Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 21 - Evidence for Monday, February 11, 2002
OTTAWA, Monday, February 11, 2002
The Standing Senate Committee on Transport and Communications met this day at 4:05 p.m. to examine issues facing the intercity busing industry.
Senator Lise Bacon (Chairman) in the Chair.
[English]
The Chairman: I welcome you to our first public hearing on intercity busing. As you remember, Transport Minister David Collenette asked the Standing Senate Committee on Transport and Communications to undertake a study on intercity and charter bus operators in Canada. The request was prompted by a need to clarify some issues in scheduled intercity bus travel.
Following the Ottawa hearings, the committee will hold public hearings in Montreal, on February 20, and in Halifax, on February 21. Further hearings will take place in Vancouver, Calgary and Toronto in March of this year.
Several relevant aspects are to be investigated by the committee. These may comprise the structure of the industry, market segmentation, demand analysis, and the industry's performance within the macro context of the social process. We are confident that the hearings will greatly contribute to the study by offering the committee the opportunity to gather a broad range of opinions and information from users, industry and governments. The findings will be reported to the Senate later this year.
Our hearings begin today. Today, we hear officials from Transport Canada. Welcome to our committee. Please proceed.
Ms Guylaine Roy, Director General, Surface Transportation Policy, Transport Canada: Honourable senators, I thank you for the opportunity to appear before the committee today.
[Translation]
When the minister addressed this committee in June 2001, he provided a broad overview of the state of the industry. In addition, the orientation document submitted to the committee outlined the issues and contained background information and data.
In Canada, as in the United States, over 90 per cent of all domestic travel is by private vehicle. Until the late 1980s, more domestic intercity passengers traveled by bus than by either of the competing modes. Transportation by bus now has a 32 per cent share of the intercity public passenger sector, as compared with 58 per cent for air and 10 per cent for rail. The importance of bus has been declining relative to the other public modes.
However, as Minister Collenette mentioned when he appeared before the committee, the buses remain vital to the movement of people in Canada. Bus is the most environmentally friendly of the passenger modes. Every year, millions of Canadians rely on the bus for safe, efficient, low-cost intercity travel, and an even larger number rely on charter buses for their vacations and for travel to special events.
Canadien jurisdictions have divergent views on how to maintain a strong bus industry presence in the Canadian intercity passenger market. Some jurisdictions think that economic controls are necessary. Others do not. Still others believe that economic controls can remain, but they should be relaxed.
[English]
From a federal perspective, this is perhaps the most important issue, because federal legislation, the Motor Vehicle Transport Act, allows extra-provincial bus operators to be subject to the laws of each province in which they operate. As the minister put it when he appeared before this committee in June, 2001, are the differences between the provincial bus regimes that have developed over the last decade detrimental to the industry and travelling public, and if they are, what is the appropriate remedy?
The regulation issue is only part of a bigger picture. The industry does not appear to be growing to any significant extent. These were some of the themes that the minister outlined in June 2001, and they remain current today.
The questions that the minister proposed are still relevant. Can the long-term decline in scheduled bus service be reduced, and what can the government do to help? Are the differences between the provincial bus rules detrimental to public, and if so, what is the appropriate remedy? Is the economic regulation still appropriate? Is the industry, as it is now, the right tool for serving rural Canada, and, if not, what are the alternatives?
In the remainder of my remarks this afternoon, I shall address developments since the minister appeared before this committee in June 2001.
There are four main themes that will be of most interest to you: the report of the Canada Transportation Act review panel; recent bus industry developments; the recent amendment to the Motor Vehicle Transport Act; and the aftermath of September 11.
[Translation]
The Canada Transportation Act review panel was appointed by the minister in June 2000 and charged with a broad review of federal transportation legislation. The panel reported a few weeks after the minister's appearance before this committee in June 2001. I understand that the committee has been provided with copies of the panel's report.
Around a dozen of the over 200 submissions to the panel dealt, at least in part, with bus issues. These submissions are available with the report.
The panel noted that, ``the regulatory fragmentation facing the bus industry is a clear cause for concern.''
The panel also recognized that, if the solution to fragmentation was, to use their words, ``a harmonious national regulatory regime,'' then the choice would be most likely between: the status quo, possibly with ``pledges to negotiate voluntary harmonization through a permanent federal-provincial consultative body or other multilateral process''; or, second, federal action to deregulate the industry.
[English]
There have been a number of previous attempts to create a harmonious regulatory regime. Transport Canada began consultation with the provinces and the industry in themid-1990s. In 1999, the minister proposed legislation, Bill C-77, that included provisions both to create a national motor carrier compliance safety regime and to deregulate the bus industry.
Subsequently, the minister decided to deal with bus issues and carrier safety separately. This committee dealt with the motor carrier provisions last year in Bill S-3. In May 2001, Minister Collenette asked this committee to look at the bus issues as well. The minister has always signalled his intention to deal with bus issues on the basis of consensus.
The CTA review panel's conclusion on this subject is of particular interest. It states: ``The panel decided not to offer a recommendation about whether the Motor Vehicle Transport Act, 1987, should be amended to remove or ease regulatory constraints on intercity bus market entry. This is effectively the central question the minister asked the Senate committee to examine, and the panel will not pre-empt its answer.''
Before I leave the review panel, I should note that there is one other recommendation that is relevant to your committee. The panel recommended that the National Safety Code for Motor Carriers be structured such that all vehicles carrying passengers are subject to a consistent pattern of safety regulations. This topic is best dealt with in the context of the carrier safety regime and the amendments to the Motor Vehicle Transport Act. In a moment, we will talk to you about Bill S-3.
Mr. Emile Di Sanza, Director, Motor Carrier Policy, Transport Canada: Briefly, the Motor Vehicle Transport Act amendments created a framework for a provincially run motor carrier safety compliance regime that would apply to extra-provincial operators of trucks and buses. The amendments also allowed the federal government to regulate the standard for assessing carrier safety compliance. In practice, the government proposed to adopt by reference the National Safety Code compliance standard, which was also the basis for provincial regimes.
This committee reviewed Bill S-3, which received Royal Assent in June 2001. We are waiting for the provincial regimes to be in place before proclaiming the act. At this moment, the department is working on the regulations that will be necessary to give effect to the act.
The safety compliance regime is the appropriate context for dealing with the panel recommendations on changes to the National Safety Code to deal with smaller buses. Brian Orrbine is here from our road safety group. He can answer any questions you may have later on these issues.
[Translation]
Mrs. Roy: I will now discuss the most recent developments in the industry. Before I go on to deal with the 2000 statistics, I want to say a few words about statistics generally.
I believe that the committee has received a paper from the Canadian Bus Association that deals with Canadian bus industry statistics and expresses reservations about some of the data. The data we use are collected by Statistics Canada, that are in a better position to address specific data issues.
As for the data already published, we have always acknowledged that there were various factors to be taken into account in interpreting the data.
[English]
For example, the orientation document acknowledged that the sectoral classification within the industry — scheduled, charter, school, shuttle and tour — made it difficult to interpret industry's trends. The document attempted to compensate for this by presenting the data both by sector and by service line; that is, the document was organized by the types of service provided by each of the sectors.
To take another example, the orientation document acknowledged that some of the long-term decline in scheduled passengers reflected the fact that in some parts of the country that which was an intercity journey in the 1950s and 1960s is urban transit movement today.
Our data does allow us to track industry trends. The service line data in particular is useful because it identifies revenues from all carriers derived from a particular service.
The industry statistics for 2000 recently became available. We will provide to the committee the updated data with the relevant tables and graphs from the original orientation document. I would say that, either this week or next week, we will provide you with updated data.
