Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 23 - Evidence -  Morning Sitting


HALIFAX, Thursday, February 21, 2002

The Standing Senate Committee on Transport and Communications met this day at 9:00 a.m. to examine issues facing the intercity busing industry.

Senator Lise Bacon (Chairman) in the Chair.

[English]

The Chairman: We are pleased to be holding this public hearing in Halifax. Because the distances between centres in Atlantic Canada, especially the Maritimes, are so great, we would expect intercity bus service to be an attractive means of passenger transportation. We will be especially interested to see if that is indeed the case, and if not why.

The federal Minister of Transport asked this committee to undertake this study. We began our in Ottawa last week, we were in Montreal yesterday, we will go to Vancouver and Calgary and then to Toronto next month. We will report the results of our study to the Senate before the end of 2002.

We do not want to get caught up in operational problems, details about a carrier's equipment or the merits of different regulatory regimes before fully understanding what the users of the service want. Our primary aim is to understand the needs of the user of intercity bus service, what the economists would call the demand side; after all, the carriers are there to serve the users. We believe that if the demand side is understood, designing responsive service and appropriate regulation may become more straightforward.

Before we hear from our witness, let me say a few words about why we have been asked to study intercity buses.

The essence of the problem, we are told, is that intercity bus ridership has been steadily declining for several decades, although yesterday, we heard something else. This decline is troubling because the bus mode is an important mode of passenger transportation system. The bus mode can go virtually everywhere. It is environmentally friendly and, traditionally, it has been inexpensive.

There are several possible explanations for the decline, if there is a decline. It could be that more people are travelling by automobile. It could be that more people are living in big cities. It could be that there is too much government regulation, or that the regulation varies too much from one province to another. That is what we hope to find in the days and months to come.

This morning, questions will follow each presentation. I will also add that the key questions we hope to answer will appear on our Web site.

Our first witnesses this morning are Mr. Don Stonehouse and Mr. Bernie Swan.

Please proceed.

Mr. Don Stonehouse, Manager, Transportation Policy, Department of Transport, Government of Nova Scotia: Madam Chair, on behalf of my minister, Mr. Russell, who is the Minister of Transportation and Public Works, I would like to welcome you to Nova Scotia and particularly like to thank you for coming to Halifax.

I have been asked to make a presentation to provide an overview of the public passenger industry in Nova Scotia — that is, to provide a background and context for other presentations that will be given throughout the day at this hearing.

With respect to the regulatory regime in Nova Scotia, I think it serves well to review the situation, both federally and provincially. The regulation of bus operations, including both scheduled and charter services, can reside with two different levels of government. Extra-provincial bus operations, that is, bus services that cross provincial, territorial or international boundaries, are the jurisdiction of the federal government. Intra-provincial bus services, that is, bus services that operate within the boundaries of one province or territory, are the responsibility of that particular province or territory. The federal government has as well determined that if one aspect of a bus company's operation involves extra-provincial movement, then all services that that company provides, including those services that operate solely within the boundaries of a province or territory, are within the jurisdiction of the federal government. Hence, this hearing that you are conducting for the federal minister is very important to us.

The federal government, however, within its Motor Vehicle Transport Act, has delegated authority to regulate extra-provincial bus operations to the respective provincial and territorial governments. The only proviso has been that provincial and territorial governments must regulate extra-provincial bus operations in the same manner as they regulate intra-provincial bus operations.

Turning to this province in particular, the public passenger industry in Nova Scotia has been regulated since 1923 under the authority of the provincial Motor Carrier Act. This act calls for the economic and safety regulation of public passenger services and it is administered, on behalf of the government, by the Utility and Review Board, the URB. Any public passenger vehicle with a passenger capacity of at least nine seats is subject to regulatory oversight.

One rationale put forward for the full regulation of the bus industry is that it affords the opportunity to ensure that unprofitable and break-even scheduled routes are continued and are cross-subsidized by profits from such sources as other scheduled routes, bus parcel service and profitable charter services.

The economic regulation in Nova Scotia refers to regulatory oversight on entry into the market, the tariffs to be charged, the schedules to be adhered to, the routes to be followed and the exit from the marketplace.

Safety regulation refers to the vehicle regulations under the National Safety Code and minimum insurance requirements.

The board uses a public convenience and necessity test in its assessment of applications for new or additional services. Under a public convenience and necessity test, the applicant must prove to the satisfaction of the board that the service being proposed is in the public interest and that there is a public need for the service.

This test differs from the reverse onus test, where the burden of proof shifts to the complainant, who must prove that granting the application would be detrimental to the public interest.

The board's deliberations are often held within a quasi-judicial public hearing process. Complainants have the opportunity to oppose the proposed service or change, and complainants are usually comprised of licensed carriers providing a similar service or who could be affected by a new or additional service.

Who are the participants in this industry? The public passenger industry in Nova Scotia consists of scheduled service, charter and tour bus service, bus parcel express, school bus service and contracted service.

It has been the experience in Nova Scotia that, within integrated bus companies, the charter and tour bus service, as well as the bus parcel express service, helps to maintain the financial viability of scheduled service. There is a synergy not only on the financial side of the ledger, but also with the provision of equipment and drivers. New vehicles are usually brought into the charter and tour service initially, before being moved over to the scheduled side of operations.

The situation in Nova Scotia has been complicated, however, by the entry of a significant number of unregulated vans that operate in direct competition with the regulated scheduled bus operators on the major intercity routes. These vans are exempted from economic regulation, and even from public passenger safety regulation and insurance requirements. The government intends to correct this latter situation shortly.

Scheduled bus service is provided by SMT/Acadian Lines over much of Nova Scotia. Acadian Lines, which is the largest regular route service operator in Nova Scotia, provides connections between Halifax and Sydney — three frequencies per day — and Halifax and Amherst, three frequencies per day. Both services go via Truro. Acadian also provides once-a-day service between Halifax and Kentville, once-a-day service Halifax and Digby, and beyond Digby four days per week to Yarmouth.

DRL Coachlines of Newfoundland, which replaced McKenzie Bus Line, provides once-daily service between Sherbrooke and Halifax along the Eastern Shore. Zinck's Bus Company provides once-daily service between Sherbrooke and Halifax, along the Eastern Shore.

Other services include Al and Sons Cabs and Vans, which operates once daily between Canso and Antigonish, and Transoverland, which operates once daily, three days per week between Cheticamp and Sydney.

There are two regulated scheduled service operators from Charlottetown to Halifax and one regulated service operator from Halifax to Charlottetown, utilizing a total of seven large vans on a daily basis.

There could be up to 35 unregulated vans operating within Nova Scotia and to and from Nova Scotia on a daily basis, primarily into or out of Halifax. The vans tend to follow the main highway routes, the same routes as the intercity bus operators.

The SMT group of companies, including Acadian Lines, Nova Charter Services, SMT Eastern and Pictou County Bus Services, is the largest provider of charter and tour services in Nova Scotia.

DRL Coach lines, which received McKenzie Bus Line's charter licences with its takeover of the South Shore scheduled route, has established itself as a major player in the intra- and extra-provincial Nova Scotia charter market, especially as the largest supplier of cruise ship day excursion services in Nova Scotia.

The Perry Rand group of companies, made up of Boyd's Bus Service, Bluenose Transit, Reid's Bus Service, The Bus Boys, Zinck's Bus Company and Perry Rand Limited, are major suppliers in the motor coach and activity charter bus markets.

In addition, Trius Tours of Charlottetown, Moncton Transit, Transoverland, Julian Carabin Enterprises, W.C. Rooney Transportation, Cabana Charters & Tours Limited, Atlantic Tours Gray Line, and Pat's Tour Bus of Campbellton, New Brunswick, provide motor coach charter and tour services within, into and from Nova Scotia.

There are numerous activity bus operations that operate non-motor coach charter and contract services within Nova Scotia and from Nova Scotia to other parts of Eastern Canada.

There are also a number of unregulated operators, that is, operators utilizing small vans, who have developed new eco-tourism products for individuals and small groups who are looking for educational, recreational, and environmental experiences.

Regulated carriers have recently implemented amphibious sea/land charter and scheduled tour services within downtown Halifax.

What changes have we seen in the marketplace? Acadian Lines experienced nearly a 50 per cent decline in passengers in the decade from 1986 to 1996, with a continued decline to about 1999, where passenger traffic levelled off. In the last couple of years, however, Acadian has experienced modest growth, in the 2 per cent to 3 per cent range per annum.

After many years of significant decline, in excess of 75 per cent over the 10 years between 1986 and 1996, with the previous operator, McKenzie Bus Line, and after initial declines under DRL Coachlines, ridership has stabilized along the South Shore. DRL has instituted daily return service between Yarmouth and Halifax, as the tide of falling traffic levels appears to have been stemmed.

Numerous reasons have been suggested for this large decline in ridership, including pricing, competition from other modes and changing demographics, but most important is the preference for the private automobile. The increase in unregulated van services throughout the province is also having a significant negative effect on existing scheduled bus service. In some cases, these vans provide door-to-door service.

Scheduled bus carriers have been forced to do a number of things in order to address the reduction in ridership. Acadian's Halifax-Sydney service has been reduced from four to three daily frequencies, with consideration being given for a further reduction in light of the competition from vans; its Halifax-Yarmouth service has been reduced from twice daily service to once daily, four times a week, with consideration being given to contracting the Digby-Yarmouth portion to a smaller carrier; and the Truro-Amherst service through the Wentworth Valley has been reduced to once a day in each direction, with the other two frequencies going via the Cobequid Pass.

In 1998, McKenzie Bus Line was granted its application to abandon its South Shore route, but DRL Coachlines Limited was subsequently granted authority to operate MacKenzie's scheduled service and also received MacKenzie's charter service licences. One casualty of this downsizing trend was Bluenose Transit's run from Truro to Amherst via Parrsboro; it was abandoned in 1995. In 1997, a hearing was held to consider an application by Zinck's Bus Company to abandon its Halifax to Sherbrooke run. The board did not grant the application.

The charter and tour industry has grown by approximately 5 per cent per annum over the past 10 years, particularly in the area of tourism. The board has approved nearly 100 applications from new operators or for amendments to existing licences. DRL Coachlines has increased the number of motor coaches licensed to provide general charter services from 8 to 16 units on a year-round basis. There are certain peak days during the busy tourist season when additional coaches must be made available to meet demand, especially for the cruise ship business. The URB has provided flexibility within the regulations through temporary licences to address these peak demands; for example, DRL was granted an additional 75 units during the peak 2001 summer season.

Your committee has been given a very challenging assignment. The questions are fairly straightforward, but the answers are rather difficult and they can vary from jurisdiction to jurisdiction.

In closing, I should like to wish the committee well. As you state in your background paper, I truly hope that you are able to find new perspectives and bring the parties involved to some new state of agreement. I look forward to your report.

The Chairman: Thank you, Mr. Stonehouse, especially for the concluding comments.

I am concerned about the vans that you mentioned a few times in your presentation. The vans tend to follow the main highway routes, the same routes as the intercity bus operators, and they are not regulated. Does that mean that unregulated vans are operating illegally, or are they exempt?

Mr. Stonehouse: They are exempted from the Motor Carrier Act, under the stipulations that the Motor Carrier Act only addresses those public passenger vehicles that have at least nine passenger seats. These vans are usually eight- seated, one for the driver, and so they do not come under the economic regulations, nor do they come under the safety regulations at this point in time. The government has recognized this and shortly will be addressing the safety issues as well as the insurance.

The Chairman: That is what you have on page 2 of your presentation. What kind of regulation do you want to impose on the vans? Would you regulate the service? Would you regulate their fares?

Mr. Stonehouse: No, it will not be an economic regulation. It will only deal with the safety regulation and the minimum insurance requirements, the same safety regulation that the larger vans and the larger buses are adhering to — that is, those regulations under the National Safety Code.

The Chairman: Is economic regulation of the industry still appropriate, or should some or all of the industry be deregulated now or at some point in the foreseeable future?

Mr. Stonehouse: Well, we are looking forward to what some of the other representatives say here. The government is very interested in that. The government has chosen at this point to continue economic regulation of the industry.

The Chairman: Are the differences between the provincial bus regimes that have developed over the last decade detrimental to the industry or the travelling public, and if so, what is the appropriate remedy? Which level of government should implement it?

Mr. Stonehouse: The standard now is if a bus is crossing provincial boundaries, it is under the federal government, so the federal government has assumed or has been given that role. As I said in my presentation — and you note it in your background document — the courts have determined that if one portion of a bus operation is federal then all operation is federal. Hence, it is obvious that the determination that the federal government makes will have a significant impact on what we do in this province or have to do in this province. There really cannot be two regimes operating, because it will not be fair to one or the other operator.

