TRAN Committee Meeting

STANDING COMMITTEE ON TRANSPORT

LE COMITÉ PERMANENT DES TRANSPORTS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 24, 1998

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[English]

The Chairman (Mr. Raymond Bonin (Nickel Belt, Lib.)): I call the meeting to order.

We will today continue our consultations on passenger rail.

We are pleased to have with us, and we thank you for accepting to be with us, from the Railway Association of Canada, Cynthia Hick, Mr. Lacombe, and Mr. Cameron.

We have one hour together. We ask you for a presentation of ten minutes, after which we will open the floor for questions. If you run out of time in your ten minutes, the trick on the Hill is to incorporate the rest of your presentation into your answers.

I open the floor to you.

Mr. Martin Lacombe (Vice-President, Railway Association of Canada): Thank you very much, Mr. Chairman and members of the committee. We thank you for the opportunity to appear here today.

With me today are Mrs. Cynthia Hick, who is our corporate secretary-treasurer, and Mr. Roger Cameron, our general manager of public affairs. Mrs. Hick will commence our submission.

Ms. Cynthia Hick (Secretary-Treasurer, Railway Association of Canada): The Railway Association of Canada appreciates the opportunity to provide its input to the standing committee on the future of the railway passenger services in general, and VIA Rail Canada in particular.

The RAC is the trade association of the railway industry in Canada and currently numbers 43 railways in its membership. These 43 companies account for virtually all rail freight and passenger services in Canada.

With the growth of short-line railways in Canada, our membership has been increasing at a rapid rate in recent years. Of those 43 railways, VIA, Amtrak, Algoma Central Railway, Ontario Northland Transportation Commission, B.C. Rail, and Quebec North Shore and Labrador all provide inter-city services. Agence métropolitaine de Montréal, GO Transit, and West Coast Express provide rail commuter services in Montreal, Toronto, and Vancouver respectively. Some VIA services are also used for daily travel in southern Ontario.

There are major tour operations offered by Rocky Mountaineer, Ontario Northland Transportation Commission, B.C. Rail, and Algoma Central Railway, and VIA's western transcontinental service handles a substantial tourist business. Finally, there is a number of small tourist railways, some using vintage steam locomotives. The involvement of these carriers in the RAC means the industry can promote consistent operational, equipment, and safety standards.

In considering the present and future of rail passenger services, there are a number of fundamental points to consider.

First, virtually all rail passenger services worldwide require some level of government funding, as does highway travel.

Second, rail passenger services must be balanced with rail freight service, which is basic to the economic health of Canada.

Third, rail passenger services exist in competition with air, bus, and the private automobile, and to some extent complement these modes.

Fourth, the private automobile accounts for over 80% of all inter-city passenger miles in Canada, leaving air, buses, and rail services to compete for the remainder. Passenger rail has the smallest portion.

In considering the place of railway passenger services in the marketplace, it is instructive to look at the Montreal-Toronto corridor. This is often considered a natural rail passenger corridor. It is relatively short and has Canada's greatest population density. However, the reality is that Ontario Highway 401 and its Quebec extension, Highway 20, exist and were built with government funds. There is approximately one automobile for every two Canadians. There are well-developed air services. Air Canada and Canadian Airlines run approximately 94 flights between Montreal and Toronto each weekday, and the Voyageur Colonial bus has 14 trips. VIA operates 12 trains each weekday.

This is the context within which VIA must operate. Most of the characteristics, except population density, described for Montreal-Toronto are true for passenger rail services in the rest of the country. The railway industry, both passenger and freight, has been living with 75 years of government support for competing modes. This has resulted in railways retreating from being a universal mode of transport to an industry that has had to find specific niche markets that it could continue to serve effectively. This has contributed to the long decline in rail passenger traffic and has led to the need for government financial support to keep the service operating.

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In aviation, governments built airports and provided air traffic control and weather services. Commercial aviation reaped enormous benefits from government-funded research for military aircraft. In the marine world, governments built and maintained ports and funded the St. Lawrence Seaway. Governments throughout the world, but particularly in Canada and the United States, made massive investments in highways throughout the continents, and these benefited automobiles, trucks, and buses.

While all this was going on, government regulations prevented railways from responding to the new reality. I am reminded of a remark by the late N.R. Crump, former president and chief executive officer of Canadian Pacific. Mr. Crump was appearing at a Canadian Transport Commission hearing on the abandonment of CP's second transcontinental passenger train, The Dominion, in the early 1960s. He told the commissioners:

The Canadian government has spent hundreds of millions of dollars to build the Trans-Canada Highway for 3,000 miles just outside the CPR right-of-way fence. This subsidy to other modes has drawn business away from the railway. We have no choice but to withdraw some service that the market is no longer supporting.

Mr. Martin Lacombe: With this background, the RAC believes there is a role for passenger rail in three specific markets: inter-city, commuter, and tourist. We can see passenger markets, but finding a profitable way to serve most of them is elusive.

In commenting on the future, we will use the terms of reference that you provided, and we'll answer the questions that you pose where we can. The RAC will not, however, comment on the business relations between VIA and our other member companies. These are matters for commercial negotiation between business entities.

Rail is a high-volume mode of transport for both passenger and freight. Where volumes exist, passenger rail can make a positive contribution to Canada's environmental objectives, particularly in terms of improving air quality, reducing road congestion, and limiting land use dedicated to transportation. Each rail passenger-kilometre is less polluting than the same passenger-kilometre by air, private auto, or bus.

With respect to intermodal travel, it is our understanding that VIA has agreements in place with airlines, bus lines, and hotels to work together on specific projects. Where such arrangements make commercial sense, they are likely to be expanded and should be left to the marketplace.

With respect to governance framework, the RAC feels this is largely a matter for the government and VIA management to decide, but makes the following recommendations: the governance arrangements should provide a mandate for the service to be operated on commercial principles; private property rights should be respected; commercial agreements should result from commercial negotiations, not from government decree or regulation; VIA's mandate and status should be clarified; and the federal and provincial governments should establish a broad transportation policy for Canada, providing a consistent framework within which freight and passenger carriers can operate.

It is the view of the RAC that markets should not be distorted by government action—for example, policy regulation, taxation, and equities or subsidies. Economic theorists will tell you there is no effective demand for rail passenger service. That is, the market will not bear the cost of providing the service. This does not mean that passenger service should be abandoned.

While we believe government intrusion in the marketplace should be limited, governments have a major role in the economy. Looking at the costs and benefits from a broad societal perspective, rail passenger services may well be an attractive alternative that is deserving of government support, based on effective land use, fuel conservation and reduced pollution. With this background, it is the view of the RAC that with the exception of some seasonal tourist operations, rail passenger services will require some level of government funding, particularly for capital investment.

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To put in context any government contribution to rail passenger service, consider the massive post-war highway construction programs. Were these subsidies to GM, Ford, Chrysler, and the bus and trucking companies? It's a question worth pondering.

In determining government funding levels, decisions should relate to market demand, the nature and level of the service that the government wants provided, a forecast of passenger revenue, and decisions on new equipment and fixed plant changes.

The minister and the president of VIA have both suggested franchising as a possibility. This option is worth exploring. There may be a role for private sector involvement, but this will require innovation and imagination to achieve.

With respect to the different services, specifically commencing with the corridor services, the corridor service has the best chance of achieving a high revenue-to-cost ratio. However, even this service is unlikely to cover all its operating and capital costs.

Another factor in the corridor and other parts of the rail network is track capacity. There's a growing demand by rail freight services for track capacity in support of Canada's exporting industries. Investment requirements in fixed plant to accommodate passenger operations would add to the cost side of the ratio.

Your terms of reference ask questions under this topic on franchising. It's our view that if the corridor were to be franchised, awarding it to one franchisee would provide the greatest efficiencies and convenience for passengers.

Regarding the transcontinental services, are these services primarily tourist operations or inter-city services? VIA now markets the western transcontinental service as a tourist operation and the eastern, or maritimes, service primarily as inter-city. These services may be able to fill both roles, but if so, this should be explicitly recognized in planning, marketing, pricing, service, and equipment decisions.

You asked whether or not VIA should be allowed to compete with private sector companies. Competition must be carried out on a level playing field. It is not clear to the RAC that VIA, receiving some public funding, could compete with private rail carriers on a basis that was both fair and seen to be fair.

With respect to remote and regional services, under this topic we are assuming that the committee is referring to the services mandated by government. It's our understanding that VIA has never been specifically compensated by the government for these government-ordered services.

The RAC makes the following recommendation in this regard. The government, as a matter of public policy, should determine for each mandated service, if a need exists, alternative ways of meeting the need, be it rail, bus, air, or other modes of transportation, and the least-cost solution to meet the service requirements.

Whatever decision results from this analysis, the government should purchase the service from the provider on a commercial basis. Perhaps the government could ask for competing bids on a multimodal basis.

With respect to high-speed rail, there have been a number of studies of high-speed rail undertaken, all of which indicate the need for large funding by government. No high-speed rail services are self-sustaining even where population densities are greater than those in Canada. Distances are shorter and automobile ownership is not as universal.

Canada does not have the density anywhere to support high-speed rail on a commercial basis. High-speed rail would require a dedicated, separate fenced right of way. The cost to government would be measured in billions of dollars.