Mr. Di Sanza: I refer first to the financial data. Overall, bus industry revenues were up 11 per cent over 1999, from $1.8 billion to $2 billion. These revenues are for the entire bus sector, excluding urban transit.
Both schedule and charter services grew at a faster rate than the industry as a whole. Please note that these are service line revenues; that is, they are total revenues in each category as reported across the entire industry. The highest growth rate in the industry was in bus charters, which had revenues up almost 29 per cent from 1999, from $305 million to $393 million. Scheduled service revenues grew by almost 15 per cent, from $235 million to $271 million.
Overall, the trend towards faster growth in the charter services is consistent with that which we have seen since the mid-1990s. Bus charters traditionally do well in times of economic prosperity.
The growth in scheduled service revenues is stronger than it has been in recent years. However, it is worth noting that the scheduled revenues are almost exactly, in current dollars, the same as those in 1990.
The number of scheduled passengers reported increased by almost 600,000, to 13.5 million. This number has been fluctuating between 12 million and 14 million for the last six years, so I think that we can say that ridership levels have been reasonably stable. The trends are consistent with what we have seen in previous years.
On the regulatory front, as well, there have been few significant developments. We surveyed the provinces within the last two weeks, and there have been no major changes on the regulatory front since last year.
[Translation]
As we reported to you when we appeared with the minister, four provinces and territories are deregulated: Prince Edward Island, Newfoundland, the Northwest Territories and Nuvavut.
Five provinces retain significant economic controls over the bus industry: British Columbia, Saskatchewan, Manitoba, Quebec and Nova Scotia. The other three provinces and one territory, Alberta, Ontario, New Brunswick and the Yukon, are somewhere in between. That is to say that they still have economic controls, but they are more lightly applied than in the fully regulated provinces.
[English]
There were no significant mergers and acquisitions in the industry last year. As we reported in the orientation document, the financial position of Laidlaw Incorporated, the parent company for Greyhound and a number of other Canadian operators, has been attracting attention for a number of years. In June 2001, Laidlaw filed voluntary petitions for bankruptcy protection in both Canada and the United States. At that time, Greyhound Canada wrote to government officials with an interest in the bus industry to assure us that its intercity bus operations in Canada would be unaffected by this development. Laidlaw is currently still in the process of restructuring under bankruptcy protection in both Canada and the United States.
Ms Roy: For the bus industry, like the rest of us, the tragic events of September 11 will be the enduring memory of 2001. The crisis had a direct impact on bus operators in a number of ways. Transborder operations were cut off in the border delays immediately following September 11. Some passenger traffic moved to scheduled bus in the days immediately following September 11. However, the industry tells us that scheduled passenger levels returned to normal fairly quickly. The biggest impact, however, appears to have been on the charter operators, which report a significant decline in business after September 11. Carriers tell us that tours originating overseas dropped off after September 11: some cancelled and, in other cases, expected bookings did not materialize. Carriers also tell us that Canadian bookings dropped off as well.
On this last point, it is difficult to quantify the extent of the decline, but we do know from international travel statistics that arrivals from abroad dropped dramatically after September. For example, entry from Asia declined by 32 per cent in September, as compared with September 2000, by 40 per cent in October and by 35 per cent in November. Entry from Europe declined by 20 per cent in each of the three months, as compared with the same three months in 2000. As Europe and Asia are the two main sources for overseas bus tours, at least some of these declines are the result of tourist cancellations or not booked.
[Translation]
Therefore, the biggest problem arising from the September 11 crisis appears to be the softening in discretionary travel. This may be self-correcting eventually. The bus industry is not as apprehensive about the possibility of systemic border delays as some of the other transportation modes. However, the industry has taken an interest in the efforts the Canadian government is making to address security issues at the border. This concludes my presentation this afternoon.
We will be pleased to address any questions the committee may have.
[English]
The Chairman: Transport Canada, in its annual report, ``Transportation in Canada 2000,'' stated that scheduled intercity bus travel steadily declined between 1981 and 1989, and then increased in 1990 and 1991. Since then, however, with the exception of 1994, the number of buses has declined every year. It also points out an uninterrupted decline in traffic, that is, the number of passengers and bus kilometres travelled. At the same time, it indicates that charter carrier services have noticeably grown, with an expansion in bus kilometres of 76 per cent since 1986.
Did the study consider the fact that the decline in ridership of scheduled intercity buses could be due to a changing market demand within the socio-economic and demographic context?
Mr. Di Sanza: The annual report that Transport Canada produces reports essentially on data that is provided by the industry through Statistics Canada. In some instances, it reflects on studies that have been made available. Certainly there has been a change in terms of the market demand as a result, as has been pointed out in terms of the preponderance of the use of private vehicles in many instances. There are also other factors it may reflect, the change in terms of operations by the industry. That concerns some of the operations around major urban centres as well.
Essentially, what is reported in the annual report is a reflection of the data itself. There have been other studies, some of them conducted by provincial authorities, that try to assess the factors underlying the demand for services, both scheduled, charter and specialty, and, in other instances, try to assess how best to deal with the changing demographics.
The Chairman: Has your department conducted a market survey of root cause analysis of this issue?
Mr. Di Sanza: As the orientation document points out, we have worked closely with the provinces over a number of years. Given that the industry is regulated at the provincial level, most of the studies have been done at the provincial level. We have outlined what some of those studies are. We have also worked closely with the industry as part of a task group, and information has been provided by the industry, as well as other studies that we have conducted, to outline what some of the structural changes and some of the market changes that have taken place in the industry have been. Principally, most of the work that has been done in the field has been largely done at the provincial level in anticipation of possible changes in the regulatory regime.
The Chairman: Could you help us understand the relationship between scheduled and charter operations? Can they be owned by the same companies and use the same equipment?
Mr. Di Sanza: Yes. In many instances, the same company may be providing both scheduled and charter services. There are instances, however, where some operators will provide only charter services. However, there could be operations that cover off both types of services, yes.
The Chairman: Can there be an interrelationship between charter operations and school bus operations? Would you clarify this for us?
Mr. Di Sanza: To the extent that we may be dealing with companies that provide a whole range of services, yes, that could certainly exist. If we look at the information provided in the orientation document, we will see that on an industry sector what is reported principally under charter also reports throughout a number of different sectors. Yes, there could be a variety of services provided either under scheduled services or charter services.
To take a case in point, Laidlaw, which is the largest, operated in all sectors and derived a considerable part of its revenue, and still does, from school services. However, they also operate Greyhound, which is principally a scheduled service operator but one that also derives revenues in charter operations.
Ms Roy: On page 18 of the orientation document, there is a chart that shows industry sectors and the service lines they provide. Scheduled services provide a variety of services, including school, charter, and so on. That clarifies the industry sector and service line products that they have.
The Chairman: The minister told us last June that there was a need for more national treatment of our transportation system, including bus transportation, and that this was an issue that must be examined extremely closely.
What does ``national treatment'' of the bus transportation system imply to you?
Ms Roy: I do not wish to speculate on the meaning of the minister. I read the notes from his last appearance and I understood the minister to compare the bus and the truck sector with the air and rail sector. For example, on the rail side, if you have extraprovincial service, it is fairly regulated. There is a more consistent framework when it is regulated by one entity.
On the motor and bus side, it is different. The authority lies with the federal government, but since a Supreme Court of Canada decision in 1954 that confirmed a federal decision, it was decided to delegate the authority to provinces. That gives rise to various regimes, depending on the province.
When the minister said ``one system,'' I think he was discussing having either one regulated system or a framework by which, on a consensual basis, provinces would agree to a national standard. There are different ways to look at what is meant in terms of a national consistency. The minister was asking the committee to look at the current situation of the industry to determine whether fragmentation might create problems in the industry and, if so, what the committee would recommend. I do not think he had one solution in that regard, but he was looking for views.
