Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 22 - Evidence - Afternoon Sitting
MONTREAL, Wednesday February 20, 2002
The Standing Senate Committee on Transport and Communications met this day at 1:09 p.m. to examine issues facing the intercity busing industry.
Senator Lise Bacon (Chairman) presiding.
[Translation]
The Chairman: Honourable senators, while we await the arrival of the witness, we will turn our attention to the committee's budget for the year 2002-03. Budget papers will be distributed to you and if you have any questions, by all means you can raise them. Otherwise, we will proceed to adopt the budget. The process can then move forward with Internal Economy. What you have before you is a summary of the committee's expenditures.
[English]
We have various expenses in connection with the special study that we have started. We have included, in the special study expenditures, under ``Transportation and Communications,'' the fact-finding mission to Boston-Washington. We removed those items from the expenditures for the year 2001 and we included the fact-finding mission in our budget for April 1. We had envisaged spending $20,000 to $25,000 on this special study, that is, over and above what we have already spent, and what we will spend up to April 1st. You have the numbers before you.
[Translation]
Senator LaPierre: Do these expenditures correspond solely to this year's activities?
The Chairman: You have the two budgets, one covering the committee's activities for the year, and the other, any studies.
[English]
One item is, ``Application for Budget Authorization Special Study''; and the other is, ``Application for Budget Authorization for the Fiscal Year ending March 31st, 2003.'' I need a motion.
[Translation]
Senator LaPierre: The amount requested totals $70,000?
The Chairman: That is correct.
Senator LaPierre: That figure represents expenditures incurred by the committee?
The Chairman: Precisely, for special studies.
Senator LaPierre: And the other figure of $69,000?
The Chairman: That represents expenditures for regular meetings for the purpose of examining bills and conducting other business.
Senator LaPierre: If we need to undertake other studies, will we be able to use a special budget, or will we need to request additional funding?
The Chairman: We will request additional funding.
[English]
Senator LaPierre: I move that we accept these two budgets.
The Chairman: Is it agreed?
Senator Jaffer: Agreed.
[Translation]
The Chairman: Our witnesses this afternoon represent Transport 2000 Québec. They are Mr. Normand Parisien, Director and Coordinator, and Mr. Richard Beaulieu, transportation economics researcher. Welcome, gentlemen, to our committee.
Mr. Normand Parisien, Director and Coordinator, Transport 2000 Québec: Madam Chairman, we want to thank the committee for this opportunity to express our views today on this issue. Admittedly, we were somewhat surprised because we thought Bill C-77 had died on the Order Paper in 1999. It has now been resurrected in another form. This is not the first time a bill before the House of Commons for consideration has been referred to the Senate for further study.
Some time ago, we had the opportunity to discuss the challenges associated with the issue currently under consideration. Moreover, Mr. Beaulieu worked with me to gather a certain amount of information. Obviously, we have not explored this issue thoroughly, but we have been monitoring developments in this area long enough to provide a enlightened opinion.
Transport 2000 Québec is a non-profit association established in 1977. It brings together public transportation users in Quebec and is an ex-officio member of the group Transport 2000 Canada. It also is involved with other organizations at the international level. Our mission consists primarily of defending the interests of users of urban and intercity public transportation, to promote public and intermodal transportation.
The whole issue of deregulation has proven to be a formidable challenge for our organization. You have seen the results of an analysis carried out by government agencies. We concur in part with the findings, particularly as regards the decline in the use of intercity busing. A number of solutions have been proposed, among others, those put forward in 1992 by the Royal Commission on National Passenger Transportation. A decade later, the time has come to examine the ramifications of the policy arising from the work of the Hurdman Commission.
Clearly, the use of intercity public transportation has declined. However, to our minds, the analysis that has been done or the question that has been put by the government to the committee fails in some respects to answer the following question: Are regulations to blame for the decline in the number of intercity bus passengers?
We have every reason to believe that the answer to the question is no, because there has been a considerable increase in the number of automobiles and in automobile travel in Canada. The issue is fraught with economic considerations and the question of a link between current provincial regulatory regimes and a decline in the number of users of this transportation mode cannot be answered strictly on an ideological basis. Other factors must be considered, such as gasoline prices, or the availability of other modes of transportation.
Consider the following example which refutes the theory of a link between a regulatory regime and the use of intercity bus transportation. Despite the complete deregulation of the airline industry, access to regional services, whether in Quebec or in other Canadian provinces, has become increasingly unstable. Regions are abandoned when market forces are left to determine whether transportation services should be made available to the public.
Clearly, we need to seriously consider this question and to continue looking for answers before taking any steps to revisit jurisdictions for the purposes of deregulating certain areas for which responsibility was turned over to the provinces in the 1950s.
To our minds, deregulation has clearly been a failure when applied to intercity modes of transportation. Consider as evidence of this statement the US policy which has been in force since 1992, the same year the Hurdman Commission tabled its report. In the United States, a federal policy, the rural transit program, provides for the direct subsidization of rural public transportation modes. If the United States, even with its market forces at play, cannot provide transportation services to remote regions, how can we even think that Canada would be in a position to do so, Madam Chairman.
We believe caution is in order when it comes to the government adopting this approach to transportation policy. Perhaps we need to consider other kinds of federal-provincial cooperation with a view to improving transportation services. We would like to put the following question to you at this time: What steps can be taken to increase the number of intercity bus transportation users? The answer lies in the quality of transportation infrastructure.
Recently, I took the bus instead of the train to travel from Montreal to Quebec City. Obviously, my experience was quite different, given the winter weather and current highway conditions. The bus ride is so uncomfortable that often it is viewed as a last resort by many people. In my humble opinion, this could be one reason for the decline in ridership.
Another step would be to improve the overall comfort of bus passengers. In our opinion, the solution lies in a shift from automobile to bus transportation. The potential benefits of this shift have yet to be fully exploited. In our opinion, the government should recommend that direct support be given to improving the quality of vehicles and current infrastructure. Although the provinces and municipalities have been pressuring the federal government to build new roads, current governments cannot even maintain or rehabilitate the existing network of roads and highways. Clearly, the priority must be the rehabilitation of existing infrastructure with a view to enhancing passenger comfort and improving efficiency. Provinces and municipalities must contend with an aging infrastructure.
Making buses more comfortable is important if this mode is to attract more motorists. Much like the situation in the United States, public transportation has become a marginal mode of transportation. Virtually 90 per cent of all travel in the US takes places on highways, whereas in Canada, this figure is in the neighbourhood of 85 per cent. These are rough figures which would have to be confirmed.
Despite Canada's stricter user-pay policy, urban public transit remains a very popular mode of transportation, particularly in Montreal, Toronto and Vancouver, and to some extent, in Winnipeg as well. However, the popularity of intercity public transportation has declined and steps must be taken to reverse this trend.
From an environmental standpoint, initiatives to encourage people to make the switch from automobile to bus use could prove more effective than outright deregulation. The government, through Transport Canada, must have more control over vehicle emissions.
In a free market, maintaining profitability is critical, but as we pointed out earlier, this is a difficult proposition in Canada. Steps must be taken to prevent combustion engines or vehicles from contributing to harmful emission levels. Regulatory regimes must be harmonized nation-wide.
Madam Chairman, we recommend that the government address this matter by implementing the proposed measures.
The Chairman: Mr. Parisien, in the past decade, differences have emerged in the provincial regimes governing bus transportation. Do these differences hurt the industry or travelers, or are both sides adversely impacted? If you respond in the affirmative, what remedial action is warranted and to what extent should the government be involved?
Mr. Parisien: Having discussed this question, we feel the federal government must show some leadership in the area of policy harmonization. Provision must be made for awarding incentives. The U.S. federal government and Congress have demonstrated some flexibility on this matter. In the U.S., government institutions wield considerable authority over the administration of government.
Clearly, Congress, that is the House of Representatives and the Senate, have given the Department of Transportation room to maneuver in terms of providing services to the public, sustaining economic and social development and protecting the environment. With the introduction of intermodal policies, the I.S.T.A. and the Transportation Equity Act T-21, which was extended in 1998 until 2003, efforts in this area have increased in the past ten years.