A more viable option would be to make more modest investments in infrastructure that would allow VIA to improve transit times while not inhibiting rail freight services.

Commuter services are being provided in the Montreal, Toronto, and Vancouver regions in response to public interest needs as identified by their respective provincial or municipal governments. These services bring significant benefits in terms of environmental improvement, energy conservation, reduction in traffic congestion, and reduction in costs for road construction and maintenance. Contractual arrangements have evolved over time between the government agencies and the operating railways, and those appear to be working for the parties involved.

Ms. Cynthia Hick: In conclusion, rail passenger service can offer benefits to society. It has a role to play in helping Canadian society reduce pollution, road congestion, and road accidents, and limit the amount of land that must be dedicated to transportation.

There are broad issues of highway funding, rail taxation, regulation, and transport policy that need to be addressed by governments at all levels if railway services, both freight and passenger, are to achieve their full potential for Canadian society and the economy.

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The four horsemen of the railway apocalypse—transport policy, regulations, rail taxation, and highway funding—are issues in the government domain and need early action by various levels of government, especially in this era of NAFTA and liberalized trade.

VIA, the other passenger railways, and the freight railways are all doing a good job under very difficult conditions. The railway industry helped build this country and has a role to play in its future. The decisions made concerning VIA will have an impact on other passenger and freight railways and on other modes of transport. The work of this committee is important to all Canadians, to the economy, and to the carriers. It will require wisdom, sensitivity, imagination, and a breadth of vision to arrive at equitable decisions for all parties. These are decisions that need to be made quickly.

We wish you well in your deliberations and we ask the government to move quickly once they have your input. Our citizens expect service appropriate to Canadian conditions that is second to none. Our rail carriers are doing their best to provide it. Governments are partners in all businesses. We need the support, understanding, and action of all our partners to make this industry ready to move Canadians and their products into the next century.

The Chairman: Thank you very much. We will proceed to questions. The 10-minute presentation was 17 minutes, but everyone was concentrating and paying attention, so I found it of benefit to allow time to continue.

Did you have a question, Mr. Bailey?

Mr. Roy Bailey (Souris—Moose Mountain, Ref.): Your association, as I understand it, brings together all of the railway operators in Canada and therefore you are the liaison to which they all speak or represent themselves.

Mr. Martin Lacombe: Yes, our association is comprised at the moment of 43 members, which represents most of the railway companies in Canada, both passenger and freight, and we are an association of the railways in Canada. When there is an industry position as an industry, it is normally voiced or developed through the Railway Association.

Mr. Roy Bailey: Thank you. Your presentation was similar to others we have heard in this committee, and what I have say as my lead-up to a question is that I think this committee is well aware of the points you have raised. It gets down to a basic question, and you mentioned the core section. It seems to me that if we are going plan, as our forefathers did, in providing transportation, there's a vital question before Canada right now, and that is basically in the core area first; that's where you would start. And if you are going to do this, you have to consider the amount of land you would take into consideration to build another highway and so on.

After taking a look at this, it seems to me that the fundamental thing that has to take place in the core area is to build another track line parallel to the ones you have now and we shouldn't spend a whole lot of money in redoing a 401 in Ontario, which would be more costly and require more land and more expense. Has your organization looked at this as to how you could best meet the needs of not only the rail traffic, but also the freight traffic in the core area? Surely you have done some work in this area.

Mr. Martin Lacombe: Specifically, the Railway Association has not been charged with that mandate.

Mr. Roy Bailey: Then are you waiting for this committee or you are waiting for some outside sources to provide recommendations as to how to solve this dilemma that we are very definitely in?

Mr. Martin Lacombe: No, I'm referring to the association as an institution itself.

Mr. Roy Bailey: Okay.

Mr. Martin Lacombe: The various railway companies have been involved in studies and, as I am certain you are aware, there have been some provincial government involvements and studies in respect of that, but the Railway Association as an institution has not specifically been involved in the studies.

The Chairman: Mr. Calder.

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

I want to go back to page four, where you ask about the federal and provincial governments' need to establish a broad transportation policy for Canada, providing a consistent framework within which freight and passenger carriers can operate.

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It seems to me that we can take a look at the passenger issue like this: There's going to be a slow passenger freight and a fast passenger freight, one being commuter and the other being tourist. And quite frankly, if you're out on holiday you're not in a big hurry to get anywhere fast. But the commuter one is the one that's probably causing a lot of problems with the railway, because you obviously are going to have scheduling problems with freight on that line. Any turns—or anything else like that—are going to need to have elevated turns in order to handle that.

I'm wondering what your position would be on the idea of common running rights, because it would even seem.... For instance, on the Windsor-to-Montreal line we could have one line that was designated to be a fast freight of both material and people and the other line could be a slower freight. Is that feasible? Have your 43 members ever talked about this? Because obviously the short-line operators would probably be interested in common running rights too, on the class ones, and whether they can get a better deal with CN or CP. Has that been discussed?

Mr. Martin Lacombe: If I can come back to the paper, let me say specifically that when we talk about establishing a policy we're talking about creating a public policy that responds to a public need. But such a policy would be determined on the principles of being market-driven, and any agreements or undertakings between the parties would be undertaken on the basis of commercial principles.

Mr. Murray Calder: Are you saying, then, that there is no place for the idea of common running rights, that it's a non-starter?

Mr. Martin Lacombe: No, I don't think that's what I said. I said that these undertakings between different companies should be entered into on the basis of a normal commercial transaction between separate business entities.

Mr. Murray Calder: Then in that situation, I'll rephrase it. Do you think a a successful passenger policy should incorporate common running rights?

Mr. Martin Lacombe: I think that depends upon the response that this committee and the government would develop in identifying what sort of passenger service is required to satisfy and meet the public need.

Mr. Murray Calder: I can see, just even by demographics, the public probably needs.... My generation, for instance, born from 1946 to 1966...we're turning 50 at the rate of 500,000 a year. For my 47th birthday I got my first set of bifocals—

Voices: Oh, oh.

Mr. Murray Calder: —which I wasn't very happy about, but I'm at that point. So probably in another five to ten years, if I can take the train to go someplace instead of driving I'm probably going to be looking at that. Or even if I want to go on vacation someplace I'm probably going to look at the train.

So at that point, I'm going to be looking at what the schedule is for that train and all of that, and I see that this issue kind of keeps coming back to the common running rights. Is there enough population here in Canada to have both class ones run a passenger rail service, or should that passenger rail service be designated to a good, fast rail service on say both railways but interconnected all the way through the country? I don't know.

Mr. Martin Lacombe: The only comment I can offer in respect to that is that as an association we do not have access to all of the information necessary to answer that question for you here today. I think that's part of the dilemma and the decision that this committee, through its efforts, will be endeavouring to address.

The Chairman: Monsieur Guimond.

[Translation]

M. Michel Guimond (Beauport—Montmorency—Orléans, BQ): Mr. Chairman, before putting any specific question on VIA Rail's vision of the future, I'd like some clarification on where the Railway Association of Canada gets its funding. I hope you're not going to say that I'm out of order, like you started doing a while ago.

Who funds your association that's made up of 43 member companies? How do you go about funding your association? Does each of those 43 companies account for one forty-third of the funding or do some contribute more than others? You'll see what I'm getting at later on.

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[English]

Ms. Cynthia Hick: The association is funded by its members under an assessment formula that is based on their freight revenues or their passenger revenues and their track miles.

[Translation]

Mr. Michel Guimond: So one might presume that CN and CP are the two biggest contributors—I was going to say to your campaign fund—to the Railway Association of Canada.

[English]

Ms. Cynthia Hick: They are the two major ones. However, with the emergence of all the short-line railways, they are becoming quite a force in the industry.

[Translation]

Mr. Michel Guimond: Fine. At the end of your presentation, I almost felt like telling you to take off your fancy skates; the Nagano Olympic Games are over. What you've done here today is demonstrate the obvious. In your brief, you've demonstrated the circularity of the circle for us. You have shown us that a circle is round. You have shown us that every morning you wake up a little bit older than the night before. You have demonstrated the obvious.

The Chairman: One moment, Mr. Guimond. It's unacceptable to criticize the presentation of our witnesses. I will allow questions on the substance, but I won't allow an evaluation of the presentations. That is not our role.

Mr. Michel Guimond: Mr. Chairman, we receive briefs to do work that will be as productive as possible. We hear witnesses who come before us with concrete suggestions. There is nothing concrete nor any suggestion at all in what you've just presented here. You are just stating the obvious.

[English]

The decisions made concerning VIA will have an impact on other passenger and freight railways and on other modes of transport.

[Translation]

I almost feel like saying: Oh, yes? You're kidding! You think we don't know that?

Paragraph b) on page one of the English version states:

[English]

Rail passenger services must be balanced with rail freight service, which is basic to the economic health of Canada.

[Translation]

When you say "rail passenger services must be balanced", what side of the scale are you talking about? In Canada, should we promote rail passenger service or should we stop passenger trains somewhere out in the field to let freight trains go by with cars or oil? Is that what you mean when you say "must be balanced"? What rail services do you favour?

[English]

Mr. Martin Lacombe: The first comment I would like to make is that we are an association and not the railway companies themselves.

