TRAN Committee Meeting

STANDING COMMITTEE ON TRANSPORT

LE COMITÉ PERMANENT DES TRANSPORTS

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 1, 1998

• 1534

[Translation]

The Chairman (Mr. Raymond Bonin (Nickel Belt, Lib.)): Order please. As our agenda indicates, we are meeting in accordance with Standing Order 108(2) to proceed with a review of passenger rail services offered by VIA Rail and the means to revitalize this important mode of transportation within the context of the fiscal and environmental concerns facing the Government.

We are pleased to have Mr. Pierre-Yves Melançon, an Executive Committee member and the person responsible for transportation with the City of Montreal. He is accompanied by one of his colleagues, whom I would ask him to introduce.

Although I should not have to apologize on behalf of the absent members, I would like to inform you that there are fewer government members because most sit on two or three committees and they must be present when a vote is held by another committee.

• 1535

I would ask you to make your presentation. In about 15 minutes, we will invite the members to ask their questions.

Mr. Pierre-Yves Melançon (Executive Committee Member and Responsible for Transportation, City of Montreal): Mr. Chairman, I'm accompanied today by Stéphane Brice, who works in the Economic Development Department of the City of Montreal.

As members of a minority administration on the municipal council, we obviously understand the importance of being present when a vote is held. Mind you, our average numbers at our votes are not bad either.

Mr. Chairman, honourable members of the Committee, it is a pleasure for me to appear before the Standing Committee on Transport today to present the City of Montreal's views on the future of passenger rail service in Canada.

This is not the first time we have taken part in a consultation effort on transportation. We have previously testified before the Royal Commission on National Passenger Transportation, the National Transportation Act Review Commission and the Standing Committee on Fisheries and Oceans concerning the Coast Guard. The City of Montreal also took part in consultations conducted by your Committee on the commercialization of Canadian National and on the Canada Shipping Act.

The City of Montreal's interest in transportation issues is not a chance affair. Montreal was and is still a transportation hub. We have a legitimate interest in passenger rail service not only as the site of the headquarters of Via Rail, but also as a city served by passenger rail operations. No fewer than 1,150 Montreal residents are employed by Via Rail (there were nearly 2,700 in 1988), including head office, Central Station and the maintenance shops. Every week, 111 trains leave Central Station, 89 of which are assigned to the Quebec City-Windsor corridor.

Montreal has been a witness, although it cannot be called a privileged witness, to the turbulent times that have completely altered the railway industry's corporate landscape. For more than a decade, the two major railways, CN and CP, have made every possible effort to restructure their operations. And as a result of their strong presence in the city, Montreal has been the most sorely tested of all Canadian regions. Both companies have put on a new corporate face. Canadian National has been privatized, while Canadian Pacific has gone west, although it has not taken all its marbles away from Montreal.

The Chairman: Excuse me for interrupting you, Mr. Melançon. The light indicates that we will have to go to the House for a vote in less than 30 minutes. So you will have the time to finish your presentation.

Please continue.

Mr. Pierre-Yves Melançon: At least the suffering has not been in vain, because both companies have appreciably improved their performance and have been able to restart their operations in Montreal.

Via Rail's recent history is similar to that of the other two companies in certain respects. The federal government's 1990 decision to cut gradually into the company's annual subsidy triggered a process that forced Via to make a serious effort to trim its operations.

Of course, the company's large subsidy deserved to be seriously reconsidered. In the next few years, Via Rail made strong efforts to reduce its financial dependence on government by controlling its costs more effectively, while maintaining service levels and adopting a more commercial outlook.

The parallel with the other railways stops there because, for CN and CP, restructuring had an avowed purpose. Apart from improving their competitiveness, it was part of a growth program. At Via Rail, however, restructuring seemed to be an exercise forced on the company, one that was not part of any redevelopment strategy.

The Standing Committee on Transport's current hearings have come at the right time since Via Rail's fate is now more than ever in the balance. We hope they will help answer the fundamental question: What do we expect of passenger rail service in Canada?

This existential question, if it is indeed one, is the key to the definition of Via Rail's mandate. That mandate needs to be clarified. According to it, Via Rail is a public service with related obligations. At the same time, the company is expected to achieve a financial return similar to that of a purely commercial business.

The Montreal community believes in the future of passenger rail service. Its position is not based on nostalgia, but rather on the conviction that rail transportation is part of the answer to our questions regarding economic progress, sensible development and environmental preservation.

Despite all it has to offer, growth in passenger rail service in Canada has been outstripped not only by development in other modes of transportation, but also by a form of urbanization unfavourable to public transit and by new lifestyles.

• 1540

With the founding of Via Rail, an attempt was made to ensure that train travel would survive, although there was some doubt that it could return to its former place. Consequently, Via Rail never received a clear mandate or the financial means to undertake its recovery.

Mr. Terry Ivany, President and Chief Executive Officer of Via Rail, has previously described to this Committee the two options facing passenger rail service: the status quo or growth. In our view, and we are not the only ones to think so, the status quo means a long, slow death.

The issues of corporate governance and funding are related. All observers acknowledge that Via Rail's current structure is incapable of maintaining a sufficient rate of investment to renew equipment and infrastructure. The problem, however, is that the attraction of passenger rail service is very much determined by a set of benefits afforded by this type of travel that depend on the constant improvement of Via's assets.

The financial dilemma seems understandable to us since municipalities are constantly faced with similar, apparently impossible choices regarding the matter of sustaining urban infrastructure and containing the tax burden, while expanding the tax base.

Access to financial markets could meet this shortfall, but, to gain such access, Via would be required to produce a return that a passenger train operator would find it difficult to achieve. No passenger train operator anywhere in the world recovers all its operating costs. Of course, examples of profitable services do exist, but those profits are the result of a specific high-volume line, rarely the organization as a whole. However, railway companies such as Amtrak nevertheless post honourable cost recovery performances.

This fact inevitably leads to mixed private/public arrangements. We are not qualified to design the ideal arrangement, but we nevertheless offer the following observations, which we hope will assist the members of the Standing Committee in addressing this issue.

First, the Canadian market cannot support a purely commercial passenger rail system. The government must have the opportunity to give an operating company a mandate in exchange for financial support.

Second, private sector participation is conditional on a minimum level of government financial involvement. The same is true in all other modes of transportation. Private airlines rely on airport infrastructures which were initially funded by the federal government. It would also be impossible to operate bus lines without access to an extensive road system financed by all taxpayers.