Therefore, there has been some leadership shown on this issue. It is equally important for consumers and for the industry to be correctly informed of policies in effect. As the saying goes, no one should be ignorant of the law. It is important to be familiar with the legislation and with the corresponding regulations.
Our government must show some leadership on this issue and we encourage you to seize this opportunity to do so and to work toward broader federal-provincial cooperation.
[English]
Senator Oliver: You have made two basic points, first, that deregulation has been a total failure and, second, that what we should be doing is trying to find ways and means of facilitating the greater use of buses. When I think of what is important to me as an ordinary individual, I think of the cost of busing as compared to other modes of transportation. I also think of the speed of the vehicle, the comfort of the seats, whether food is available, whether there are accessible washroom facilities, and timeliness, that is whether it will arrive on schedule. These are some things that the average person would want. Therefore, my question to you is this: What is your answer to your own question? What type of things should we, as a committee, be looking at that would help facilitate more use of buses in Canada?
Mr. Parisien: The economics of transportation influences a consumer's expectations. Beyond the theoretical concept, there are some concerns regarding supply, transit supply, transit services. As for the infrastructure, the service level and the quality of service, there is a concept called ``cross-elasticity.'' Consumers react to variations in the price index, and there is price elasticity between transportation modes. If the cost of private transportation is lower than the public transit system's fare structures, there will be a high attraction to the use of private transportation. With regard to the issues of supply, that is, the quantity and quality of service, the same response as for the price variations would apply. There are many variables such as the comfort of the vehicle, and the level of service, to which consumers will respond.
It is not an easy task to define the best operations options. However, there are some directions that you might consider. Earlier we raised the issue of policy options for inducing that travel — that modal shift from the private use of transportation — causing consumers to shift from the use of private cars to the use of intercity buses.
We think the committee's responsibility lies more on direction than on the operations options. We must think about federal-provincial cooperation policies and programs that will inspire, such as the U.S. policies and programs for rural transit support in the United States.
Senator Oliver: You told us that rural transit support in the United States is subsidized.
Mr. Parisien: Yes. Overall, transportation systems are much more subsidized in the United States than in Canada. There is a stronger public support for transportation infrastructure or services as a whole.
Senator Oliver: You are saying that one of the things the committee should consider as a way of increasing the ridership of buses in rural or remote areas of Canada is to find a way to encourage Canadians to stop using their personal motor vehicles as much as they have been and to use public transportation.
Mr. Parisien: Yes. We need flexibility. However, we also need more coordination and cooperation between all levels of the administration, whether it be federal, provincial or municipal. Now that provincial governments are dealing with what was formerly a controversial issue, that is, the amalgamation of cities, there has been stronger regional cooperation, so perhaps they could set some directions to the Federal government for closer cooperation between different levels of public administration.
Senator Callbeck: You said that the federal government should give direct support for infrastructure. You then talked about better roads, and about improving the comfort of buses. Are you suggesting direct support to the transportation companies in order to provide better buses, or were your comments restricted to improving roads?
Mr. Parisien: We think it is very important to fine-tune any funding support. We have had experience with funding support policies and programs that did not work. We think it is very important not to disseminate funding for rural transit or for infrastructure and services before you set global criteria. That criteria should deal with inter-modalisim, energy efficiency, higher quality vehicles and other options. It is important to focus on effective criteria for supporting transit systems.
Mr. Richard Beaulieu, Director of Research, Transportation Economics, Transport 2000 Quebec: More than just the cost structure of a bus company is important. I am in urban planning, so I believe that the concept of a seamless interface between the person who wants to travel and the price structuring of the bus company is important. In an urban setting a person may want to, in certain situations, leave his or her car and take the bus for a certain part of a route. However, if our shopping centres, our cultural centres, and so on are conceptualized and built with the car in mind then, by definition, that excludes intercity bus or city bus transportation.
Perhaps a federal agency could facilitate the interface. The ultimate goal would be to create a seamless service for people to travel around in their surroundings. Their built-up environment must be more ``public friendly.'' Services should not have to rely on people having access to their businesses only with private automobiles.
Our population is aging, so people will more and more face the direct challenge of deciding which mode of transportation to use, not just intercity but within our big metropolitan areas, which amounts to the same thing as intercity travel.
It is more than just a question of cost structures; it has to do with the way we build or set the environment for the traveller.
Mr. Parisien: Of course, it is a jurisdiction challenge, because urban transportation comes under provincial jurisdictions. The key to national policies is the provision of an intermodal service. In that regard there must be better integration of our polices. There is room for cooperation to further the vision of our national transportation systems.
[Translation]
Senator LaPierre: I am having a little trouble understanding the reason for your opposition to Bill C-77. I assume that if the federal government confined itself to recovering the jurisdictional fields handed over to the provinces, you would drop your criticism and in fact support the bill.
If the government did in fact take this action, as it is fundamentally entitled to do, would Transport 2000 then support Bill C-77?
Mr. Parisien: Yes, but only if other avenues such as federal-provincial cooperation have failed. As we see it, that would be the ultimate solution, albeit not our first choice as solutions go.
The Chairman: You maintain that this is another attempt on our part to revive the legislation. That is not at all the case. You come to several conclusions or even suggest a number of recommendations to us. Since we have a year to complete our study of this industry, I do not think that you should jump to the conclusion that we want to revive Bill C-77.
Senator LaPierre: I understand.
Mr. Parisien: I was not referring to the committee's intentions, but rather to those of Parliament.
The Chairman: I was reading your communiqué, Mr. Parisien.
Senator LaPierre: You maintain that you are opposed to deregulation. Is that correct?
Mr. Parisien: Yes, because this option has proven unsuccessful in terms of providing services.
Senator LaPierre: I see. However, you have to understand that deregulation would not compromise bus safety considerations. Bus licensing would still be regulated, for example.
Furthermore, the licensing of bus drivers would continue to be regulated. Drivers would still have to take courses to obtain a license to operate a bus. No doubt the RCMP or the Quebec Provincial Police would also be involved in ensuring the industry operated safely.
Governments that subsidize the industry will take steps to ensure that certain conditions are met so that everything runs smoothly. There is not a great deal left to deregulate. The public would object to changes in these areas. Therefore, what were there be left to deregulate? Do you understand what I am trying to say?
Mr. Parisien: Madam Chairman, obviously there is not much left to deregulate as far as the intercity busing industry is concerned. We have seen first hand the effects of deregulation on the air transportation industry. Deregulation has been a failure. Even in the United States, airline companies are filing applications with federal authorities.
Total deregulation has led to some major problems. Therefore, we need to proceed with extreme caution before embarking any further on the road to deregulation. That is the main message we would like to convey to you today.
Senator LaPierre: Understandably, everyone will seek to obtain a license to operate a busing service. What will deregulation accomplish? It will create a huge, open market in which everyone will be on a level playing field. They will be able to charge whatever price they wish. Some basic areas, however, will not be affected by deregulation.
In an open market, if Intercar busing wants to operate province-wide, they will be able to do so fairly easily. Moreover, if they want to extend their operations to Ontario or to Victoria, in the absence of any regulations, the company will also be able to do just that.
A vast national coast-to-coast market will be created and consequently, everyone will make money. Your association will receive additional subsidies.
Mr. Parisien: We would like to believe that this utopian scenario would materialize, that it would be possible to provide cost-effective efficient services to everyone. However, since this has not come to pass in the United States, we have to seriously ask ourselves if this can possibly happen here in Canada. Even the U.S. federal government was forced to step in with its Rural Transit Program. It should be remembered that in Canada, intercity transportation comes under federal jurisdiction.
Even though market forces are much more dynamic and long-standing in the United States, no one transportation mode can meet its overhead costs. Even automobile travel is subsidized in the U.S. Clearly, we need to ask ourselves some serious questions. From an environmental and energy standpoint, will the U.S. be able to continue supporting this policy to subsidize transportation, in spite of having more means at its disposal?
Clearly, from a competitive standpoint, Canada finds itself at a disadvantage because it cannot sustain its transportation modes to the same extent as the United States currently does. This is a basic consideration at this point.
[English]
Senator Jaffer: I found your presentation most interesting.