Specifically with respect to that paragraph, the point we're trying to get across is that rail freight is an important part of the Canadian economy. I think something in the order of 66% of the total rail freight volume is involved in import-export traffic. It's a significant portion of the economy.

Where that statement becomes relevant is, as long as you're operating on shared track it's a relevant statement. If you have and if the government in its wisdom were to decide to build a completely separate, dedicated rail line, then this is not an issue in general terms. But as long as you're on shared track, it's a relevant comment.

The dilemma the members of the committee have and the government has is balancing that. If you overweight one side, it can be to the detriment of the other, and there are impacts to which you will have to give consideration.

The Chairman: Mr. Cullen.

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Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman. Thank you, presenters.

As an association, this must be a difficult issue for you. I thought I heard CN and CP say that VIA doesn't necessarily have to be part of the ultimate solution. I'm not sure I should ask you that. If you want to venture out on that limb, be my guest. I'll give you a chance later if you want to do that.

You say that passenger rail will require some level of government funding, particularly for capital investment. This government has given VIA a subsidy that is now at about $170 million a year. We learned that VIA has increased their productivity and passenger intake and contained their costs, but to deal with the decreased subsidy, they really let their infrastructure decline. That's their rolling stock and any other infrastructure.

Are you then effectively saying that the $170-million subsidy, and what it was before, was really not meant to cover capital renewal? I would disagree with that. If that's what you're saying, I'd like to know.

Mr. Martin Lacombe: That's a long question.

With respect to the capital requirements, I think the people who are in the best position to answer that are VIA. I think I'm not saying anything out of turn when I say that when VIA made a presentation to the Canadian Transportation Agency I believe it was a week ago, they indicated an ongoing and future need for capital in order to renew their equipment.

The situation is that there were mid-life refits carried out on the passenger equipment. There's the LRC equipment in use in the corridor. The HEP equipment used on the transcontinental service was retrofitted and introduced to service a few years ago.

Here is my observation and comment. The clock is running, and at some point equipment is required.

Mr. Roy Cullen: Excuse me, if I could just interject, we all know that VIA needs an infusion of capital. The way I read your phrase here, it sort of implies that the $170 million a year was really not meant for capital. That really puzzles me. I'm not saying that VIA doesn't have its problems.

Here's the other thing with respect to your brief. You sort of break down the different types of passenger services. You seem to intimate that the government subsidy is particularly for the remote and regional services.

Am I correct in assuming then that the $170 million a year—this is what you're suggesting—is really going to subsidize remote and regional, and not other services?

Let me put it another way. Do you have a breakdown of where that subsidy is going if you sort of segment VIA's businesses?

Mr. Martin Lacombe: The short answer to your question is no, I do not have a breakdown.

The answer to the other part of your question is no, we are not suggesting that the $170 million is used solely as a subsidy for remote services.

Mr. Roy Cullen: Okay.

Mr. Chairman, I'd like to maybe more formally suggest to the committee—maybe we could get consent sometime—that the chair of this committee formerly request VIA for information on the various business segments. Can they can provide some analysis of where the losses are heaviest? In other words, where is the current subsidy going? I wonder whether VIA would be prepared to share that information with us.

We heard a lot about the different types of rail service. At this point, as a member—I don't know whether maybe other members have more information—I don't know where that $170 million is going. There's sort of an inference here, with respect, sir, that a lot of it should be going to remote and regional services. Some of it may be going to transcontinental services, some of it may be going to the corridor. We don't know where that subsidy is being applied to.

I'll come back maybe on the next round. Thank you.

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The Chairman: Before we go on, I'd like to say something for the benefit of our committee and in justice to our witnesses.

We have invited these people to appear today. They represent various groups of people. They have not had an opportunity to have a general meeting to mandate us to produce a document and to make a presentation. So I understand the position you have been put in. In all fairness, had you had an opportunity to do like the Liberals did over the last weekend—or any party, for that matter, as I don't want to be partisan—you would have come with motions that have been carried or rejected.

In fairness to our witnesses, we have invited them and they are here, but I don't believe they've had the opportunity to get the meat for their product, and I understand that.

Mr. Roy Cullen: A point of order, Mr. Chairman. Am I to understand that this submission from the Railway Association of Canada is not a formal brief—that it doesn't have the support of the director?

The Chairman: I believe it's probably a brief presented by the staff, but has it been mandated by the 43 members, or a majority of them?

Ms. Cynthia Hick: The brief was prepared by staff members and has been circulated to a number of the interested parties, who have made their comments, some of which have been incorporated in the final document.

The Chairman: Well if I'm wrong in my assessment—you know, use it whatever way you wish, but I just wanted to identify that.

Mrs. Wayne, please.

Mrs. Elsie Wayne (Saint John, PC): Thank you very much, Mr. Chairman.

I had an opportunity, when I was still mayor of Saint John, at the request of the German government, to go to Germany. We were at that time looking at unification. What I wanted to look at was the rail service they had in place at that time. I think Mr. Cameron and some others will remember that I did have VIA in my city, which is a national port city, and therefore we really needed the rail service.

I wanted to see what they were doing in Germany. Basically, they didn't have tractor-trailers on their highways. They didn't have to rebuild their equivalent to our Trans-Canada Highway every eight years. They had weight restrictions, and everything went on the rails. That's the way they did it, and it was excellent, Mr. Chairman. I had an opportunity to go on their trains, also, from one city to another.

I see a need for rail passenger service. I would have to say with the government.... And I say this not politically. I'm just filling in for Bill Casey, and I wish I were here more often, because Joe Fontana and I used to have a few debates. But I would like to see your committee take a look around the world as to what other countries are doing.

Mr. Joe Fontana (London North Centre, Lib.): We're leaving in three weeks, Elsie.

Mrs. Elsie Wayne: Are you, darling, to go? You're going to take me in your hind pocket? And to London, England, I think.

Anyway, it is very important, because in the end, Mr. Chairman, they saved money by putting money into the rail service.

It is really needed. I would like to see.... At one time our tracks went from one end of this country to the other, and we called it a united Canada because of that.

I'm not sure, as Roy has said, where your $170 million go, but I don't really mind if they subsidize some of those small remote and rural areas. I wish they were still subsidizing Saint John that way. I really feel that the rail service plays a major role in the economy—and I say this when it comes to freight, being from a national port. When CP and some of the others looked at pulling out, it had a negative impact on the port of Saint John—a really negative impact. Yes, we privatized it, and you know who bought it? Mr. Irving.

Nevertheless, I would like to see a very positive approach to this. I thank those members who are here. I've had an opportunity to meet with an awful lot of people over the years when it comes to rail service, I have to tell you. God help me, I used to fight it tooth and nail. But I say this: I think the committee needs to travel. I think the committee needs to look, Mr. Chairman. I think you need to study what they're doing in other countries, because really, we're going in the opposite direction, and it isn't good.

That's all I'm going to say. Thank you.

The Chairman: Thank you.

[Translation]

Mr. Drouin.

Mr. Claude Drouin (Beauce, Lib.): In the same vein as my colleague, Mr. Roy, I'd like to ask you to be more specific about what you mean when you state that VIA's status should be clarified. In what way would you like this to be done?

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Second, you say that many governments all around the world invest in rail transportation. Do you have any ballpark figure for those investments and can you name the countries in question?

[English]

Mr. Martin Lacombe: In response specifically to the first point, that VIA status be clarified, I think that has been stated by a number of people, including Mr. Ivany when here was here, and he spoke on it much more eloquently than I can.

With respect to how much other countries are spending on rail services, I don't have specific information before me. I can quote a number to you, but I cannot explain the exact meaning of the number. However, in a recent edition of The Economist it's indicated that Europe's railways as a whole received $31 billion per year in subsidies between 1990 and 1994. But, as I say, I can't give you any specifics as to what precisely that means.

[Translation]

Mr. Claude Drouin: You don't have any data that could shed light on this? You have no figures? If you can't give us any today, you could send them later on to our clerk and our research staff to help us. We would appreciate that.

[English]

Mr. Martin Lacombe: Yes, we could undertake to do that.

The Chairman: Mr. Mark.

Mr. Inky Mark (Dauphin—Swan River, Ref.): Thank you, Mr. Chairman, and I want to thank the committee for the report.

My original question was that I would like to know the process that took place, which the chairman had asked. The reason is because you have 43 members in your organization and we know that freight is king in this country. We've been told this very fact by former presenters.

Maybe I can ask a different question now. What percentage of your membership are freight carriers and what percentage people carriers?

Mr. Martin Lacombe: That's a good question. Some obviously carry both. For example, the Ontario Northland Transportation Commission handles both freight and passenger; Algoma Central does both; B.C. Rail does both; and Quebec North Shore and Labrador does both. But we've also indicated other companies that provide passenger service; these are Amtrak, VIA, and there are others that Mrs. Hick listed in the opening comments we made. To put that in precise percentage terms, I'm guessing there are maybe eight or nine passenger service operators that are members of our association, and there are some commuter companies that are members of our association but they are not operating. I would say maybe 20% might have passenger services.