The Chairman: What is the impact of the industry consolidation over the last decade? Is this apparently continuing consolidation of the industry an issue requiring government attention?

Mr. Stonehouse: What we have found in Nova Scotia is that there has not been very much consolidation of the industry. There has been some. SMT Eastern out of New Brunswick has purchased Acadian Bus Lines, and DRL out of Newfoundland purchased McKenzie Bus Lines. Nevertheless, it seems there has not been the consolidation within the province itself. It has been more on a regional basis.

The Chairman: So you seem to agree in your presentation on the decline in ridership.

Mr. Stonehouse: Yes, there has been a significant decline in ridership, and as we indicated, it is probably for a number of very clear reasons. There are still those out there that require public transportation, and what we are seeing is that in some cases it has reduced to a certain level. It has levelled off probably at a base level, but the popularity of what we refer to as unregulated vans has really increased over the past number of years. I think it is somewhat unique to Nova Scotia.

The Chairman: Is it because rural areas would need more services and they would use the van?

Mr. Stonehouse: Well, the van provides convenience. Sometimes, the service is door to door. I think that is probably one of the reasons. They are priced competitively with the intercity bus operators.

In the situation in Nova Scotia, Halifax is central, particularly for medical services, as well as educational services; there are a number of universities that are in this area. It would appear that the van services are providing a particular level of services that the public is looking for.

Mr. Bernie Swan, Transportation Policy Analyst, Department of Transport, Government of Nova Scotia: It is not just the vans that are causing the decline though. The decline started before the vans ever became popular in Nova Scotia. The best example of that is the south shore run that is now operated by DRL. Under McKenzie, in 1994 there were 80,000 passengers on that run. That declined under McKenzie in 1996, down to about 14,000. So it is pretty hard for a business to survive with those declines.

The Chairman: Are cabs used sometimes for transportation in small areas?

Mr. Swan: Within an hour, quite often, I suppose, of Halifax. You even hear of the case of Sydney to Halifax, but that would not be the rule though. It would be a special case. I have heard of cases, for example, of people coming in from the fishing boats and wanting to get to Sydney. They want to get home as fast as they can, they have just made a lot of money out on the water, so a cab is no problem for them; three or four hop in and away they go.

Senator Forrestall: I am replacing Senator Spivak, who has had a fall. She is very interested in this work.

We have heard for some time now that the province is looking at some changes. You said ``soon.'' The chair and others around the table will recognize my reaction to the word ``soon'' from government; it is almost unnatural. When do you think that might happen?

Mr. Stonehouse: The changes that are being looked on regular vans have to do with applying safety regulations as well as van insurance requirements. We are well along in the process. The matter is with our Department of Justice. We are just finalizing how this stuff should be worded. I would expect that within a month or so a proposal will be presented to government for their consideration.

Senator Forrestall: Your aim is to have it in front of the legislature this spring?

Mr. Stonehouse: It does not need to go before the legislature as regulations. It will have to go before executive council of the government for their consideration.

Senator Forrestall: That leads me then to the question I was really after. Why could we not have gone ahead, by regulation, with certain aspects of this that have obviously been of concern over the last many years, as a matter of fact? Why could we not have done it instead of saving it all up to do it at one time?

Mr. Stonehouse: The only aspect of doing it is rewriting the National Safety Code regulations that apply to buses and putting them in the context of a smaller vehicle. We have been working with our legal advisers for over a year now to develop that.

Senator Forrestall: Will we, at the end of this then, be in sync with our fellow provinces across the country?

Mr. Stonehouse: I am not sure what the situation is in other provinces in regard to these small vans. They seem to be somewhat unique to Nova Scotia. I do not think it has been as significant an issue in other provinces as it has been in Nova Scotia. I think our act and regulations were written in such a way that these small vans were exempt from regulation. The smaller type vehicles were deemed to be only an interest in the taxi industry. Each municipality regulates its own taxi industry.

Sp, you can call it a loophole or whatever. This determination was done prior to the proliferation of vans. They seem to have slipped between the cracks with respect not only to economic regulations but safety regulations. The government has taken on that issue around the safety regulations to ensure that they operate under the same safety regime that any other public passenger service operates in Nova Scotia.

Senator Forrestall: How significant is the development of the cruise ship industry? Is it measurable in terms of dollars?

Mr. Stonehouse: I do not have the dollar amount, but it has grown significantly. Last year I think they set a record for the number of calls and the number of passengers. So there is a huge demand when they are in port, particularly if you get more than one cruise ship in here at a time, and that does happen from time to time. The board has addressed some of those needs by adding temporary licences for that particular purpose, so that they can all pile in a bus and go down to Peggy's Cove or do a city tour or some other tour and related activity.

Senator Forrestall: In the changes you will make, will you be addressing — without getting into deregulation now from an economic point of view, are you looking at that in terms of some new thrusts you are considering?

Mr. Stonehouse: No, the only direction government has given is to apply safety regulations to these new —

Senator Forrestall: The safety insurance?

Mr. Stonehouse: The safety insurance, no other economic type of regulation, only on the safety side.

Senator Forrestall: If you buy the insurance and you have the equipment, go to work.

Mr. Stonehouse: Yes, that is what is deemed the position of the government at this point in time.

Senator Forrestall: They actually let somebody else do the work, the heavy work, use the equipment, safety it up and so on.

Mr. Stonehouse: Yes, that is what the government wants to ensure.

The Chairman: Where does someone go to catch a van? Does he or she go to a bus station, or telephone for one? Do you have any percentage on the use of the vans, a percentage of regular buses?

Mr. Stonehouse: No, we do not, which is one of the benefits of regulating for them on the safety. We will then understand exactly how many there are out there. The only way we can know at present is by looking at the ads in the paper and by casual observance on the streets of Halifax. Usually, as I say, they can make door-to-door stops. There is probably a stop near the major hospitals in Halifax, as well as at some of the major hotels. They seem to work out the stops in accordance with where their passengers are going.

The Chairman: Does an individual telephone for a van?

Mr. Stonehouse: Oh, yes, they all have 1-800 numbers. Some may even be found circulating around some of the bus stops. It is very competitive.

Senator Callbeck: You say here that vans have nine seats. They are subject to regulatory oversight for economic and safety regulations. So the changes you are going to make are to cover vans that carry eight or less people. How low are you going to go?

Mr. Stonehouse: Any public passenger vehicle that is hauling somebody for hire, regardless of the size, will come under the safety regime.

Senator Callbeck: So if you have nine seats, you are going to have the economic and safety regulations; if you have eight, you do not.

Mr. Stonehouse: Just the safety and the insurance.

Senator Callbeck: You mentioned that large buses only adhere to safety and insurance right now. Did I understand you properly?

Mr. Stonehouse: Nine seats and up, whatever the maximum seats are, 52 or 53, are regulated fully within Nova Scotia. Someone who wants to get into the business has to apply to the URB. That service will come under the full regulatory regime, including economic, safety, and insurance.

Senator Callbeck: Did you say up to 52 seats?

Mr. Stonehouse: Whatever the number is; I forget.

Senator Callbeck: Does a bus with more than 52 seats come under the full regulatory regime as well?

Mr. Stonehouse: Yes.

Mr. Swan: Anything having nine seats and up would be subject to both economic and safety regulations. Mr. Stonehouse said 52, but 55 is probably the maximum.

Senator Callbeck: When an operator gets permission to operate on a certain route, is that licence only for a certain length of time? Does the operator have to get that licence renewed every so often?

Mr. Swan: No, once an operator is granted a licence, that is it; there is no requirement to renew it periodically. What an operator might have to return to the URB for is to change a fare, change the stops or the routing; as well, an operator probably has to advise the board if there is a change of equipment.

Senator Callbeck: Are the fares based on expenditures plus a certain percentage?

Mr. Swan: That is probably best asked of the carriers. From a regulatory perspective, the carrier will make an application to the board about the proposed fare and will provide arguments for that. The board will determine whether that is a fair and reasonable charge. The carrier is mandated to abide by the fare that has been agreed to between with the Board.

Senator Callbeck: You mentioned a 50 per cent decline. Then you say that Acadian has experienced modest growth, 2 per cent to 3 per cent per year in the last couple of years. Why is that? Did they take on more routes?

Mr. Stonehouse: You would have to ask the carriers directly why they deemed that there has been a slight increase — probably through efficiencies and whatever, and within the regulations providing the types of services that they believe their customers want.

Senator Oliver: I am surprised at the drop in ridership, and I am surprised at the number of routes that are being dropped. I am surprised that there are so many Nova Scotians not being serviced by traditional buses the way they were years ago. You have indicated that this is largely because people are choosing private automobiles, because of changes in demographics and because of other modes.

On the other side of the coin, people are living longer, many move from urban areas to rural areas, and a number of seniors and disabled people cannot operate a motor vehicle. These people need access to some sort of public transportation. There are no trains; there are no helicopters; there are no boats. It would seem to me that given the road infrastructure buses and busing is the way to go.

My question to you is this: What should this committee be doing to ensure that the disabled and seniors living in rural or non-urban parts of this province have access to the urban centres? It is a question of public policy.

Mr. Swan: That can be answered in two ways. First of all, bus service is still there, and it covers a broad area of the province. It is there as an option. In our consultations back in 1998, seniors told us that they loved the van service primarily because of the pick-up service. I am not sure that this applies to the disabled because I do not believe the vans are wheelchair accessible.

However, there is the Community Transportation Assistance Program, which is an ongoing program run by the government. It is in the order of $500,000. The key objective there is to implement accessible services, more than that even, inclusive services, which would be service for anyone, the disabled, the elderly, the underprivileged, in the rural areas of the province. I believe that six areas are currently benefiting from that, and there are another five areas that are currently studying how they can implement this type of service. That would be service on a local rural area.

Senator Oliver: Is that program funded 100 per cent by the province, that $500,000?

Mr. Swan: No, no. The key objective was for these services to be self-funding, to be sustainable, but that is not practical. This $500,000 is a subsidy. The program needs that subsidy; without it, it would not exist. That is the reality.

Senator Oliver: What percentage of Nova Scotia is covered by the Community Transportation Assistance Program?

Mr. Swan: As I said, six areas are benefiting from the program at present. Colchester County is an example. If we go back into the history of this — which I do not really want to do because it will take too long — we had a number of pilot projects around the province, Yarmouth and Colchester being examples, and they continue to benefit from this program.

The program runs in various parts of the province, and we are hoping that it will expand as more areas become aware of it.

One of the objectives of the program is for it to provide not only local service but feeder service into the mainline routes serviced by DRL or Acadian Lines — in other words, local and long-distance service. We are aware of the problem in Nova Scotia, and the government has tried to do something about it for all groups, whether the underprivileged, disabled, or the elderly.

Senator Oliver: Would a totally deregulated system not be better, so that other groups, carriers, and businesses from outside the province wanting to do business here could come in to help fill some of these voids?

Mr. Stonehouse: Well, if there is a void, a carrier can apply to the Utility and Review Board for a licence to operate a service.

Senator Oliver: Is it difficult; is there a difficult hurdle to get over?

Mr. Stonehouse: There is a hurdle, depending on the extent of the service that is being proposed; I imagine, it is directly related to the difficulty.

Senator Oliver: Have you considered the reverse onus that some other provinces are using now?

Mr. Stonehouse: That has been discussed, but at the present time the government has determined that it wants to stick with the regulatory regime that is now in place within this province.

The Chairman: I am still not sure I understand the economic regulating of buses with nine seats or more but not regulating the vans. You have two regimes, in fact. What do the big bus operators feel about this?

Mr. Swan: They will probably tell you later on today, no doubt.

The Chairman: Would you know?

Mr. Stonehouse: As indicated, the vans are having a negative effect on intercity bus services, no doubt about that, and probably could have an effect on actual levels of services that are being provided. It is an anomaly, certainly.

Mr. Swan: It is an anomaly; however, we are in a tricky situation. This sector came out of nowhere and all of a sudden it is very popular throughout the province. The dilemma is that if the smaller vans are subjected to full economic regulations, meaning the economic test, then in all likelihood, if we brought them all in before the URB with the public convenience and necessity entry test, they would not get a licence. Hence, they would be gone, and that would create an uproar. There are not a lot of them, maybe 35-odd vans throughout the province, to and from the province.

In our 1998 consultations, a large segment of people told us, ``Do not take these things away from us.'' We are afraid that if we do subject them to economic regulation they will disappear. That is our dilemma.

Senator Callbeck: So what is involved there that would cause problems for the vans?

Mr. Swan: You have to prove to the Utility and Review Board that the service that you will provide is in the public interest.

Mr. Stonehouse: And needed. If these vans are travelling the same route as the intercity bus services, the bus companies, no doubt, would argue before the URB that there are 10, 12, 20 — whatever the number — empty seats on their runs and that therefore the need is not there. The board could probably find that there is not a public need for the vans, because there is already a service there, and a service with a sufficient capacity to handle the demand if the customers chose to use a bus.