Third, calculations of the public's financial contribution must take into account the implicit financial support enjoyed by competitive modes of transportation and the external benefits that trains offer for the environment.

Fourth, supposing that an arrangement made it possible to attract enough private money to meet capital requirements, the federal government would very likely continue to subsidize operations at a level equivalent to that of 1998 ($170 million), at least in the short term.

Fifth, the franchise model is an attractive one and can be reconciled with the idea of a mixed private/public arrangement that can secure commercial viability without compromising the company's public service mandate. However, a regional franchise arrangement would have the disadvantage of fragmenting the system.

Sixth, the option of creating a commercial Crown corporation, as proposed by Via Rail management, would help redefine the operating company without dismantling the current structure. The Crown corporation model fits in well with the idea of a public mandate.

With some 14 million inhabitants spread over a 1,000-kilometer span, the Quebec City-Windsor corridor is undoubtedly the Canadian market most conducive to passenger rail service. And in fact, Via Rail's figures confirm that the corridor generates nearly 85 per cent of passenger traffic and 70 per cent of revenue. Apart from these statistics, however, the corridor is the country's economic focal point, and Montreal is one of its centres, and intercity access is one of the conditions for the region's development.

These requirements, particularly adherence to schedules, are particularly stringent on railway lines where freight traffic volumes are highest. The challenge is all the greater since Via Rail has virtually no infrastructures and the line owners, CN and CP, have their own operating constraints. Consequently, cooperation and coordination with the freight carriers are an absolute necessity.

• 1545

The fact that Via Rail does not own the infrastructures is not in itself a handicap in view of the fact that the new British model, which has given considerable hope to many, is based on a division between operations and infrastructure.

The Quebec City-Windsor corridor is also the theatre of intense modal competition. This is not a bad thing in itself since it encourages carriers to innovate and improve service quality. Airlines offer more than 40 daily departures from Montreal to Toronto and vice versa, and there is also hourly bus service to Quebec City, Ottawa and Toronto.

It is important to recognize these characteristics of the corridor market before redefining passenger rail service in Canada. Far from reducing service levels under the proposed model, we must improve them.

The introduction of a high-speed train system is one of the most attractive options for the renewal of rail service in the most highly populated corridor in Canada. The Carman-Bujold Task Force established by the Quebec and Ontario governments concluded in 1991 that high-speed rail service would prove beneficial for passenger transportation and for the economic development of the Quebec City- Windsor corridor. Whatever the case may be, the financial and commercial viability of high-speed service remains to be proven because of the prohibitive cost involved. Significant government participation was required to guarantee an acceptable rate of return for private investors.

However, the task force opted for the TGV model, a high- performance technology requiring extensive new infrastructures. However, in the current state of public finances, there should be an assessment of alternatives that can both increase train speed and make do with existing infrastructures.

More conventional and less ambitious solutions do not make it any less important to increase train speed significantly. The competitiveness of the corridor's trains relies on this. It takes more time to travel by train between Montreal and Quebec City and between Montreal and Ottawa, for example, than it does to make the same trips by bus, and train departures are also less frequent. The busiest and fastest line, Montreal-Toronto, features travel time of four hours at best, in a market saturated with air shuttles that can make the trip in 70 minutes.

Short-term improvements in the performance of Via Rail's trains are prevented by the joint use of passenger trains and freight convoys. The corridor is very much in demand for both uses. Better coordination of freight and passenger schedules would no doubt result in appreciable improvements in travel time and punctuality. However, it is up to the railway owners and Via Rail to agree on a reasonable co-user arrangement.

Improvements in access to railway lines, however, must not be made to the detriment of freight operations. Freight transportation is also subject to the imperatives of speed and efficiency.

As is the case for freight transportation, the intermodal strategy increases business opportunities. Better integration of air and rail services, far from harming the latter, would instead help attract new clienteles and facilitate passenger travel.

If intermodal solutions are to go beyond the concept stage, considerable investment will have to be made in infrastructure. In the Montreal region, Dorval Airport is one kilometer away from a railway station serving both a suburban commuter line and a Via Rail line dedicated to service in the corridor. The missing link was recently the subject of a feasibility study and was found to be achievable. Similar opportunities no doubt exist at the national level and should be examined.

Similarly, better integration of passenger train and bus services would work to the advantage of travellers, who would thus be able to make better connections and could opt for the route that best suited them, rather than remain captive to either option. However, the structure of the passenger transportation industry in Canada is such that both of these modes, instead of being complementary, compete with each other on virtually all major long hauls.

Via Rail is already offering bus connections on certain routes across Canada. These examples of complementary service are still too scattered and, in the case of Montreal, virtually non-existent. Montreal is also penalized by the long distance between its major railway stations and bus terminals. In its current state, the Gare du Palais in Quebec City appears to be one of the few examples where train stations and bus terminals operate side by side to the great satisfaction of users.

It is in the interests of a carrier such as Via Rail to go intermodal. Its network, which does not reach far beyond the main lines, cannot claim to serve secondary urban centres. Buses are still the most suitable means of passenger transportation. Via would gain new customers if its top-performing intercity routes in the corridor could make better use of regional bus lines.

• 1550

Furthermore, most Canadian and transborder intercity markets, apart from the Ontario-Quebec corridor, are beyond Via Rail's reach and belong to the field of air transport. Via's rail links can play a complementary role in itineraries from the major airports, in particular Montreal and Toronto.

Transcontinental service is an essential passenger train segment in Canada and is associated in people's minds with the comfort and pleasure of train travel. It also has an impact on Canada's reputation as a tourist destination and on Canadians' support for train travel.

Under the current review, Via Rail will probably be assigned a more commercial role. In this context, transcontinental service may be relegated to a secondary position behind more lucrative services such as those in the corridor. However, transcontinental lines must be assessed in light of a number of other considerations.

First, since passenger trains will still have to rely on some form of public funding, it is important that they not be perceived as the exclusive prerogative of the central regions.

Second, in certain regions, transcontinental service is the least costly option for long distance travel. Third, transcontinental trains are part of Canada's tourism product.

Service is provided in isolated regions under a federal government mandate and through contractual commitments. It is not for us to judge whether this public service is appropriate.

In the context of the review of Via Rail's role, it is important that these commitments remain clearly separate from the general mandate and that they not undermine the railway's financial position.

