I think one of the most important things that the federal government and the regulatory agency should do is to go much more slowly with the abandonment of rail lines in urban areas. I think the delay of the situation is a concern, but I think we have situations in Edmonton, Barrie, Orillia and many other places across the country, and we have to save those rail lines. They're very important. I think we've seen in the U.S. the value of abandoned rail lines. They're now re-laying tracks, as Mr. Gow has mentioned.

After the station was taken out of Quebec City, of course, the track was put back in. It was a more circuitous track, but it cost $24 million to undo the damage that had been done.

So I hope that's one of the things in support for VIA Rail and for rail service in general, that we'll stop abandoning our railroad tracks, especially those in urban and suburban areas.

Mr. Lee Morrison: But it has already happened in a lot of places. That was my point. You cannot undo what has been done.

Dr. John Bakker: In Edmonton, the—

The Chairman: Just a moment, please. We have about two minutes left. You can use it to have closing remarks, or you can continue on this question. It's your time.

Dr. John Bakker: I do want to answer that question.

In Edmonton, the development didn't take place except for one building, yet the railway lines are closed.

Mr. David Glastonbury: Mr. Chairman, ladies and gentlemen, thank you very much for the opportunity to address you today.

I reiterate the points we raised earlier. I think the key to continued and viable passenger rail service in Canada is to give VIA a mandate to get out there and make it work.

Thank you very much.

The Chairman: Thank you very much for being with us. I want to apologize to you for the way I keep time, but we usually end our meetings on time because of that. So I apologize; I hope I didn't offend anyone.

The meeting is adjourned.