Senator Callbeck: Is the cost of service for a van more expensive, because they pick you up at your house?

Mr. Stonehouse: They tend to be very price competitive with bus service.

Senator Phalen: Still on this van issue. Is there any record of the surge in van ridership?

Mr. Stonehouse: We do not have any record of number of people using vans — except from what we have heard — because they are not regulated. They are not required to file reports or anything like that.

You could estimate the number of vans out there, and there are a considerable number of them.

Senator Phalen: You said that these vans provide door-to-door service. However, not all of them are door to door; some of them have pick-up points, correct?

Mr. Stonehouse: Yes, they do.

Senator Phalen: So not much different than a bus, actually. You go to a terminal or you can go to a pick-up point.

Mr. Stonehouse: Certainly.

Senator Phalen: Why vans? Are they any cheaper?

Mr. Stonehouse: They are just as cheap or approximately the same price, depending on the routing. I guess the thing with the vans is that although they may not all be door to door, they are a lot more flexible about the pick-up points. They can take you directly to the front of the hospital door or the university door or wherever. Whether the public chooses to be in an automobile-type vehicle as opposed to bus-type vehicle, I do not know.

From my personal experience, I know my children have used vans, as have my in-laws. We are very pleased with the service they got, coming from Prince Edward Island, door to door. For elderly, older people, those are things that they are looking for.

Senator Phalen: I do not know if this is a proper question or not, but do vans have an unfair advantage over buses?

Mr. Stonehouse: Some have suggested that they probably do have an unfair advantage, given that they do not have to adhere to the same safety regime, hours of service, those types of rules, and that is why the government is taking steps to rectify the situation.

Senator Phalen: Let me follow that up just a little bit. If you were to impose those restrictions on vans, would that result in an increase in their fares? Would it cause them to raise their prices? Would it cost them money to comply with your new restrictions?

Mr. Stonehouse: If they are not properly maintaining their vehicles to what the standards should be, there could be an additional cost afforded to them. If they are not carrying the level of insurance that anyone in business should be doing, assessing the risk, then it will cost them some more dollars to operate, and that may affect their fares, or they may choose to reduce their margins to stay competitive.

Senator Jaffer: Mr. Swan, is my understanding correct, that politically it is not a wise thing to economically regulate the vans? Is that what you are saying?

Mr. Swan: From an economic regulation perspective, yes, but from safety regulations, it is fully realized that they should come under safety regulations.

However, let me just point out that vans are not out there running around without any regulations. They are subject to the Motor Vehicle Act, which has a certain minimum level of regulation.

Let me give you one perspective, because you are interested in the vans. I will have to ask a friend of mine back here to confirm the number.

I notice Brian Gillie is in the room. Mr. Gillie owned Acadian Lines before he was bought out by SMT. He put some numbers together years ago indicating that their loss in revenue to these vans on the Halifax to Sydney run alone was in the order of $1 million a year. That will give you some idea of how many vans are out there and how many passengers are on these vans.

Senator Jaffer: As you said, they are regulated in a sense. They surely must carry insurance, right, so they are partly regulated?

Mr. Swan: They carry at least the minimum insurance required under the Motor Vehicle Act, and we are aware that most of them carry more than that. However, we do not know how much they are carrying and we want to ensure that they are carrying as much as they should be vis-à-vis the Motor Carrier Act.

Senator Forrestall: Are safety standards for buses in Canada high enough, in light of the two or three very bad accidents in the last handful of years? Should we be re-examining this issue. I know there has been a lot of thought given to this, but what is your judgment? Are the safety code provisions, the national standards, high enough? Are they good enough?

Mr. Stonehouse: My own personal opinion is that the National Safety Code is strong enough. I think what has to happen, though, as the situation in Nova Scotia indicates, is that they have to be fully implemented and enforced. The NSC addresses, I believe, almost every aspect of the vehicle, mechanical, technical, whatever. It is a matter of implementation and enforcement. The URB I can say, I believe, without too much argument, fully enforces the safety regime that is intended for these buses. The URB is known throughout the industry and throughout the jurisdictions, both in Canada and the United States, as having a very strong safety focus. A bus that has been inspected under the Utility and Review Board is recognized throughout Canada and the U.S as being a safe bus.

Senator Forrestall: Is the national standard higher than the provincial standard?

Mr. Stonehouse: No, the standard is the same. I think the issue is not necessarily the standard but the extent to which the standard is implemented and enforced.

Senator Forrestall: I am asking ask these questions, Madam Chair, because not long ago the Homeland Security people in the United States were asked questions about security. Security involves not just air ravel, but a lot of things. Very important and very high on that list, of course, is busing, public movement of people, by vans, charter buses, regular bus routes and whatnot. I was interested in your comment and it perhaps gives us a sense of security and safety or a feeling of safety about it.

Given the change that has taken place since September 11, have we reviewed security on buses with respect to it as a transportation medium or platform for terrorists?

Mr. Stonehouse: That is probably out of my area of knowledge. I am not sure whether that has been done. I think you might be able to get answers from the carriers who are moving out of the province and into the United States as to what new rules are being imposed upon them with regard to tariffs. I do know, just from hearsay concerning the ferry services that operate out of Southwest Nova, out of Digby and out of Yarmouth, that they have instituted new procedures, whereby more detailed information on who is actually travelling is being obtained, and that information is forwarded ahead to the United States authorities prior to departure. I know that there are some new rules being instituted on that side. I am not aware directly of what is happening in the bus industry.

Senator Forrestall: It is rather important because I have in the back of my mind the transmission or the making available of manifests, passenger manifests, their names. Because we live in a different world, pretty soon we will have to comply with this. If we do not, we will be forced to comply with it.

Mr. Stonehouse: Bill C-44.

The carriers who are actually moving in may be able to shed some light on that.

Senator Forrestall: We have an obligation to ensure secure means of transportation, I suppose, to other people.

Senator Callbeck: Does the province have regulations that bus owners must follow to accommodate disabled people? For example, are the buses accessible by wheelchair?

Mr. Stonehouse: There is, I believe, at least one, maybe two, bus in the fleet of SMT, Acadian that are accessible. If they bring an accessible vehicle into the fleet, it has to meet the national standard. The province has adopted those standards for ensuring that these accessible buses meet all those standards.

I can find out whether within the regulatory regime the government mandates a certain number of accessible vehicles; I do not think so.

Senator Callbeck: In other words, on all your scheduled routes, they would not necessarily have a bus that is accessible?

Mr. Stonehouse: That is right. I understand that there are some vehicles in the fleet whereby if reservations are made well in advance those vehicles can be made available. Again, the carrier will be able to more fully answer that question.

Senator Oliver: Earlier, Mr. Swan, you were telling us about the Community Transportation Assistance Program. I was wondering if you could lay before this committee all papers, documents, books and reports that you have on that program and how it is being rolled out, so we can study it in more detail. Perhaps you could just send it to the clerk of the committee in Ottawa so that we could review it, to see how it is being rolled out and in what communities, the cost of the service, who is paying, its utilization rate and whether it is effective.

Mr. Swan: Yes, certainly, no problem. I will send that to your attention.

The Chairman: Would you explain the difference between the charter bus service and contracted service?

Do you have both?

Mr. Stonehouse: Yes. The services are similar, I suppose. It is just to whom it is provided. Contracted services could be supplied to an organization or a department for whom you agree to move a certain number of employees or members to the destinations that they determine. It is a form of service that is on a contract basis as opposed to being open generally to the public.

The Chairman: Thank you.

Our next witness is Mr. John Pearce, the Executive Director of Transport 2000 Atlantic.

Please proceed, Mr. Pearce.

Mr. John Pearce, Executive Director, Transport 2000 Atlantic: I am very pleased to present to your committee the comments of our group, Transport 2000 Atlantic. We represent the four Atlantic provinces of Canada, part of five regional groups across the country composing our federated organization, Transport 2000 Canada, which, in itself, is part of an international organization.

We are a charitable voluntary group representing travellers advocating improved public passenger transportation because it is economically, socially and environmentally beneficial.

First of all, I am going to answer, primarily, the points in your call for appearances. Point one: Reversing the decline in use of intercity buses is not an easy problem to solve. One approach might be more cooperation between the bus and rail modes, to make an intermodal network easier and strengthen this public service passenger network, which is cheap and environmentally friendly, in general. A positive example is the amalgamation of Acadian Lines bus terminal in Halifax and the underutilized VIA Rail station in downtown Halifax, which is set for April of this year.

Since the elimination of the five regional rail routes in the three Maritime provinces in 1990, bus service has also declined noticeably, contrary, perhaps, to the general expectations of government or the bus industry. In other words, the discontinuance of rail routes has not benefited the bus industry. We believe that the higher frequency of a combined bus and rail network with more choice for travellers attracted more people from using their cars for intercity trips. This experience was felt in the U.S. when Amtrak was formed — Amtrak is the U.S. equivalent of VIA. In 1971, the U.S. passenger rail network was cut in half but there appeared to be very little effect on bus traffic.

A positive way to reverse the decline might be in more connections to airports, again featuring intermodal network. These connections are afforded by Acadian Lines at the Halifax airport for buses passing by on the highway. They could increase bus ridership and provide a cost-effective alternative to short-haul airfares, which are bound to be fairly high.

We would recommend this to SMT at the New Brunswick hub airport in Moncton, which is where air traffic is certainly growing. A call by SMT at the airport might be quite beneficial to bus traffic.

Improved bus terminal facilities have been recommended by some. In 1979, the federal government gave $1 million to SMT to improve facilities in Fredericton, Saint John and Moncton, and that was done. However, since that time, because of declining ridership, the bus companies have tended to downgrade their terminal facilities, moving to motels or shopping centres or highway service stations as a cheaper alternative to maintaining their own terminals. Whether that is a disincentive to travel or not is a questionable point, whether it offsets the savings made to the expenditures of the bus companies.

I wish to talk now about the impact of regulation, point two. We believe that bus fares are reasonable. They are controlled by competition with the automobile, and perhaps for longer trips, competition with cut-rate airfares and rail fares. Regulation has a positive impact with respect to entry conditions. Bus traffic in most parts of Canada, especially in the Atlantic provinces, is light, and it has been declining in the past. It really cannot support competing carriers, even on major routes such as Halifax-Moncton or Halifax-Sydney without damaging the carrier's ability to cross-subsidize other routes that are perhaps not quite so busy.

Point three: We do not feel that internal competition within the bus industry would have a positive effect — which is what was said in number two. We feel that this would diminish the connectivity of the network. Carriers would operate in consideration of their own particular interests. I think the parallel might be with the deregulated British rail system, which has been rather a disaster, where there are 26 different companies operating passenger rail services in Britain. It is almost as if you took the transit system in Halifax or any other city and had a different operator for each bus route. There would not be through fares, nor connecting schedules and that sort of thing. Hence, we feel there needs to be regulation with respect to entry; after all, you do not find several companies operating urban transit in the same city.

Point number four. There was a reference to air service in northern communities. I understand that that air service is more protected than the service in southern Canada, where service is almost deregulated. In fact, we feel that government should cooperate to support bus services, particularly to small communities and lightly travelled routes. In other words, there should be some sort of benevolent regulation, even, perhaps to the extent of contracting out or tendering service with some minimal government subsidies controlled by the tendering process, to ensure an optimum service to smaller communities and connections to mainline routes. I offer examples of towns like Pugwash and Parrsboro and Inverness in Nova Scotia and many places in P.E.I., which has no bus service at all. These places could benefit from a van or taxi service feeding to Acadian Lines mainline routes. Proactive work on the part of governments and agencies to help provide this sort of service is something we would certainly recommend as a socially very important item.

Point number five: There was a question about rural bus services and whether that is important. We certainly feel it is. We see health care and education facilities in towns and smaller cities being cut back by provincial governments. The cost of operating an automobile exceeds $8,000 a year, whether people realize that or not, and those costs are rising. There is more to operating a motor vehicle than putting gas in the tank. The cost of operating an automobile consumer more family income than food, clothing, and footwear combined. I think that is worthwhile recognizing. Our seniors population is growing, and many of these people are physically unable to drive, particularly in an agrarian province like Prince Edward Island. There is no internal provincial transport, and seniors are forced to leave their lifelong rural surroundings and homes to migrate to urban areas like Charlottetown if they are going to survive.

Point number six relates to the environmental advantages of buses and trains. We think they could be exploited by removing the HST — 15 per cent in Nova Scotia, New Brunswick and Newfoundland — from intercity public surface transport. After all, our urban transit systems do not charge HST. The rationale there is that they are a useful public service and are environmentally very friendly. Surface transportation by bus and train also has those merits, so we should look at that. As well, an environmental fuel tax on road fuels dedicated to surface public transportation, despite opposition by Finance Minister Martin, is long overdue. It works well in the U.S. Many start-ups of urban transportation systems in the U.S., especially light rail, are a result of this dedicated tax; hence, we should be considering that.