Mr. Inky Mark: On the second question, what I'd like to say is that in your brief on page 5 you indicated that VIA had not been compensated by government for their remote services. I know they're only getting 50¢ back for every $1 they spend. That's probably the reason the government spent $352 million a year originally on subsidy and it's down to $170 million a year.

It's interesting that the final paragraph in your brief states that people expect service appropriate to Canadian conditions that are second to none. We're told here that the culture of transportation has certainly changed in North America, that it is now one of the automobile, and that the rail association would like to see infrastructure paid for and compared to the highways. What portion of this infrastructure development do you think government should be paying for?

Mr. Martin Lacombe: The short answer to your question is that I can't give you a specific answer. I can give you an answer that deals with principles and level playing fields for competition and that sort of thing—avoiding to the greatest extent possible distortion of the marketplace because of subsidies. However, specifically to answer your question, I can't answer it. There are modal and equity issues, there are taxation issues, there are a whole range of issues.

• 1620

The Chairman: Mr. Fontana.

Mr. Joe Fontana: Thank you, Mr. Chairman, and thank you to the Railway Association of Canada, who have made many a presentation to our committee on a whole host of issues that relate to transportation in the country.

I guess their association is no different from essentially Canadians, to a certain extent, who are trying to get their heads around whether we're actually going to have passenger rail service in this country or whether we're going to be predominantly a freight rail service in this country.

I think we underestimate, really, the value of passenger rail service in this country, because we think of passenger rail only in single dimensional terms, and that's VIA Rail. As Mr. Lacombe has already mentioned, there are a number of tourist trains and a number of smaller trains: B.C. Rail, Ontario Northland Railway, and the Rocky Mountaineer.

If in fact you look at the total impact on passenger rail to the travelling public—and I don't care whether it's tourist, inter-city, continental, or corridor services, at the end of the day it's all transportation—you will see that there is a heck of an awful lot of support for passenger service.

What this committee has to do—and I can tell you it's the way of the future in Europe—and what we'll find out is that passenger rail, of course, by population or by shorter distances, makes that much more viable, but there isn't a passenger rail service in the world that's not subsidized.

To tell you the truth, there aren't a lot of modes of transportation that are not subsidized in one way, shape, or form. Yes, cars are the most plentiful; everybody likes to use them. But the taxpayer pays a very big dollar to subsidize that public infrastructure.

Mr. Michel Guimond: I think, Joe, you would be a good witness.

Mr. Joe Fontana: I'm going to get to my question.

I can understand, because this report does sort of, again, favour freight, and I'm getting a little concerned that the Canadian approach, so far with the witnesses, is that it's either freight or passenger and it can't be both. Well, that's typically a simplistic approach to things. How is it that other countries have been able to put their public infrastructure or even private infrastructure to better utilization?

I think the question I asked both of CN and CP, and I'll ask it of even the short lines, which in fact are becoming a pretty good force in this country to carry freight and maybe even more passengers, is at some point in time if we're going to come to grips with passenger rail—and I believe it should be a particular mode of transportation—we're going to have to get our heads around how in fact we can share some of that infrastructure.

We can't go out and build a separate passenger rail infrastructure in this country. Anybody who thinks we can do that is absolutely bonkers, because we just don't have the billions of dollars. So at some point in time, I think, Mr. Lacombe, you said you have to apply commercial principles to using that private infrastructure that primarily now belongs to CN and CP—even though I hasten to add that it was the Canadian taxpayer who helped both of those companies in a very big way build that infrastructure, too.

How do you see, in a very creative way, being able to use that public or private infrastructure to enhance passenger rail services across this country? I for one, and I think this committee, believe there is a place for passenger rail. But the only thing so far I've heard from your brief, and even the big railroad companies, is if you force VIA or anybody else to use our infrastructure, you're putting the economy of Canada at peril, because if you stop the freights or cause all kinds of delays in the freight trains, you'll cause all kinds of economic havoc to this country.

I'm sure your association has international contacts. I'm sure you get together internationally with other railway associations around the world to discuss these kinds of things. Have you any good, creative ideas for us as to how we might manage to do both in this country, and not an either/or, as Michel indicated?

The Chairman: The challenge for you is to answer a five-minute question in one minute, because we have two more on the list.

Mr. Martin Lacombe: Please, Roger, go ahead.

Mr. Roger K. Cameron (General Manager, Public Affairs, Railway Association of Canada): If I could, Mr. Fontana, very briefly, nobody is suggesting that it's either/or. The reality is that all the passenger and freight operations that are currently operating share existing resources and facilities. That's particularly true in the case of GO Transit in Toronto, with 28 million passengers. That's 28 million cars that aren't on the road every day.

• 1625

So it would be a mistake for people to come to the conclusion that people are saying it's one or the other. A lot of existing services and facilities are used by more than one company at the present time and they work well together.

The concern that's being expressed here is about the expansion of operations without taking into consideration effects on others. It's not any more complicated than that. In the same context, it's the effect of the freight, as Ms. Wayne said before she left, on rail operations.

In terms of innovation, Canadian Pacific has a good demonstration project running between Montreal and Toronto. It's a service that takes trucks off the highway with virtually no capital equipment in terms of cranes to lift them on or off. It's quick. It's fast. It's faster now in operation. It's operating at almost full capacity. With the present equipment, it's being expanded. New terminals are being built. They're looking for the potential extension of that service from Toronto to Detroit, and potentially, western Canada and other parts. So there are things going on there.

Mr. Joe Fontana: I wonder if you could provide something to this committee. I think it would be useful. We always talk about VIA as the only.... I'm sure that within your railroad association you have number of different members. Could you provide us with the passenger numbers for all of your passenger members, such as ONR and Amtrak. This is so that we can get a real global picture in terms of how many people are actually using rail.

Then we could start to calculate how much it would cost us if every one of those people came off the rails. How much in fact would the Canadian taxpayer have to put into public infrastructure money in terms of the road? It would be helpful if you could do that.

The Chairman: We'll leave that to the clerk.

The Clerk of the Committee: Yes, certainly.

The Chairman: Thank you very much.

Second round. Three minutes for the question and the answer, please. Mr. Bailey and then Mr. Cullen.

Mr. Roy Bailey: I'm somewhat disappointed in the fact that we are admittedly talking about basically railways, in terms of freight, passengers, and so on.

I'm from an area of Canada where there's no planning going on. I think that's generally true throughout Canada regarding transportation. I'm not just talking railway, I'm talking highway and everything concerned with transportation. For instance, in the area I come from, I'm losing hundreds of miles of track. They'll be pulled out by 2000. Having said that, no one has planned with the municipality, provincial government, or department of highways to see what happens when all of this takes place.

We in Canada, at one time, had a real vision. We planned things ahead. Today, those rail lines are being pulled out. In my particular area, I won't have a railway in the western half of my constituency by 2000. Everything will be moving by transport and truck, which is very expensive. We simply don't have the infrastructure to handle it.

It's a disaster out there. Please save the rest of Canada from going through the same thing that we are experiencing. Get together with your 43 organizations, municipalities, provinces, and highway departments and let's have some Canadian planning. Let's not go ahead any further with planning in isolation without the effects of all the other facets of transportation. That's what Canada needs right now.

The Chairman: Do you wish to respond to that?

Mr. Martin Lacombe: I understood Mr. Bailey's comments, but to respond would take a fairly comprehensive discussion, I think.

The Chairman: I understand.

Mr. Cullen please.

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

Witnesses, I apologize. I know this issue must be very difficult for your association. If I was putting words into your mouth, or trying to, I apologize.

Let me just come back to this capacity issue. CN and CP told us that there's a five-to-one capacity issue in freight versus rail. If you're talking about a commercial basis of recognizing any kind of arrangement on a commercial basis, this would require, as I understand it, a huge investment in infrastructure. Are there any ways we can, as Mr. Fontana indicated, think outside the box, or, as others have mentioned, find ways of sharing infrastructure in a more efficient way? If I read this brief, it sounds to me like more subsidies, not fewer subsidies. How do we deal with this problem?

• 1630

Mr. Martin Lacombe: I believe the best suggestion I can make would be that the best way to address those issues to get points of view with respect to the specific topics you've raised would be to address the questions to the parties who are directly involved. They are the people who have the information necessary to be able to intelligently inform you as to what can and can't be done, what the limitations are or are not, and what in their view needs to be done.

Mr. Roy Cullen: Thank you.

Your membership is increasing a lot of the short-line trains. Could we apply the short-line model to passenger rail in Canada, or is it a totally different thing?

Mr. Martin Lacombe: I'm not sure. Could you define the short-line model for me?

Mr. Roy Cullen: In other words, taking those rail lines where the demand for passenger service is low, where for instance VIA might say to someone, we can't make it work, but you take it and run with it and we'll reach some kind of a deal.

Mr. Martin Lacombe: I believe we indicated in our submission at some point that franchising is an option worthy of study. We haven't carried out that kind of a study. Differing approaches may be possible, but they need to be considered. Other than that, I can't answer more specifically at the moment.

The Chairman: In relationship to your question, Mr. Cullen, the last time I checked, the Budd car in northern Ontario was costing taxpayers something like $300 every time a passenger took the train. I have a constituent who wants to buy it. He knows he can make money and he wants to buy it. Those opportunities that you bring up are there. It's up to us to look for them.