The prospects for passenger rail service look better as we become increasingly concerned about the environment. They reflect the intrinsic qualities of trains: they use little energy, occupy little space, produce moderate amounts of pollution, reduce road traffic and are relatively well suited to urban development.

Highways, particularly on the outskirts of large cities such as Montreal and Toronto are subject to chronic and increasing congestion. The urban fabric is such that it can no longer accommodate new road corridors, and municipal governments are facing increasing expenses resulting from the premature deterioration of their road systems.

In its review of Via Rail, the Committee should not limit itself to the train's commercial potential. The impact on the quality of life of travellers and people in general must also be considered.

In conclusion, Mr. Chairman, the members of the Standing Committee are facing a sizable challenge. They must identify options for reviving passenger train travel, while guarding against simplistic solutions. Massive injections of public funds are not an option in view of the state of government finances, and the same is true of a drastic restructuring of the rail system, which is already a modest structure.

The most plausible options concern virtually all types of partnerships between government and the private sector. Examples exist of these types of partnerships in other countries and the Committee will have to be imaginative in applying these experiences to the Canadian context.

Regardless of the structure eventually proposed, we believe it must be subject to the following parameters:

- In any case, the operating company must be given a clear mandate;

- As the operating company steps up its commercial orientation, the government must not abandon its obligations to determine service levels;

- Redefining passenger train travel in Canada must lead to its revitalization, not the contrary. It must enable the operating company to modernize its assets so that train travel becomes a competitive alternative and significantly expands its clientele;

- The Quebec City-Windsor corridor remains the cornerstone of renewed passenger rail travel, with the most promising long distance markets;

- In view of Montreal's central position in the system and its critical mass in the railway industry, it would be entirely rational and appropriate for the operating company to establish its head office and maintenance facilities in that city;

- The operating company must have the tools to carry out an intermodal strategy;

- Lastly, passenger train travel must be revived in a way that reconciles its commercial orientation with a strategic framework for sustainable development.

Thank you, Mr. Chairman and committee members, for your attention.

• 1555

The Chairman: Thank you very much, Mr. Melançon. Excuse me once again for the disruption that has occurred. We see that the vote has been cancelled. I imagine that they have come to an understanding in the House. All we had to do was be absent for that to occur.

We will now turn to the question period. We normally allocate five minutes to each committee member to ask a question and to hear the answer. We try to stick to that.

[English]

Mr. Mark.

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

I'd first like to welcome you to the committee, and thank you for your report. Having been a former mayor, I'm very happy to see municipalities being involved in these public hearings. There's no doubt that VIA is an asset to your city. I, like you, would certainly advocate that they remain an asset in your city.

As municipalities are very accountable, if the City of Montreal had the opportunity to take over the VIA system—under the current circumstances, as we know, the rolling stock probably needs to be replaced—do you think it would be a wise investment even with the current $170 million subsidy? That's one of these “what if” questions.

[Translation]

Mr. Pierre-Yves Melançon: It seems to me the answer must be this: we are a municipality and, as such, we want to ensure that there is a rail service for the region as a whole. However, from that to turning ourselves into an operator, I would say no. I don't believe that's the mission of a municipality.

Similarly, when I consider the examples of what has been done, for CN or by Canadian Pacific, where there has been diversification, I feel it is possible to operate differently. However, it's not the responsibility of municipalities to get involved in managing or operating a railway. Our territorial limits impose a certain modesty with regard to the management of that kind of system.

[English]

Mr. Inky Mark: If I may pursue the same topic, the traffic certainly is between Montreal and Toronto. There's no doubt about that. I had asked a former presenter, that being the way it is, perhaps this may be an opportunity for the municipalities to actually operate a business like a utility. I know you already do operate a subway system. Do you consider this an opportunity, perhaps with a partner like Toronto, to operate the system between Montreal and Toronto like a commuter system?

[Translation]

Mr. Pierre-Yves Melançon: As for providing the Montreal Urban Community with a commuter system, we also have commuter train service, but that is operated by Canadian National and by a subsidiary of the St. Lawrence and Hudson Railway Company.

Ensuring that our citizens have access to a railway system is one thing, but we don't think we should interfere in the management of the system or its operation.

What the Urban Community Transport Corporation has done... Ms. Junca-Adenot, the Chair of the Metropolitan Transportation Agency, could have told you about the importance of a contribution by the municipalities and users to good suburban train service. However, from that to saying that the municipalities should take internal action in operating a railway system, I can tell you that I would be more in favour of not getting involved in that.

Sometimes we tend to say that we should do so, but I don't think so. It would be an error in our duty towards our citizens. It would mean getting involved in a mix-up of roles. If we have a public transit mandate, it is for the territory of our municipality or the Urban Community. I don't think we should move into other areas than those of our urban communities and our cities. We have to ensure with the players, that is to say the railway owners or operators, that adequate service is provided.

The Chairman: Ms. Lalonde.

Ms. Francine Lalonde (Mercier, BQ): Thank you very much, Mr. Brice and Mr. Melançon. This is an excellent brief, which I'm going to keep and talk about again.

• 1600

You show that passenger rail service for Montreal is an issue related to many others, to development first of all. You say that to ensure its development, there must be investment. You say that you cannot make extravagant investments, as has already been done, but that, at the same time, investments must be made because if they are not, if you simply try to maintain what already exists, you will fall behind.

Then you say that this must be related to social considerations and that intermodal issues are important, and you link that no doubt to recommendations, not only by the City of Montreal, but also by the Urban Community.

I'm merely sitting in on this committee, but I will forward your recommendations to the permanent members I represent. Ultimately, this committee has an extremely important responsibility regarding the future of Montreal as a city and as a region. Could you elaborate further on this idea? Ultimately, this committee's decisions will have an influence on the future of Montreal.

Mr. Pierre-Yves Melançon: I believe that the railway sector, both freight and passenger service, is extremely important for the Montreal region. This is true as far as employment is concerned, both at the maintenance shops and at the head offices. Currently, as a result of implementation of the Local Railways Act, maintenance and activities within Montreal city limits are still being consolidated. We can see this from what is being done. For example, the St. Lawrence and Hudson Company is selling a certain number of regional lines.

So partnerships are developing. A major consolidation of rationalization efforts has been done by CN and CP, and this has resulted in the St. Lawrence and Hudson.