If there is no deregulation, in your opinion will there be more investment from private industry in the busing industry?
Mr. Parisien: This situation is likely to arise whenever the federal government provides the opportunity to serve as the manner of last resort, like the Bank of Canada for monetary systems. It would be like seed money. The federal government can induce some investment patterns in the economy, while investing leverage money. There is room for private investors to increase investment in the transportation system. However, it calls for not only leadership, but also for seed money to allow the economy to benefit the population.
Senator Jaffer: What do you mean by seed money? Do you mean a partnership between the federal government and private industry?
Mr. Parisien: Yes. To us it sounds better to call it a partnership rather than deregulation. A partnership offers better options such as calling for better federal-provincial cooperation, and cooperation from the private industry as well.
[Translation]
The Chairman: Our next witnesses represent the Conseil régional de développement de l'Abitibi-Témiscamingue. They are Mr. André Brunet, Member of the Executive Council, and Ms Martine Rioux, Development Officer. Welcome to our committee. You may begin immediately, as this will give you enough time to make your presentation and field questions from senators.
Mr. André Brunet, Member of the Executive Council, Conseil régional de développement de l'Abitibi-Témiscamingue: Madam Chairman, I want to thank you very much for giving representatives of the Abitibi-Témiscamingue region the opportunity to speak to the matter under consideration.
Briefly, to let you know who we are, the Abitibi-Témiscamingue regional development council was established in 1966 after the region had experienced a number of transportation problems. Residents of the region had encountered some problems and one problem that everyone shared was transportation.
The first regional development council was founded in 1966. Later, the Picotte reform in Quebec in 1993 led to the creation of regional development council which were guaranteed funding. However, from 1966 to 1993, the council brought together primarily leaders from the Abitibi-Témiscamingue region.
From the outset, the council executive is been comprised of the majority of elected officials, namely reeves, mayors, school board trustees and health sector stakeholders. Members of aboriginal communities and community organizations also serve on the council executive. In essence, the council represents all citizens.
The mission of the council, if not its raison d'être, is to address transportation issues. We have expanded our actions into other areas, but transportation remains our primary concern.
As we see it, the government's approach to this issue ties in with deregulation within the train and airline industry. Over the years, we have been seriously affected by discussions on the deregulation of the busing industry.
To give you a brief historical overview, the Abitibi-Témiscamingue region was founded in 1910 in the wake of the passage of the Grand Trunk railroad which led to the development of the entire area. The first settlers arrived in the Abitibi region in 1910. Given that the territory's waters naturally flowed to the north — our region is located on the watershed — the arrival of the railroad contributed to the development of the region's natural resources and heralded the coming of the first settlers.
This area was developed as a result of a vision for this nation. The building of the Grand Trunk railroad gave rise to the vision to develop Canada's north, to settle the vast Canadian landscape and to exploit Canada's natural resources.
Earlier, I listened to conservative philosophies being expressed and I found them to be a far cry from the creative spirit behind the development of this region. I have to wonder if this is a move to wipe these vast areas off of the map of Canada. Compared to other large Canadian provinces, Quebec has historically settled much of its territory.
Yesterday, I drove here in a snowstorm. I drove for three hours in total whiteout conditions. During this time, I did not encounter another living soul. However, I would not move for all the tea in China. The Abitibi region is home. I consider myself a true Canadian just like everyone else.
Deregulation has had a disastrous impact on regions like ours. Just consider what has happened with air fares. Five years, a one and a half hour flight from the Abitibi region to Quebec City cost about $300. The cost of a flight to Montreal was approximately $250. Today, a flight from Val-d'Or to Quebec City would set you back $1,000. A one- hour flight from Val d'Or to Montreal costs $795. Moreover, one in three flights are cancelled. Schedules are totally unreliable and can change from day to day. Flights can be delayed anywhere from 20 minutes to half an hour. Schedules mean very little. Moreover, flights are regularly overbooked and passengers are forced to spend the night either in Quebec City or Montreal, even though they have reservations. This happens on a regular basis. Air travel has become virtually impossible in our region.
With respect to the railway, I was reading the Transport Minister's report. There is no longer any railway service despite what the minister said. There is only railway service from Senneterre and that is strictly for isolated aboriginal communities situated along that line. The line no longer serves Abitibi.
When Canadian National was sold, we almost lost the Canadian National Railway in the regions. This is a very important means of transportation for raw materials: for forestry, mines and minerals. This important means of transportation was saved by a Canadian National branch that has maintained its operations but that from year to year threatens to close them because they are not profitable enough, not because they are losing money.
There is therefore a whole region in Quebec that is currently threatened by this globalization and deregulation. It is as if we have arrived at a very linear vision of Canada. There is only one line left between Halifax and Vancouver and anything that is outside that line no longer has the right to exist and to continue to grow.
This deregulation is now threatening intercity buses. I am going to tell you about the history of transportation by bus in Abitibi-Témiscamingue. Since 1992, one operator has owned five different licences in Abitibi-Témiscamingue for intercity transportation. On the map one can see the main cities, but I would like to point out that in Abitibi- Témiscamingue there are 83 municipalities. There are only five on the map but there are 83 small communities with 200 to 40,000 inhabitants.
In this region one bus line is profitable, the Rouyn/Val-d'Or/Montreal line; all the other lines are unprofitable. In 1992, the Conseil régional de développement lobbied strongly to ensure that the licence owner for Rouyn/Val-d'Or/ Montreal also owned the licences for the other lines, that is the Senneterre/Rouyn line, the Ville-Marie/Rouyn line, the Amos/Val-d'Or line as well as the Amos/Rouyn line.
All those lines are currently unprofitable but the operator continues to operate this line because he is making a profit on the Rouyn/Val-d'Or/Montreal line. Try to imagine for one minute what would happen if tomorrow morning we said that anybody could operate those lines. I will bet you that no one would maintain the unprofitable lines. They would keep the profitable ones. They will therefore take the profitable part of the business and the other lines will cease to exist.
In a region such as ours, who travels by bus? I would tell you that it is the population in general, but more specifically elderly people who need health care, as well as students. People who live in Montreal or Toronto take the subway to go to university. We do not use the subway to go to university. Our people travel and they travel a lot. I can tell you that I come to Montreal approximately once a week. We need to come to the big cities.
Therefore, if we deregulate, what we are saying essentially is: ``Canada will only survive if it is economically profitable; what is not economically profitable will be closed.'' That is what we conclude when we see what is happening. What that means is that now Canada is something other than what it was, what that means is that we are fundamentally changing the philosophy that created Canada as it is. And as administrators, we are now only considering two columns: the input and the output columns, and we are completely forgetting about the human column.
The message needs to be clear. Then we will take our homes, we will move them and we will leave the regions. But doing it without telling us is slowly killing people off. The basic philosophy of Canada used to be: ``We must find ways of sharing the wealth so that people can inhabit this vast territory.''
There is only one deciding factor, which is cost effectiveness: be competitive in areas which are cost effective. If you take advantage of discounts, the trip between Toronto and Montreal may set you back between $95 or $100 for a plane ticket. But to go from Abitibi to Quebec City, that will cost you $1,000. That is a huge difference and yet the trip is longer by plane.
If we are basically changing the underlying philosophy in Canada by not redistributing wealth anymore, we may have to compensate for this, over the next few years, by subsidizing transportation companies. This is more or less what happened in the United States after deregulation. Americans like to brag that they believe in the markets. We will have to do what the United States did: compensate transportation companies with subsidies.
However, we do not quite trust that formula and we do not completely agree with it. That type of solution always depends on the good will of the government, and if there is the risk of a deficit, subsidies are cut. The situation can change completely from one day to the next.
We do not believe the solution for the future lies in paying subsidies to non-competitive transportation routes in order to make way for free enterprise and open competition. We have a solution — albeit not a perfect one — which would, for now, allow us to continue to provide transportation to our students and patients who need specialized care available only in town.
There are no radiotherapy services available in Abitibi-Témiscamingue. People need to go elsewhere to receive that type of treatment. I will not go into details. This transportation route connects that region with the main transportation route in Canada today, the Vancouver/Halifax route. There still are a handful of links which connect us and ensure our survival. But if we do away with that route, it will be impossible to live outside of the Halifax/ Vancouver line.