Point number seven: In Nova Scotia, there are problems for intercity bus service caused by unregulated vans, particularly in Nova Scotia and from Prince Edward Island to Halifax. Safety inspections, hours of work, liability insurance and schedule obligations are not regulated rigidly, if at all. That certainly has significant implications for the safety of vehicles and their occupants. Since most operators of vans do not net more than $30,000 yearly, they do not charge HST. In that way, they have an advantage over the bus services.

The other disconcerting thing that that caused some problems is that I understand that being unregulated, trips do not have to be made if traffic is not offering. If I am the only passenger, maybe they will not go. If the weather is bad or if the vehicle breaks down or a driver is ill or unavailable, there is no obligation for that service to run, except that, of course, that sort of service probably would not attract too many passengers. Competition for vans is not as well established in New Brunswick, but I understand that it is beginning to grow. I do not know whether you will hear from the Province of New Brunswick, but that would be an interesting discussion to have with those officials.

These vans are very convenient. They offer pick up and drop off at homes and major hospitals and universities, as you have heard. The bus companies in Halifax attempt to compete with this by driving their buses to hospitals and universities at least four or five times a day, and they will drop people off. However, it might be more economic for bus companies to cooperate with taxis in many of their urban areas to allow passengers to get a cut-rate taxi fare to exactly where they want to go.

A significant disadvantage of vans is that they do operate quite independently; they do not connect to other vans or other scheduled carriers. They operate on their own, sort of like the British rail system that I described earlier. As well, fares and reservations are quite separate, so that if you want to pass through an interface to another system, it is very difficult.

We feel that vans offer net benefits on feeder routes, but unfortunately where they are running now is on mainline routes where the main traffic potential seems to be available. They are splitting the traffic away from scheduled carriers. In our opinion, there is a very mixed benefit to this sort of thing. In fact, in Newfoundland I understand that vans are prevented from operating on or near the TransCanada Highway. They can feed the network across Newfoundland, the DRL service, but they cannot run parallel to it.

Point number eight relates to parcel services. They are very important to the urban bus industry. I understand that about 25 per cent of Maritime bus revenue comes from parcel carriage. Without this, most routes, indeed, across the country would probably lose money. In the U.S., Amtrak, and of late VIA Rail have moved into the parcel mail or premium freight business as well. Certainly airplanes carry air cargo at the same time as they carry passengers. If a vehicle is carrying passengers, it certainly makes sense to carry parcels as well. One thought is that bus services could benefit greatly if some agreement with Canada Post were possible where mail with appropriate security could be carried on buses rather than Canada Post shipping the mail independently by truck.

Point number nine relates to safety standards. We think the safety standards for bus lines are adequate. One problem is that working hours can be excessive. There are some examples, for instance, the Halifax to Yarmouth run, where drivers make trips on two successive days and have a very short night of six hours off duty. That may include looking after the vehicle to some extent. Hence, the working hours could be a problem. We would like to see the working hours more closely regulated.

Another area of concern is that the bus driver is vulnerable to abuse or attack by passengers. There have been cases recently where police authorities have knowingly placed mentally unstable passengers on buses to send them back home, these passengers being unaccompanied. This practice should definitely be discouraged because the bus driver is somewhat vulnerable, much more so than pilots in an aircraft or operators in a train, where the actual engine men or pilots are separated from the passengers, and where other staff are on board.

Number ten: There was some talk about deregulation in Newfoundland and Prince Edward Island. On Prince Edward Island, the scheduled bus service is only 1.4 round trips per day, one daily and one three days a week serving Summerside and Charlottetown. There is really not much in the way of interurban bus service on P.E.I.

In Newfoundland, scheduled services are fully regulated. That seems to run counter to a statement in your questions. On and near the TransCanada route, van competition is not allowed.

There is one interesting anomaly of concern on Prince Edward Island. Fully loaded transport trucks can cross the Confederation Bridge for about $50 return, but for buses that fee is over $200. The explanation is that it has to do with the competing ferry system. It is interesting that buses crossing on the ferry are charged per customer while cars crossing on the ferry from P.E.I. to Nova Scotia are charged not by the passenger but for the vehicle only. So there is some confusion there — which certainly moves against the bus service to Prince Edward Island, which is currently scheduled bus services only from Moncton.

Number eleven relates to disadvantages of longer bus trips and ways to improve that. Certainly bus seats are cramped, but that is an economic situation. There is no food or drink available, except at brief stops, which may be several hours apart and of short duration, depending on the schedule-keeping abilities of the carrier. Terminal facilities are moving away from dedicated terminals to motels, convenience stores or gas stations on the highways. Alleviating these problems would be costly for the operator. It is an economic situation, I guess. Rail passenger services are considerably more comfortable, but they are also more expensive. I am particularly referring to longer runs where amenities are needed for food and sleep. Providing more amenities on buses always could be considered to be an economic problem, but I have mentioned some things like perhaps improved terminals or calls at airports, which would augment bus traffic.

I mentioned that I hope you will hear from the New Brunswick government because we are concerned about the bus industry there. We cover the four Atlantic provinces.

I should mention that 30 per cent of Canadians do not have access to an automobile. That is an estimate that we have made, but I think it is true. These may include people who are disabled, students, seniors and low-income people. Hence, public transportation in general, and especially intercity buses, have an important role to play. Automobiles are becoming less and less affordable to people, so I think that we have to offer an alternative, and certainly environmental considerations will also play a part.

In summary, there should be oversight by government to ensure that the bus industry serves the social interests of citizens, not just the interests of the bus business, but the interest of citizens for mobility, which is, we think, as important as education and health care, which are funded by the public.

We believe there has to be policy and financial intervention by government on behalf of smaller communities where health care, education and business opportunities often lie elsewhere and people have to travel away.

The third point, and I have referred to this several times in different ways, but there must be an intermodal network. It must be considered as a whole. We are looking at the air industry a lot in Canada, and there are ombudsmen and so on. Your hearings here are looking at the interurban bus industry. VIA Rail operates fairly independently as a federal Crown corporation, and certainly our inter-provincial ferry systems in Canada are quite separate. Marine Atlantic has been broken up and they are quite fragmented. Intermodal terminals, good intermodal connections, the appropriate use of various modes so that you can transfer easily and use the cheapest or most environmentally friendly as well as perhaps the fastest mode where it is appropriate, will become more important as energy and environmental problems grow in the future. Ten years down the road, we are going to see that energy and lack of fuel and environmental problems will impact very heavily on our public transportation network. It has to be beefed up. It has to work better.

The Chairman: Thank you, Mr. Pearce. Is the traditional scheduled bus industry the appropriate tool for providing public mode rural and small community service? What alternatives are there? Which public policy would best support rural and small community service?

Mr. Pearce: The problem with vans is that they are almost folklore. They are known in the local community, and they advertise in the local community. If you live there, you know about them. However, if you are from Ottawa and you want to go to Church Point, you do not know there is a van going there. You do not know what is available. For tourists or for other people travelling from outside, this is the problem. Perhaps the province could provide a master list of all the services that are available. However, van services, by their nature, do not necessarily have to operate. They do not operate on a regular schedule. They move on weekends and so on.

My preference, if I am travelling to Vancouver and want to go to a rural area outside of Vancouver, is to look at the bus guide. I can see what possibilities are available. The very informal van services need to be somehow better organized. I think they need to be run on a schedule to be of benefit to people across the country as a network of transportation. They need to be better known. So this is a disadvantage to the public travelling from other parts of the country.

The Chairman: Are the differences between the provincial bus regimes that have developed over the last decades detrimental to the industry or the travelling public?

Mr. Pearce: I certainly think that deregulation would be detrimental. I know that deregulation was discussed in Ontario. It became more and more obvious in Ontario that deregulation would result in quite a loss to rural communities because the focus would then be on competitive service on the mainline routes and rural communities would lose their service. We would be concerned if deregulation became widespread across the country because we would lose those lightly used routes. Even if those routes are not economic, they have great social benefit.

The Chairman: What would be the appropriate remedy and which level of government should implement it?

Mr. Pearce: That is an interesting discussion because, of course, now we have some discussion on urban transit and whether the federal government should move in and take some of the role that the provinces have in urban transit.

I would like to see cooperation. There is a federal role in interprovincial service. Traditionally, perhaps because the provinces have controlled highways, bus service was provincially regulated. There may be some benefit in having municipalities involved, especially the smaller municipalities involved, in helping. I do not know how much they could help financially, but they might be able to help support with the public and with terminals and support connecting their smaller town to the nearest mainline bus, or train, or even airport route.

Senator Oliver: If I were Transport 2000 and I were facing a lack of ridership on the buses and so on in Atlantic Canada, one of the first things I would do is engage someone to do some research and some polling and testing to find out why people were not using the buses as they had in the past. I would give the results of that polling to a focus group and ask them what they thought about a number of proposals. I am sure you have done that, and I am wondering if you can tell us what kind of research you have and what form it is in and how we can get our hands on it so we could have the benefit of it.

Mr. Pearce: We have not done much. We are a volunteer group, entirely volunteers. We have no public funding of any sort, so our capabilities are limited in that respect. However, we have asked people about vans and we have been told that they like them because of the personal convenience, the pick-up, almost like a taxi. That has been important.

We did do a survey concerning the Halifax to Sydney rail service. That service was very popular, but it was removed in 1990, and we did a survey to try to figure out what people were doing. There was also a continued decline in the bus service when 115,000 rail passengers per year disappeared. Where did they disappear? They did not go to buses. They drove their automobiles or they stayed home. I think those are the two things. They stayed home. Discretionary trips, visiting relatives and this sort of thing, they stayed home. They tended to get medical treatment in their local communities; otherwise, they tended to forego that treatment. But that was with respect to the rail service.

With the train discontinued, the popularity of public transportation, in this case, the only thing that was left was bus, really declined. With respect to vans, the convenience of local pick up and drop off is a big factor.

I am of mixed opinion about whether the quality of the terminals is a big factor or not. We did have concerns and we did appear before regulatory boards a few years ago when it became common that carriers would stop near the highway, at gas stations on the highway or at motels on the highway rather than in town. We thought there would be a loss of passengers and partial service.

Senator Oliver: Mr. Pearce, you said that in April busing will be next to VIA Rail or a train station. Passengers arriving on train will be able to get on a bus. You also talked about the possibility of buses stopping at airports to pick up and drop off passengers, as a way of increasing ridership. You also talked about other intermodals. It seems to me that some agency is going to have to regulate all of this scheduling, to ensure that the bus will be there at the time that passengers from a train or an airport will be dropped off, just to make it convenient. I do not think that should be government. I think it should be the industry itself. What do you think?

Mr. Pearce: It would be to the benefit of the bus industry and the transportation industries in general to arrange this. Up until now, it seems as though each mode of transportation is operated independently. Greyhound made an interesting attempt by running an airline connecting to their bus services, to start this interconnectivity, but the airline was not economically viable.

These terminals, we have one in Quebec City that works quite well and one in Vancouver that works very well. Now we will have one in Halifax with a considerably smaller volume. Also, in Toronto, the old CP Express sheds, I think, are being converted. The post office and express between Bay and Yonge Street are being converted to a bus terminal. That is right next to Union Station. That seems to be a move in a positive direction as well. These connecting terminals certainly would be helpful. We hope to see the rail line to Kitchener from Toronto interconnect. They pass right by Pearson Airport. That is a possibility.

In the Maritimes, a lot of people are travelling from Saint John, from Charlottetown and from the north shore of New Brunswick to Moncton because Moncton is the hub. West Jet flies from Moncton, the only place in the Atlantic provinces that West Jet flies. That is very popular. I would think that SMT might want to extend some of its routes to the airport and thereby gain some intermodal traffic. People from Saint John or smaller communities like the Mirimachi and Sussex might want to catch a West Jet flight to western Canada or even to Hamilton, Ontario.

Senator Oliver: You mentioned travellers such as the disabled, students, and others, but you did not say anything about the business group of travellers, people who have to travel for business. If there were business people wanting to, say, leave Halifax for Charlottetown at seven o'clock in the morning, do you not think that some of the amenities they might want would include food services, access to plug-ins for their computers, comfortable seats, and so on? If so, do you think that these are things that might enhance the ridership?

Mr. Pearce: I do not think so. I think business people will fly. They have the money to pay for it. A small businessman who is paying his own expenses may take a van. Generally, however, business people, and, I think it is fair to say, elected representatives tend to use the quickest service available.

