:
Good afternoon, ladies and gentlemen.
I have sent you a presentation. I would like to do a short introduction for about 10 minutes. Then you are invited to ask your questions either in French or English. I understand and speak both.
First of all, what does the Swiss Association of Public Transport do? We have 130 members. They are public transport associations and public transport enterprises that are organized in our association. One of our main tasks is making transport policy and lobbying Parliament and the government. This is one of our main tasks and a very, very important one.
We are also an information platform for enterprises. The enterprises meet in our association to learn how to make and experience exchanges. One of our most important tasks is that we do the management of joint tariffs and rules. We have joint tariffs and joint rules in Switzerland. I will talk about this later.
We're doing education, formation, and training, and we also do the organization of the distribution of ticket revenues. This is also one of our very important tasks.
Of course, we have services for members--for example, if they have very detailed problems concerning laws or new laws. Also, we are a think tank for future development and strategies. We are a kind of neutral association. All of the public transport companies are organized in our association. We have the big ones like the Swiss Federal Railways, but we also have very small ones, such as, for example, public transport companies in cities.
You can see on page 3 of my presentation that we have a very dense national network. This is a result of our collaboration. We're very proud of our public transport here in Switzerland. We have different actors and roles.
I would like to talk first about the different roles on a Swiss level. Then I would like to talk about the different laws on the cantonal level. As you might know, we have three different levels in Switzerland. We have the communes, then the cantons, and then all of Switzerland. This is the Swiss level. It's very important that we work together and have good coordination and communication.
When we come to page 4 of the slides, you can see the different roles we have. We have 26 cantonal governments. The cantonal governments are important because they organize public transport in their cantons. They order public transport in the cantons, but they cannot do this alone. They have to collaborate to work together with the Swiss level. I will talk about the cantons later.
We have public transport companies. You see them illustrated in the middle of the diagram. They are very important, of course, and there are different kinds of public transport companies, as I've already mentioned, both big ones and small ones. We have the railways, the buses, and the trams. We have everything.
We also have the federal Department of the Environment, Transport, Energy and Communications. We have our Minister of Transport--you can see that on the right side of the slide--and then we have the Federal Office of Transport. Of course, they are very closely linked.
On the left of the page, you can see us, the Swiss Association of Public Transport. We're also trying to influence public transport policy.
What is very important in Switzerland is that we have direct democracy. Direct democracy says, for example, that people can vote on public transport projects.
For example, here in the city of Berne, we had an extension of the tram line. Before it was built, we had a vote at the communal level. We also had a vote at the cantonal level. People have to decide on public transport. This issue is why we have such a dense net, because of course everybody wants very dense and good public transport to be offered in their regions.
The roles of the federal institutions, which are discussed on page 5, include, for example, monitoring and surveillance. They give us a framework for the question of security standards, for example, and they order public transport services, which are very important. They tell the companies and us what to do. They have the role of regulator. Of course, they are the owner of the Swiss Federal Railways and of the biggest public transport companies.
You can see that the federal institutions have different roles. Sometimes it's really a little bit difficult, because the different roles have different interests. As the association, sometimes we have the role of mediator so the different roles of federal institutions can have one common aim.
The last role of the federal institution is that we have someone we call “Mr. Price”. He looks at the prices. He controls our prices. For example, sometimes he also has different interests, if you compare his interests, for example, to the owner of the Swiss Federal Railways. This is also one of our challenges: to talk to him and to ask him about our prices.
That was the federal level. The roles of the cantonal governments are shown on page 6. In our 26 cantons, we also have governments and we have parliaments. They're very important because, for example, they decide on education, on public transport, and on health systems.
Cantonal governments also have the role as an orderer for transport services, so the cantons tell the companies what to do. I'm living here in the city of Berne, the capital of Switzerland. For example, if the canton says to the public transport company in the city of Berne that they need to have a bus or a tram every six minutes, they order it and they pay half of the price of it. Public companies make half of the price through ticket pricing, through the revenue coming from customers, and the other 50% is paid by the cantons.
I will talk about finance later on. It's a very complex and difficult system here in Switzerland, but as a main rule, we can say that in the cantons half of the public transport cost is paid by the cantons and the other half comes from ticket revenues.