Witnesses, thank you very much for your presentation. If you wish to make closing remarks or comments we have three minutes left. They belong to you.

Mr. Martin Lacombe: I want to thank you for the opportunity to appear here today and to express our opinions and to wish you very well in your deliberations. Thank you.

The Chairman: Thank you very much.

We'll suspend for two minutes, until the next group, from the Coalition pour le maintien et l'utilisation accrue du rail, is ready.

• 1632

• 1635

[Translation]

The Chairman: Order, please! We are glad to have before us the Coalition pour le maintien et l'utilisation accrue du rail represented here by its president, Mr. Richard Couture, and its secretary-treasurer, Mr. Louis-François Garceau.

We'll be here for an hour and we would appreciate it if your presentation were to last about ten minutes; it will then be followed by a question period for the members of the committee. As I pointed out to the group preceding you, if you think your presentation will last more than ten minutes, you could always piggyback some of it on to the answers you give to the members.

Mr. Couture.

Mr. Richard Couture (President, Coalition pour le maintien et l'utilisation accrue du rail): Good afternoon, members of the committee, and thank you for inviting us. I am Richard Couture and I'm president of the Coalition pour le maintien et l'utilisation accrue du rail. With me is Louis-François Garceau, the secretary-treasurer of the Coalition.

We're sorry for the small discrepancies that exist between the English and French versions of our briefs and for any typos that may have slipped in.

Ladies and gentlemen, members of the committee, we are a coalition consisting of 17 railway organizations, citizens committees and environment organizations as well as some 20 individual members. The member organizations are made up of approximately 7500 members. We have also prepared this document in the name of 11,241 people who signed the petition to save the Lévis and Charny stations as well as those people who presented some 30 reports during public hearings held in November, 1997.

The Coalition pour le maintien et l'utilisation accrue du rail, CMUAR,

[English]

in English, Coalition to Maintain and Use Actively the Railway,

[Translation]

is a non-profit organization with these three goals as a mandate: to ensure quality development of railways in the province of Quebec, help all new railway development projects in Quebec, and contribute to the preservation of all railway infrastructures already in place in Quebec.

I will now give the floor to Mr. Garceau.

Mr. Louis-François Garceau (Secretary-Treasurer, Coalition pour le maintien et l'utilisation accrue du rail): Ladies and gentlemen, I unfortunately forgot my glasses. I'll do my best to read out the brief. As you've already noticed, we're not used to this kind of meeting.

Mr. Chairman, first of all we'd like to address the glaring examples of the Charny and Lévis train stations that risk disappearing, as well as the environmental aspect and the tracks linking these two stations.

We imagine you already know that the disappearance of these two stations is connected to the simple fact that the Canadian National, or the CN, wishes to give up the operation of the subdivision known as Montmagny between miles 111.35 and 119.12, which is a distance of 7.77 miles in the province of Quebec.

First, the Lévis station, as we speak, offers a trimodal service, that is taxis, cars and buses as well as a ferry service across the river between Quebec City and Lévis and also train service with the transcontinental trains, Chaleur and Océan.

The Chairman: Mr. Garceau, I'll ask you to slow down a bit for the sake of our interpreters.

Mr. Louis-François Garceau: I'm sorry. With my glasses on, I'm really fast.

The Chairman: Someone get his glasses.

Some Hon. Members: Ha, ha!

Mr. Louis-François Garceau: We should always bear in mind that the transcontinental was set up, at the time, to link all capitals of our country, including our provinces, using the ferries. You certainly are aware of the recent decision made by the federal Minister of Transport, Mr. Collenette, that you'll find in appendix C to our brief. You also doubtless know that the Minister of Transport of Quebec, Mr. Brassard, does not support the disappearance of this station or that section of line and you'll find this in appendix B to our brief. As you'll be able to see for yourselves, the Lévis station was renovated in 1986 to the tune of $3 million.

The use of the land by the CN, CNR or GTW, previously, for over 145 years has led to their contamination especially around the Lévis station. What are the Canada and Quebec governments going to do in this matter?

Finally, some 21,000 travellers go through the Lévis and Charny stations every year. It has been shown that 40% of them, some 8400 travellers, use the ferry to go to Quebec City. The disappearance of the Lévis station would jeopardize the existence of the ferry again.

• 1640

The Charny station is situated in the Quebec-Montreal corridor and offers the Charny clientele only one stop when heading west on the south shore to Montreal, that is train number 3 leaving at 10:25 and arriving in Montreal at 12:50. The amazing thing is that train number 22 leaves Montreal at 13:00 giving passengers scarcely ten minutes either to get off or on the train. That is very poor service on the part of VIA Rail and it could easily be improved.

Why tear down two stations and build another one? If it is eventually decided to abandon the Montmagny section of the line and rail service along the St. Lawrence River, the Lévis station would no longer be used as a railway station.

The Charny station is located in the centre of the triangle constituted by the Montmagny, Bridge and Diamond subdivisions. It is a strategic station. What is the point of building a station in the middle of a beet field invisible from the highway and difficult to get to for travellers who are not familiar with the region?

Although the Joffre yard with its many under-utilized tracks is close to the Charny station, consideration is being given to building a bypass in Saint-Nicolas in the Drummondville subdivision for the changeover of VIA Rail crews in the Quebec Region at a cost of almost $1 million. It would cost taxpayers practically nothing to make intelligent use of the existing station in Charny as a transcontinental station, providing it with a small shuttle service if necessary.

This shuttle service would be intended for travellers from the neighbouring regions on the south shore. Clearly, this is not the solution advocated by our coalition but if the Lévis station were to disappear, it would be more intelligent to use the Charny station than to tear down two stations and build another one in Saint-Nicolas.

Our coalition is the sponsor of two new transportation projects that would also serve tourists. Charlerail would be the new service between Charlevoix and Quebec City. It would be year-round train service and be a tourist attraction during the summer season. It should be noted that if the railway is abandoned in Lévis, the promoters of the Montmagny tourist train would have no choice but to review their initial plan. This train is to make a two-hour shuttle trip between Montmagny and Charny via Lévis, making several trips a day. It would be impossible to carry out this plan if the decision is made to abandon one of the most attractive railway routes in eastern Canada. These two new projects would give a significant boost to railway service in the Quebec region.

Mr. Richard Couture: I'd now like to turn to a matter of more direct relevance to the mandate of your committee, namely environmental considerations.

We believe that VIA Rail certainly has an important role to play in intercity transport, at the same time furthering Canada's objectives with respect to climatic change. Because of its energy efficiency and ability to compete with highway networks, rail transport does have the potential to help us achieve these objectives.

Unfortunately, the methods of funding rail and road transport created a distorted picture of the real costs of their use and are skewed in favour of the automobile. As the Environment Department of Waterloo University mentioned, we must take into account the external costs of automobile use including expenses related to accidents, parking, congestion, the use of the road network, the loss of land, municipal services, equity and the right to choose, air pollution, noise, consumption of resources, the barrier effect, impact on land use, water pollution and the eventual disposing of vehicles.

With respect to its decisions concerning the south shore of Quebec, the government must take into account that precise measures can be taken to contribute to our national objectives relating to climate change. For example, preference should be given to connecting different transport modes, protecting existing infrastructure and creating new incentives for the use of rail transport by greater equity in the funding of transport modes.

I'd now like to turn to the subject of intermodal trips. A practical and profitable means of integrating the rail system into the urban fabric would be to avoid abandoning railway stations in metropolitan areas where they can be useful for urban transit as well as intercity travel.

Since one of the principal advantages of rail transportation is its ability to offer service from the centre of one city to another, VIA Rail should put a stop to its unfortunate experimentation with the closure of downtown stations.

• 1645

By locating a station next to a suburban highway network, as was done on the south shore of Quebec, VIA Rail is exacerbating urban sprawl and its negative impacts on the community.

Improved co-ordination between the various levels of government concerned, federal, provincial and municipal, is advisable. Shutting down what is probably the only trimodal station, that is rail, maritime and road...

The Chairman: You absolutely must slow down, otherwise we're going to have to take away your glasses too.

Mr. Richard Couture: All right.

Some Hon. Members: Oh, oh!

Mr. Richard Couture: Shutting down what is probably the country's only trimodal station combining rail, maritime and road transport at the bottom of the famous Château Frontenac in order to build another station 25 or 30 kilometres from downtown on the site of a dumpster factory demonstrates a strange conception of sustainable development.

Such a move ignores lessons which should have been learned from past errors. For example, in 1976 Quebec City's Palais station was closed and its services removed to suburban Sainte-Foy, resulting in a 50 per cent loss of clientele for VIA Rail. Once this mistake was recognized, it cost the taxpayers tens of millions of dollars to have the service restored ten years later.

This loss of our national railway heritage will seriously weaken the link between the capital of Quebec, the Gaspé region and the Maritimes and at the same time prejudice regional rail development, that is autorail, trams, tourist services and the establishment of a north-south link via the Quebec central railway, which is now being put back into use.

The financial dilemma: any increase in revenue must obviously be the result of an increase in clientele. It is not the role of the private sector to bring about the revival of VIA Rail, it is up to VIA Rail itself. Privatization, even if it is only partial, would lead to the selling off of the most profitable lines to the detriment of regional services. Rail transport must be seen as an organic entity.