We are currently trying to develop our commuter trains as well. This is a delicate and difficult issue because it calls for additional contributions by the municipalities. However, as regards what will be called sustainable development, we have to consolidate the regional focus of the railway to guarantee service. As road infrastructure costs are lowered, the quality of the environment is improved. I also think that the reliability of the railway and road systems is increased because there is less congestion.

What we are seeing in the Montreal region is no doubt also true in the Toronto area and in the other urban areas in Canada. In that sense, I believe that VIA Rail's purpose in the context of its new mandate, which will perhaps be suggested by this committee and eventually by the government, will have to reflect each of the economic realities and the presence of the railway in each of those regions across Canada.

This is vitally, fundamentally important for us. We mentioned that we have 1,800 employees. So this is important for us. There are no doubt other rationalization efforts to be made, but they must be made through investment.

I cite the example of the St. Lawrence and Hudson, which, after Canadian Pacific was restructured, made such rationalization efforts that it is now hiring staff, at its regional processing centres among other places. It is now making profits.

I believe these rationalization efforts must be made as an example of available investment opportunities. We must not move backwards. That can cause a temporary employment setback, but it can also produce a recovery effect over the short and medium terms.

The Chairman: Thank you. Mr. Drouin.

Mr. Claude Drouin (Beauce, Lib.): Thank you for your testimony, Messrs. Melançon and Brice. Without going as far as my colleague, Mr. Mark, I would ask you whether you are currently contributing indirectly or any other way to the maintenance of the station or of your head office. If not, wouldn't that be worth considering? Would it be possible for not only Montreal, but also other municipalities along the Quebec City-Montreal-Toronto-Windsor corridor to provide assistance to the railway itself? Have you already considered that?

• 1605

Mr. Pierre-Yves Melançon: For the moment, I would say no. When we at the City have to work with our friends at the railway, it's much more for the purpose of facilitating renovations to the station. That was done for Windsor Station. Those are the kinds of efforts we make, but we don't make investments. There is an ongoing debate, and I believe everybody is aware of it, about property tax exemptions for railway companies. This is a debate that involves the Quebec government, in the context of the Municipal Taxation Act, but these are claims that have an impact on our budget. For us, the impact of this kind of exemption would be a decline in revenues coming into the City's coffers of approximately $4 million. Four million dollars for us is equivalent to $0.01 per $100 of assessment.

But efforts are being made. If we find a way to reduce the tax burden on the railway system, that's an effort we could eventually agree to make, but that must have a consolidating impact on the railways for the region as a whole. This also enters into the calculations and the discussions we are having with the Quebec government.

Mr. Claude Drouin: Thank you.

[English]

The Chairman: Mr. Casey.

Mr. Bill Casey (Cumberland—Colchester, PC): I think I'll just pass and listen for now, if that's all right,

The Chairman: Are there any other questions? Mr. Bailey.

Mr. Roy Bailey (Souris—Moose Mountain, Ref.): Thank you.

You're probably aware you are not the first witness before this committee who has come here and given us the benefits of VIA Rail. It's true that across Canada, and in particular in the core area, you will find many supporters of VIA Rail. You are no different from the others in that you have given us the various reasons why you support VIA Rail and the advantages it has for your city.

The last time we had someone in here, I mentioned that VIA Rail, from a Canadian perspective, is very sick indeed. In some parts of its body it has a terrible ailment. The transcontinental, of course, as you get into the sparser areas of Canada, is a terribly non-profitable venture. However, in the core area of Windsor to Montreal there's a possibility. But while we have all its supporters and all the reasons for their support, this sickness VIA Rail has will only be cured when it gets a massive injection, a regular injection or a regular dose of that thing we call money. That's the only cure I can see at the present time for VIA Rail.

So in the city of Montreal, should everything else fail, don't you think you should take a different look at the situation to see if offering some fast train service within the city and to those institutions immediately outside the city is viable? I don't think we're going to cure VIA Rail before 2000, and it may pass away totally.

[Translation]

The Chairman: Mr. Melançon.

Mr. Pierre-Yves Melançon: We are quite aware that the Canadian reality differs greatly from region to region and that the regions may have more or less satisfactory service as a result. However, I wouldn't dare say—and I wouldn't want you to think I'm trying to avoid the question—that we in Montreal should decide what should be done in the west or in the east.

It nevertheless seems to me that, to the extent the government or the committee suggests there should be a national passenger rail policy, there are necessarily realities that it will have to face. There are isolated regions in Canada and we are aware of that fact.

With your permission, I'll draw a parallel with what has been done in the context of cost recovery for the Coast Guard. We all admit it's important to have Coast Guard services in the northern territories. Consequently, the Canadian government decided it was important to maintain some form of shipping subsidy. And yet a cost recovery policy was implemented on the Pacific Coast and on the Atlantic Coast, as well as in the St. Lawrence. A decision was made that showed this reality had been acknowledged. Some people are affected by this, people who need to be supplied by boat. So it was done.

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With regard to the Canadian situation, I believe there can be mixed solutions. Perhaps the solutions in western Canada will be different, in view of local realities and infrastructures, from those that might be desired for the Montreal region or for Halifax or Toronto. I believe there has to be some flexibility there. It seems to me you are in a much better position than I am to know about the specific aspects of the Canadian situation.

In that sense, I believe there must definitely be a way to come up with a game plan, if I can use that expression, that will let the patient survive. Would that presuppose major investments? When the passenger train policy has to be decided on, I believe difficult choices will have to be made. But there may also be a joint financial plan that should be added to that, through which we could consider solutions involving partnerships between the public and private sectors in a certain number of areas. We could retain transcontinental priorities, while entering into various partnership agreements at the regional level. It seems to me this is the great challenge that you must address as members of the Standing Committee. If we can help you in our own way, it would be our pleasure to do so.

[English]

The Chairman: Mr. Calder.

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

Yes, this is an interesting report. You've basically said here you'd be satisfied if VIA Rail were to look at the option of creating a commercial crown corporation and if the government were to commit itself to leaving the subsidy at $170 million a year as a base from which it could start.

There are three things I've seen here so far since we've been going through this. I believe that however VIA is going to co-exist with CN and CP, it will obviously need a detailed operating plan. It will have to come up with some sort of a management structure that allows for a coordinated decision-making process. And it needs good rolling stock.

Along the Windsor to Quebec City corridor, if you look at it, the issue of common running rights is definitely going to surface during this process because there are sections of this track where CP has the best line and where CN has the best line. Basically, CN from Toronto to Montreal has the best line. CP from Windsor to Toronto has the better line. From there, another railway line goes up to Montreal.