The Chairman: The minister also said that the government would not change the rules at the federal level unless there was consensus among the provinces and the industry as to what the changes should be. Is it likely that consensus can be achieved among the provinces?
Ms Roy: In 1999, we thought there was a consensus when Minister Collenette tabled Bill C-77. That bill dealt with safety issues but also regulation in the bus industry. His approach was a phased-in approach. Before tabling that legislation, we thought we had a consensus among the provinces. However, some provinces raised certain issues. When that occurred, the minister decided to deal on a more urgent basis with the safety issues, to see if there might be a consensus in that regard.
The minister had a sense that there was provincial consensus when he tabled the legislation. However, since the bill was not totally supported, the minister decided to withdraw it. A consensus is fairly important to the minister.
The Chairman: Does consensus within the industry include users, or does the industry mean only the carriers?
Ms Roy: That is a difficult question.
The Chairman: Is there a simple answer?
Ms Roy: The minister is a conscientious gentleman. He would welcome discussions between the committee, the users and the carriers. An industry is not dealt with apart from the clientele. The minister is interested in ensuring that Canadians are well-served by the industry.
Senator Callbeck: In regard to the classifications, what is the difference between the terms ``charter'' and ``tour''?
Mr. Di Sanza: Charter services are buses that are hired on a specific contractual basis. Tour buses have a regular itinerary that they provide on a seasonal basis; they involve services that a tourist group might use. Charter services can involve one single trip for purposes that may be less related to tourism than tour operators might engage in. The term ``charter'' is probably more inclusive and would typically include tour services as well. ``Tour'' is a precise term in the industry to designate tourist-related services.
Senator Callbeck: You said ``charter'' could include ``tour''?
Mr. Di Sanza: ``Charter'' could include ``tour''; it is more inclusive.
Senator Callbeck: They are listed here as separate categories. In your brief, on page 9, you talk about industry classifications, and you name five of them.
Mr. Di Sanza: The classification of the industry will depend on the regulatory regimes that are in place. Some licences might be awarded on that basis. For reporting purposes, there may be distinctions made in some instances in terms of the type of services provided. However, from a policy point or regulatory point of view, the primary distinction is between scheduled regular services and services that are either charter or contractual, and that would include tour operators as well.
In regard to provincial jurisdictions requiring licences, they may be doing so on a tour categorization.
Senator Callbeck: Provincially, there is a different category for ``tour'' than for ``charter''; is that correct?
Mr. Di Sanza: There may be in certain instances. If we were to limit that specifically by province, we would have to do a survey. It is our understanding that, for the most part, the regulation over charter services, including tour services, will be more flexible than it is with respect to scheduled services.
Senator Callbeck: In the school classification, does that include all the school buses? In Prince Edward Island, the government owns the buses; are those figures included?
Mr. Di Sanza: They should be in there, yes. I could not say specifically what is included in those figures. Statistics Canada might be able to amplify exactly what kind of coverage there is and who reports. Typically, they do not indicate which entity reports on those figures. However, school bus services typically would include all services, in the same way that the information on scheduled services includes services that are owned by the Province of Saskatchewan.
Senator Callbeck: I will turn now to the subject of economic controls. For example, if I wanted to charter a bus and tour from Prince Edward Island to Vancouver, how many governments would I have to obtain licences from? Can you take me through that process?
Mr. Di Sanza: Typically, in the bus industry, an operator would have to get an operating authority or licence in each jurisdiction in which that operator might wish to operate. On a practical level, that operator would have to obtain an operating authority in each of those provinces.
Senator Callbeck: You would not have to get a licence in the provinces that are deregulated, being Prince Edward and Newfoundland?
Mr. Di Sanza: That would depend. You would probably still have to indicate operations in that jurisdiction. It would not necessarily be getting an operating authority or a licence; it may simply be a question of registering. Management of jurisdiction-based operations, that is, operations within a particular province, and in-transit operations, that is, someone travelling through the province, varies from jurisdiction to jurisdiction.
Senator Callbeck: We talk about deregulating. If all provinces were deregulated, would an operator have to get permission to go into another province?
Mr. Di Sanza: This regulatory regime is, as was pointed out, delegated to the provinces. Using trucking as an example, a five-year transition period for trucking deregulation began in 1988. The general approach was that the carrier would get an operating authority in the base jurisdiction. It would typically register its fleet in the jurisdiction of operation. In some instances, the carrier would have to advise the jurisdictions through which they would be travelling of their intent to do so and would get a special licence for that.
Under deregulation, there could be an agreement wherein the provinces acknowledge that a carrier registered in one province with the required operating authorities has met the safety requirements in all jurisdictions and does not have to make multiple applications, as is currently the situation.
Senator Callbeck: Currently, even though Prince Edward Island is deregulated, a carrier needs a licence to operate there?
Mr. Di Sanza: It is possible that charter operators could go into Prince Edward Island without an operating authority, due to the status of P.E.I. We would have to check with the province to learn exactly what kind of rules they would impose on the carrier, depending upon where the carrier operates, what kinds of services it offers and whether it is a charter or a more permanent type of operation.
Deregulation typically means that an entrant will not have to go through an economic test to demonstrate that there is a need for the type of service they would provide. It is a more competitive approach. In a deregulated regime, if a carrier is in a position to offer that service for either service, convenience or whatever, that carrier is permitted to do that. That does not mean that a carrier would not have to demonstrate that it could meet safety requirements for compliance purposes. In some instances, some provinces that are deregulated would still require a carrier to indicate itineraries, fares and, in some instances, intent to cease operating services.
When Bill C-77 was proposed, the transition period still required carriers to report information in the various jurisdictions in which they operated, that is, itineraries, fares and intent to cease services. Deregulation does not mean that a carrier can operate in a jurisdiction without some form of registration and demonstrated compliance on a variety of fronts, including safety.
Senator Callbeck: What economic controls do British Columbia, Saskatchewan, Manitoba, Quebec and Nova Scotia have, in addition to setting the fees?
Mr. Di Sanza: Those economic controls vary by jurisdiction. Typically, a province that is regulated will receive applications from a possible entrant, but that entrant would have to demonstrate clearly to a regulatory board that there is a compelling need for that service. In that environment, the current stakeholders would have an opportunity to demonstrate whether that is the case. Typically, the carrier would have to demonstrate that there is a need for that service in that particular sector, whereas, under different forms of regulation, a carrier would simply have to demonstrate that it is in a position to provide a certain service for competitive reasons.
Senator Atkins: Has there been any return toward normal circumstances since September 11, or is the indication still that the tour business is down considerably?
Ms Roy: In terms of charter services, the figures that we have are only those for September, October and November. We do not have that information for December and January yet.
In terms of transborder movement, they were affected by September 11, but not as much as trucks, for example.
Mr. Di Sanza: The data that we used were really proxies for bus operations. They were international travel data and not necessarily bus statistics per se. We have no current figures. We have anecdotal information from the industry in terms of the patterns immediately following September 11 and what is emerging recently.
Senator Atkins: That is interesting. When I was in Halifax a couple of weeks ago, I was told that cruise ship business has increased for the next season.
Ridership on intercity buses in Canada is in decline. Is that in part because of the cost of riding on these buses? A return trip between Halifax and Fredericton costs $120, which seems costly. Are they pricing themselves out of business?
Ms Roy: This is due to various factors, one being the use of cars. Another factor may be that what was once intercity bus service is now provided by urban transit. I do not think we can say definitively that the decline in usage is due to increasing fares. It is due to various factors.
Mr. Di Sanza: Yes, there is probably a series of factors. One would have to look at this on a sector basis, and possibly regionally as well.