Canada's basic creative generosity lies in the redistribution of wealth to ensure that all citizens have access to an equal level of service across the country. The message has to be clear. We have to hear this with our own ears. If it is true that that idea is an anachronism which has no future, please tell us.
The Chairman: What you say does not leave me indifferent, Mr. Brunet. God knows that in the past, when I was in charge of regional issues, I was well appraised of many issues, including that one. Let me say from the outset that we have not yet reached any conclusions in the course of our study. We still have not decided on what recommendations to make to government. Our main focus is the passengers. We are trying to find solutions to help people who take the bus. I think that will be the leitmotiv of our study and our work.
I just wanted to say from the outset that we are not leaning towards one side or another. Our main focus is on the people who take the bus. We will continue to study the situation until we can reach certain conclusions. But we are not there yet. Do not put words into our mouth, Mr. Brunet.
I want to know if there are alternative solutions. Bus services have an impact on interurban transportation. You mentioned the huge impact it had on the overall development of your region. Do you believe a secondary transportation system could help promote regional development? I am talking about a real secondary transportation network.
Mr. Brunet: The Conseil régional de développement de l'Abitibi is very interested in what is called secondary networks. For us, a secondary network does not refer to Amos-Val-d'Or, or La Sarre-Rouyn. A secondary network would involve providing services to everyone living in the 83 small communities in Abitibi-Témiscamingue. The way they appear on a map resembles a fishnet covering the entire Abitibi-Témiscamingue region. This represents an agricultural zone encompassing 83 municipalities.
We have worked closely with people from each of these communities and our current focus is to try to understand their needs. We have concluded that for small villages with a population of 200, 300 or 400 citizens, the problem is not one of regular and predictable transportation services. Elderly people living in these smaller communities are often concerned with accessibility to health care services, but not necessarily on a regular basis. They are basically insecure because they do not know when they will need that type of service. We realized that the solution does not necessarily lie in creating a network of regularly scheduled buses which would run between these communities. We need a system which is much more flexible to meet these people's needs.
People feel insecure and their needs are unpredictable. We are currently working on creating a needs-based network to address the issue of insecurity amongst the elderly people living in the small communities in the entire area.
For young people, the problem is how to get jobs. As it now stands, a young person living in one town who wants to work in another town cannot get there. This is a problem for young people who realize that they cannot get work because they have no means of transportation. These people need a car to get to where the jobs are.
We are looking at a different approach for young people than the one we have taken for the elderly, namely a system based on a regular schedule. Young people have two needs: the need to work, in other words, a regular schedule, and a need for recreation. So young people need a little more flexibility.
A lot of work needs to be done to connect the entire territory. But no matter what approach we take, we cannot expect to reach the break-even point. We will need to find a system which includes partial subsidization of the costs involved. We cannot aim to be cost effective because we do not have the population density required to that end.
That is why I said that the idea of cost effectiveness — if that is the only solution — will cause huge organizational problems.
The Chairman: It is dehumanizing.
Mr. Brunet: A segment of the population is being ignored. We are shunting it aside and causing it to disappear.
[English]
Senator Callbeck: You mentioned that some 83 small communities in your area are currently serviced by bus, and that one is not, and that only one bus route is profitable, the route to Montreal. In spite of that, the bus provides service to these other areas.
[Translation]
Mr. Brunet: The only cost effective bus route is the one between Rouyn, Val-d'Or and Montreal. But the operator of this line must also service the La Sarre/Rouyn and Amos/Rouyn lines. The service basically transports people from the north and people from the south to the two towns in the middle, and those routes are not profitable. But the route to Montreal is. Around each of those towns lie 83 municipalities which are doing their best to provide transportation to those towns, to provide a bus service to get to the other town. So, there is a kind of network-subnetwork involved here.
Ms Martine Rioux, Development Officer, Conseil régional de développement de l'Abitibi-Témiscamingue: I would like to clarify the situation. We signed a contract. That is, we presented our case to the Commission de transport du Québec in our capacity of Regional Development Council. In 1994, the operator's licence had to be renewed.
The position we took, as a region, before the Commission de transport du Québec, was that the operator should be based in the region, in other words, that it should be headquartered there. But, more importantly, the operator must provide the service for the entire territory, since there is no other choice, and service the profitable route because it will help the company finance less profitable networks.
That position was defended at the Commission de transport du Québec and that is why the network was not dismantled. The network was transferred in its entirety to the operator. The operator is now working under these conditions. We know full well that some lines are less profitable, but the operator is providing the service because of the agreement reached by the region, the Quebec transit commission and the operator. It works well that way.
If deregulation comes to pass, the Quebec transit commission would no longer have a raison d'être. Agreements like the one we currently have would no longer be possible. A new carrier or an operator would come in and only take over the profitable route, as he would be entitled to do, and that would completely destroy the network. And even our current operator would do the same thing, because he would no longer be required to provide the service.
It takes an hour to go from Amos to Val-d'Or. People are not close by; that type of system cannot be easily replaced.
[English]
Senator Callbeck: You believe that with deregulation that could possibly lose everything you have. Are you talking about charter buses too, or just intercity buses?
[Translation]
Ms Rioux: With a catchment population of 150,000 people, the transportation company provides a host of attractive services, including charters and paratransit in certain cities. The company also provides intra-urban transport in certain cities, and by that I mean city bus service in Rouyn-Noranda and school bus service. This is a transportation company with a head office in our region and with which it is easy to do business. This situation would become highly complex if the network were dismantled, in other words, its cross-subsidization or business plan would be much more complex.
[English]
Senator Callbeck: Do you think the bus fares are reasonable?
[Translation]
Ms Rioux: It is always onerous, fuel costs do not decrease, and transportation costs are always high. However, when we look at what exists, it is the most effective service, the most flexible and the best adapted. When a plane does not leave Dorval, we can currently count on the bus. With respect to costs, we are talking about young people, people who cannot afford safe vehicles in good condition, because you need vehicles in good condition to use a road network where fuel is difficult to supply. People need to have good vehicles. Buses remain the most affordable means of transportation.
Senator LaPierre: Is the bus fare regulated by the government or the Quebec transit commission?
Ms Rioux: You are going into great detail.
Senator LaPierre: Do you know the answer? That is fine, we will find the answer to that question.
Ms Rioux: You will surely be able to find the answer.
Senator LaPierre: But an operator has the Val-d'Or-Montreal route; serving the small neighbouring communities is part of his permit and he uses the profits from the other route to offset his fees.
Mr. Brunet: It is called cross-subsidization.
Senator LaPierre: Is the situation the same if people just want to go from Amos to Val-d'Or, for example, and not to Montreal?
Mr. Brunet: Yes.
Senator LaPierre: So in reality it would be ludicrous to deregulate the network! That has been done for a long time. History will show us that the most serious social problem of the past 20 or 25 years has been deregulation and privatization.
Under the Charter of Rights and Freedoms, portability and mobility are fundamental rights Canadians have. They have the right to be transported and the right to transport. Are we not interfering with this right set out in the Charter of Rights and Freedoms by not giving regions, like yours, the means they need to respect the fundamental rights of people who live in your region? This is not philosophical, it is very real.
Mr. Brunet: Your question is very tempting, and I have little difficulty agreeing with you. But I am not necessarily qualified to tell you that constitutionally, it could be interpreted as a breach. However, with the question as you worded it, I am inclined to say yes. It is rather easy for me to say that.
Senator LaPierre: That makes transportation a societal need rather than an economic matter. Here is my final question. If we leave Val-d'Or-Montreal and the neighbouring routes to the operator, there will still be 83 communities that will not necessarily have service, is that not correct?
In your opinion, would it be a good idea for the committee to recommend assisting the Abitibi-Témiscamingue Regional Development Council by giving it what it needs so that the council can set up its own transportation network in the small communities?
Mr. Brunet: Again, this is very tempting. You are very good at tempting me. But I would point out that that is not at all how we work. We are currently working on the territory of each MRC. For example, all of the municipalities around Amos are currently experimenting. We have agreements with the Department of Transport. There is a kind of funding. The NPO was set up to manage the flexible transportation system that I mentioned earlier. And we are currently seeing some interesting developments.