Common running rights is a concept, and I would like your opinion on whether or not this is achievable. CN and CP have told us if you have a high-speed passenger train running on their lines, it could cost them as much as four to five freight trains. Obviously they're in the business of hauling freight and they'll want compensation for that. I'd like your comments on how we would get around a detailed operating plan to make this corridor work.

[Translation]

Mr. Pierre-Yves Melançon: Mr. Tellier was very clear on this, I believe, when he came to testify before the committee, saying that passenger service isn't regulated and freight service isn't regulated. So there's another way to do it, and we are completely aware of that fact.

Perhaps I'm mistaken, but there may be a way to double or triple tracks on certain lines, if that can be done, so that when trains meet, one of them does not have to stop and let the other go by. There may be a way to make the necessary investments to double or triple the tracks, not for the entire system, but at certain places. By adjusting schedules, perhaps we could manage to achieve a better coexistence between passenger and freight traffic.

I don't know whether I'm completely mistaken, but from what I know of the railway system in the Montreal region, it seems to me that might be feasible. In urban areas, we can't add a second track to the existing one because there's no room, but it might be feasible in other places.

• 1615

As for management, if my memory serves me, the possibility of rights of way under franchises was also raised by the President of VIA Rail. On this point, I would be inclined to think that there must be a way of coming to terms with the owners of the railway lines.

However, we have to realize that CN and CP compete against each other. To date, CP has been present in the Port of Montreal. CN will now be offering services as well through new strategic alliances it has entered into with European ship owners. So they're in competition with each other.

Can we get them both to sit down at the same table to agree on a form of cohabitation or coexistence? I know that at one point they wanted to buy each out. I don't know which one wanted to buy the other. I don't know which was the bigger of the two, but I know that they wanted to do it, even though it didn't come about.

Could this happen through government intervention? I don't have a clearer answer than what I've just said. Mr. Brice?

Mr. Stéphane Brice (Research Assistant, City of Montreal): With regard to line sharing, you'll remember that the two companies east of Winnipeg had considered merging. In other words, there were surplus infrastructures at the time. We are currently at a point where we don't have enough infrastructures to accommodate passenger rail service. In another context, there were surplus infrastructures. So there is probably a way to achieve a better allocation of rail lines, by having CN use certain CP lines or vice versa.

We know that VIA Rail uses Canadian National's lines to a much greater degree. Of course, if VIA Rail obstructs CN's lines to a greater degree, CN will be placed at a disadvantage and will be less competitive than CP. There would probably have to be a solution and accommodations to prevent them from hurting each other, one more than the other.

Perhaps that's why Mr. Tellier reacted more strongly on the issue of cohabitation since CN was probably concerned to a greater degree. However, the truth is that there were said to be surplus lines in the east. Perhaps they should serve some purpose.

[English]

The Chairman: Very briefly, Mr. Calder.

Mr. Murray Calder: That would bring me to one last question. I don't really see the City of Montreal getting into the nitty-gritty of operating passenger rail, but this could also fall underneath the management structure. The railways are very sensitive about municipal taxation on their rights of way. A lot of the time, the rate has set over-the-fence valuing. If we're now going to get into a true management structure and a plan to get passenger rail back on track here, basically a tax break to any of the companies that are into this passenger rail strategy would probably be appreciated. Instead of having over-the-fence valuing on right-of-way taxation, I would like your opinion on the idea of having right-of-way taxation whether it's out in the country or in the city.

[Translation]

Mr. Pierre-Yves Melançon: Taxation for the railways is currently structured in a way that varies with each municipality. It was based on the municipal assessment and land value. In a small, isolated municipality, land is worth less than, for example, in downtown Montreal.

In that sense, if the provincial legislation provided for a standard rate for all regions in the province... That's what's called having the Quebec government shovel its bills over the fence into the municipalities' yard. In the debate in Quebec, I'm convinced that the Union of Municipalities would be on the look-out for this kind of thing, although it seems to me things are headed in this direction, whether there is a standard rate or a standard zero rate. There would thus be a tax exemption.

Since we're talking about Canadian politics here, I sense that the constitutional debate is going to be reopened. Could the federal government ensure standard rates across Canada? Would the Ontario government agree, along with the New Brunswick government and so on, to the concept of standard tax relief for railways rights of way from sea to sea?

• 1620

That's the issue. There's also the issue of the setting up of businesses in each of the provinces. We are familiar with Mr. McKenna's dynamic attempts to attract business to his province, for various reasons known only to him, of course. From there, we have to admit that there are issues involved. This is true of Ontario, which offers benefits, and of Quebec which offers certain others, and so on. That's part of the game of interprovincial competition to attract foreign investment.

So I wouldn't dare cross the Quebec border on this aspect, but I believe this is an orientation that should be considered by seeing how it would be possible to share. Perhaps there should be a constitutional conference of Canadian ministers of Transport.

The Chairman: That was a very clever answer.

Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Gentlemen, I apologize for my absence during your presentation, but I was attending a meeting of another committee. Can you describe the current situation in Montreal regarding Central Station and Windsor Station? Are both operating at full capacity as regards passenger trains? What's going on there?

Mr. Stéphane Brice: Windsor Station is mainly given over to commuter trains, whereas Central Station receives all VIA Rail trains and is the railhead for one commuter line. This situation stems from the historical sharing arrangement between Canadian Pacific and Canadian National whereby the lines that are used are linked to the stations there. But VIA Rail's operations are concentrated at Central Station.

Mr. Roy Cullen: Do you get the impression there is a duplication of infrastructure or are things well organized as they stand?

Mr. Stéphane Brice: According to the CN people and those currently at St. Lawrence and Hudson, the common running of commuter trains seems to suit them. It also suits us to a certain degree because these two businesses have joined forces to promote the commuter trains since these services complement each other, not compete with each other.

As regards passenger service, I would say the issue much more concerns intermodal transport involving buses, taxis, cars and commuter trains to serve the major regions. It would have been a good idea for Ms. Adenot of the Metropolitan Transportation Agency to appear here to explain the ins and outs of the issue, but there are major financial issues involved. In addition, to date, the two major partners have joined forces in a commuter train council for the Montreal region and they are working together. I assume that when you manage to work together, it's because you're satisfied with the situation.