Of course, the cantons also have a role as regulator or owner of different public transport enterprises. So what we have on the Swiss level, we also have on the cantonal level. For example, the BLS, the second-biggest train company in Switzerland, is owned by the Canton of Berne, where I am living.
I would now like to say something about the financing. I will begin with the financing of infrastructure. This is shown on page 7. We have tried to keep it simple. If we had made it to show what we're really doing, it would have been 10 times more difficult.
You can see that the money is coming from different places. We have the ordinary federal budget and then we have the cantonal budgets and the budget of the communes.
I will now change over to French because it's easier for me, if it is okay for you.
[Translation]
We have the regular federal budget—that is where taxes go—then we have the regular cantonal budget and the regular municipal budget. In Switzerland, we have something really great and very important. We have two funds.
[English]
We have created two funds and they're out of the budget, so this is one of the main advantages of these funds. We don't have the budget discussions every year, but we have funds made for public transport, so we have a long-term view. We have two funds. We have the fund for infrastructure, and we have the FTP, which is le fonds pour le trafic public.
These funds are very important. We also had a vote on these funds. For example, for le fonds pour le trafic public, we had a referendum in the whole of Switzerland, so the Swiss population could decide whether to make the fund or not.
What we would do with this fund was already defined. For example, we could invest this money in big infrastructure projects. The Swiss population voted maybe 15 years ago and said yes to this fund, and they said yes to how to finance the fund.
Now I will say something about the fund, le fonds pour le trafic public, which is very important in Switzerland.
At the moment we're having a discussion about it, because we want to
[Translation]
keep the fund.
[English]
When we introduced it, it was just for a short time. Now we would like to install it as a fund for the rest of our lives. This fund for public transport, le fonds pour le trafic public, gets the money from
[Translation]
taxes on mineral oils.
We have the VAT, the value added tax.
[English]
So a part of the tax, la taxe sur la valeur ajoutée, goes into this fund.
The third thing is that we have a tax
[Translation]
on lorries, the big lorries that pass through Switzerland.
[English]
Whenever the lorries come into Switzerland, they have to pay something. Also, part of this tax, the lorry tax, goes into the fonds pour le trafic public.
So we have a stable fund. This is an important thing in Switzerland. We don't have a bunch of discussions every year, but we finance public transport and the big projects out of these funds.
As for where the money is going, I won't say more about this. Maybe you will have some questions later. One of the main issues is that we have two funds. We have one for infrastructure, for projects in the cities and in the agglomerations of the cities, and the other is the fonds pour le trafic public, which is made for the big infrastructure projects of the railways.
[Translation]
Then we have the funding for traffic, the operating costs.
[English]
Here, you can see where the budgets are going. One important thing, which you can see on page 9, is where the subsidies are going. We have subsidies for regional transport at about 19%. We have city transport subsidies at about 16% overall. We have rail freight transport at 3% overall and infrastructure at 62%.
Also, there are express train lines are the trains that are going very, very far. They don't get subsidies because this is the only place where we really get money. With the express lines--the trains that go far--we get money, but for regional transport we don't get money. The customers are paying for the service of express train lines and we are getting the money, but when we offer regional transport or transport in towns and little villages, we don't get enough money, and therefore we get subsidies from the state of about 50%.
So there are no subsidies for express train line services and of course no subsidies for tourist facilities.
I would like to point out one last thing, which is the close cooperation between the public transport companies in Switzerland. You can see an example on page 11. If one goes from Engelberg to Appenzell--these are two very nice tourist regions in Switzerland--and you pass through Lucerne, the cultural city of Switzerland, you have to use six different railway companies. But you have just one ticket, so you have just one price. We have a kind of subsidized price. If you were to total all the distances, the real price would be 39 francs, which is maybe 30 euros at the moment, but the real price you would have to pay is 29 francs, so it's 10 francs cheaper.
We have the idea that we have less revenue per ticket but higher total revenue through more rides. This is one very important thing. It's very easy. You have one timetable in Switzerland and you can watch all the timetables for all the companies. You can buy one ticket for everything. I think this is one of our success factors.