Charter service, for example, has increased for certain sectors. Scheduled services have been, at best, stable, and perhaps declining, for the reasons outlined, depending on what factors are taken into consideration.
With regard to whether they are priced too high, we would have to do a market-specific assessment of the demand for services to determine that. Typically, bus services are used by the lower-income echelon of the population. Relative to the other public modes, that is, rail and airlines, they are much cheaper.
Senator Atkins: I was thinking of scheduled service rather than charter services.
Mr. Di Sanza: Certainly, on the scheduled side, yes.
Senator Atkins: Do you have any statistics with regard to parcel service? Are people using bus parcel services, or are companies such as Purolator and Federal Express biting into that area of business?
Mr. Di Sanza: The parcel revenues reported are close to $100 million a year. Certainly, people also use bus services to send parcels. To put that figure into perspective, the parcel or courier service in Canada is estimated at over $3 billion. The bus parcel revenue is a relatively small share of the total market.
Senator Atkins: One would think parcel service would be an opportunity for the bus companies. There does not appear to be much promotion. We used to see it, but they do not promote it any more as they used to.
Mr. Di Sanza: It is our understanding that in some of the rural areas that are serviced by buses, the demand is fairly strong for bus parcel delivery, possibly because these are areas that are not as well served by the major small parcel companies as the major centres. Overall, the industry has reported approximately $100 million in revenues. Yes, there is some usage of it there.
Senator Atkins: Does the Canada Transportation Act set the standard for safety rules, or is it done through provincial regulations?
Mr. Di Sanza: The Motor Vehicle Transport Act sets the overall framework for compliance standards. However, it is the provincial regimes that put in place the various systems for monitoring carrier performance.
Mr. Orrbine may wish to amplify that point, as he is responsible for that area in the department.
Mr. Brian Orrbine, Senior Policy Advisor, Road Safety Programs, Transport Canada: You are quite correct. The Motor Vehicle Transport Act sets the umbrella for the safety regime. Each province takes safety very seriously and has in place a system to monitor the performance of all motor carriers, both bus and truck.
With the passage of Bill S-3 last year and with the eventual proclamation in the regulations, the effort behind that is to strengthen the safety regime for both bus and truck operations, making them consistent and uniform, and based on objective criteria. This process has started. I hope it is something that we can see by the end of this year. It will put everyone on a much more equal footing across the country.
Senator Atkins: Is it at a level that you are satisfied with?
Mr. Orrbine: That is an interesting question. I may end up shocking the committee here. If the question is whether bus travel in Canada is safe, I must say, absolutely, that such is the case. If we look at a history of fatalities over 10 years, we see that roughly 3,000 individuals die on Canadian roads every year. If we look at bus involvements with respect to those fatalities, it is virtually insignificant.
I will give you an example. In 1999, there was one fatality on a bus. If we look at most years, going back over the last 10 years, we will find very few fatalities. I do not mean that one fatality is not important — they are all very important — but we will find very low numbers, with the exception of a tragic accident in Quebec in 1997.
Senator Atkins: There was one in Sussex.
Mr. Orrbine: That is right. There was recently one in Sussex, in New Brunswick. Typically, the figures are very low for serious problems.
Senator LaPierre: I am confused as to what kind of bus I am supposed to inquire into. Frankly, there are too many.
Let us begin with school buses. School buses operate within cities; right?
Mr. Roy: Yes.
Senator LaPierre: However, school districts have been amalgamated so much that often buses transport children, after a long voyage, to another city.
I know a little bit about Sudbury. I know that the school district there is larger than in France and that children are being bused long distances, travelling from one municipality into another.
Do you consider that to be intercity bus travel?
Mr. Di Sanza: That is considered strictly school bus service.
Senator LaPierre: That is school bus service and it does not fall within this; is that what you are saying?
Mr. Di Sanza: It does not fall under scheduled services, which have, typically, in the provinces that are regulated, itineraries, fares, and levels of services in some instances.
Senator LaPierre: When a school bus takes a group of children to Camp Fortune from Orleans, that is not intercity busing; it is not regulated, except for educational purposes?
Mr. Di Sanza: That would probably fall under either a contract or charter service.
Senator LaPierre: Are charters, contract services and tours — I am trying to eliminate my work here — not regulated under the bill that we are considering or the jurisdictions we are talking about? In other words, they will not fall under the purview of my inquiry?
Mr. Di Sanza: In fact, they do, largely. What we have outlined is that, for the most part, for commercially based services such as tour operators or charter services, where there is a discretionary demand, even in those regulated jurisdictions there is a far more lenient or less rigorous economic test applied. Typically, those are niche markets.
We have a multitude of charter operators, for example, in British Columbia, which, on the scheduled service side, is highly regulated; but where there is a demonstrated need for a charter service in lower mainland B.C., typically those licences are awarded.
Therefore, for charter services we are not dealing with the same dynamics as for scheduled service.
Senator LaPierre: To use Senator Callbeck's example, travelling from Charlottetown to Vancouver, she will join a tour or will charter a bus to go somewhere in British Columbia. That does not fall under scheduled services; correct? It is similar to the charter or tour buses that visit Parliament Hill, correct? They are not scheduled.
On the other hand, the bus that travels between Ottawa and Montreal, such as the one I took my niece on at 11:00 o'clock last night to Montreal, is a scheduled bus.
Mr. Di Sanza: That is correct.
Senator LaPierre: Is this what we are concerned about?
Mr. Di Sanza: The major policy issues that have been set forward deal with the scheduled service, the Greyhound services from Montreal to Toronto that you pick up at the terminal, typically downtown to downtown. That is the primary issue that we are dealing with. There are some collateral issues, but that is the primary one.
Senator LaPierre: What about a bus from Montreal to New York? Are we interested in that?
Mr. Di Sanza: There are several companies that provide scheduled services from Canada to the United States and they fall under scheduled services. Of course, there are charter services that operate in those markets, but there are different factors at play there.
[Translation]
Senator LaPierre: What would the advantages of deregulation be?
Ms. Roy: It would allow greater flexibility for new entrants. The market is fragmented when all of the provinces are not regulated. Companies offering non regulated intercity service do not enter a regulated market as easily. However, regulated carriers operating in a deregulated province are not faced with the same constraints as to market entry. This fragmentation creates inequality. A carrier offering services in several provinces is confronted with several regimes.
Senator LaPierre: During the 1950s, the federal government transferred the management of these services to the provinces. Is this why we are today encountering the problems we are seeing?
Ms. Roy: In 1954, the court confirmed that the regulatory framework as to interprovincial carriers still came under federal jurisdiction. However, the federal government delegated this authority to the provinces. In doing so, it allowed each province to create its own system, the result of which was the establishment of several different regimes.
Senator LaPierre: We should therefore be advising the minister to broaden this deregulation to the entire country. Would that require of the federal government that it take over all related powers?
Ms. Roy: The first question that the minister is putting to the committee is to see if the fragmented system that exists is creating a problem within the industry. If your conclusion is that the fragmentation of the regimes is having a negative impact on this industry, then we will have to see what possible solutions there might be. According to the report of the National Transportation Act Review Commission, there are two possible solutions if what we want is a harmonious national system. One possibility would be for the federal government to take on full responsibility for it. The other possibility would be for the provinces to agree on a way of cooperating amongst themselves.
[English]
Senator LaPierre: Tell me about the users. Last night, I did not see lawyers getting on that bus. I certainly saw no businessmen. I saw no senators, let alone elected members of Parliament. I saw students returning to Montreal after a nice weekend at Winterlude. I saw ladies with large bags, escorting children. I believe you have said that this is the transport of choice of a group of people in our society who find it cheaper than the train and, of course, the plane.