There is another experiment with a different approach in the Val-d'Or region. But it is at the MRC level in the region around Val-d'Or. The Regional Development Council is a consensus-building agency, not an implementing agency. We work with them a lot. Service is gradually being set up for seniors and young people.
If the federal government were to invest in the project, I would say yes, it is a good idea. I recommend that you make that recommendation. However, we are currently working on some good projects with the Quebec government and the Department of Transport.
Senator LaPierre: I must point out that earlier on, when I was arguing for a free market, Sir Wilfrid Laurier said to me: ``Come on, you have become a complete idiot!''
Mr. Brunet: He told you that? Just how old are you?
Senator LaPierre: He told me that today.
Mr. Brunet: When I was making my counter-argument, I also thought that I needed to exaggerate a little to get my message across, as you did.
Senator LaPierre: I always do that.
[English]
Senator Callbeck: My next question relates to parcel service by bus. If you required a parcel to be sent to you from Montreal, would you request that it be sent by bus, by Parcel Post, or by what means? Is the bus service in your area frequently used to deliver parcels?
[Translation]
Mr. Brunet: There is a bit of everything, for example, companies like Purolator and the Post Office. We also have the bus which, in many cases, can recover its costs on inter-regional routes for example, because it delivers a lot of parcels among the municipalities. It is a combination of these aspects. Parcel service is in fact a major source of revenues for transportation companies that need to make up for shortfalls in other areas.
[English]
Senator Callbeck: Does it cost a lot more to get that parcel from Montreal by bus rather than through the post office?
[Translation]
Mr. Brunet: The transportation costs between mail delivery or bus parcel service are highly competitive.
[English]
Senator Callbeck: The bus is much faster. Thank you.
[Translation]
Senator Biron: Do you know if the transportation company is subsidized?
Mr. Brunet: For the bus service, the company does not receive any subsidies.
Senator Biron: There are no subsidies. Approximately how far is it from Val-d'Or to Montreal?
Mr. Brunet: I would say about 550 to 600 kilometres.
Senator Biron: Do you know how much a one-way ticket to Val-d'Or costs?
Mr. Brunet: I cannot answer that question.
Ms Rioux: I think it is $84 for seniors, but I would have to check that.
The Chairman: Thank you, Ms Rioux, we appreciate your testimony very much. I can assure you that we have not reached any conclusions yet. We have a lot of time before we reach that stage. And do not hesitate to send us any additional information you may have.
Mr. Brunet: We are very hopeful about your work, and we think that someday logic will triumph.
The Chairman: As you know, the Department of Transport has been talking about doing this study for 20 years. Now it has been assigned to the Senate, so we are trying to be as expeditious as possible. At the same time, we must take the time to meet with people, to hear from them and to make some good recommendations. I thank you very much indeed.
Ms Rioux: We made a presentation to the Board of Directors before coming here in order to hear people's concerns. This remains a very important issue. And people are pleased to have an opportunity to express their views to committees such as yours about the impact policies have on them.
The Chairman: Thank you very much. Our next witnesses are Mr. Romain Girard, the Executive Vice-President of the Quebec Bus Owners Association, and Mr. Roger Gervais, the president of Motor Coach Canada Incorporated. With us as well are Mr. Sylvain Langis, the president of the Canadian Bus Association and Mr. Brian Crow, the Director General of the Ontario Motor Coach Association.
Welcome! We will hear your presentation and I am sure my colleagues will have many questions to ask you. We will hear again the questions you asked of our earlier witnesses, but which were more appropriately directed to the group of witnesses we have before us now.
Mr. Sylvain Langis, President, Canadian Bus Association: Madam Chair, we would like to thank you for inviting us to appear before you today in the context of your study on the bus industry in Canada.
We would like to make a few preliminary remarks and explain why there is such a large group of us here today. As you just said, I am Sylvain Langis, the president of the Canadian Bus Association, and I have with me a number of representatives from various bus associations in Canada. With me are people from the Bus Owners Association and the Ontario Motor Coach Association, which represents the operators of charter and tour buses.
[English]
Collectively, we represent scheduled, tour and charter, sightseeing, airport shuttles and privately owned transit bus carriers operating intercity passenger services throughout Canada.
We account for a significant portion of total intercity bus industry revenues, employment and utilisation of motorcoaches. The fact that we are appearing as a group is not accidental; in fact our joint submission represents something of a watershed in the history of intra-industry relations in Canada.
In the wake of Minister Collenette's decision to remove the economic regulation provisions of his proposed amendments to the Motor Vehicle Transportation Act, due to the lack of consensus within the industry and across governments in Canada, we began to explore ways of bridging our differences in order to build consensus. We did this because, to be perfectly blunt, we felt it was in our best business interest to do so. The way in which governments, both federal and provincial, regulate our industry is obviously of vital interest to us, and we simply decided that we needed to be part of the solution.
[Translation]
We think our common position on the major transportation issues will help you review the situation quickly and make some appropriate recommendations to the minister who is about to table a master plan on transportation for Canadians.
At the end of this consultation process, we hope that there will be some intelligent rules governing bus transportation and a better understanding of the role played by our industry within the broader passenger transportation sector in Canada. It is crucial that the government define the regulations, ensure their application and determine the roles that should be played by the various means of transportation if we are going to meet the needs of the travelling public.
On the other hand, we can offer safe, reliable service to the public while operating viable companies. Our industry has evolved and diversified. Our companies contribute to the Canadian economy by providing jobs in tourism and regional development. We also make a more general contribution by providing safe, environmentally-friendly transportation for our fellow citizens.
[English]
At a time when alternate modes of transportation are under economic pressure and depending on government financial support to maintain their services to the public, the intercity bus industry can continue to be counted on to provide efficient, reliable, flexible and economical service to the travelling public.
From a policy point of view, we have based our recommendations to you on a set of six basic principles. These are set out in our written submission, but I think they merit reference, for the record, here today.
A bus regulatory regime must, as a first principle, meet the highest practicable safety standards. This regime must also be enforceable, and enforced consistently, uniformly and visibly by government. A bus regulatory regime must also serve public need and convenience. As a fourth principle, it also must be fair, simple and understandable. The regime must allow for innovation, and finally, be competitive with other modes and within the mode.
As long as these are the basic principles informing bus policy, we think public interest and private enterprise will both benefit. Indeed, adherence to these principles in the development of policy will, we believe, render rather sterile the debate over whether or not the industry should be regulated. Regulation or deregulation is not the fundamental issue. 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 enunciated.
[Translation]
Our brief describes in detail the points essential to the success of any regime. We do not intend to repeat all of this in our opening remarks, but we are quite prepared to discuss with you our analysis of the situation and our related recommendations. We are more than happy to provide precise answers to your questions to correct, once and for all, some of the popular myths that unfortunately surround the development of our industry over the last 30 years.
[English]
Mr. Langis: We are all here to answer your questions.
[Translation]
The Chairman: Mr. Langis, is economic regulation of the industry still appropriate?
Mr. Langis: That is a short and profound question in itself. We are not here to tell you whether or not to deregulate the industry. In fact, we are here to ask you if there is another way or another method that would be better than what we currently have.
We are not necessarily defending the status quo. We know that some companies in Canada that have to cross the territory of different provinces have to deal with different systems from one province to the next, in terms of administration.
Having said that, these systems have not impeded passenger mobility; to date, they have never prevented people from being mobile. Except that there is often an administrative burden when you do business according to certain rules in one province and different rules in a neighbouring province.
There is no magic solution. A system has been in place since the late 1920s, with a system of regulations and that over the years has made it possible to meet the needs of the various Canadian provinces in terms of serving the regions and the major routes.
On one hand, if we were to deregulate, would everyone try to move into the main corridor, for example, Quebec/ Windsor, and decide to drop the other services offered elsewhere in Canada? We do not know the answer to that. We have some doubts as to what would happen. And we have to be careful, because our definition of intercity passenger service includes to a larger extent what we call scheduled services.