Make no mistake about it, the private sector will take risks commensurate with its hope of profit. We advocate eliminating unjustifiable expenses related to rail transport such as the closing and opening of new stations and we encourage the government to tax the ownership and use of automobiles so that the social and environmental costs are borne by users.

Would it not be possible for VIA Rail to explore other avenues for generating income such as post and express?

Service in the corridor: we have a number of questions about the issue of service franchises in the corridor. Would this be detrimental to the regional services? What assurance is there that the existing level of service will be maintained, not to speak of improvement? Will we be handing over the best lines and then get rid of those that are the least profitable? Are there other models for revitalization besides the British one?

As far as the transcontinental service is concerned, it should operate throughout the year. Its role must not be limited to a tourist function. VIA Rail should increase its market share of the regular service. It has an intraregional role to play and as we already mentioned, partnership with the private sector risks letting the most profitable segments of the line slip into other hands leaving VIA Rail with the least viable portion of the route, thus paving the way for abandonment of regional services.

VIA Rail should first of all retain its profitable sections and develop a strategy to improve the profitability of the other sections. Lastly, if climate change is indeed a serious concern for Canada, it is essential to ensure the maintenance of rail services in remote areas.

Resources allocated to achieve this should be equivalent to those allocated to road transportation. Canada is one of the largest countries in the world. Why then is more support not given to the most energy efficient means of ground transportation; steel wheels on steel rails?

Small streets connect with larger streets, which lead to boulevards, main roads, highways and expressways. So it is with the rail system, main lines need feeder lines into all regions to effectively tap potential markets.

Mr. Louis-François Garceau: In conclusion, we'll skip over our comments about high speed trains, they are to be found in the brief that was distributed.

Now that our national railway has been sold to private interests capable of exploiting it for profit, the control of our major railway infrastructures has passed into mainly American hands.

Part of the railway network has already been dismantled in the name of profitability while at the same time the infrastructure of highway transport is generously subsidized and not generally cost effective. We are asking that the most energy efficient means of transportation be supported and promoted by government action.

• 1650

Rail is an option which benefits both the environment and the economy.

The Coalition is proposing diversified and cost-effective transportation development which respects the environment. Our search for the best means of achieving this, whether intercity or transcontinental, must be guided by a coherent and all inclusive concern for efficiency, quality and the reduction of environmental pollution.

VIA Rail's advertising features beautiful views of many Canadian landscapes on the Internet or more specifically VIA's Interactive Resernet. What is the explanation for the curious omission of one of the most spectacular entrances by rail into any North American city, that is the arrival to Quebec City as approached from Lévis?

Since 1864 this rail line has offered one of the most spectacular vistas to be seen from a train east of the Rockies. The elimination of transcontinental rail service on this line directly contradicts Transport Canada's policy statements. Indeed, the ministry's strategy of sustainable development and its effort to move from theory to environmental action would be better served by the preservation of this unique infrastructure. A decision to eliminate it would be more in line with the post-war mentality of sacrificing everything to the car.

Lastly, we know from reliable sources that many doubtful transactions made by a former senior official of the National Transportation Agency along with a great deal of land speculation explain to a large extent why particular stations and segments of lines were abandoned by the present government of Quebec.

[English]

These facts lead the coalition CMUAR to the conclusion that there appears to exist a very clear conflict of interest in this matter.

[Translation]

Thank you, Mr. Chairman, ladies and gentlemen.

The Chairman: Thank you. We'll start off our questioning with Mr. Guimond.

Mr. Michel Guimond: First of all, Mr. Couture and Mr. Garceau, I'd like to congratulate you on your brief particularly in view of the fact that since the beginning of our hearings on the future of passenger rail service, little has been said about the protection of the environment and the social costs resulting from the increased use of highways for transporting persons and for trucking. The downstream social and health costs are not given sufficient consideration. This is something that you raise in your brief.

I have a few questions. On page 3, when you talk about the 21,000 passengers making use of the Lévis and Charny stations, why they get on or get off at these stations, you were also thinking of the Chaleur as well as the Océan, both of which trains used to pass through these two stations. As a user of the Chaleur myself, I know that it now only travels three or four times a week.

Do you have figures relating to the period when there was one of these trains travelling in each direction every day? The reason why I'm raising this point, Mr. Chairman, is I've often maintained before Mr. Ivany that the fewer the services offered, the less incentive there is for people to take the train. It's a bit like Hygrade sausages. More people eat them because they're fresh, and the fresher they are, the more people eat them. If we do not offer an adequate level of service, we cannot be surprised that people are no longer using the train.

So do you have any statistics enabling us to compare the 21,000 present users with the situation in the old days when there the Chaleur and the Ocean used to run every day?

Mr. Richard Couture: What we do know is that there's been a 5% increase in service at the Lévis and Charny stations over the past three years. Unfortunately we don't have the previous figures.

Mr. Louis-François Garceau: VIA Rail should be able to provide them.

Mr. Michel Guimond: Yes, that's the kind of information we can obtain.

Secondly, I'd like to make a comment about the closing down of the Lévis station in relation to intermodal transport. I questioned Mr. Ivany on this and he told us that frequent service had to be provided in clean and modern stations and that intermodal transport also had to be developed. The decision to shut down this station seems to go directly against the policy advocated by VIA Rail.

Mr. Richard Couture: At the present time actions are the opposite of the political discourse. We are told that intermodal transport must be encouraged along with sustainable development. If a station built 140 years ago is not an example of sustainable development, then I'd like to know what is? Furthermore, the station is also located downtown.

• 1655

In North America the approach by train is often through industrial parks. Here in Quebec City we have one of the most fantastic vistas to be found east of the Rockies and a rail approach to the city that is unique in North America. They're actually thinking of throwing this all away to the scrap heap.

Mr. Michel Guimond: My third and last question refers to page 9 of your brief, the last paragraph printed in bold type. I don't think we're well enough informed to know what you're talking about. Would you please explain to us this following comment:

Lastly, we know from reliable sources that many doubtful transactions made by a former senior official of the National Transportation Agency along with a great deal of land speculation explain to a large extent the present government's decision to abandon particular stations and line segments.

Mr. Garceau, this can be checked in the transcription of our proceedings but you did say: "the abandonment of the line segment by the present government of Quebec". It isn't the government of Quebec but the present government of the country. You are referring to the present federal government. What exactly are you insinuating here?

The Chairman: Where is this leading us? Do we want to talk about politics or are we doing a study on passenger trains? Let's try to stick to the subject. I don't give a fig about politics here. So I'd like everyone to stick to the study on passenger trains and we can talk about politics tomorrow.

Mr. Michel Guimond: I see. I wanted to know what this comment in the brief meant, Mr. Chairman.

The Chairman: But what does this have to do with passenger trains? I don't care a hoot about what took place in the past unless it has a direct link with our study. If there is one, please answer.

Mr. Michel Guimond: That's why I asked the question.

Mr. Richard Couture: These are facts that can be checked. We did a land research on the particular site, the segment of the railway line, and there were lots that changed hands among corporations on several occasions. All this can be verified either in the files of the institutions or corporations or the land registry office.

The Chairman: If a station was shut down when it was still viable, give us some arguments so that we can recommend it be opened again. Give us some arguments to make it viable so that service can be provided to people.

As I said, I couldn't care less about what took place in the past as far as our committee is concerned, but certainly not outside our committee. Give us some reasons to recommend that the station be reopened to provide service. That's why I made the comment.

In all fairness, if you'd like to add something, please do so.

Mr. Louis-François Garceau: Let me elaborate. People from the Gaspé and from New Brunswick and the Maritimes make great use of the train as opposed to cars to travel to Quebec City. So if the Lévis station disappears and the station is built 25 kilometres away, there's no doubt that the Transcontinental will be in danger. I think it's quite understandable and we don't need to give any further explanations. It's clear enough.

The Chairman: That's a very good point.

Mr. Richard Couture: There'll also be a drop in ridership.

The Chairman: Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Couture and Mr. Garceau. I have two questions for you.

Do you know who the clients of the Lévis station are? Are they tourists or people travelling, as you said, from the Gaspé Peninsula to other parts of the province of Quebec or Canada? Can we increase the ridership of the trains that go through the Lévis station? Are there any ways of doing this?

Mr. Louis-François Garceau: Most definitely. Many people come from Halifax to visit Quebec City throughout the year. And there are lots of people who travel to Quebec City on business. All these people use the train. This is something that can be confirmed by VIA Rail. It's very easy to confirm that this track is important for VIA Rail. It's a very important train for VIA Rail. We don't have the figures.

Mr. Roy Cullen: If that is true, why do you think that VIA intends to shut down this track?

Mr. Louis-François Garceau: Canadian National is the one that asked to abandon the railway line.

• 1700

It's a short eight-mile line. CN no longer needs this line because it doesn't have customers anymore. They can come from the other side to serve the other clients. CN has been asking to abandon this line since 1991. Two decisions were handed down and they were postponed five times. We are now in 1998. The official decision has been made to abandon the line. Mr. Collenette decided that the railway would be dismantled once the new station is built on the south shore.