The average consumer is not as well represented — and therefore it is a good thing that you are here today — because the business community and the elected representatives tend to use either their automobile or the airlines.

Senator Oliver: We took the bus from Ottawa to Montreal the other day. It took two hours to travel from Ottawa to Dorval. By the time you get in your car and drive to the Ottawa airport, wait for your plane, take an hour to go through security and then fly for 25 minutes to Montreal and get off and get downtown, two hours have elapsed. Our ticket cost us $30.

Mr. Pearce: Yes, the bus service between Ottawa and Montreal is very good. The service is hourly. That is a great convenience.

Senator Oliver: There were business people on that bus as well.

Mr. Pearce: Oh, yes, yes, if you are able to offer a service every hour, but this is not possible, unfortunately, in, say, southern New Brunswick. If you could get frequent service between Saint John, Fredericton and Moncton, that would be attractive to the business community, but unfortunately the population base does not appear to be quite high enough.

What will happen in 10 years when there is no fuel around to fuel airplanes and automobiles? This is something that may happen. I do not want to get into the environmental and energy aspects, but I think we have to hedge our bets very much that short-haul air service and the widespread use of automobiles will not be readily available in 10 years because of energy problems.

Senator Forrestall: Just a brief supplementary. We have 400 years of reserve oil sitting on the tar sands, so I must say I have to look slightly differently at your projection. Ten years ago, I would have agreed with you 100 per cent, but today I no longer agree with that.

The environment is not something outside the purview of the interests of this committee. I am wondering whether there would be any benefit, even if it were merely an environmental benefit, to encouraging buses and vans to use propane or some other form of energy.

Mr. Pearce: One of the programs, environmentally, of course, is the production of carbon dioxide. I am not a research chemist, so I am not sure if there is much improvement with propane. I cannot really answer that question. Bus and daytime trains are about four times as efficient as the automobile, and probably six or seven times as efficient as an aircraft per seat per kilometre. So there are important efficiencies if we can reasonably fill the public transportation vehicles. Of course, running an empty train or an empty bus is not practical.

Senator Callbeck: Yesterday, I raised the issue of parcel services. You say that parcel services represent 25 per cent of bus revenues. I get the feeling that this service is not promoted that much. Do you agree with me on that?

Mr. Pearce: From what I have seen in the Maritimes, there is a fair bit of promotion. I am at bus terminals often, so I see this promotion, but there is promotion. Perhaps the representatives of the bus companies could tell you a little more about it. However, I agree that promotion is important.

Out West, Greyhound has trailers behind their buses carrying parcels and express items. That is an indication of how important this is to the bus industry.

Senator Callbeck: You mentioned you see parcel services promoted within the bus stops. Do you see it in other places?

Mr. Pearce: I have seen it in the newspapers, in publications, yes. However, perhaps I am prejudiced, because I look for transportation-related items.

Senator Callbeck: Am I right in assuming that you think all vans should be regulated like the large buses and that they should be on a schedule, not only regulated for insurance and safety but really for everything, that vans should be treated the same way as buses?

Mr. Pearce: I am not against unregulated vans. In Prince Edward Island, where there is no public transportation, except the off-island SMT services, if vans are going to be promoted there has to be some regularity of service. It has to be known to people in Charlottetown, not only in Albertan and O'Leary that there is a van service running.

It is hard to sell a product if the user does not know if it is going to be there. There need to be some guarantees about the service. There does not need to be hard regulation. Hard regulation should be for insurance, safety, working hours. Working hours is not so much a problem in P.E.I., but there are longer routes in Nova Scotia where a driver can work too many hours and be subject to fatigue.

Senator Callbeck: So you would regulate for working hours, et cetera.

Mr. Pearce: For safety and insurance and vehicle maintenance and this type of thing. A private van operator who has something go wrong with his van in the middle of the week may not have a spare vehicle. It is not easy to maintain a vehicle. Usually that is done on a Saturday. Not a lot of vans run on Saturday. There are some things that happen during the week that may need to be looked after.

Senator Callbeck: You mentioned that you have 200 members. Would most of those members be groups or individuals?

Mr. Pearce: No, most of those are individuals, but there are groups. There are labour unions. There are some communities. There are municipalities. The City of Bathurst is a member, and so that represents quite a few more people. We do have a broad representation. We do appear on the media quite often, and we appear at environmental shows and at model railroad shows, which are definitely biased towards the rail mode. We do appear where we can and meet the public where we can, so we try to get a cross-section of other groups, even those that are not members. We have liaisons, for example, with a group that is appearing later on this afternoon, the Ecology Action Centre. We also have members from seniors groups. In fact, I have been in touch with them about these hearings and have encouraged them.

We are working quite closely with the P.E.I. Seniors Federation who are appearing later on today, because we are trying to get some improved transportation within the Island of Prince Edward Island. There is work going on right now to get a more regularized urban system, which is not this hearing's concern, but an urban system in Charlottetown, or perhaps something linking Charlottetown and Summerside more frequently than once a day.

Senator Callbeck: How do you canvass your members for the ideas? For example, you were talking about improving bus terminal facilities but you really did not know whether that would increase ridership or not.

Mr. Pearce: Well, it is turning more and more to e-mail. You would be amazed at the number of people who have e- mail, almost everyone, even seniors. I spend more time than I would like at my computer now, but it does offer an interchange of ideas. It is quite democratic. We do send mail back and forth.

We have a board of 15 people. They come from all over. We have two board members from Prince Edward Island, one who is resident there all the time and another who lives in New York City, in Manhattan, and spends his summers, six months, in P.E.I. He offers very refreshing insights, because he comes from a high-density public transportation area. He does have difficulty in understanding Prince Edward Islanders who have grown up without public transportation and do not have a very good understanding of what it might do. I am speaking from our point of view. We think it could be very beneficial, but if you have never had it, you do not know what you are missing.

Senator Jaffer: In your presentation you did not touch on service for the disabled. Do you think the service is adequate? What could be improved?

Mr. Pearce: It is adequate as far as the financial resources of the bus companies are concerned. Government could provide more funding, in which case more or all buses could have facilities for the wheelchair disabled. Of course, facilities for the visually impaired and hearing-impaired are important too. I guess it is an economic question, and if governments wanted to contribute more, I am sure the bus companies would convert or purchase new vehicles.

All trains are accessible to the standard wheelchair, although not some of the wider, new motorized ones; however, with a little bit of assistance, people can travel sometimes without wheelchairs. One of the difficulties with the bus industry is that there is one driver on board, which limits the amount of assistance that can be provided, certainly at smaller terminals.

I would be interested in knowing from the bus industry what percentage of time the wheelchair space in a couple of buses that SMT Acadian has is filled. I have great sympathy for those who are disabled in any way, but there is a question of economics. It applies to the population in general too. Can you provide a service if it is not at least moderately utilized? This is an interesting problem. Do you want to have a wheelchair space on every bus, even though it is not used all the time? It may well be that you do want to do that, but that would require some financial assistance from levels of government.

Senator Jaffer: I have always thought that vans can be used for on feeder routes, where there are not as many people, as opposed to the main routes. I appreciate that I am going to venture into something we asked earlier.

What is your opinion on economic regulations for vans?

Mr. Pearce: In our summary, I use the term ``benevolent regulations.'' We are concerned about the public in smaller towns like Parrsboro and Pugwash and Inverness, in Nova Scotia. You may not know these places, but they are places of 1,000, 2,000 or 3,000 people that have no formal access to the outside world. How do we bring that about?

It seems to me that government may have a role. Our group tries to play a role. We go to hearings; we speak about the issue. However, as volunteers, without funding, we are a bit limited. Nevertheless, we try to bring this to the attention of people.

I think the province might in fact be able to encourage this. They might even put out to tender, say, service from Inverness to the Canso Causeway. There should be a bus coming down to connect with Acadian Lines for Halifax. They could put that bus out to tender and give it to the operator who conforms to size of bus, schedule, and that sort of thing.

The province might have to assume some costs. The cost of operating buses is considerably less than rail or air, and most particularly the highway system. It is a drop in the bucket. The cost of a hundred yards of highway is the cost of running a bus everyday. Bus service is a real bargain. Of course, the point of this hearing is that it is only a bargain if you can get people on the buses, and that is really what we want to do.

Senator Phalen: Vans are, I guess, kind of a recent thing and they could be a big help, but I think they are probably part of the problem. You said that vans should not be on mainlines and on feeder lines. On the route from, say, Sydney to Halifax, where are the feeder lines?

Mr. Pearce: Well, from Inverness to Canso Causeway would certainly be one.

Senator Phalen: Okay, just back up. Are you saying that from Inverness to the Canso Causeway would be a feeder line?

Mr. Pearce: It would be a feeder line. There is no service there right now.

Senator Phalen: But then you are on the mainline.

Mr. Pearce: Then you are on the mainline. Do not run that van all the way to Halifax; let it connect to Acadian Lines at the Canso Causeway, which would be Port Hastings, or maybe Port Hawkesbury, wherever the terminal is most convenient, where it all flows together. Let it from perhaps from Parrsboro into Truro, or up to Amherst. Again, I am using local geography. The important point is for the van not to run all the way, just on the feeder lines.

The regulatory agencies in Newfoundland do not allow vans on the TransCanada Highway, transporting people in parallel with the DRL Coachline service or on an adjacent municipality, where the highway may bypass by a mile or two. However, they encourage feeder systems in from the Northern Peninsula or in from the Burin Peninsula, and so on.

The benefits of vans, or even taxis — there is nothing to say that a taxi company could not bid on a service. If the volume of traffic were seen to be only four or five people, perhaps a taxi would be adequate. For overflow, hopefully a taxi company has more than one vehicle.

Senator Phalen: The cost of taxis would be prohibitive, for a mainline?

Mr. Pearce: Oh, yes. Certainly as the numbers drop, if you are only carrying a couple of people, the economics are not as good. That is why these vans often times will not run. That is a big advantage. If Acadian Lines could say that they will not run their service on days when they have less than 12 passengers, they could save a bundle of money. The marketing aspect would be a disaster, because people could not rely on their transportation.

Senator Phalen: Just to follow up on Senator Callbeck's question. You said bus services could benefit greatly if agreement with Canada Post were possible, with security arrangements. What type of an agreement would you need?

Mr. Pearce: Well, to carry mail. In other words, Canada Post sends tremendous quantities of mail by truck between its post offices. Much of it is sorted here in Halifax. I believe that if you were to mail a letter from Yarmouth to Yarmouth, it would be trucked to Halifax, sorted, and sent back to Yarmouth again, even if it were going to your next- door neighbour. They have tried to get around that in some ways, but there is a lot of trucking of mail by separate trucks on the highway. Buses, by and large, have regular daily schedules. This is what is important for the parcel service. You have almost instant transportation of your parcel. You get it the same day you put it on the bus. The bus routes, by and large, are daily and sometimes two and three times daily, so Canada Post could take advantage of this.

There would have to be some security in place. They would not want me going along and opening the luggage bay and grabbing a sack of mail and making off with it. There would have to be some kind of security, large containers that would slide into the luggage bay, or something like that.

It would serve to remove some trucks from the highway and to stabilize the declining revenues in the bus industry. Amtrak makes $100 million a year, I think, for carrying mail via rail; Canada does not. If Canada Post were to utilize buses running to smaller communities, it could be very worthwhile. Both could save some money.

The Chairman: Thank you, Mr. Pearce, for all the information you have given us this morning.

We will now hear from SMT/Acadian Lines, Mr. Odell and Mr. Melanson.

Please proceed.

Mr. Bob Odell, General Manager, SMT/Acadian Lines: We represent SMT Eastern Group of companies, which is comprised of SMT (Eastern) Limited, Acadian Lines, and Nova Charter Services. SMT (Eastern) Limited is owned and operated by the Irving group of companies. In turn, SMT owns and operates Acadian Lines and Nova Charter Services.

SMT was incorporated on June 30, 1937. The company has provided a public passenger service seven days a week ever since. In conjunction with the passenger service, SMT has a same-day parcel express business in New Brunswick, Nova Scotia, and P.E.I. and is part of a bus interline network, which provides service to and from Quebec, Ontario, and Western Canada.

On December 20, 1995, SMT acquired Acadian Lines Limited, the major scheduled passenger service provider for the province of Nova Scotia and Nova Charter Services Inc. This acquisition gives SMT group a comprehensive network of scheduled services throughout the Maritime provinces. SMT group, through SMT and Nova, can also provide group travel charters originating from any point in the Maritimes to destinations throughout North America.

The SMT group is the fifth largest bus company in Canada and the third largest scheduled service provider. We serve more than 82 communities, operate a fleet of 74 coaches, employ 258 people, and operate two maintenance facilities, one of which is in Halifax and the other is in Moncton, New Brunswick. In 2001, SMT operated over 7.2 million kilometres in line-run and charter services, and we operate approximately 40 scheduled trips in the Maritime provinces on a daily basis.