Yet we do not have a profile of the users; at least I have not seen one. Is there a profile of users? I want to know their age, their sex, their income. I want to know what they complain about when they travel. Have you included this in your studies?
Mr. Di Sanza: On page 5 of the orientation is an indication of the income profile. The Canadian Bus Association commissioned a study of a profile, speaking in general terms, of the users for scheduled services. It is important to distinguish scheduled from charter. The users for scheduled service tend to be lower income, students and, in some instances, the elderly who have no other means of travel.
Senator LaPierre: Are the buses wheelchair accessible?
Mr. Di Sanza: There is an advisory group that works closely with regulators and with the industry, the advisory group comprising handicap organizations. They set voluntary standards for the industry to be adopted in the usage of services.
We would have to get back to you with information in terms of their satisfaction with the service.
The Chairman: We are meeting with some people next week in Montreal. We can ask the question there.
Senator Jaffer: Is bus transportation cheaper than train?
Ms Roy: For scheduled service, bus transportation is cheaper. I cannot provide precise figures, but normally it is cheaper. The fare depends on the distance.
Senator Jaffer: Let us say from Montreal to Ottawa. Do you have any idea?
Ms Roy: I cannot give precise figures.
Senator LaPierre: I have been advised by people at VIA Rail that they will soon provide a fast train that will do the trip in an hour and a half, instead of two hours, which is the length of time the bus takes, and the economy fare will be cheaper than bus because VIA Rail wishes to absorb that market.
Senator Jaffer: Your minister has said that most of the industry agrees that charter services should be deregulated. What is your opinion on that?
Mr. Di Sanza: The position of the industry and, indeed, of provincial jurisdictions on that emanates principally from the work we did in the context of a federal-provincial-industry task force from 1995 to 1997. In fact, one area where there was consensus among the federal government, the provinces and industry was that parcel services and charter services can be deregulated and that, generally speaking, the process for scheduled service could be streamlined. That task force was not able to get consensus on going further than that at that stage with respect to scheduled services, but there was general consensus on the charter because it is more commercially based. It is more discretionary income that provides a demand for those services as opposed to scheduled services, which are more regular in nature.
Senator Jaffer: You said in your presentation that some provinces are regulated and some are not. Should they all be regulated, or deregulated?
Ms Roy: We are not here to express our personal opinions on whether provinces should be regulated or deregulated. The key question for the committee is the impact of deregulated regimes in some provinces, regulated regimes in others, or some half regulated-half deregulated regimes. What is the impact on the industry? If there is an impact, what would you recommend as appropriate action from the federal government? This is really what the ministry is looking for from the committee.
Senator Jaffer: I accept that you are not giving opinions. Do you have any idea of the impact when there is deregulation?
Ms Roy: I know the committee has scheduled meetings with provinces. I would suggest that you might want to look at the impact of the regulations in provinces where there is regulation. You would get the information right from the provinces where there is a regulation. In those provinces where there is partial deregulation, you can look at the impact there as well. It is better to ask the provinces directly what they have seen as an impact after deregulation.
[Translation]
Senator Biron: My question is along the lines of that of Senator Jaffer. Has there been a drop in service in the rural areas of provinces where there has been deregulation? Have their been requests for grants in order for rural areas to continue to benefit from these services?
Mr. Di Sanza: Let us take the example of Newfoundland, which is a deregulated province. A study showed that there was no negative impact within the sector because of deregulation.
However, I believe that this issue must be placed in the proper context. One might say that in certain provinces where there has been strong economic control, there has nevertheless been abandonment of service in rural areas and in low-density markets. The fact that a province might have what could be deemed ``strong'' economic controls is not a guarantee that service will be maintained in all markets, especially low-density markets.
Various studies carried out in virtually all of the provinces have shown that there has certainly been abandonment of service in provinces such as Ontario where there is a regime swinging from strong regulation to deregulation. It all depends on the existing demand and on the services offered in the given sector of the industry.
The situation may vary from one sector to another and from one province to another as far as the impact is concerned, but to date there has not been any negative impact. In some cases, services rebounded with the usage of small buses or vans.
Ms. Roy: It is preferable to delve into the experience of each province rather than to draw a general conclusion.
[English]
Senator Callbeck: You said that in Newfoundland, if I understood you properly, there was not any effect, but that had to do with the way they deregulated. Would you explain that?
Mr. Di Sanza: In the course of the work of the task force and following that, when the federal government and provincial jurisdictions were looking at what a basis for consensus, one of the questions that often arose in our discussions was the experience with regard to jurisdictions that have deregulated.
I do not have precise figures to provide at this time, but our understanding from officials in Newfoundland is that there was no negative impact in terms of services in the province as a result of their approach to deregulation. They have offered to provide information in the past for whoever might be interested in doing so. You may wish to call upon them to provide details of the impact, if any, of that on small or larger communities.
Senator Callbeck: The question I am asking is whether that had anything to do with the way they deregulated.
Mr. Di Sanza: I am not in a position to give you a precise answer on whether it had to do with the way they deregulated or whether if it was as a result of other factors. However, we can pursue it with the province, if that is a question you would like us to pursue.
Senator Callbeck: The Canadian Bus Association did a study in 1998. What was their conclusion?
Mr. Di Sanza: Their major conclusions are outlined in the orientation documents. They outline that, for the most part, deregulation would result in a certain number of marginal routes being abandoned. These would typically be lower-density markets or some rural routes. They recommended a number of measures that regulators could take. However, for the most part, their major conclusion in terms of economic dimensions was that there would be a loss of some of the services to lower-density markets and that new entrants, as a result of deregulation, typically would target the larger markets or the major corridors.
Senator Callbeck: The bottom line was that they were not supportive.
Mr. Di Sanza: At that time, the position they advanced was that they were not typically supportive of deregulation, generally speaking, for the various reasons that they outlined.
However, if one looks at the list of conditions or recommendations in their report, they also indicated that, under certain conditions over a period of time, regulatory regime would not have the type of negative impacts that something in the short term might have.
A period of time has elapsed since that report. You may wish to address that question specifically to the associations that are part of the Canadian Bus Association to determine their position at that stage.
Senator Callbeck: Were the major reports done in Quebec in the last five years supportive?
Mr. Di Sanza: Could you clarify that, please?
Senator Callbeck: I am reading here that the Quebec government produced two major reports in the last five years on the topic. What was the bottom line?
Mr. Di Sanza: The Quebec government did a thorough analysis of the services and operations in that province. It looked at the impact that various narrow scenarios might have. The position of the province, generally speaking, has been that there would be an impact on certain markets. They would be looking at the options available to deal with that impact.
Again, it is important to hear from the province about their position. The information I cited earlier regarding loss of service to smaller communities came from one of those reports, where even under a regulatory regime there were still services that were being abandoned.
The Chairman: You said that ridership seems to have levelled out at between 12 million and 14 million for intercity buses. Does the department have any feel themselves as to what might lead to a significant increase in ridership?
Ms Roy: We find it difficult to say how exactly ridership could be increased. Perhaps more competition in the sector would have an impact. It is difficult to give one simple answer because various factors affect the choices of taking the bus. I would not want to venture into that field.
You may want to ask that question of the users and carriers with whom you will meet. From various sources, you may be able to put together a trend of how it could increase.
[Translation]
The Chairman: We thank you for having answered senators' questions. Your answers are much appreciated in this the very beginning of our study. Should we need further information in the course of our work, we will most certainly call upon you.
[English]
We will now hear from Mr. Norris and Mr. Baldwin. Welcome gentlemen.
[Translation]
Mr. Douglas A. Norris, Director General, Census and Demographic Statistics Branch, Statistics Canada: It is a great pleasure to be here today to give you an overview of the recent social and demographic trends in Canada. I hope this information will be useful to you in setting the stage for your study.