There is also suburban transport, charters, and shuttle service to the airports. There are a host of other transportation services that, over the years, have grown. I know that you have been told about certain aspects. Some say there has been a decline in intercity ridership. But when you look at the broad definition of people who have travelled from one city in Canada to another, the people who provided you with this information got it wrong. Because what we have seen is much more an increase in ridership Canada-wide. I think you have already been given the document we are referring to, one that indicates an increase in the volume of passengers, not a decrease.
The Chairman: Mr. Langis, you mention the differences that have appeared in the provincial systems governing bus transportation over the past decade. Have these differences been detrimental to the industry or travellers, or to both groups?
Mr. Langis: I would perhaps invite others to step in if they would like to do so. I told you earlier that so far the people who have been the most affected are probably the businesses that have to deal with different administrative systems. But to the best of my knowledge, it has never had a negative impact on people's mobility or on passenger transportation. Passenger movements from one province to another have always been very transparent.
The Chairman: Do you feel any remedies are necessary? You were saying that it is having a detrimental effect on the industry. And if a remedy is required, how should the government resolve this problem?
Mr. Langis: In the 1950s, one level of government delegated its authority to the provinces which have learned a lot about passenger transportation on their territory, somewhat to the detriment of what the federal government has been able to learn in this area, especially over the years. And the federal government is wondering if it should take back jurisdiction in this area.
Perhaps, but it will have to do its homework to do so, and take the time to fully understand the issue. This is not necessarily the case at present.
The Chairman: You do not think it is ready?
Mr. Langis: Ideally, it would be much easier if we had one system or economic framework in which we could provide services for all Canadians, on the administrative level. But I think we will be missing the real issue if we focus our efforts solely on that aspect. I think we also have to ask the following questions: in geographic or socioeconomic terms, what kind of transportation system do we want to serve all Canadian citizens? Do we want a system that will, first and foremost, serve people living in the most populated areas? Do we want a different system for people living in less populated regions? Do we want a system that will be similar and equal for everyone?
We do not necessarily have the answer to those questions. I think that is the mandate you have been given. And we would certainly not want to be in your shoes when it comes to drafting the recommendations that you will have to pass on to the minister.
[English]
Senator Oliver: I would like to ask a different kind of question, which I would base on one of the reasons you state that you have come together as a group today. We are a public policy-making group, and our job is to come up with ideas, recommendations and suggestions for government that will be in the public interest and assist all Canadians. Why would you come together as a group? In terms of good public transportation policy, we have to know what is convenient, what is needed, what is timely, what is inexpensive, and whether it is safe for all Canadians, particularly those living in remote or rural areas.
One of the things that we have heard during this couple of days of hearings is that there is, in fact, an interrelationship between a number of carriers and that, automatically, to me, raised an issue of conflict of interest.
Can all of you explain to me the relationship between the intercity scheduled bus industry, the charter bus industry, and the school bus sector. If there is cross-ownership, does it give rise to a potential conflict of interest that would not be in the public interest? I personally believe in the marketplace, but if you are all coming here as a group, and you are working together, sharing on the price of your diesel fuel, sharing equipment, sharing data and computer systems, and acting as a whole, where is the competition and how is the consumer being protected?
Mr. Brian Crow, President and Chief Executive Officer, Ontario Motor Coach Association: There is competition in our industry. When we talk about interlining, that is, to go from, say, Halifax to Toronto or Vancouver, people travel by way of three or four different carriers. You may start with SNT, go to Orleans Express and transfer to Greyhound. These companies are not competing. They work together and they interline.
Senator Oliver: Is that at any extra cost to the consumer?
Mr. Crow: No. In fact, I think there are economies gained by that to the consumer.
Those carriers have to share point-of-sale software, so that when the consumer purchases the ticket in Halifax, he can buy that ticket all the way through to Toronto, regardless of the carrier, to make it seamless. We do not view that as being against the public interest, not at all.
Mr. Langis: You also alluded to the fact that some operators are in school bus operations and others are in the charter business. There is not necessarily a relationship between the school bus operator and the intercity bus operator, except for those that own a company in which they are involved in the different segments of the industry. They could, for example, use the same garage facility and the same mechanics to maintain the school buses and the intercity buses, but that is just productivity, it is not unfair to the public. To the contrary, this just helps bring the price of tickets down.
Mr. Crow: There are different segments of our industry. You have identified the school bus segment and earlier you identified the intercity industry. Many companies serve all of those markets or some of them. We are not homogenous. We are quite diverse in some cases. You will find a particular company that offers scheduled service and charter services; and some scheduled services will offer parcel express and some will not. Some carriers operate school buses and charter coaches, but not scheduled services. Some operate municipal transit under contract, interurban transit under contract to municipalities.
Our industry is quite broad, but there is a fair bit of competition within that to make sure we serve the public.
Senator Oliver: In your brief you say that regulation or deregulation is not the fundamental issue. It seems to me that, if two or three small bus companies were competing with each other in a particular area, the consumer would ultimately benefit by having lower fares, perhaps better quality equipment, and more timely schedules, since the consumer will gravitiate towards the best service.
I note that in one of the conditions in your paper you use the words, ``public necessity and convenience.'' Those terms are normally used by our public utility boards or our public boards to keep others out. I was a little bit surprised by your use of that language. However, you have explained that.
Mr. Crow: The ``PN & C'' term has been around since 1929. That has been the basis or the foundation of the regulatory system. It varies in that, in some provinces, it is a reverse onus test and in some it is not. It has been around for a while and we continue to use it. That is what the regulatory bodies usually follow, depending on the province. We use the term because that is what we are governed by.
You had another part to your question about competition. It varies between the scheduled market and the charter market. I recognize that you have a lot of terms thrown at you. I do not know of too many communities where there is not more than one carrier offering charter service. In Vancouver, 101 companies in the Yellow Pages offer charter services out of Vancouver. The charter market in most areas has more than one carrier, and that is based on the market demand, the the demand of the consumers.
There is competition in the scheduled service in certain areas. In other areas there is only one bus company, but that does not mean there is no competition. If there is only one bus company on a line, perhaps that is all that market will serve. There is always competition with the private car. There is competition with rail in many of those areas, and there is competition with air, but our main competition is the private car. There is not an area that does not have competition of one form or another.
Senator Oliver: Should our committee have any concerns about cross-ownership?
Mr. Crow: In my opinion, you should have no concern on that. I think it is a benefit to the consumers because, as Mr. Langis just said, some of the carriers that are running school buses can use the same garage and the same maintenance facilities to fix their motorcoaches. We can use the same drivers in peak periods. If there is a shuttle or you have a convention in Montreal, those line-run carrier drivers can run the shuttle services at night, and so forth. That overlap, if it is such, is beneficial to the public. I do not see a problem to the public in cross-ownership.
Mr. Langis: In fact, an intercity bus company, which provides 90 per cent of the scheduled bus service, also has charter licences. It will maximize utilization of the equipment and the manpower to bring down the cost of that equipment, to depreciate the cost of that equipment.
Senator Callbeck: You list several things in your brief that you feel should be in a bus regulatory regime. You provide scheduled services, tour services, charter service and intercity service. Is it possible to regulate one and not another? Could we deregulate the charter service and maintain the regulations in the scheduled service?
Mr. Langis: You may think that this could be easily applied, but we believe it could not. If you have a dual regime like that, you would get friction within the industry. To take your specific example of regulated scheduled bus services and deregulated charter bus services, some companies would say, ``No, no, no. We are not on a scheduled service today. We are on a charter service today.'' You would get friction within the industry and within the system by having a very difficult way to enforce what is regulated and what is not.
Mr. Crow: Let's say that a scheduled carrier offers service between Quebec City and Montreal 10 times a day. If you deregulate the charter service, a charter operator could charter a motorcoach to a travel agent in Quebec City who could set up daily service every day to Montreal from Quebec City. From the bus carrier point of view, that is a charter. He has chartered his coach to a travel agent. The travel agent could operate 10 trips a day between Quebec City and Montreal. By law that would be a charter, not a scheduled service.
How do you deregulate one and not the other?
Senator Callbeck: Is you position that you want them all regulated or all deregulated?