The last point is our challenge for the future. We have to finance more infrastructure projects and also the maintenance of the infrastructure, so we have to get more money for more projects. Of course, public transport is in competition with other tasks, so we need to have discussions. We have to convince Parliament and the government that it is necessary to invest money in public transport.
At the moment, we're discussing our policy on tariffs, because we know users will have to pay more. This is one of our big challenges. We have the challenges of liberalization and regulations. We will have bigger liberalization, but liberalization and regulation are twins: if we have more liberalization, we get more regulation.
All in all, public transport in Switzerland is a success story. It's appreciated by the people, by the customers and the commuters.
This is very brief—it's the most important points—and of course I'm ready to answer your questions.
:
Thank you, Mr. Chair. You have a copy of the presentation in both French and English. So I am going to do the presentation in French and you will be able to follow along with the help of the images—there's not a lot of text—that give you a snapshot of what STM is. The pictures are bilingual.
A voice: Ha, ha!
Mr. Michel Labrecque: Joining me today are Ms. Desmarteaux, Director of Strategic Planning at STM, Mr. Bélanger, Director of Government Affairs, and Mr. Porlier, Assistant to the Chair.
In a nutshell, STM is the 14th largest company in Quebec, We have 9,000 employees. The Montreal subway system has four lines, 68 stations and 759 cars. The first cars were made in 1963 and started to run in 1966; the second set of cars were made in 1973 and started to run in 1976 at the Olympics. Our bus fleet has 1,700 buses and only eight of them are hybrid at the moment. All the others run on diesel. We provide 1.2 million passenger rides each day. The STM handles 80% of all public transit use in the Montreal area, which is 70% of all public transit use in Quebec. Other companies in Quebec share this work among themselves: the transit networks of Longueuil, Laval, Quebec, Lévis, Trois-Rivières, Sherbrooke, Gatineau and Saguenay.
The company's budget for 2011 is $1.1 billion. Roughly half of the revenue comes from passengers and non-tariff revenues, around 50% that is. Montreal municipal taxes represent 34%. Government subsidies for special programs, especially from the Quebec and Canadian governments, are around 12%. We get 7% in regional contributions that come especially from the gas tax and registration fees, and the rest comes from other operation revenues in advertising and marketing.
In a public transit company, the expenses basically go to pay the staff: bus drivers, subway operators, fare collectors, mechanics who repair the cars and the buses. The 24% in goods and services include the diesel and electricity. There are also investment-related expenses. We will come back to that. Of our $14 billion in assets, the maintenance of our buses and of our transportation centres, as well as unexpected expenses, represent 11%.
On another page, I have included a graph that shows the entire history of public transit in the Montreal area since the end of WW2. At that time, there were nearly 400 million passengers in a year. There was a long decline afterwards because of Montreal households owning cars, the urban sprawl and the highway system being developed. You see a small peak in 1967; that's because of Expo 67, when the subway had just opened. There is another peak in 1976 because of the Olympics, when another section of the subway opened. And there is a big peak, a sharp rise, in the early 1980s, late 1970s when the unlimited monthly CAM pass was introduced. When you put a pass in people's pockets, they are going to use public transit. Then there were some fluctuations and you can see a rise over the past few years because of additional investments from the City of Montreal and the Quebec government in particular. This year, within a few weeks, we are going to beat the all-time record in 150 years, since the STM was founded on November 27, 1861. It has taken us 150 years to beat the 1947 record, with 405 million trips.
Our company has won a number of awards, including
[English]
the American Public Transport Association “best of the best” in North America award as a public transit society.
[Translation]
According to Imperial College, London, the Montreal subway is the world's most productive subway in terms of mileage.
Montreal also won the MetroRail award. Subways around the world were compared to each other and we received an award for our commitment to sustainable development. That was two years in a row. On top of that, Moody's Investors Service and Standard & Poor's gave us excellent credit ratings for our loans.