My presentation will be based on a series of diagrams, and I understand members of the committee have these in front of them. They are available in both official languages and at the end of my presentation I will be happy to answer your questions either in French or in English.
[English]
I want to talk today about the trends that I thought might interest the committee in studying interurban transportation. Most of them are general trends. Many of them will not be new to members of the committee.
Most of our social trends are slowly changing over time and certainly not dramatically. There are a number of trends that are likely of interest. Some of them were touched on in the earlier presentation about the profile of interurban ridership. Those are some of the same groups that we have chosen to profile.
Demand for any service or product is influenced by population growth. The first graph shows population growth in Canada over the last half century. Our population has grown from approximately 15 million at mid-century to just over 30 million today. That increase has been fairly steady. An decline in the rate at which our population is increasing is occurring. The darker line on that first graphic shows the annual rate of growth, the percentage increase in our population size year over year. In the 1950s and 1960s, that increase was around 2 per cent or 3 per cent, but it came down during the 1960s and 1970s to around 1 per cent per year. Since about 1970, the growth in population has been approximately 1 per cent per year, with some ups and downs due to trends in immigration.
The next graph looks ahead, to determine what future demographics may be based on these past trends. We have taken a range of possibilities for the future, depending on what happens with the major determinants of the population growth. The fertility rate is by far the most important demographic determinant, that is, the number of children a woman may have during her lifetime. The immigration rate is also an important determinant of demographics. Mortality is also a factor, but it is a more slowly changing factor.
The graph shows the future trajectory of our population over the next 40 years or so, under a high, medium and low scenario. The high scenario represents an increased fertility rate from the 1.5 children per woman on average of today and an increased immigration rate from what it is today. The medium scenario represents the current trend in fertility and immigration. The low scenario represents a slight drop in our fertility rate and a lowering of the immigration number. We get a range.
Under all of these scenarios, the momentum built into our future demographic change is likely to be downward. The growth in our population is predicted to slow over the next two or three decades; most analysts are not postulating an increase in our fertility rate.
The third graph shows what has happened to our rural and urban population. Here we have defined urban in fairly broad terms as centres of 1,000 people or more. We use a broad definition of urban in our census information. The rural is outside of these urban areas.
The graph shows the long sweep of history in terms of our changing country, going back to before Confederation and up to the 1996 census. You can see that the country was predominantly rural until about the 1920s or 1930s, when that crossover occurs. Beginning in 1951, we see a rapid urbanization of the country, with the urban part growing and the rural part staying constant. Today, about 80 per cent of our population is classified as urban.
If you look ahead to the differential growth in urban and rural areas, and even in small cities, with the low fertility rate, the primary driver or determinant of our population growth will be immigration. That will make a difference in terms of whether an area grows or declines together with internal migration, that is, people moving from one part of the country to another.
Immigration will be important. One of the characteristics of our current immigration trend is that it is concentrated in our large urban areas, particularly Toronto, Vancouver and, to a lesser extent, Montreal and a few of the other large urban areas. To the extent that that will determine growth in the future, we could see a differential growth. We have already said that overall growth would be low. It would likely be even lower in our small rural areas that are not receiving immigrants compared to our large urban areas that will, if current patterns continue, see immigration. Their growth rate will be higher than that of the rural areas. We are likely to see the possibility of differential rates of growth with lower growth, possibly even declines in some population, in respect of the rural and small town parts of the country compared to our large urban areas.
The next graph shows another important trend in Canadian society, which is the aging of our population. I have depicted this in the form of comparing what our population looked like back in 1951, which is the solid line that you see on this graph, within the brown area. That shows a number of people — males on one side and females on the other — at ages ranging from young children to senior citizens. This demonstrates what has happened to those numbers between 1951 and 2001. The brown bars represent the estimated numbers for today. A few things are notable.
First, there has been a growth in most of the age groups, and that reflects the doubling in the size of our population. As well, the distribution of our population by age has changed. In 1951, children represented the largest part of the population. Those were the children born during the 1940s — the war years and post-war — and that base actually widened out if we were to look at this in 1960 and 1970. The fertility rate then declined. If we look at 2001, the largest part of our population is people aged 35 to 55, the baby boomers.
The relative size of our population at the different ages has changed dramatically. If you think about fast forwarding that brown pyramid, you can see the aging of those baby boomers into their 60s, 70s, 80s and 90s that will occur in the future, to be replaced under current fertility patterns by much smaller generations of children. The importance of that is the extent to which any phenomena, any service, or any product is age-related. The profile of the potential users of that service will be changing fairly rapidly.
The next graph amplifies that trend, showing the number of people aged 15 to 24 and 65 and over. These two ages were chosen because they are likely to be higher than average, as was suggested in the earlier presentation, in relation to intercity bus ridership, which includes students, young people and elderly persons. You can see that for the 15-to-24 age group, those numbers increased up until 1981, then levelled off and have been more or less constant since then.
On the other hand, the numbers of seniors have been continually increasing, and you can see the projected crossover, where their numbers will surpass the number of youth. This number will continue to increase, particularly in the post-2011 era, when baby boomers begin to hit 65. The numbers will increase rapidly between about 2011 and 2031, when they will level off. Under virtually any scenario, the future holds a much larger number of seniors and a much larger proportion of our population at those older ages.
The next graph looks at university enrolment. Senator LaPierre talked about putting his niece on a bus last night. I can remember not too many years ago trips to the bus station to put my daughter on the bus to university or to pick her up. University and college students are important users of intercity bus transportation, at least based on my personal experience.
While the 15-to-24 age range has not changed much, enrolment in universities and post-secondary schools has in fact increased, so the numbers of students — and this is showing full-time university enrolment — actually increased fairly steady over the last half century, perhaps levelling off in the 1990s to some extent.
The next graph shows a phenomenon that we have seen over a number of years in Canada, and that is that we are a country of movers. On average, Canadians move from one household to another at a fairly high rate. About half of us actually change where we live over a five-year period. Some of us just move down the street, others across the city, and others to another city or province. Not surprisingly, the tendency for people to move is related to age, with the highest rates of moving around those ages when one is finishing schooling, starting a family, et cetera. Our mobility levels have not changed dramatically over the last three or four decades, as we can track it through our census information.
The next couple of graphs show yet another important trend in Canadian society, and that is the changing composition of our population as a result of immigration. This first graph shows the percentage of our population that is classified as immigrant, and by immigrant we mean someone born outside of Canada. In 1996 — the last time we took a national reading of this — a little over 17 per cent of our population were classified as immigrant, and that number had not changed much over the last half century. It increased somewhat, from perhaps 15 per cent, in the 1990s, and we will be looking at this number again early next year when we release the results of our new 2001 census. I would expect at that time the number to be higher than shown here. You can see that the levels, although they have not changed much for the last half century, are lower than they were earlier in the century, when the West was opening up and many immigrants were coming into Canada; on a per capita basis, the immigration rate was higher at that time.
The next graph reflects our changing cultural diversity. It shows distribution of immigrants to Canada by country or continent of origin. One can see that prior to 1961, virtually all of our immigrants, some 90 per cent, came from Europe. Much smaller percentages came from other parts of world. A gradual shift has taken place over the decades, so that by the 1990s fewer than 20 per cent of our immigrants were coming from Europe. Much higher percentages came from Asia, the Caribbean, South America, Central America and Africa. There was a dramatic change in the diversity and origins of our immigrants. Certainly that is reflected in the changing composition of our population in those large cities that are receiving the immigrants.