Our mission is to provide the highest standards of safety, quality service, convenience and good value at all times, in order to satisfy our customers' needs. Our key intercity target markets are students and seniors. Our intercity bus service has experienced an increase in ridership over the last five years. Comparing the year 2001 to 1997, passenger count has increased by 9.6 per cent. I am sure that will be a topic of discussion here today, in view of what you have been hearing.

The bus industry, of which SMT is a key member, has a collective vision that views our industry as an integral part of the national and regional passenger infrastructure. We believe that our industry has been instrumental in the development of the social and economic fabric of Canada. SMT is ever mindful of the importance of the transportation services we provide to the Maritimes in terms of community links for passengers, freight, and tourism.

As an industry and SMT as its largest carrier in the Maritimes, we believe that we must continue to play an important role in Canada's national and provincial transportation network. We provide the most comprehensive and diversified system of any mode of transportation. Our concern is whether or not the strength and viability of this network is sustainable.

The bus mode is the only mode that links with all other modes. Our industry provides services to many markets that other modes cannot or will not serve. We are concerned, however, that in the development of a national transportation policy and framework, we will be regarded as an afterthought, or a bit player, existing only to support or enhance the development, growth and sustainability of other modes.

It is recognized that the patchwork of current diverse regulatory frameworks is in need of a comprehensive review. As with the development of a national passenger strategy, economic regulatory reform must be well defined, based on fact and reason and based on a clear assessment of the market realities of each region in the country.

The values of economic regulation of the motor coach industry in the provinces of New Brunswick and Nova Scotia are currently under attack. The regulatory system allowed carriers market stability in the form of entry restrictions on key routes, with an obligation to provide services on secondary routes and rural areas.

This allowed for a framework of cross-subsidization that ensured a comprehensive scheduled service network without direct or indirect government subsidy. The regulatory frameworks in New Brunswick and Nova Scotia, with minor exceptions, applied strict approval and enforcement of all pricing actions, increases, or discounts. The regulatory systems have allowed the intercity scheduled bus service in New Brunswick and Nova Scotia to develop into a comprehensive network, serving all regions of both provinces.

Today, however, the integrity of this network is under extreme pressure to rationalize. The SMT group's key markets, both charter and intercity, are facing increasing competition. Charter operators have been allowed to enter the prime charter markets, resulting in the elimination of cross-subsidization between charter and intercity scheduled services.

Unlicensed and unregulated van operators have entered key corridors and cherry-picked ridership on routes that are essential for SMT to continue its cross-subsidization program. A comprehensive scheduled services network is in jeopardy. Services offered in rural New Brunswick, Nova Scotia and P.E.I. are at risk of disappearing.

Being members of the Canadian Bus Association, the Ontario Motor Coach Association and Motor Coach Canada, we have participated in discussions with fellow members of these associations, and our views about deregulation or regulation pretty much mirror those of the associations.

We believe that a common position on key issues relating to intercity bus transportation will better serve your examination of our industry and lead to policy recommendations that are beneficial to the minister as he works toward a viable transportation program for Canada and its citizens.

Our goal is to come out of this consultation process with a practical set of rules governing the activities of motor coach carriers and gain a clear understanding of the role our industry plays as it relates to transportation of all modes in Canada.

The leadership of government in defining and enforcing the rules and assigning roles to various modes is essential if the interests of the travelling public are to be served. It will enable our industry to serve the public in a manner that is economical, yet safe and efficient, while providing us the opportunity to operate our buses profitably.

Our industry is growing and has become more diversified. We contribute to the Canadian economy through job growth, tourism and regional development. We contribute to society by providing a safe and environmentally friendly mode of transportation for the Canadian public.

At a time when alternative modes of transportation are stressed and dependent on government money to maintain their services to the public, the intercity bus industry does provide, and will continue to do so, economical, efficient and reliable service to the general public.

From a policy point of view, our industry has, through the bus associations, based our recommendations to you on six basic principles. For the record, I think that these principles are worth mentioning here today. A bus regulatory regime must do the following: meet the highest practicable safety standards; be enforceable and enforced consistently, uniformly and visibly by government; serve public need and convenience; be fair, simple and understandable; allow for innovation; and be competitive with other modes and within the mode.

So long as these are the basic principles in forming bus policy, we think that both the public interest and private enterprise will benefit. We believe that following these principles in the development of policy will not resolve the debate over whether the industry should be regulated or not.

Regulation or deregulation is not the fundamental issue, as far as we are concerned. We have concluded that the needs of the public as well as our private interests can be met under either regime, so long as policymakers are guided by the principles that we have put forth.

The Chairman: It seems to me that carrier representatives are very happy about the situation and telling us, with the numbers that they have, that there is no decline in ridership.

Mr. Odell: Well, there has been. I keep hearing the date 1985. There was a very steep decline and loss of business. If we compare today, going back to 1985, I think that the numbers are still significantly low to what they were at that time. However, we cannot live in the past. So we are just looking at the last five years, and I have given you some numbers in my brief for you to relate to. It is a tough market, but it is a market that one can still win by doing right things.

The Chairman: In your statistics, passenger counts have increased. How can you count passengers? What is one passenger trip?

Mr. Mike Melanson, Director of Operations, SMT/Acadian Lines: We have a driver pull tickets from the passengers and put it into what we call the driver trip envelope. Those tickets are lifted from the envelope and counted as a trip passenger. In Nova Scotia, we even break it down further than that. We recognize on that particular route where that passenger got on and where that passenger got off. So as the bus travelled from Halifax to Moncton, we knew how many got on in Truro, how many got off in Truro, how many got on in Oxford, those stops along the way as well. So we do have some details to define exactly where these passengers are travelling. It also helps us understand the revenue per passenger, on average.

The Chairman: I know my colleagues will ask about the vans, but in this region do they seem to hurt the ridership?

Mr. Odell: No, I do not mean to imply that. The van operator is like a flea market — we do not know if they pay taxes. What we are looking for as it relates to the van operators, to make it short and sweet, is a level playing field. Are they running safely? What about their hours of service? Hours of service is extremely important. In fact, the cargo that we are handling, we are not just talking freight or packages here, we are talking people. These van operators, most of them, I believe, are operating out of their garages. So how many trips are the van operators making? Is the van driver breaking the hours of service rules or laws that we follow? Of course, if he is, there appears to be a saving, but that could prove very costly if and when there is an accident and people are affected negatively.

Mr. Melanson: I have listened to the testimony here today, and one point that I would like to make clear is that the van operators do not operate through small towns. They operate from a major centre to a major centre. They themselves, even in past hearings, have said that they do not want to go to Amherst or into Oxford; they argue that their service would take too long and that they would not gain that ridership they need.

In essence, they are allowed to perform this service that even the bus services have applied to the board to try to compete with, and they have disallowed us to do this because we would be abandoning small communities. We are held to a different standard than the vans. The only reason the van operators operate is they can take advantage of a situation that we cannot, by running direct services, having no level of commitment to communities, no level of commitment to the frequencies of the service and no level of commitment to the pricing.

I have witnessed situations down at the ferry terminal in North Sydney where four operators will pull in when the ferry does. They pull in alongside our buses. One offers to take a passenger for $45, another for $40, and yet another for $35. What about safety and service? It is just unbelievable. How much of that goes in their pocket, and how much goes to taxes?

Mr. Odell: As you can tell, there is a lot of passion about vans.

The Chairman: Well, if both scheduled carriers and vans were not economically regulated, would that be a level playing field?

Mr. Odell: It could be interpreted as a level playing field, but I do not think it would be a very responsible thing to do. I grew up in the freight business, and I never saw a package or a skid of cartons complain. Perhaps the customers would, from time to time, if we did not perform on time, but in this business the cargo complains. They let us know. We get letters, and we have to address every single one of them. It makes you gain a whole new appreciation for the kind of business you are in. We have a very heavy responsibility.

I do not want to appear to be supporting regulation, one way or the other, but I my observation is that the regulatory system we have in Nova Scotia is an asset. We are very concerned about safety, and they act like a third party, making sure that our equipment is inspected on a regular basis and making sure that all of our buses are well maintained. They police that very thoroughly. We are grateful for that because New Brunswick does not have that. They are on reverse-onus. Nova Scotia actually comes down and inspects our buses in Moncton and our facilities there, as well as here in Halifax.

Senator Oliver: The federal Minister of Transport has said that most of the industry agrees that charter services should be deregulated. Do you agree with the minister?

Mr. Odell: I think the charter business, for the most part right now is deregulated.

Senator Oliver: Is your component deregulated?

Mr. Odell: No, it is not. When you look at it across Canada, when you look at the number of charter operators that are now in the business — and the more there are the harder they are to police. We do not have a real policing network countrywide. I would say that for the most part it is deregulated, not here in Nova Scotia, but everywhere else it probably is.

It is a hard one to answer, but I know that our charter business is under extreme pressure because that competition reduces profitability. That is part of the cross-subsidization money that we have been using to provide the passenger services to both rural and major communities.

Senator Oliver: There is one main thing I would like to ask you about and it comes from one sentence in your paper. On page 5, you say:

As with the development of a national passenger strategy, economic regulatory reform must be well-defined, based on fact and reason and based on a clear assessment of the market realities in each region of the country.

I am going to ask you to explain that.

Near the end of your paper, you give us the six principles. Yesterday, when we were in Quebec, we heard the same six principles, in the same order, with the same concluding sentence that you had today. Your concluding sentence is: ``Regulation or deregulation is not the fundamental issue.'' We questioned them about that and we soon found that it was, in fact, a fundamental issue. Nevertheless, the same sentence appeared in the brief yesterday of the carriers from Ontario and Quebec.

What do you mean by ``economic regulatory reform must be well defined''? Help us, and this committee, because that is what we are trying to do.

Mr. Odell: We do not feel that it is our position to determine whether we should be regulated or not regulated. We feel that that is what the government should be deciding.

Senator Oliver: We are here asking for your help and assistance. What would be a good public policy for all Canadians, so that all Canadians can be well-served by this mode of transport? When you say ``economic regulatory reform must be well defined,'' in what way? What are some of the principles that we should keep in mind in defining it?

Mr. Odell: To begin with, it has always been a difficult issue across Canada getting all of the provinces that oversee, that have the responsibility, to agree. I do not know if the provinces have ever agreed on anything in this country, but that is a key element we are advocating there. When we talk about the economics of it, what we spend to maintain our equipment and run our services versus what a van operator might invest, it is comparing apples to oranges.

Senator Oliver: That is not a regional difference, though.

Mr. Odell: No, but what we are advocating is trying to come to a consensus, or a set of rules that everybody could follow.

Senator Oliver: What would you like to see? What are you recommending to the committee?

Mr. Melanson: First, the industry has to understand what level of service the government wants for Canada and for Canadian citizens? If a fully deregulated environment develops, a substantial number of communities will lose service. We will not go into nearly the number of communities that we do today.

Senator Oliver: What do we have to ensure that people in rural areas of Canada are equally serviced?

Mr. Odell: They are serviced now.

Senator Forrestall: No they are not.

Senator Oliver: You heard the previous witness. Places like Pugwash, Parrsboro and Inverness are not serviced.

Mr. Melanson: Those areas were once serviced. However, there has been a decline in ridership; people have chosen to use their car rather than the coach. They have made the decision to not support the service. That is why the services were lost.

Senator Oliver: What is it going to take for you to go into Parrsboro, Pugwash, and Inverness and service them?

Mr. Melanson: There is a cost associated with that service, and we need a lot more than one passenger a day to cover the cost. In some instances, by servicing some of these smaller communities the travel time between major centres becomes too long for anybody to be attracted to the service. People will not travel between Moncton and Halifax if the service is too slow. Attitudes have changed. People are more time-sensitive, and much concentration is placed on major centres as opposed to rural areas. There has been a decline of people moving to major centres, as opposed to living in rural areas, if you compare it in the past.

Senator Oliver: What do you recommend we do to ensure that those citizens living in communities like that all across Canada get serviced? What is it going to take?

Mr. Melanson: First of all, the government has to protect the mainline haul service. There would have to be feeder services, almost like a hub-and-spoke arrangement, similar to what is happening with air service in Moncton. We are looking at working with the airport to bring passengers in from Charlottetown, Bathurst, and so on. That concept between bus and air is what we would look at between van and bus — vans servicing these rural areas.

Now, even a van operator will tell you that he cannot afford to run Springhill to Oxford to Truro, to meet up with the bus, or Amherst. Given that we cannot, I am sure they cannot as well. They would require a subsidy to do that.

There is a lot of work involved between government, the industry and local rural communities, to determine an alternate form of transportation, which will require some subsidies. However, we have to stay focussed: We have to protect the mainline corridor, to have the ridership to sustain line haul service between those two major centres.