[English]

Mr. Roy Cullen: Could you describe what areas the commuter trains service on the West Island? Are there more areas that they service? Do they pay their own way, or are they subsidized at all? This would be the commuter trains from Windsor Station.

Ms. Stéphane Brice: Only the West Island is serviced from Windsor. From the Gare Centrale, it's the northwest, to Deux-Montagnes.

[Translation]

Mr. Roy Cullen: Deux-Montagnes, but most of the trains leave from Windsor Station, don't they?

Mr. Stéphane Brice: A bit more from Windsor Station, but it's a question of market. The West Island market is slightly bigger than the northwest market, although they are tending to even out.

[English]

Mr. Roy Cullen: Do the services pay their own way? Are they self-supporting, or are they subsidized by governments?

[Translation]

Mr. Pierre-Yves Melançon: They are subsidized operations. There is a base price per passenger. If my memory serves me, it's $1.35. For the Montreal community, the subsidies amount to $17 or $18 million for the commuter trains.

• 1625

Mr. Roy Cullen: Does the City of Montreal pay these subsidies?

Mr. Pierre-Yves Melançon: All the municipalities do, as well as the Metropolitan Transportation Agency, which receives funds from the 1.5¢ per litre gas tax collected throughout the Montreal region and from automobile registration fees. The Agency's general fund is also used to subsidize the commuter trains, public transit, the subway, bus lanes and so on.

The Chairman: Thank you.

[English]

Mr. Morrison.

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

Good afternoon, Mr. Melançon. It's interesting that you got off to the icebreaking question on the side. As a westerner, I wish I had the power to make you an offer: I will relinquish the transcontinental VIA Rail service and you give up the subsidized icebreaker in the Port of Montreal and we'll call it square.

I would like to pursue the question that has been raised by a number of people here about municipal control of VIA. As you are aware, the Government of Ontario has recently bailed out of the GO train and basically threw it at the municipalities and told them to take it and run it or it's going to disappear. Isn't there some potential for not just metro Montreal but all affected municipalities to get together, form an operating corporation and run a rail service in the corridor that would not have any direct relationship to the rest of the country, it would be totally independent, simply run it like a giant version of the metro, but run it all the way to Toronto?

As a city administrator, do you see any potential for that? The municipalities in southern Ontario are going to have to come up with something like that with the GO train whether they like it or not.

[Translation]

Mr. Pierre-Yves Melançon: Most municipalities, like all governments, are obviously facing extremely tough financial constraints. We tend not to want to increase the tax burden on our taxpayers.

However, we see from the history of our municipalities that we have had to take on certain types of responsibilities, including, for example, public transit. For the Montreal Urban Community as a whole, we have to manage the Urban Community Transportation Corporation, which is constantly under government control, you could say. In other words, it is essentially and exclusively controlled by the Corporation's employees.

If we were able to ensure we had a very good regional transportation corporation that had the financial support of users and the municipalities, but no government subsidies, I would not be inclined to want that corporation to expand significantly into new territory. It seems to me that current public transit management solutions should be oriented more toward what could be called mixed enterprise corporations involving forms of partnership between the public and private sectors.

Personally, I would not tend to encourage the municipalities to go beyond their own territorial limits to meet regional needs. Beyond those limits, they would risk rewriting CN's history, but in a different way. I don't think this can be of any interest to the municipalities. In that case, we would tend to over-standardize management rules and not to be able to make the necessary adjustments because we would have to meet the needs of all the regions of the country. I believe that would entail much too great a burden for the municipalities.

The Chairman: Yes. Mr. Brice.

Mr. Stéphane Brice: In my view, the municipalities are not the right jurisdictions to manage an intercity passenger train system, particularly since not all the municipalities in the corridor have the same level of service.

• 1630

It would be very difficult for us to reach a consensus on the cost-sharing formula. I imagine that the cities that don't have stations, but through which the railway passes, would refuse to pay anything, whereas the cities with stations would be more interested. It would therefore be more appropriate to ask the cities to engage in municipal management and do the maintenance.

Moreover, the gas tax collected by the federal government is not necessarily invested in transportation, whereas that collected by the municipalities in the Montreal region is used to finance our commuter trains. It seems to me the excise tax on gas brings in much more money than would be needed to finance a system such as that of VIA Rail.

The Chairman: Mr. Melançon.

Mr. Pierre-Yves Melançon: Allow me to add one point. The subsidizing body is usually the ultimate decision-maker. Imagine the trouble we have when the 25 municipalities of the Urban Community must come to a local consensus on the management of service orders. If you increase the number of decision-makers along our major corridor, you risk having a decision-making process involving elected representatives which is particularly complex and hard to manage. When you invest a dollar in a business, you expect a return on your dollar. So imagine what happens when you amplify the situation.

I would also point out that there is a mandate that is both Quebec-based and Canadian-based. The Government of Canada has major responsibilities for rail and air transport and shipping. This is a federal jurisdiction. In Quebec, we talk about public transport or trucking, responsibilities that come under provincial government jurisdiction. Of course, the municipalities must provide their populations with public transit services, and we have in fact established transportation corporations. I can't tell you when or how the first Montreal Transport Commission was founded, but I imagine that transportation services have been provided and localized since that time. You can't remove responsibilities from those who have to carry them out, and it's the elected representatives who must make decisions and determine how they will discharge those responsibilities.

[English]

The Chairman: Mr. Morrison.

Mr. Lee Morrison: Mr. Melançon answered the question I was going to ask just in the last 30 seconds.

[Translation]

The Chairman: Now we'll move on to the second round. Ms. Lalonde.

Ms. Francine Lalonde: As a history teacher, I find the situation somewhat ironic because some historians say that Confederation came about essentially to enable the provinces to join forces so that they could borrow together to enable the railways to develop the west.

First, a political will must be expressed here, and passenger rail must be viewed as a component of development. That's the first thing. It if is perceived solely as an economic problem, I would advise you to put the entire matter into the hands of Quebec, which will try to do something with it, because we in Quebec are firmly convinced that we need passenger rail service.

I would also like to ask you whether you don't think that VIA Rail could try a little harder to provide decent service. I've often travelled on VIA Rail and I find that there aren't enough trains, that the schedules don't suit me and that VIA doesn't at all do what could be done to encourage more people to take the train.

My questions concern these two extremes: history on the one hand and schedules on the other.

The Chairman: Perhaps I could help you. That's why we are here today: everybody agrees that VIA Rail has been vastly improved and developed, and that it is fully extended. It can't do any more.