The next two graphs reflect changes in family structure since 1980. There are a number of points to note here. One is the decline in the proportion of families that are married couples with children. That number has declined, from 55 per cent back in 1981 to 45 per cent in 1996. It reflects, in part, the aging of our population as well as changes in marital patterns, with part of that decline being picked up by an increase in common-law couples — both common-law couples with and without children — and also by an increase in the percentage of lone parents. You can see that the number of married couples with children has not changed much. However, if we look at the aging of our population into the future, that dark blue part of the pie will show some decrease, as the so-called empty nest families become more numerous.
The phenomenon of empty nest is not as clear as sometimes it is made out to be. The next slide shows another aspect of our changing family situation, that is, that over the past 20 years or so we have had an increasing proportion of our young adults staying at home with the family instead of leaving to be on their own. In some cases, children leave the home; in others, they come back and sometimes bring someone back with them. Our family structures are becoming more and more complex
The empty nest phenomena — where children of a married couple have left the home — should become more frequent. However, that trend is balanced somewhat by the tendency of young adults to remain at home.
The next couple of graphs provide a quick picture of how our labour force has changed over the past 25 years. I wish to point to two major changes that have occurred. These are the two lines in the middle of the graph. The first shows the increasing participation of women in the labour force that started before this period, in the 1960s. That line increases from around 50 up to 80; that is, 80 per cent of women aged 25 to 54 are active in the labour force. That number has levelled off or increased more slowly in recent years than previously.
The other major trend is for older males, aged 55 to 64. The labour force participation of older males has dropped from the high 70s, in 1976, to around 60 by the mid-1990s. Again, that is levelling off, perhaps increasing a bit. That is something we will track closely. That reflects the earlier retirement ages we have seen of older males in particular.
The other phenomenon related to the labour force is the change that has occurred over the past 20 years in the types of jobs that have been created. This graph shows jobs classified as part-time, full-time and self-employed positions. For males, the biggest increase in jobs has been among part-time and self-employed categories, while for females, full-time employment has increased. It is still the lowest, but much closer to part-time, while the highest rate of increase has been among the self-employed. The nature of our labour market is changing as well.
Turning to the subject of income, there are a couple of different measures of income over the last 30 or 40 years. The first graph shows the trend in what is known as the median income of family. That is the point at which half the families have income above and half have income below that figure. The median income of families increased between 1961 and 1981, and has essentially levelled off. That category has been up and down since then but has not seen any dramatic change for the last 20 years or so. If anything, there has been somewhat of a decline in some periods and an increase in others.
The next reflects income in some of the subgroups of Canadian society where we see the incidence of low income, or the proportion of these groups classified as being in a low-income situation as measured after taxes, according to Statistics Canada's definition of low income. This is useful for tracking change. Here we see that, for couples with children, towards the bottom of the graph, there has not been much change over the past 20 years. For elderly families where one member is over the age of 65, there has been a decline in low income from 8 or 9 per cent to 2 or 3 per cent. There has been a fairly dramatic decline for the unattached elderly, such as elderly women living alone, not in a couple situation. This category has declined from over 50 per cent to just over to 20 per cent. The fourth line shows the trend for lone-parent families, which has not changed much, and is still hovering around the 40 per cent range over that period of time.
The next graph documents one of the topics referenced in the earlier presentation and that is vehicle ownership in Canada — the fairly dramatic increase in the ownership of vehicles, particularly during the 1950s and 1960s, going from about 40 per cent of households where the occupants owned a vehicle up to a little over 80 per cent today. That figure has been more slowly rising over the last 20 years. Most of that increase occurred during the 1950s and 1960s. The bottom line shows a measure of households where the occupants have two or more vehicles. Here we see a fairly sharp rise over that period of time.
The final graph amplifies vehicle ownership for that segment of the population of seniors. As we saw earlier, seniors will become more numerous. However, even among senior households, the ownership of vehicles has increased from about 11.5 per cent in 1980 to approximately 17 per cent. This graph shows somewhat of a drop, but some of that could be sampling variability. It is too early to point to a trend in that regard.
That is a quick overview of some of the major social trends that are occurring. I hope this information helps honourable senators as you think about what the future may hold for intercity bus transportation. I will be happy to answer any questions that committee members may have.
The Chairman: Mr. Norris, would it be fair to say that increases in income and automobile ownership account for a significant amount of the decline in bus ridership from 1950 to 2000?
Mr. Norris: I have not done any analysis that actually links bus riders by their income or other characteristics. However, since bus ridership is higher among low-income people, certainly that would move the trend in the direction of lower ridership. Whether that is accounted for or not is difficult to say. However, looking at that relationship statistically, the figures would be pulled downwards to the extent that income is a factor, and it does seem to be a factor.
The Chairman: We speculate that urbanization has reduced the overall demand for bus service. Is it reasonable to think that reductions in rural population would have an especially large effect on bus travel from one small community to another small community as opposed to from a small community to a large urban centre?
Mr. Norris: Unfortunately, I cannot be too precise. I do not have the information on the relationship between many of these characteristics to bus ridership. I suspect others appearing before you will have done such studies and may be able to illuminate the relationships, and point to what will happen. Certainly, since rural areas of the country have grown more slowly than urban areas and in the future will likely, under current fertility trends, grow more slowly and perhaps even decline, that will tend to pull down the relative rates of anything that is related to urban and rural factors. Those are the things that explain ridership rates being lower. That portion of the population is smaller, that would tend to bring those figures down. However, I do not have hard evidence that actually supports the premise. This impression is more inferential from the broad trends I have described.
The Chairman: The annual report by Transport Canada, Transportation in Canada 2000, portrays in chapter 11 the structure of the transportation industry with a subsection focussing on the scheduled intercity bus industry.
On page 122, the report indicates that virtually all scheduled carriers provide at least some charter service. These overlaps within the industry sector make it difficult to describe the size of the scheduled and charter industry.
How does one determine the size of a market segment and how has Statistics Canada determined the size of the scheduled intercity buses? Has the segment size of scheduled intercity buses varied over the years, and, if so, what were the reasons for the variations? If a market segment size is difficult to describe, how is revenue determined?
Mr. Gord Baldwin, Director, Transportation Division, Statistics Canada: This measurement is complicated because there are two ways one can count the industry and many of our business-oriented surveys are structured on the industrial basis. That makes sense for our system of national accounts. We want to ensure that all industrial sectors are counted, but counted only once. We do not want them double counted, but we want their impact on the economy measured' therefore, we tend to divide the economy on an industrial-type basis. The bus industry is another in which we do that.
Industries are very dynamic, and, as has been mentioned previously, although we categorize industries on the basis of where their primary source of revenue comes from, most of the firms are involved in more than one activity. Although much of the information we put out is compiled on an industrial basis, there is an activity element to it. That can lead to confusion if you look at only a particular industry as identified. If you look only at the scheduled intercity bus industry, you will not measure all the scheduled intercity bus activity.
In our publication, we ask what the revenue stream is from all the industrial components, and that is what you have to look at to come up with the sector for the scheduled intercity bus.
The Chairman: This committee received a letter from the president of the Canadian Bus Association dated February 1, 2002, together with a report entitled ``Is the Canadian Intercity Bus Industry in Decline?'' Appendix 3 of that report examines data accuracy issues, in particular the method used by Statistics Canada to gather its data in 1970. How do you respond to the statements in appendix 3?
Mr. Baldwin: Statistics Canada itself warned that there was a data issue. There was a suspension of publication of the data for a period of time. In 1974, we came out with some new approaches to collecting data. That was well before my time there, and I am not fully aware of the reasons for the need to redo the assessment. However, it was a warning that there was a break in the methodology for compiling the numbers and that we must be careful of comparing the 1970 and 1974 numbers.
We are currently in the process of revamping our bus surveys. We have had the help of Transport Canada, various bus associations and other players in coming up with a revamped survey that will be used this year for measurement of year 2001. We hope this will give yet a further improvement in the data.