Mr. Langis: We believe it would be easier to track the system and to ``police'' it, if I can use that word, if it were all under the same regime.
Senator Callbeck: I am told that there is money to be made in the parcel service but, yet, I do not see any enthusiasm or anybody jumping up and down to do that. If there is money to be made, why isn't the bus industry going after it?
Mr. Langis: We do go after it very strongly. It is very difficult to compare it to what UPS, Federal Express, or other the big parcel companies do. In the country, the revenues to the bus industry from the bus parcel services is around $110 or $120 million yearly. We are running after it. In fact here in the province of Quebec we are reorganizing the system so that it will be a much more aggressive player in the years to come.
Senator Callbeck: Are you spending money promoting this?
Mr. Langis: In the past few years the system has not been advertised very strongly, mainly because most of the transportation companies or the motorcoach companies have been concentrating on the infusion of cash to substantially improve substantially the transportation of passengers.
At this point in time, there is a reorganization of the parcel services, which have never gone down anyway, in order to attract a bigger portion of the market.
Mr. Crow: Senator Callbeck, may I add, I think it started in Alberta when Greyhound developed trailers to run behind the motorcoaches with the specific purpose of transporting parcels. That has expanded through the West and now we have those trailers in Ontario. It is a growing market and they are adapting to that growing market by putting on trailers and making it convenient. They do not affect passenger transportation and they make it easy to haul parcels. It is growing, and we are adapting.
Mr. Langis: Currently, we are finalizing our discussions with Transport Quebec in order to be able to use the trailers in this province, so that we can go from Western Canada to the Maritimes with the trailers, and that will help us to increase our market.
[Translation]
Mr. Romain Girard, Executive Vice-President, Quebec Bus Owners Association: Two aspects must be added for Parbus or courier service. Bus transport is handicapped by pickup and delivery service. We cannot offer this service in town unless there is an additional supplier at the origin and destination to take care of pickup and delivery; this limits our competitiveness in this market.
Moreover, it is quite easy to imagine bus services with packages in the baggage hold travelling between two large cities. We drop off the passengers, and then look after the packages. But in a large corridor with 40 villages, we will stop in each village, open the baggage hold, make the passengers wait and drop off the parcels. And our driver will close the baggage hold, put on his jacket, and get back behind the wheel. It sends a bad message to passengers in some circumstances, but it is necessary to ensure the industry makes a profit.
Senator Biron: In recommendation 9 on taxation, you propose introducing a fuel tax rebate for intercity bus service similar to the current practice in the United States. Would a fuel tax rebate like that for all companies not result in companies in more profitable areas seeing their costs decrease? Would it not be better to provide subsidies in rural areas?
Mr. Langis: Not if the same transportation company provides service in the busier corridors and the rural region. It is first and foremost a tax incentive for the transportation company. Bear in mind that this recommendation was also made based on discussions in Kyoto.
If we have to reduce our greenhouse gas emissions, buses are a very efficient and clean mode of transportation in comparison with all other modes of public transportation, including the train and the plane. Our pollution levels are much lower than they are for the other means of public transportation. What is more, each bus trip makes it possible to substantially reduce the number of cars on our roads that pollute the air we breathe.
This recommendation was made first and foremost to include buses as a way of reducing our greenhouse gas emissions in the busiest corridors. Moreover, by allowing this tax incentive, we also allow bus transportation companies to maintain lower public transportation service costs, by taking into account the fact that there is a rebate.
Obviously, this type of system has some give and take. That is quite understandable. However, a tax regime that would allow us to recover a portion of the taxes on fuel would be a positive initiative and would encourage the use of public transportation. It would allow carriers to invest much more quickly in their fleet of vehicles and to offer better service and a better level of comfort to passengers who would then be more inclined to use the system.
Mr. Girard: The public transportation tax credit or gasoline tax rebate was brought in 17 years ago in Quebec. The urban carriers buys his gasoline at the regular price for city bus service, paratransit services throughout the region and intercity public transportation. At year's end, the carrier calculates the overall number of kilometres travelled while providing public transportation services in Quebec and receives a gasoline tax rebate.
The amount of the rebate varies, depending on whether the gasoline was purchased in a regional or urban area, given that taxes vary across the province. The tax rate is different in peripheral or northern regions and in the heart of the provinces were the major highways are located. The rebate was introduced as a means of promoting public transportation and to offset major fluctuations in gasoline prices in the early 1980s.
My second comment relates to a question raised following an earlier presentation. The question concerned the method used to set rates. In Quebec, carriers propose fares to the Quebec Transport Commission. The Commission examines these proposed fares and checks to see if the carrier is entitled to the gasoline tax rebate. It can also examine the carrier's financial statements to see if it is operating at a profit or at a loss. The Commission then rules on the proposed fares, taking into account the amount of the fuel tax rebate.
Senator Biron: What is the price of a bus ticket from Val-d'Or to Montreal?
Mr. Girard: The price of a ticket to travel from Val-d'Or to Montreal is $60, not including two different taxes. The round-trip fare is double that amount, less a 25 per cent discount. As the representatives of Intercar explained to you this morning, students, seniors and charters are also eligible for rebates. A round-trip ticket from Abitibi to Montreal costs around $100, if a person makes the trip within the same week.
Senator Biron: Do you have any idea of what the fare might be to travel from Montreal to Toronto?
Mr. Langis: I believe the fare is currently $85.
Senator Biron: For a round-trip ticket?
Mr. Langis: No. If my memory serves me correctly, the round-trip fare is either $113 or $123. The one-way fare may be a little lower, somewhere around $70 or $71. When a passenger purchases a return ticket, and undertakes to travel within a certain time frame, a discounted fare is available. Certain economies of scale then come into play. Unfortunately, such a broad range of fares applies that it is difficult to recall every single one.
Senator Biron: I simply wanted to get some idea of the fares. It works out to around the same price per kilometre.
Mr. Girard: Exactly.
[English]
Senator Oliver: Are there special discounts, as well, for seniors and for the disabled, on top of that discount?
Mr. Langis: At all times on the network across Canada you will find special fares for students, seniors and disabled persons. In Quebec, and I do not know if this applies to other provinces, usually a disabled person or a mobility impaired person can travel with ``une personne qui l'accompagne,'' a companion, and the companion travels free. The mobility impaired person would pay the regular fare. It is two persons for the price of one.
Mr. Crow: Some companies offer a 10-ticket pass. It is more of a commuter ticket system, so that, if you are travelling a number of times in a week or a month, you can benefit from that discount.
[Translation]
Senator LaPierre: When you state that ridership has not declined, that may in fact be true if we consider the all of the various components of your industry. Has the level of service on intercity routes declined or increased?
Mr. Langis: There is quite a history behind all of this. Moreover, it is difficult for us to paint you a perfect picture because the definition of intercity or schedule bus transportation has radically changed over time. The procedure for collating information has changed so much over the years that it is no longer possible today to compare apples with apples.
However, to answer your question in the simplest possible terms, I would have to agree that over long-haul routes, that is distances of 400 or 500 kilometres, bus ridership has declined, with passengers shifting to air travel as their preferred mode of transportation, for reasons that are well known, such as speed.
Ridership on shorter intercity routes has definitely increased. We have the figures to prove it. Over the past five years, my company has seen ridership increase anywhere from 27 per cent to 30 per cent.
Senator LaPierre: Have your associations done a study comparing the state of the industry in those provinces where bus transportation services have been deregulated. I believe this is the case in five provinces.
Mr. Langis: We have provided you with that information.
Senator LaPierre: Mr. Girard, you receive a fuel tax rebate. Is that correct?
Mr. Girard: Correct.
Senator LaPierre: You use this rebate to do what the carrier operating on the Val-d'Or-Montreal route does, that is you rely on overall profits to provide service to all of the smaller regions that are presently under served. Miracle of miracles! All that remains for us to do is fold up our tent and slip quietly away. The problem is resolved.
Profits generated on the lucrative Val-d'Or-Montreal route are used to help the other four municipalities. Is that not correct? The members of your association do the same thing across the province because they receive substantial fuel tax rebates. The government gives them the gift of a rebate and they return the favour.