Ms. Francine Lalonde: Not with the same amount of money it can't.

Mr. Pierre-Yves Melançon: That's what the Minister admitted when he came to testify before us: we are fully extended. VIA Rail has made every possible effort and has coped with the constraints placed on it, he said, without reducing service to the public. VIA Rail's President and Chief Executive Officer, Mr. Ivany, said virtually the same thing.

• 1635

I'm going to answer you in an ironic way. Today, the train for Ottawa left at 10:00 a.m.; I would have been here at noon. The next train left at 3:00 p.m.; so I would have been late. Are there any adjustments to be made relative to the clientele? I was due here today at 3:30 p.m. Perhaps VIA Rail doesn't have to change its schedule for me or for us.

I believe VIA Rail regularly conducts customer surveys on which it relies in developing its business plan.

Ms. Francine Lalonde: Perhaps it's because of freight.

Mr. Pierre-Yves Melançon: Perhaps it's because of freight because there definitely are cohabitation problems.

Ms. Francine Lalonde: Ah...

The Chairman: That's a real problem and it has been identified on a number of occasions. Ms. Lalonde, have you finished?

[English]

Mr. Mark.

Mr. Inky Mark: Thank you, Mr. Chairman.

In your report you indicated that there are currently 1,150 employees at the head office and the maintenance facility for VIA in Montreal. It is the mandate of this committee to decide what the future of VIA will be, and you've heard that perhaps it may be taken apart through franchising and other means. What I'd like to know from you is what economic impact VIA Rail currently has on the city right now. The reason I'm asking is that I guess the worst-case scenario is what impact it will have in the event that it does leave Montreal, in dollars and cents.

[Translation]

Mr. Pierre-Yves Melançon: I'll answer the economic impact question. I'll just give you a rough guess, but our office can forward details to the committee's members. You have to calculate the number of employees, approximately 1,800, who receive an average salary of $50,000. There are buildings, properties. If my memory serves me, in the case of CN, at the time, it was... Stéphane help me.

Mr. Stéphane Brice: It all depends on the period.

Mr. Pierre-Yves Melançon: When we talked about CN, we estimated the value of the economic impact in billions of dollars. You also have to calculate the purchases that VIA makes, its equipment maintenance expenses, the number of employees. These are extremely large amounts. It's not like Pratt & Whitney. You have a business that has a whole series of impacts. It doesn't do much exporting, but it's a railway company. So there is the maintenance of its vehicle fleet and all the head office staff, the buildings, properties, etc. We'd have to check, but the impact is necessarily great.

[English]

The Chairman: Mr. Cullen.

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

I'd like to briefly talk a bit more about the commuter service in Montreal. Since we're getting into constitutional issues, though, I think I'd be remiss if I didn't mention one of the very unfortunate tragedies in Canada today. With respect to passenger service and Montreal, I suspect there are more passengers leaving Montreal than there are going to it.

If you look at the West Island service out of Windsor Station, do you see a time when the Metro in Montreal will extend to the point where it will compete completely with the West Island commuter service? If so, what would happen then to the commuter service out of Windsor Station?

[Translation]

Mr. Stéphane Brice: The commuter train, particularly on the West Island, does not really compete with the subway. There's no chance of extending the subway and doubling the commuter line. They have different and complementary purposes.

Mr. Pierre-Yves Melançon: The investment costs to build a subway tunnel and an addition would be high. Based on the population of Montreal Island, which amounts to approximately 1.6 or 1.7 million inhabitants, the cost-benefit analysis indicates there would be no point in building additional subway stations. There may be pre-election political reasons for doing so, but that is another matter.

• 1640

However, the purpose in choosing to establish the Metropolitan Transportation Agency was precisely to ensure that there was a harmonization in the development of intermodal public transit: buses, taxis, bus lanes, subway and commuter trains. When you look at the potential development areas for commuter trains, you see that there is a complementary relationship with the existing subway system. So there's no competition between the train and the subway. Otherwise, we would be shooting ourselves in the foot or throwing money out the window.

[English]

The Chairman: Mr. Bailey.

Mr. Roy Bailey: You have answered a lot of the questions and you've answered them well when it concerned the part of the city of Montreal and its relationship and the future of VIA Rail.

Let's get down to a rather nasty situation where it is left as either a unilateral decision or a recommendation from this committee to the government as to the future of VIA Rail. That would be a unilateral decision. If we're going to maintain VIA Rail—it's obvious, and we've all agreed, that it will be in the core area—would you not think that rather than to have the federal government dictate a policy and say here's VIA Rail, take it and be satisfied...? Does it not seem more of a viable situation to involve VIA Rail, CN, CP, the City of Montreal, the City of Toronto, the provinces, and we all get together and hope to come up with some type of a solution?

I really don't think the federal government trying to unilaterally say this is your railway and if you don't like it.... It seems to me that you people are as important in Montreal as the people of Toronto or Windsor. Why not become part of a greater committee—call it what you like—between Windsor and Montreal and let's see what we can do with this? I don't think just saying make the decision, and that's it if you don't like it.... Would you cooperate in that type of a venture?

[Translation]

Mr. Pierre-Yves Melançon: My answer is necessarily yes. We are here because we want to cooperate with the parliamentary committee and the Canadian government and eventually with VIA Rail.

However, as a representative of the City of Montreal, I feel it is important that we have a national passenger rail service policy, both for the service proposal that VIA Rail is making to us and also, of course, for the economic vitality of Montreal and for the preservation of its railway industry and all of its components.

However, economically viable solutions may vary from province to province in strategic alliances. Air Canada must develop its international markets through strategic air alliances. That's true for all businesses. This is a current trend in the air transport market. The railway market is somewhat smaller from the standpoint of players who can take part in strategic alliances, but there's nothing preventing us from having a policy with VIA Rail, which serves the major corridors.

I don't think Canadians are opposed to making a financial contribution to a Canadian policy from which not every Canadian would necessarily benefit. I'll give you an example. As a Quebec taxpayer, I pay for health insurance and I'm quite happy not to be sick. But I'm happy to spend my money because I feel that all Quebeckers are entitled to high-quality basic health care. However, when I see what is going on in the hospitals, I wonder sometimes whether my money is being well spent. We can try to make our health service more efficient. As a Canadian, I feel we should have minimum national service for a certain number of regions, but VIA Rail's modus operandi could include ways that differ from one region to another.