There are many measurement issues when looking at an issue such as this and the impact over a longer term could be larger than over a shorter term. It seems that it should be very simple to count how many passengers were carried. However, different bus firms use different methods for passenger counts. If passengers are travelling across the country switching individual carriers, each carrier will validly count those passengers because they are customers to them. That will give a certain count. Other firms count passengers based on a change of bus driver, or an internal transfer from one bus route to another bus route on their own internal system. From their point of view, they carried the passenger on more than one route and they will count it more than one time.
Consolidation of carriers over time can affect numbers. When a carrier counts on a system basis rather than a route basis, if there is no longer a transfer between two carriers it can look like there has been a reduction of passengers carried although that may not actually be the case.
As roads have improved and buses have become faster, there has been less requirement to change equipment or drivers on the same route. I know that when I travelled from Ottawa to Toronto as a student, the driver changed halfway there. It was easier for the carrier to have an Ottawa-based driver go halfway and a Toronto-based driver take the bus the rest of the way. As buses got faster and highways got better, one driver could make the trip to Toronto and back in the same day. That could result in an apparent reduction in passenger count on the carrier system without actually changing the number of passengers.
To use a local example, not long ago one had to take an intercity bus to travel from Rockland to Ottawa. Now, OC Transpo service is available for that trip. As GO Transit in the Toronto area expands, there is an apparent loss of passengers from intercity buses into the urban transit system. The passenger may still be travelling but has switched carriers. Many things can affect the number and the results are more severe with longer time frames.
There is also the aspect of intercity defined as a product. When measuring the intercity bus industry, it is the product line that is being offered there. Despite all the changes that are possible, there are some changes that will not be reflected in that. Change in a geographic boundary, such as the new definition of the City of Ottawa or the City of Gatineau, will affect numbers as well. If one is travelling on an intercity bus service within the boundaries of a new amalgamated city, as long as that individual is are still buying his or her product from an intercity bus operator, that would still be categorized as intercity bus.
That is all to say that what may sound like a very easy number to come up with is actually quite difficult and is affected by many of the operational aspects of how the carriers are performing the operations themselves.
The Chairman: Do you agree with the conclusion that any effort to make long-term historical comparisons for the intercity bus industry could only be made using industrial revenues as the comparative index and then adjusting for inflation?
Mr. Baldwin: That is also complicated because there have been revenue changes, changes in tariffs and costs, and changes in inflation through time. There may be some legitimacy to it. I do not know if I totally agree with the methodology used in that submission.
Senator Callbeck: You mentioned bus surveys. What other statistics do you get besides passenger counts?
Mr. Baldwin: We have revenue information by product line and major expense elements of the carriers. We have some information on equipment they are utilizing, a bit of employment data and some fuel usage.
Senator Callbeck: How often do you do those surveys?
Mr. Baldwin: Most of the surveys are annual. There were some quarterly surveys, but most of them will be discontinued with this move to the new survey operations.
Senator Jaffer: Mr. Norris spoke about the increase in immigrants in urban areas. Although I am drawing some conclusions, normally immigrants do not have as much income as people who are born here have. Would you see an increase in the use of buses?
Mr. Norris: Like you, I am trying to think about the possibilities. On the one hand, our information shows that recent immigrants tend to have lower incomes, and there is an extent to which lower income would drive ridership.
The other thing to consider is whether or not, given that immigrants tend to concentrate in large urban areas such as Toronto, they may not have family in other parts of the country, in smaller towns. They may have less of a reason to take intercity buses, although they would use them certainly for travel and leisure. That might argue against higher rates for immigrants. It is hard the say how those factors would play out overall.
Senator Jaffer: Do your statistics say anything about the trends in income among residents of small communities?
Mr. Norris: I do not have that with me today. However, overall, the broad trends probably are quite similar to what I have shown today for the nation as a whole. We have seen, for most segments of the population, an increase in income in the 50s and the 60s and then that levelling off. The magnitude of the increase or the levelling off may be different. However, I think I am fairly safe in saying that the trend, even for smaller communities, is not different, with the one exception that perhaps it gets affected by the changing demographic makeup of communities. It would have an effect if smaller communities tend to be much more likely to be older communities with a higher proportion of senior citizens not active in the labour market. If we have the same demographic composition, the big trends would be more or less similar.
Senator Jaffer: Is there a noticeable difference in automobile ownership between residents in cities and those in rural communities?
Mr. Norris: I do not have that information handy. We could probably get it for you. I did not tabulate it today. I will not venture a guess. I will try to get it for you.
The Chairman: The Transport Canada orientation document shows a decline in intercity bus traffic from about 32 million in 1980 to about 14 million in 1999. Accepting that there are doubts about some of the data, would you say the broad trend is basically true or not?
Mr. Baldwin: Allowing for all the other things I said that made it difficult to quantify how big a decline there is, I would say, yes, I think there has been a decline.
The Chairman: Can you speculate from travel statistics how people who are too old to drive do travel between cities? Do you know if many are driven by friends and relatives?
Mr. Norris: I do not have that information. That possibly could be something that is changing over time. The rates at which older people have driven during their lifetime likely are increasing. The seniors of tomorrow will likely more often have driven their own cars when they were younger and may continue to drive as they get older. That may have the effect of them keeping up driving themselves, with a colleague or friend, on a visit. I do not have a firm time series to show that.
The Chairman: Based on the analysis you did for your presentation, would you recommend any further statistical research that would be useful for our study?
Mr. Norris: The one thing that I thought might be useful, and I tried to look at it a little bit, is something called the Canadian Travel Survey, where we survey Canadians. It is a recent survey, so unfortunately it will not provide a long history. However, one could look at that to get a little bit more information on the characteristics of people who use bus transportation.
The issue one is faced with is that that survey uses a somewhat different definition. We have talked a lot today about the problem of definitions and changing definitions, but taking that into account it is essentially looking for trips of 80 kilometres or more. It is a distance-based factor. It is probably not a bad proxy. The information from that survey might be of some use in trying to amplify the characteristics or confirm the information on the characteristics.
I did have a quick look, and certainly that survey supports the argument that it is young people and older people who have higher rates. Some of the work I just looked at yesterday suggested that rates were a bit higher in small towns than in large cities and in real rural areas. Some of that could be fleshed out more and might be of value to the committee.
Senator Callbeck: Do you have statistics on the various age groups between rural and urban, and is there much of a change, if you look back over the past number of years, with senior citizens in rural areas? Is that percentage decreasing or increasing?
Mr. Norris: The percentage of seniors in rural areas is increasing and is higher than in big urban areas.
Senator Callbeck: The percentage of seniors living in rural areas is increasing?
Mr. Norris: I am sorry. You are looking at the percentage of seniors living in rural areas, not the percentage of the rural area made up of seniors. You could cut the pie two different ways.
I would think, if you took all seniors in the country today, there is likely to be a higher proportion of them living in urban areas, simply because the urban areas overall have grown so much faster.
Senator Callbeck: I think of my own province. It seems that there are more seniors every day moving to Charlottetown and Summerside, to be near doctors and other services, more so than years ago.
Mr. Norris: I think you are right. However, if you look at the rural areas of P.E.I., and other parts of the country, there is a higher proportion of that area that is senior today than 20 years ago, even though seniors are moving in.
Your point is well taken. When seniors decide to move, they seem to be moving for family reasons. My neighbour told me that he moved from B.C. back to Ottawa because his grandchildren are here now and he wants to be close to them. That is a current phenomenon. Certainly, from a health perspective, there is moving to be closer to health services.
The Chairman: Mr. Norris and Mr. Baldwin, thank you very much. Please feel free to send us more information, if you have any, that could be helpful for our study.
The committee adjourned.