Mr. Richard Couture: I'd like to add that perhaps your committee can suggest to VIA Rail that they do the same thing as in Ontario, that is buy up the particular line. That is what they did in Chatham near London or in Smith Falls here to the south of Ottawa and that is also what they did to establish the link between Montreal and Ottawa.

It's only a matter of a few kilometres in Quebec City. We could preserve one of the most beautiful railway panoramas that are to be found, one of the most spectacular ones. It would be merely a matter of VIA Rail doing once in Quebec what it has done at least three times in Ontario.

Mr. Roy Cullen: Do you think that it would be possible to make use of the Lévis station as a point of destination for tourists by providing it with certain attractions? You may know that at the Washington station in the US there are stores, games and all sorts of things.

As you said, Quebec City has very large suburbs. What do you think of this kind of thing?

Mr. Louis-François Garceau: I don't know whether you've noticed on the side of expressways or any highway, there are road signs, white on a green background, put up by VIA Rail to indicate that there is a railway station or a train service nearby. You don't see any of these signs in Lévis or in Charny. That is a serious omission. Pressure is being put on Lévis and Charny and people don't even know that there are stations there.

They're now talking about building a station in Saint-Nicolas or Saint-Rédempteur. You may not know where exactly they are, they're off highway 20 quite close to the entrance to Quebec City. It will be hidden away in the middle of nowhere when VIA Rail says that it wants a station that is visible from the highway. It will be well out of sight. Now no one will be taking the train. It's a threat to the train service. If this isn't the right place to make this known, I wonder who we'll have to approach the next time.

We are volunteers. It's absolutely awful to work as a volunteer for companies that can't see straight, that shut their eyes. We won't talk about politics, because Mr. Bonin does not want to.

I don't know what more I could add.

Mr. Roy Cullen: If I understand you correctly, this is now a fait accompli or...

Mr. Louis-François Garceau: The other two stations will not be demolished until another station is built on the south shore. The Levis station can remain as a bus and ferry station. However, we will no longer have a train to serve approximately 21,000 passengers per year and the transcontinental train may disappear.

Mr. Richard Couture: I could add that this has just handicapped the development of a north-south line which, paradoxically, a trucking firm owner is in the process of acquiring from Canadian Pacific, the central Quebec route, to re-establish the north-south rail link with Lévis.

The Chairman: When was the station shut down?

Mr. Louis-François Garceau: It is not shut down.

The Chairman: Has a decision been made?

Mr. Louis-François Garceau: On February 21 or 22. This was indicated in the brief.

The Chairman: This year.

Mr. Louis-François Garceau: Yes, by Minister Collenette.

The Chairman: I didn't see the brief.

Mr. Louis-François Garceau: Yes, Minister Collenette made the decision on February 21.

The Chairman: I'm going to ask you a fairly direct question: do you believe that this decision was made because of the review that this committee is doing in order to prevent the consequences of any recommendations we may be making?

Mr. Louis-François Garceau: I don't believe that was the case, and neither does Mr. Couture, I'm certain.

Mr. Richard Couture: We will not be talking politics, but that is really a political issue.

The Chairman: These decisions were not made by politicians. They were made by the directors of a company that belongs to Canadians.

Mr. Louis-François Garceau: That's your opinion, Mr. Chairman.

The Chairman: Mr. Bailey.

[English]

Mr. Roy Bailey: Thank you.

I'm not going to be like my counterpart, Roy, and attempt to speak French. I'll go slowly and I'll do so in English.

• 1705

When I first picked up your brochure and looked at the bottom of page one, I noticed the words “of Quebec”, “in Quebec” and “in Quebec”. I thought at first you were strictly concerned about items dealing with transportation in that province, but as you spoke you alluded to how the other portions would benefit from the improvement you were speaking about in Quebec. Therefore, as a group representing the province of Quebec, I congratulate you for drawing this to our attention. In the railway business, as in any transport business, any improvement in your province means a great improvement to the maritimes or to your neighbouring province of Ontario, and as a matter of fact to the rest of Canada.

If my arithmetic is correct, about 127 years ago we built a trans-Canada railway. A lot has happened since then.

I see your point of view with regard to the Canadian National Railway. A lot of things have taken place that have made Canadians...and I can see it has also made you somewhat disgruntled with the privatization of CN.

It might surprise you to know that crossing one of my border points within my constituency, the Canadian National Railway has always had running rights right down to New Orleans. Before this year ends, it looks like they will be buying that route, which will make the Canadian National Railway the fifth largest railway in the United States. The CP will be the sixth largest. The motivation is no different from the motivation for businesses here, and that's dollars.

Your group working in the province should spur on some of the other groups in other provinces in the hopes of doing what we have missed doing for the last 100 years in bringing the provinces together in the field of transportation. For that I congratulate you.

My original concern.... I must say, I hoped you were not presenting a package in which your province was an island unto itself, because you couldn't possibly develop a transportation system without connecting the United States and other provinces in Canada. Your gain would also be our gain, and if something happens within the development of VIA Rail in the Maritimes, that's your gain too, because it would bring people into the province.

Mr. Chairman, I got that off my mind. I was quite concerned about my original scan of the paper.

I want to thank you for the presentation.

That's all I have to say, Mr. Chairman.

[Translation]

The Chairman: Mr. Drouin.

Mr. Claude Drouin: Mr. Garceau, thank you for your presentation. I would first like to know one thing. If most of the passengers from the Maritimes, the Gaspé and the Lower St-Lawrence travel to Quebec City, what would be the impact of having them get off at Saint-Nicolas or at Saint-Rédempteur instead of Lévis?

Mr. Richard Couture: They would have to take a shuttle.

Mr. Claude Drouin: What did they do in Lévis? How did they get to Quebec City?

Mr. Richard Couture: They take the ferry boat which takes them directly downtown, to two downtown areas.

There's this whole issue of urban sprawl. All of the political discourse is about this issue and the politicians are saying that urban sprawl must be curbed. In this case, they are about to do the opposite.

Obviously, we will be the losers if we have to take a shuttle or a taxi that will cost $20 or more to go downtown. The advantage of going by train is that you travel from one downtown area to the other and you're not going from one field to another field. It would appear that the directors have not understood this.

Mr. Louis-François Garceau: I would simply like to add one point to answer the question raised earlier by Mr. Bailey. We have members who belong to CRASH in Ontario, and others who belong to Transport 2000 Canada. We have members from the Gaspé and the Maritimes. This was all mentioned in our brief because we are really from Quebec City. I don't know if this makes things any clearer now.

In answer to Mr. Drouin, if we were to build a station 25 miles from the downtown area, in the middle of nowhere, in what we call a "beet field", the people would have to use a shuttle and then pay for taxis to get to the train, which would in turn mean that nobody will want to take the train.

• 1710

Mr. Claude Drouin: My second question is as follows: if we were to assume that the Lévis station would in fact be shut down and replaced by the Charny station, could you estimate how much this would all cost? I know that you are not experts, but I would like to hear your opinion.

Mr. Louis-François Garceau: The train from Montreal goes to Charny before arriving in Lévis. The high-speed train from Montreal goes to Charny to Quebec City via the Quebec bridge. These are two different trains: the Transcontinental goes to Lévis and the high- speed train goes to Quebec City.

If the Lévis train station were to shut down, the train would go through the Charny station and would no longer travel to Lévis. It would go straight to the Maritimes through the Diamond subdivision. It makes a triangle. In other words, right now one train goes to Montmagny directly and the other travels through Lévis. Because the Charny train station is located at the point of the triangle, it should remain operational. Building another train station would be pointless.

Mr. Claude Drouin: Is it operational? Is it ready?

Mr. Louis-François Garceau: Right now it is operational for the transcontinental train and for the high-speed trains, however, the service provided is very minimal, as we said. If ever the Lévis train station were shut down, the train would still go through the Charny station.

Mr. Claude Drouin: Thank you, Mr. Chairman.

Mr. Antoine Dubé: As the member for Lévis, I'm very familiar with the situation and I appreciate the Coalition's efforts here today to try to summarize the situation in view of the little time we have. I would simply like to make two comments and then ask a question.

First of all, I would like to congratulate them. Indeed, we must recognize that having a train on Quebec's south shore has enabled us to preserve the shoreline, which is public property. As you know, CN was a Crown corporation until two years ago and because of this, the urban shoreline could not be privatized, as was done in Quebec City, and in many other cities throughout Canada and Quebec. This was unusual and stopped a lot of things from occurring.

Over time, however, the drop in train passengers, the other modes of public transportation, the rule of the automobile and the increased population have resulted in this shoreline, which is still CN property, becoming not a political issue but a multi- faceted economic one.

The City of Lévis had a project and wanted this shoreline to be turned into a linear park, a recreational and tourist parc with a bicycle path. In order to build a bicycle path, the rail tracks had to be removed. It would cost the city almost nothing to build a bicycle path. No one would oppose that idea, because that would enable us to remove the rail tracks. However, this would result in another phenomenon, which was described very well, a phenomenon referred to as speculation. Perhaps this is a big word, but there are some people who, seeing the disappearance of the rail tracks and the appearance of a linear parc, thought about purchasing land nearby in order to benefit from a magnificent view that they could have of the Château Frontenac. Moreover, VIA Rail uses this view in its advertising. You get a very good view of the Château Frontenac from Lévis. So this is an important issue to be considered.