• 1645

This is a decision that must be made by the federal government, which may draw on the suggestions you make to it. Should the passenger rail system be subject to a national, local or regional policy? That's one of the major questions that you must ask and that you must definitely answer. And it's not an easy question.

I believe there must be a Canadian passenger rail policy. How can that come about in practice? You can question that and demand that there be a business plan and objectives. Based on that, you can say: "That's not enough; this is how we're going to correct the situation." When the entire railway industry was restructured, railways wanted to divest themselves of certain lines. In Quebec, the solution was to pass legislation on local railways. These lines were bought and are profitable. So specific alliances can be formed that may vary from region to region.

I won't speak for people in the west, in the east or in Ontario, but I can tell you about the Montreal region. This is a highly political decision, just like the decisions that had to be made on our national health, energy and other policies to ensure a certain amount of fairness. It's up to you to...

[English]

The Chairman: Ms. Desjarlais.

Ms. Bev Desjarlais (Churchill, NDP): I have a bit of comment largely regarding what Mr. Bailey had said, and I hope I heard him wrong. He had commented that certainly it was more than likely the deal was going to be in the corridor, and I got the impression he was saying but not anywhere else.

Mr. Roy Bailey: That's where it's going to survive.

Ms. Bev Desjarlais: And I'm glad that our presenter is coming across saying that he sees it as a whole package and something that's there for all of Canada. At least that's the way I'm taking it, that he wasn't saying Montreal would take this choice piece that's going to make the dollars, because quite frankly I'm being a little bit selfish here. I would like to use some of those dollars, because I know it's going to be needed to subsidize some of the areas that don't have the dollars—and I'm talking of specifically Churchill and Pukatawagan, where it's the only transportation in.

From another side of the thing, there are a lot of roads that just can't handle the traffic they have, and I think we have to offset that. I think Canadian taxpayers don't realize exactly how much of their dollar they are putting into roads and not putting that money into passenger rail. I think that when it's presented in a certain way they would be quite willing to invest in a passenger rail system—probably more than what they are now, but time will tell.

The Chairman: Mr. Calder.

Mr. Murray Calder: Thank you very much, Mr. Chairman.

In the first term of this government, when I was elected in 1993, I had a branch line that was going to be closed down and the track was going to be ripped up. It went from Collingwood to Barrie to Orillia. I worked with the municipalities at that point in time and we developed a municipal strategy to buy the track and the right of way. And they did that through the municipalities of Collingwood, Barrie, and Orillia and all the towns and townships in between. We did it, and that line's operating right now and basically those municipalities are leasing that back to a short-line operator and it's doing quite well.

I'm currently working on another one right now in the new riding that I have in this term of government, and we're well on our way with that.

So I see right now—just dealing with the corridor, because obviously that's what we're all here talking about right now, and it's a good start-off point as to what a strategy would be for the rest of the country—we have some major players here and the players are the ones that are going to be affected. We have Canadian National, Canadian Pacific, and VIA basically as transport companies. Public bodies that are involved in this are basically the federal government and the provincial government. We also have the Province of Quebec that's involved in this and local municipal governments. Other interested parties would be rail suppliers. Obviously if VIA ceases to operate there are other interested parties, anything from real estate people to high-speed rail to whatever.

In terms of my question, I'll go back to the taxation aspect of the running rights as to getting a uniform tax rate from point A to point B. That would obviously help VIA out, because it would straighten out one of its operating costs, in taxes of property. I know we have responsibility for depreciation on rolling stock, fuel tax, and what not, and those will be things we'll be dealing with too.

• 1650

If you're that interested in this corridor, are you willing to jump in as a participating partner in this strategy?

[Translation]

The Chairman: In all fairness, that is a very difficult question because Mr. Melançon doesn't have a mandate to make commitments, but perhaps he could address this question in a more general way.

Mr. Pierre-Yves Melançon: The City of Montreal does not intend to withdraw from all forms of cooperation. We have made efforts. For example, when we talked about the possible closure of AMF's shops, the city made major efforts with a number of partners to find a way to save the shops.

We are ready to cooperate. That doesn't mean we're going to invest money. That doesn't mean we would accept something else or that we would get involved in partnerships with others. However, the City has always said yes to cooperation, and I don't believe we would shirk that kind of responsibility.

What is important is that you have suggested solutions. You have been threatened. We were threatened with the closing of the shops. You have experienced a line closing. You found your own solution, which was consistent with your way of doing things, as well as the financial arrangements necessary for survival. You said it's working well now.

In this kind of situation, we have to try to stay on ahead of crises. That's what I understood from the Minister's attitude when he came to testify here and said, "We're fully extended, we're worn out and we're going to take our time. We're not going to wait until a crisis occurs before thinking intelligently. We're going to do it before a crisis hits." This seems to me to be a completely acceptable and intelligent approach.

In politics, you always tend to try to do this, but usually a crisis overcomes us. So if we can cooperate, we are going to do it as best we can in a manner consistent with the mandates of all the players. I believe the Canadian approach is a good approach. But the way to go about it has to be found. It is not obvious. I believe we're on the right track and headed in the right direction.

The Chairman: Well said.

We are now going to move on to the third round. You have one minute to ask your questions. Please take note of the questions, if there are any, so that you can answer at the same time.

[English]

So we'll do a third round of one-minute questions, and all questions will be answered at one time, if there are some.

[Translation]

No one? That means you've answered the questions well. When witnesses avoid a question, it has to be asked again in eight different ways. If there are no more questions, that's because you were very open with us. We appreciate it. Please make any closing remarks you may wish to make.

Mr. Pierre-Yves Melançon: Thank you. I very much appreciated the questions. You are politicians. We are often criticized for talking beside the point, but if we can answer questions as directly as possible, the quality of our politicians is enhanced.

The Chairman: You raised a number of excellent questions. One in particular had not previously been asked. That was about doubling up lines in rural areas, but we always seem to think that if you add another track, you have to do so all along the line. It's not necessary. That could be a very good solution because there are modern ways of changing directions.

Thank you very much, both of you. We very much appreciated your participation here today.

Mr. Pierre-Yves Melançon: Thank you. It was a very great pleasure. We will be pleased to cooperate with the Transport Committee again. In fact, I will be around until November 1, then we'll see. We'll be on the campaign trail.

[English]

The Chairman: Thank you.

The meeting is adjourned.