Senator Oliver: If you have the mainline, perhaps there should be some obligation on you to do a little bit more.

Mr. Odell: At this point, people are still trying to determine what the principles and goals should be, whether or not there should be a service to these rural areas. Once that decision is made, then how to do it can be determined.

Senator Oliver: Do you not think it would be good national policy for the government to say that all Canadian citizens should have access to some major form of transportation? If there are no boats, no airplanes, and no trains, the bus would be the logical way. That is why we are doing this study.

Mr. Odell: Yes. It is a level playing field for everybody, is it not? I think all Canadians are deserving of the same shake. However, we are still trying to determine whether rural service should be given or should not be given.

Senator Oliver: Well, I think it should.

Mr. Odell: I do too.

Senator Oliver: Canadians live in rural and urban areas, and why should we not all be equal?

Mr. Melanson: Maybe a year from now we will be back here and we will be talking about how to do it because the determination has been made that that commitment is what you are advocating.

Mr. Odell: It is important to note that by using deregulation services to rural areas — communities are kidding themselves. We only have to look across the American border to find examples of communities that have lost service. It is just tremendous. So it actually depreciates.

Senator Callbeck: When you mention the principles, you talk about safety standards. Are the provisions of the National Safety Code adequate, or do you have any problems with those?

Mr. Odell: They are good, but they lump buses in with trucks. In my opinion, there should be a code for busing. Again, I have to come back to the people. Buses have a cargo that is different from what trucks are obliged to haul. They provisions are not bad, but they can be improved. I think there should be a special segment applying to busing.

Senator Callbeck: Give me an example of what you think should be improved or changed?

Mr. Melanson: Hours of service is one. There is a distinct difference. Our buses do not have sleepers in the back. The Canadian Bus Association has presented to government some of those concerns. That is one area that is distinctly different.

The safety standards within our company are over and above those regulations. There was a time when the government was looking at instituting a rule that all brakes be inspected every morning, prior to the vehicle leaving. It would be difficult for a bus driver to crawl under his bus in a hotel parking lot to check the brakes.

Hence, there is a distinct difference between vehicles as well that would have to be addressed. Those are just a couple of examples.

Senator Callbeck: Did you say your standards are over and above the actual safety code?

Mr. Melanson: Our company meets more than just those standards, yes. The Nova Scotia URB standards go beyond some of the requirements within the motor carrier standards. As an example, with respect to the internal overhead compartment door, if the shock on the door is not working properly to hold that door open, repairs are required to be made to the bus. You would not find that precise a thing in the motor carrier standards.

Mr. Odell: An example is our pre-check. Drivers do an elaborate check of the vehicle before starting it up and getting it ready to take over to the terminal. Following that, a post-check is done, where you inform maintenance of anything that could be going wrong with the bus. I am not as familiar with the safety code as I should be on this point, but I do not believe that truckers are obliged to do the same thing. If they are, I do not think they are held to the same standards as we are. I believe there is a little bit more care taken in our business.

Senator Callbeck: In answer to a question on cross-subsidization, you talked about money from charters going to cross-subsidize. I thought it was the money from the scheduled routes, the profitable ones.

Mr. Odell: It is, but the charter does come into play there somewhat. If the charter business is under pressure to lower prices, and if we fall into weak bottom lines, then that tends to take away from our overall profitability.

We keep the numbers separate, vis-à-vis how we run a charter operation versus an intercity operation. However, there is, I think, certain —

Senator Callbeck: Of cross-subsidization?

Mr. Odell: Well, there is a certain amount of charter. Charter can overcome weaker periods of the year, maybe January, February, slower periods in the year of city business. Perhaps your charter can help you out with that. Charter predominantly is a busier time of year, from May to October. It can help out with intercity services, when passenger counts are down because the universities are not travelling.

Senator Callbeck: I realize that. I just did not realize that the charters subsidized the non-profit routes.

Mr. Odell: The cross-subsidization applies, I think, to a greater extent to your major routes subsidizing your rural routes. We do keep separate numbers between an intercity operation and a charter operation. However, within the context of an operation, the package express business can be down, which has to be overcome by the charter business or the intercity passenger business. There are three core modes of making money in our business: passengers, the charter business, and the package business.

Senator Callbeck: Let's talk about the parcel business. What per cent of your revenue would be parcel?

Mr. Odell: It would be 23 per cent to 25 per cent.

Senator Callbeck: Is that going up or down?

Mr. Odell: It has not been going up, but we are working hard to get that turned around because we have expectations to grow our package business by 20 per cent this year. We have a pretty aggressive plan to do that.

Mr. Melanson: The whole parcel industry, and I am speaking on behalf of the Maritimes — and I am sure it is similar in Western Canada. With deregulation of the trucking industry, a lot of small independents came up. They have a van in the driveway, and they have a certain amount of key accounts. They now run basically alongside the bus schedules. That has taken volume away from us. They can undercut our pricing as well and handle greater volumes from certain key accounts. The amount of room available in the baggage compartment for parcels is influenced by how much passenger baggage we are carrying. If we have a full bus, then we have less room underneath for parcels. This is the reason Greyhound has been successful clear across Canada — as far as Montreal actually — gaining approvals to put trailers on the back of their coaches. We have applied for that within our jurisdictions as well, to give us that flexibility.

Mr. Odell: There are some small van operators that are in the courier business too. They have gone after that market and put a bit of a dent in some of our business there.

Senator Oliver: Just healthy competition.

Mr. Odell: Healthy competition, that is right.

Senator Callbeck: On your figures on page 4, you say that ridership went up 9.6 per cent from 1997 to 2001. In 1997, you carried 24,000 more passengers than in 1996. In 1998, you dropped by 4,000 passengers. In your research, what were the reasons for that drop?

Mr. Melanson: We acquired Acadia Lines in 1996. What we are showing there is both companies combined. Acadia Lines was the biggest influence in that drop of 4,000 that year. A lot of that is the van marketplace depleting ridership from the city marketplace.

Senator Callbeck: So do you have the provinces broken down? For example, in Prince Edward Island, has the ridership gone up or down?

Mr. Melanson: Prince Edward Island is strongly influenced by tourism, and it makes it very difficult for us at times to capture the local compared to what is influenced by the summer traffic. There is a distinct difference between winter and summer, six times fold. On average, during the winter months — and again, depending on the day of the week — Fridays and Saturdays would differ from a weekday, if we took an average Wednesday, we would be running probably eight to nine passengers per trip. If you compare that to the summer on a Wednesday, you are running anywhere from 25 to 30 passengers per trip.

Mr. Odell: Interestingly, and I think it came up earlier with John Pearce's presentation, when it comes to P.E.I., we are at a big disadvantage because of that bridge. We are charged $219 to make a crossing. Our competitors, these van operators, are only paying what a passenger car pays. We are hoping to do something about that. We are trying to get a hold of the Minister of Transport for P.E.I. We think there is an opportunity to grow our market to and from Prince Edward Island, especially during the tourist season and that sort of thing. It is just not cost-competitive.

Senator Callbeck: How many passengers to you need to carry to break even?

Mr. Melanson: On average, between 20 to 22 passengers, again depending upon the length of the trip.

Senator Callbeck: You do not have school buses; is that correct?

Mr. Odell: We are not in the school bus business.

Senator Callbeck: How are fares established? Do you list your expenses and then just add on a certain per cent?

Mr. Odell: I have not been through one of those yet.

Mr. Melanson: I also have not personally been through a hearing. It is usually looked after from the financial side of the company. However, from what I understand, our financials are provided to the URB on an annual basis. They review our costs in making a determination about a fare increase. Our fares have taken a big hit when you consider 15 per cent for taxes plus rising fuel costs. The increases we have requested did not even match the increase in fuel costs. We are thankful that fuel costs have come down somewhat. We hope that continues.

Mr. Odell: We are working on ways in which we can identify our costs per route. I am hoping that when we do go to the URB in the future for an increase or a review, we will be able to cite areas of our operation where we do not need an increase as well as those areas where ridership is low and as such an increase is needed. I think the days of walking in with a paintbrush and saying we need 5 per cent or 7 per cent fare increase are gone.We have to justify costs.

Senator Oliver: In the areas where you cross-subsidize?

Mr. Odell: Exactly, exactly.

Senator Forrestall: What does SMT stand for?

Mr. Melanson: Scotia Motor Transit.

Senator Forrestall: You are wholly owned by the Irving group?

Mr. Melanson: Yes.

Senator Forrestall: So you have no shares and they are not traded?

Mr. Melanson: No.

Senator Forrestall: When I buy a ticket from you, do you require my name, address and phone number, any information?

Mr. Odell: No, and I think you are heading toward the manifesting?

Senator Forrestall: Yes.

Mr. Odell: One of the objectives we have this year is to look into the possibility of getting a reservation system. I think that has been looked at in the past, but according to my information it is not economically viable. However, I think that is something we will have to look to in the future, because that is where it is all going. So with reservations systems, you would have a passenger manifest, that sort of thing.

Senator Forrestall: I was not thinking from that point of view. I was thinking of observations that occurred from the United States authorities with respect to the movement of people on public and private transportation, not just the development of the manifest. If SMT were required to transmit a manifest to the appropriate authorities, to the next carrier, immediately — providing information as to where the person started his trip and where he intends to end up — what would be the impact of that on SMT?

Mr. Melanson: As a result of September 11, our company did an internal review, to see what safety measures we should put in place. We also had discussions with CSIS. The Canadian Bus Association had a meeting with CSIS, as did most of the major carriers across Canada, to review what we should be doing as an organization. CSIS did a risk assessment, and concluded that Canada is not at the same level of risk as the U.S. and therefore there is no need to step up to that type of measure.

Things are different in the U.S. The government has helped fund the busing industry put some measures in place to scan passengers before they board, to check for weapons and so on.

Senator Forrestall: Are any measures in place to scan packages?

Mr. Melanson: No, we have not taken any steps to scan parcels.

Senator Forrestall: I have reason to believe that this is going to change, and change dramatically. The changes will have an impact on you. You will almost have to impose reservations. Certainly you will be required to get information from a passenger, and then you will be required to transmit that information to a third party. There will be some drudgery involved. I just ask you to note that.

How does your industry feel about some point in that border, somewhere between Moncton, that triangle, Moncton, Fredericton, Saint John, a straight line to Montreal on a four-lane highway with a comfort zone for trucks and a comfort zone for buses, and let the cars go where they will?

Mr. Odell: Through the state of Maine you mean?

Senator Forrestall: Yes.

Mr. Odell: Oh, yes, we have dreamt about it, but that is about as far as it goes. We are having trouble getting a highway built from Fredericton up to Edmundston, a four lane.

Senator Forrestall: I gave you that platform to make all the noise you want, because I travel it frequently.

Mr. Odell: Yes, it would be nice if we had that part of it.

Senator Forrestall: Is it a fond dream, or is it a nightmare, a Maine highway?

Mr. Odell: Something like that would be very welcome. It would sure speed up transit time to Montreal.

Senator Forrestall: I recognize that.

You have said that services to Prince Edward Island could very well be curtailed. What kind of services? What do you have in mind? That is an alarming observation.

Mr. Odell: The high fare at the bridge has prevented us from becoming more aggressive.

Senator Forrestall: What would you do? Would you not take a bus across?

Mr. Odell: We would certainly want to look at our scheduled service between the mainland and Charlottetown. We are open to looking at anything.

Senator Forrestall: If you have a 52-passenger bus, do you charge $4 a passenger to get on that bus to go across that bridge? Do you add this to the fare?

Mr. Melanson: No. They charge $217 per bus, regardless of the seating capacity of the bus. Whether there is a full bus, only one passenger, or just the driver himself deadheading, the charge is $217.

Mr. Odell and I were talking just recently about the possibility of running a direct service from Charlottetown to Halifax. Of course, it would take a fair amount of time to build that service. The day we start, we will probably come off the island with five to eight people, and it will be like that for three or four months. Those eight fares combined will not even cover the bridge costs, or maybe just the bridge costs but no other costs. Hence, it puts us at a great disadvantage at times to try to develop services.

From the tourism side, P.E.I. is losing out as well. A lot of the tours have now turned away from using the island as part of their segment because of the cost. There used to be a day trip over to P.E.I., and now there is not.

Mr. Odell: The van operator will pay the equivalent of a car, $37.50.

Senator Forrestall: Are you a principal carrier on the island, Mr. Melanson?

Mr. Melanson: We are a principal carrier to and from the island.

Senator Forrestall: To and from?

Mr. Melanson: Yes. We would like to participate more on the island, especially in the charter area; however, we think we can enhance intercity service as well. But it is really not feasible while we are at such a disadvantage from the intercity point of view.