Personally, I am happy about the decision to keep the Lévis train station open, because there were plans to have the train go through Charny and over the Quebec bridge to the Sainte-Foy station, which I may add, and with all due respect to the member for Louis-Hébert, is no more than a big box.

The other possibility being considered by VIA Rail, had it not been for steps taken by Mr. Collenette and ourselves...

The Chairman: Are you going to come to your question eventually?

Mr. Antoine Dubé: ...was to prevent to closing of the Lévis station as long as there was no other station on the south shore.

• 1715

The problem is one of location. I find this quite curious. But I did understand your question. Essentially, I think it might have been desirable that the decision be delayed six more months given the current efforts to privatize VIA Rail or make it more cost effective. In the hope of finding a better long-term solution for passenger transportation, the decision could be delayed until the committee, which is studying the problem throughout the country at the moment, makes its recommendations.

I don't think you understood the question correctly. The committee, which is to travel throughout the country, should be able to study this issue before the final decision is made. Don't you think, Mr. Garceau and Mr. Couture, that it would be interesting for the committee to see the only intermodal station in Quebec?

Mr. Louis-François Garceau: I understood that the Minister's decision may have been influenced before the committee met. However, I apologize for misunderstanding your question. I'm quite convinced that this could certainly have had an impact on the decision. However, CN had asked that the decision be made by February 21 at the latest. The Minister could have changed the decision, but it had already been made.

The Chairman: Do you know what the proposed closing date is?

Mr. Louis-François Garceau: The station will not be ordered closed unless and until there is another station functioning on the south shore.

The Chairman: Do you think this could be done before September?

Mr. Louis-François Garceau: We hear that the decision might be made in the fall, in November. It would be final.

The Chairman: I think the committee's work should include these recommendations. If the recommendations reveal that an error has been made, and that for the proper functioning of a passenger rail system, we need to maintain this, this fact should be taken into account and reflected in the recommendations. The reason I ask the question is that I wanted this to appear on the record. We need these recommendations to correct the mistakes that have been made. It would be difficult to recommend a good system without correcting the errors that have been made. That is why I asked the question.

Mr. Louis-François Garceau: The Coalition is very proud of our volunteers who work very hard to protect our existing rail system. There is no rhyme on reason to this. It makes no sense. We are what is known as "rail fans". We throw ourselves into this problem body and soul.

It is impossible to imagine what is going on in this area. We came here today, tomorrow we will be knocking on another door and another door and another door, until we manage to convince everyone that rail is the transportation system of the future. I don't know how to say it any other way. It brings a tear to my eye.

The Chairman: I do not control the committee; it controls me.

Mr. Louis-François Garceau: Yes, yes, I know.

The Chairman: I'm going to recommend that the committee travel to Quebec City to hear from people there. But that has not yet been decided. All I can promise is to recommend that the committee do this.

Mr. Richard Couture: Thank you.

[English]

The Chairman: Mrs. Wayne, please.

Mrs. Elsie Wayne: I'm pleased to hear you say that you will recommend that to the committee, Mr. Chairman.

I have grave concerns when we are looking at the demolition of a train station that has a history of 130 years. We have to protect the historic facilities that we have in buildings. We must do that. None of us would want to come here and see any of the Parliament Buildings destroyed. We protect them, and those other buildings should definitely have the same right.

Also, in listening to the presentation today, it seems to me that what they are saying to us is that in order to keep the dignity of their people, we have to keep the economy growing—and not only in Quebec City, but in the whole area of the south shore, and also in the Maritimes.

• 1720

Our young people who go to Bishop's College and the other colleges in Quebec take those trains. And I'll tell you, Mr. Chairman, I will never forget the day when we had our last train coming in from Quebec. It was at Christmas time, and the young people from Bishop's College came and they were crying at our train station.

I'm saying we have to be a little more compassionate. I know we have a budget and I know we have a debt problem and all that, but I want to say that we have to do things to help. If you balance this out, look at the tourism. If it is promoted enough, the people will take that train because they want to see that. They come from the Rockies. And I've taken the train from the Rockies. I've come down to Banff with it, and I want to tell you it's beautiful, but it's no more beautiful than taking that train from the Maritimes up through the south shore. When you see that beautiful trip, it's just unbelievable. My husband and I take that as well.

So I really appeal to you, for the sake of the environment, which none of us discuss here any more, but I have to tell you, the more cars and the more people you can put on the train and not in the cars, the better for you and for me and for the future of our young people, as well. So I do appeal to you, and I want to thank the coalition for their presentation today.

The Chairman: My promise to you, Mrs. Wayne, is that I will recommend that there be a consultation in Halifax or in that area.

Mrs. Elsie Wayne: Thank you.

The Chairman: I don't think it is a big revelation. The committee has already indicated that they want to do these things.

[Translation]

It is time for our witnesses to make their closing remarks. You have five to seven minutes, if you care to use them.

Mr. Louis-François Garceau: In closing, I would like to say that in two months, six or seven of us managed to collect 11,241 signatures, which were tabled in the House of Commons by the two Bloc Québécois members. From Halifax to Toronto, people signed a petition to keep stations open, particularly the station in Lévis. I think that if we had had six more months, we could have collected one million signatures. Everyone wanted to keep these stations open. That was my only comment.

The Chairman: If you still have some copies of your petition and would like to present it to the committee, you are welcomed to do so. We accept all documents.

Mr. Louis-François Garceau: We presented 11,241 signatures to the House of Commons.

The Chairman: I would suggest that you now give us a copy of your petition, which we will keep as a committee document.

Mr. Richard Couture: There are 400 sheets of paper.

The Chairman: We will take them.

Mr. Richard Couture: On the same subject, Mr. Antoine Dubé held public hearings in November, 1997. Of 30 briefs, 29 were in favour of our stand, and one was opposed to it.

The Chairman: Any documentation we receive will be studied and included in our report.

Mr. Antoine Dubé: If you would like the report in question, Mr. Chairman, I will send it to you.

The Chairman: You could send it to the clerk. All documents or presentations will be accepted.

[English]

Mr. Ivan Grose (Oshawa, Lib.): I'm always the guy who throws cold water on things, so I'll do it again.

We had a train that ran from Havelock to Toronto. It was a commuter train, and it never made any money. It was a nice ride of about 75 miles. It went every morning and went back every night with the same people. Every time they talked about closing it, 3,000 people appeared at a rally, but there were never more than 54 people who got on that train in one day. It was costing us $275 a person to take them to Toronto from Havelock. We could have sent them in limousines for less money than that. So don't be too impressed with the people who sign petitions or the people who come out to a rally. They love trains, but they don't ride on them.

The Chairman: I will recommend that we hire consultants to give us facts and figures. Yes, Canadians love trains and we don't always take them, but that will be balanced. This is a going to be a balanced study and we are going to look at the numbers; there's no doubt about that.

[Translation]

Mr. Dubé.

Mr. Antoine Dubé: Since you are looking for documents, I know, from a fairly reliable source, that VIA Rail had an impact analysis done in 1996 on the relocation of the Lévis station. At that time, the sites being considered were located half-way. VIA Rail should have a copy of this document. Could the committee ask VIA Rail to send it the document entitled Study on the determining the net recovery value and the renovation and annual maintenance cost of the CN Harlaka/Saint-Romuald rail segment?

• 1725

The Chairman: In closing, I would like to say that the study on this region will focus on a passenger rail system. A similar study will be done for New Brunswick, Ontario and the other provinces, so that we come up with something valid.

Thank you very much.

Mr. Louis-François Garceau: Could you tell us when the report will be tabled once the committee has completed its work?

The Chairman: We don't know that ourselves.

Mr. Louis-François Garceau: I was just wondering whether it would be done in one month or whether it would take longer.

The Chairman: I would recommend the month of May, but there will still be further discussions afterward. So you still have time.

[English]

Mr. Calder.

Mr. Murray Calder: I think maybe it might be useful for us too. I have done enough on short-line railways running freight and I know what the cars-per-mile ratio is that you need to make a line viable. I think it would be very interesting for us as a committee to have the information in front of us as to how many people per mile you would need on a passenger route to make it viable, and we could even break that down further to how many people per mile you would need on a full passenger train versus a Budd car.

The Chairman: I'm sorry, Mr. Calder; we were scheming about the next meeting. Did you ask me a question?

Mr. Murray Calder: I just asked for research material for the committee on how many people per mile we would need for a full-size train versus how many for a Budd car in order to make it profitable.

The Chairman: Okay. That's exactly what we were speaking about. The directive that I'd given at the beginning of the study was that if one member asks for a report we will not see the report. What we will do is bring it to the committee and ask if you agree that we ask for a report. Otherwise, every meeting we have they're going to have 25 reports to make. So I hope you will bring it—and I know that you will—so that collectively we can direct staff to do those reports.

Mr. Murray Calder: Okay.

The Chairman: Thank you very much. Merci beaucoup.

[Translation]

Mr. Richard Couture: Thank you for listening to us.

The Chairman: It was most interesting.

[English]

We have another meeting in three minutes in camera about the consultation and a proposed schedule.

[Proceedings continue in camera]