You have a graph that summarizes the 2020 Strategic Plan, STM's strategic plan for the next 10 years. The plan is available in French, and you can watch a 20-minute presentation in English on the website: www.stm.info. You will notice three lines. The green lines indicates the current trend. The blue line is Montreal's 2008 Transit Plan, including additional investments for rolling stock, designated lanes, streetcars and extending the subway. The orange line is a combination of the current offer and a new service offer, without taking into account the increase in people driving alone in cars. Based on that, with a modal shift, we expect to see 540 million trips by 2020.
You are very familiar with the other graph. It shows the population growth in Canadian cities. When we say “population growth in Canadian cities”, we mean “the dynamics of mobility and mobility problems for goods and employees”. Those are the projections for each of your regions and your cities and I am sure you know them better than us.
Let's take a quick look at another chart. Our 2020 Strategic Plan includes a scenario with 50 streetcars, mainly in downtown Montreal, in order to support the growth in ridership. We have also just purchased 468 new metro cars from the Bombardier-Alstom consortium as part of a $1.2 billion contract. We also want to increase our bus fleet from 1,700 buses to 2,100 buses by 2020. All the buses that we are going to buy will be hybrid vehicles from now on. We currently have buses that run on diesel. Our new buses are going to be hybrid, and we are slowly going to introduce electric buses as well.
At STM, we anticipate investing $11 billion over the next 10 years in the subway system, in cars and extension, even though the Agence métropolitaine de transport of the Quebec government will be fully responsible for the extension. As for buses, we are thinking about buying new vehicles and replacing the fleet. The streetcar project is estimated at a little over $1 billion.
Another graph shows the federal government's growing support for public transit in Montreal and elsewhere in Canada. You can see the progression for 2011 in this graph. The Canadian government's contribution to STM is around $73 million, which has been invested mainly through Building Canada projects. This was possible with the funding from the excise tax on petroleum products via SOFIL. The Canadian government has directly funded the Urban Transportation Showcase that involves testing hybrid buses—a research and development project—and a program you have set up, the Transit-Secure Contribution Program that contributes to national security by allowing devices and cameras, STM devices, to be installed in the Montreal subway.
Some of the STM projects that were funded by the federal government via SOFIL include: the OPUS card, a smart card making it possible to pay for the fare in the bus or in the subway; the purchase of service vehicles; the purchase of buses; and the IBUS project, a real-time information project for our clients and for managing our operating buses.
Of course, I am not going to go into details on the chart that follows, with the $11.4 billion. In broad terms, the sum is divided into two. The first amount is for asset maintenance, which is essential for us. The company's assets amount to $14 billion. Maintaining them in good operational condition is a must. The second amount, for a total of $5 billion, is for optimization and development. So a significant part of the budget, just over $6 billion goes to maintenance. The items are listed in order of importance. That is the order of priorities for our projects. If we don't have all the money we need, the funds will be allocated in that order, from first to last.
You can see the data on public transportation in relation to Montreal's economy on page 13. You will see how much money was invested in public transit and what the spinoffs were for the metropolitan community of Montreal. The data is from a study done by the Board of Trade of Metropolitan Montreal. The study shows the added value and the direct and indirect jobs that were created, the impact on Canada and Quebec's revenue, meaning on taxes, and finally the impact of public transit investment, which is three times greater than that of private transportation by car. This can be explained by the fact that public transit is three times less expensive than private transportation by car. This allows households to save money that they can invest in other areas of the economy of Montreal, Quebec and Canada.
This is the second study of this kind done by the board of trade.
Let me end with our recommendations. We recommend that a national fund for public transit be created to ensure predictable and long-term funding. Predictability and long term are very important for the current strategies.
We also recommend that funds be indexed. In metropolitan Montreal, a 1.5¢ gas tax was put in place in 1996 and it stayed the same for almost 12 years. That means that the fund went down relative to inflation. So our recommendation is to index the funds, especially the gas-tax fund, which we get through SOFIL.
Our final recommendation is to ensure that public transit remains eligible for the next generation of infrastructure funds in upcoming years. In some cases, it has to do with job creation programs. In other cases, it has to do with programs developed to maintain infrastructure at a national level in order to have a competitive economy.
I am going to leave it at that and let me give you a hand for taking public transit.
[English]
Thank you.