Mr. Odell: And the charter point of view.

The Chairman: If you have any additional information, statistics, you can leave them with us. Thank you very much.

Our next witness is Mr. Campbell. Please proceed.

Mr. Denis Campbell, Vice-President, Atlantic Tours Gray Line: Atlantic Tours Gray Line is one of the largest tour operators in Atlantic Canada. Our other operating company is Absolute Charters Inc., which is our vehicle operation company. Under Absolute Charters, we operate a small fleet of sightseeing vehicles, everything from 9- to 15-passenger vans, 27-passenger mini-coaches, 45-passenger trolleys, a small fleet of double-deckers, and even an amphibious vehicle.

As I understand it, from what I have been told by SMT/Nova Charter/Acadian Lines, we are the largest charterer of coaches. Our business has tripled over the last seven years, a time when according to the National Tour Association and the American Bus Association numbers are on a general decline. We achieved that through a combination of hard work, a lot of good luck, and maybe some trial-and-error marketing.

If I can state my opinion, and the opinion of my two business partners, bus operators are relatively poor marketers. The proof is in the statistics. There were 46,000,000 bus trips taken in 1970, 12.5 million trips in 1987. That is a staggering decline, and extremely concerning.

This committee has a very difficult task at hand. I think the statistics speak to a problem of the devil is in the details. I do not think there is any easy solution to this.

Thus is an industry with relatively poor marketers. If you look outside the bus industry, you will see that the airline industry and the cruise line industry have done a tremendous job, in terms of taking market share from the bus industry.

If you were to survey people about bus travel, beginning in this room and right around the country, they would say that a bus does not conjure up images of a wonderful mode of travel. The sad truth is that it is a wonderful mode. I do not like the word ``bus,'' so I will say ``motor coach.'' The general public views motor coach travel as being the bus travel of many years ago. A bus is not a bus any more. As we all know, the bus of today is a late model deluxe highway motor coach with tilt highback chairs, beautiful, large picture windows, premium sound systems, very good climate control and audio visual systems. However, the fact is that we here and the people out there still think of it as bus travel.

At the National Tour Association meeting in Houston this fall, the problem of how to combat declining numbers in general touring came up. Of course, general touring is done predominantly by bus or motor coach. One of the examples that came up was that those industries that had combated significant declines had done a grassroots massive campaign.

An excellent example of a great turnaround is the ``Got Milk?'' campaign. Milk is milk is milk, but as I understand it, that campaign has put milk in the minds of the people of Canada. As a result, milk consumption has increased significantly.

Also, from what I heard and from what was discussed at the National Tour Association meeting, the same is true of RVing. RVing was in decline, and the ``Go RVing'' campaign has shown the general public through a massive television campaign how wonderful RVing is.

Again, for busing, the message should be that it is deluxe coach travel. The message should be: ``Sit back, relax, enjoy. Let someone do the driving for you. Let someone else worry about the baggage.'' No worries, worry-free travel, so to speak.

Senator Oliver asked about a wish list. I have three things I would wish for. If I had only one wish, it would be to conduct a study done on the potential impact of a major grassroots campaign to remind people to take the coach or to take the bus. VIA Rail has done it well. ``Take the train today.'' That advertising has been very effective, and from what I understand from their marketing people, it has worked for them.

Again, the task ahead is not an easy one, by any means, neither the marketing nor the details beyond that of regulation, deregulation. I do not claim to be an expert on regulation or deregulation. We as a licensed transportation carrier are extremely strong on the aspects of mandating safety regulations for all modes of vans, buses, and motor coaches.

We are not a line run operator. We are a scheduled carrier. We operate scheduled service from May 1 to October 31, and as I say, we have all various aspects of touring scheduled. This year, we are introducing a hop-on, hop-off double- decker service. We will have about 500 seats per day on a scheduled service for that.

Being a licensed carrier, it is mind-boggling to me that these small vans are able to operate without absolute and complete safety regulations and standards to the extent that the motor coaches are. I would argue the point that one passenger is as important as 40 passengers. These vans should carry first-aid kits, axes, fire extinguishers, and so on. They should be made to do brake testing, wheel pulls, and all the rest of that.

We recently talked about this at the provincial level, the Tourism Association of Nova Scotia, and there were van operators arguing there that they should not have to adhere to these things. What good would a fire axe be for a van, they asked? I will tell you, if a van is overturned and the situation arises where you cannot get a door opened, you will want to have that fire axe. Even if it is for one person, we say as a company that that is absolutely of paramount importance.

I will now talk about regulation versus deregulation. We have we have gone from being just a tour operator to becoming a licensed carrier, adding to our fleet, building and building, all that is involved with escalating garage and maintenance costs.

Number three on my wish list is this: Being an operator here in Nova Scotia and being familiar with the Canadian Motor Vehicle Safety Standards, it is shocking to me to see how different the safety standards are from province to province. While the Canadian Motor Vehicle Safety Standards are very good — better than the U.S. — they do not reach the levels of what we have here in Nova Scotia. I am proud to be a carrier in Nova Scotia because I feel, from what I have seen in other jurisdictions, other provinces and in the U.S., that our safety standards and our level of safety is much higher. I was shocked when we bought vehicles from Montreal to learn just how different the safety issues were, along with the fact that they did not have to do wheel pulls and so on. We bought vehicles that had never had wheel pulls done, to check various components relative to safety. Here in Nova Scotia, we do wheel pulls every six months. On large vehicles, it is not cheap to do wheel pulls, but we sleep better at night knowing we are part of that system.

I would ask this committee take a good hard look at what we have here. I think Canada would do very well to model Nova Scotia's system relative to safety and our Nova Scotia Utility and Review Board across the country. Our standards are very high. Our board does a very good job, giving sober second thought and being a market watchdog, when it comes to adding new licences. Five years ago, just to apply for a 15-passenger van, you would have to have a lawyer and you would have to go into a three- or four-day hearing. You would have major opposition, and you would have to spend a lot of money and research and everything else. In the last five years, the Nova Scotia URB has become very progressive and sensitive to the market. In my opinion, deregulating would be very risky. I think it would be detrimental to our industry. Even though, when applying for new licences, we have to use a lawyer and do our research, and so on, the URB is, as I say, a market watchdog, to make sure the market can bear the increases.

Senator Oliver: What was second on your wish list?

Mr. Campbell: That the committee would consider mandating safety regulations in all forms of buses, not just buses but also vans.

The Chairman: Thank you, Mr. Campbell. We could be friendly with the board, because sober second thought is our trademark.

Do you distribute these brochures throughout the province and elsewhere, outside the province?

Mr. Campbell: We do. For a relatively small company, we have a significant marketing budget. Our marketing budget, for example, is a little over $500,000 a year. With that marketing budget, we attend trade shows all over the world. We send those brochures all over the world. We are a wholesaler and a retailer. There are many other retail wholesalers, in New Zealand, Australia, U.K., that sell these products and sell into our set scheduled departures.

Again, when I talk about our industry being poor marketers, it shocks me when I am at the trade shows and I talk to some of the bus operators, especially, and other tour operators, bus operators that are much larger than us, and discover that their marketing budget is not even half of what our marketing budget is. I tell the industry when there is a decline, when they complain about a decline, that they should look in their own backyard.

Good for the cruise industry and good for the air industry that they have managed to affect these numbers to this extent. If our industry does not wake up to marketing stronger and better, these numbers will just continue.

Senator Oliver: I would like to congratulate on your presentation and your packaging. It was well done.

I am particularly interested in your first wish list. I think you were here when I asked others whether they had done any kind of demographic surveys, whether they had done any polling or testing, focus group studies. Do riders want computer hook-ups? Do they want bigger seats? Do they want TV and music and food? Have you done that kind of research and what have you found?

Mr. Campbell: We have done that sort of research. It has been about two and a half years since we did our last major market research, and we are just about to do another one.

Having said that, about two years ago, Gray Line, worldwide, did a major market research campaign throughout the U.S. and Canada. The results of that research shocked me. Number one, of the top ten things customers wanted to see in a tour company — and I would argue that it is much the same for a bus company. We happen to be a little bit more of a tour company. When our results came in two years ago, I thought they were wrong. After seeing the Gray Line study, I realized the results had to be right, because their study was very broad.

The number one thing people wanted to see was a modern company. I was shocked to see that both times. What is a modern company? I could not tell you for sure, but what I can tell you is that the bus industry is not viewed as a modern mode. In my opinion, and this is what the Gray Line market research said especially, there is a lot of grey in the bus industry. The perception is that it is an old-fashioned way to travel; it is how our parents and our grandparents travelled.

Senator Oliver: Do you have any buses in your fleet older than five?

Mr. Campbell: We do. The nature of our business is that we have very old vehicles. We will have five double-deckers in another month or so. I do not know whether any operator in Canada has a double-decker that is newer than 1971. The Canadian Motor Vehicle Safety Standards came into effect January 1, 1971. Like antique cars, double-deckers would not meet the Canadian Motor Vehicle Safety Standards. Those standards are designed for highway travel. Double-deckers cannot do more than 40 miles an hour, so our double-deckers stay in the downtown core. Hence, the fact that they are exempt for CMVSS is acceptable. If they were travelling out on the highway, I would have to say that they should meet the Canadian Motor Vehicle Safety Standards.

Senator Oliver: One of the things that is new to us in Atlantic Canada, new in the last few years, is cruise ships, and the opportunities they present for business people in Atlantic Canada. The cruise ship business is not new in Vancouver; they have been going there for a long time.

What special things are you doing to take advantage of people who are coming in on cruise ships, at airports, at train stations, to get them on your business?

Mr. Campbell: As a company, we pride ourselves on being unique and creative, in trying many different things, many of which fail. Of every 10 things we try, one or two succeed. However, I will speak, if I could, to cruise ships because I think that is a great example.

About three years ago, I attended the international sea trade conference in Miami. I attend every year. At that conference, there was a panel of pretty much the most senior cruise executives in the industry. Their statistics showed that the cruise industry was stealing market share from the bus tour business. Good for them, if they can do it. Given the way they have approached it, they deserve what they get.

As a result, our company, while continuing to do as much motor coach tour business as we can, is putting a strong focus on the cruise business because the senior vice-president of Princess Cruise Lines, at a cruise symposium in Montreal, said that cruise business to the Caribbean has decreased in the last two years by 14 per cent, whereas cruise business to this region has increased by 22 per cent.

Senator Oliver: Good, good. What would it take to get a company like yours, which is young and creative and innovative, to get interested in busing in rural Canada?

Mr. Campbell: That is a good question. I would have to think about that one.

Senator Forrestall: They have their own wish list.

Mr. Campbell: I would have to think about that, and get back to you on that one.

Senator Callbeck: First of all, let me compliment you on your brochures. They certainly call out to be picked up and read.

You said that your business tripled in seven years, when nationally it was in decline.

You talk about marketing and promotion, which, to my way of thinking, is so important to your business. Why is it that your industry is not spending more on promotion?

Mr. Campbell: I am sure there is more to this answer than what I am about to say. However, I go when to the conventions that it tends to be an industry of families, where mothers and fathers, sometimes even grandmothers and grandfathers, are the owners, and a lot of them are from the old school. They have not changed with the times. At conferences, you can really see that. It is shocking just how resistant to change this particular industry has been.

There is really no easy answer, but in my opinion the industry lacks a fresh approach and fresh thinking, in general.

Senator Callbeck: You mentioned a study. Should the industry pay for that study, or are you suggesting that government should pay for it?

Mr. Campbell: I am glad you asked that question. I think that study could well be a cooperative study, jointly paid for. I think private industry should kick in, without question. In a perfect world, there would be the American Bus Association, of which there are many, many Canadian bus operator members and tour operator members, the National Tour Association, again a strong Canadian contingent, the OMCA. Will you get all of those factions to contribute? That is a good question.

I would argue that government should lead it, because I do not just one department will be involved. The Canadian Tourism Commission should be a strong leader in this. Also, Transport Canada indicates that buses use less fuel per passenger kilometre and produce less pollution per passenger kilometre than any other mode. One might therefore expect to find a strong interest in bus transport among those concerned with energy conservation and environment.

So again, not only should the CTC be involved, but also Environment Canada and Transport Canada. There are several departments that could do something to see if we could effect this.

The proof is there with these other industries. All we need to do is look at the milk producers, as well as the agricultural producers, the cheese producers, because they have their own campaigns, the RV producers, examples like these. From what I have seen, it has all been good news.

The Chairman: Thank you very much, Mr. Campbell. If you have a few more of these brochures, we would appreciate having them.

Mr. Campbell: I do not have them here, but I will see that they are provided to you. Also, I will send a copy of that Gray Line study that was done.

The Chairman: Yes, we would like to have that too. Thank you, Mr. Campbell.

The committee adjourned.