Mr. Girard: I am not interested in going there. I do not consider the rebate to be a significant gift. It represents anywhere from 7 per cent to 10 per cent of fuel costs. This is not a significant amount as such. It might help to bring about a modal shift from automobile to bus use, but it does not represent a significant sum in and of itself.
Moreover, the Quebec Transport Commission takes this rebate into account when it approves the fares charged by carriers. The amount of the rebate is listed in the company's financial statements.
The kind of cross-subsidization you spoke of, which also applies to some extent to Intercar and Autobus Maheu, is the result of a lengthy process. It is a function of the Commission's will upon examining the service provided and fares charged, as well as a function of the will of the carrier to use the revenues generates to support other, less profitable sectors of the industry. Would you not agree that it depends on the will of industry stakeholders?
Let me tell you a little bit about my members and this will give you some idea of the busing industry, at least in Quebec. The Quebec Bus Owners Association has a total membership of 231 carriers. Of this total, 160 members operate a busing company. Between 28 and 30 carriers provide intercity or urban busing service. In Rouyn-Noranda or Rivière-du-Loup, or between Chicoutimi and Quebec, the other carriers operate school buses or contract out paratransit services to other agencies.
Nearly 80 per cent of APAQ member carriers provide more than one kind of transportation service and operate in more than one region or network. Carriers have succeeded in consolidating services provided to school boards and municipalities as well as to the public. They have succeeded because they offer a range of services and have maximized fleet usage. That just about sums it up.
Getting back to a question raised earlier about the creation of a monopoly or about the fact that several carriers may be owned by the same individual, all I can say is that under Quebec safety legislation, all companies must be registered with the Quebec Transport Commission in the Registre des propriétaires et exploitants de véhicules lourds, or the register of heavy vehicle owners and operators.
This register contains the names of 2,200 bus or mini-bus owners and operators. It is not as if eight companies held a monopoly over the industry. A number of carriers offer a wide range of services within a given area. If the network is restricted, fewer carriers are able to provide services.
Senator LaPierre: Mr. Gervais, is Motor Coach Canada a carrier or an association?
Mr. Roger Gervais, President, Motor Coach Canada Inc.: It is an association representing bus owners and tour operators across Canada. Our association has approximately 350 active members.
Senator LaPierre: Do you also represent charter operators?
Mr. Gervais: We represent some charter operators as well as intercity bus operators. Some members of our association are tour operators. They do not necessarily own the buses, but rather sell tour packages which include bus transportation, meals and accommodation.
[English]
Senator LaPierre: Do you get this rebate on the gasoline tax in Ontario?
Mr. Crow: Absolutely not.
[Translation]
Senator Biron: Are all fares charged by Quebec carriers set by the commission?
Mr. Girard: All carriers providing busing provided under license, whether an intercity transport license, urban license, airport license or charter license are required to submit their proposed fare schedule to the commission for review and authorization.
Senator Biron: The commission approves fares after reviewing the carrier's financial statements. Are these fares based on the carrier's assets available to the public or on the return on shareholders' equity?
Mr. Girard: In the charter busing industry, the process of applying for fares is fairly open. All the commission does is ensure that the fare spread serves the public interest.
As far as intercity busing services are concerned, the process of applying to the commission is much more stringent. Proposed discounts must be taken into account. If, after reviewing the proposed fare schedule, the commission finds the proposed fares too high and detrimental to the travelling public, it can impose new fares on the carrier. It does not resort to this course of action very often because it has the authority to review the carrier's financial statements. The risk to the carrier is therefore quite low.
If the commission does determine that the proposed fare schedule is unreasonable, it can ask to look at the carrier's financial statements and projections in order to ascertain if the carriers is profiting unduly from its license. If it finds that it is, the Commission can take corrective action.
Mr. Langis: The Transport Commission considers a carrier's revenue per kilometre based on the proposed fare.
As Mr. Girard just explained to you, if the commission determines that the carrier's pricing practices are abusive, or if, for example, the cost of living has increased on average by 1.8 per cent over the past three years, while the transportation price index has risen by about the same amount, whereas a carrier is applying for a 15 per cent fare increase, there is no doubt that the commission, acting like a good watchdog, will ask some questions and will most likely not approve this kind of fare increase in order to safeguard the public interest.
[English]
Senator Jaffer: I come from a country where there are buses and mini-vans, and those are not regulated. However, that is another question. Why can you not have two modes of transportation? Why can you not run a big bus for the frequently used rounts and mini-vans for the routes that are not so often used? Do you have that?
Mr. Langis: We do have that. There are many examples of carriers running smaller pieces of equipment to operate routes which are much less densely populated and which do not necessarily require a bigger piece of equipment. That being said, the type of motorcoaches that we use can be used for many years. We can easily use these coaches for 10 or 12 years by maintaining them and we will continue to have good results with them.
The problem with smaller equipment is that if you put a certain milage on it on a yearly basis, after three or four years maximum, you will have to change the equipment. There are not necessarily gains to be made by having smaller pieces of equipment.
To answer your question directly, it is being done. Many carriers are using smaller units to provide their services.
Mr. Crow: As Mr. Langis said, in one of our recommendations to you, we would like the government to implement the definition of a bus. We think it is appropriate that a bus be defined. Does it matter to the consumer that much whether it's a motorcoach, a 35-passenger coach, a 47-passenger coach or 21-passenger coach? What is a bus? We should have that definition, especially for the clarification of safety regulations. We strongly urge you to accept that recommendation.
Another concern relates to the issue of fairness. There are vans operating this day between Montreal and Toronto, and Montreal and Ottawa, and Ottawa and Toronto that are outside the purview of any government. They have shaded windows so you cannot see how many passengers are inside. There are no markings on them. Some bus regulations define a bus as a vehicle with 10 passengers or more for safety reasons. If those passengers are not being transported for compensation, there is no requirement for any safety standards.
In the van accident you have all heard about, there was a number of people who spoke different languages. However, when they were asked if they had paid, they all said, ``Oh, no. We're all brothers and sisters. We're all the same family going to Montreal.'' They did not even know each other's names, yet they were family.
There are ways that they get around the rules, senator, and we are rather concerned about that. If a ``bus'' is defined, and if fair, consistent enforcement is applied, then we will satisfy the consumer need from a safety point of view. We will satisfy the needs of the consumer.
Senator Jaffer: Where do you see the increase? What if what you are asking for happens and the vision is met, who do you think will use the bus more often?
Mr. Langis: Do you want four answers?
The Chairman: Chacun son tour.
Mr. Crow: I believe we have to ``exploit'' a number of markets, and I use that word in a positive sense. As an industry, we have neglected or let transit take over the commuter market. We could do a lot there. Urban transit thinking seems to be: ``Let's jam as many people into a vehicle as we can and move them to a downtown area.'' We would like the opportunity to motivate people to get out of their cars and into a commuter service, rather than force them. Transit seems to want to force people out of cars and into public transportation.
We believe in the commuter market. We can grow that significantly by showing on board a television show such as Canada A.M. or a news channel, and entertain passengers while they are travelling to downtown Montreal, Quebec or Toronto. We would like to be able to allow people to have a coffee and an orange juice on the way to work in the morning, but the transit authorities say that passengers cannot eat on our buses.
We think there's a market that we could grow to the benefit of the public. We believe there is a business market that we can better attract, given the opportunity to compete fairly. There are too many incidents where we have to compete against subsidized government entities, and we cannot offer those services.
I will give you an example, if I might. A few years ago nobody would take a bus to a theatre. I will use the example of The Phantom of the Opera. It cost about $100 for a ticket to go the theatre, but nobody would go by bus. That market was developed and it has grown significantly. In one month alone there were 630 motorcoach arrivals at The Phantom of the Opera. That clientele was not the traditional bus clientele. That was clientele that could afford a $100 theatre ticket, a $250 hotel room, and a $70 dinner.
We grew that market. If we have the opportunity, we will expand that even more. We believe there is a tremendous potential for growth in a number of those markets. Others may want to add more, so I do not want to monopolize the conversation.
[Translation]
Mr. Langis: If we consider the reversal of the age pyramid, we see how baby boomers are nearing retirement. These individuals have more disposal income than previous generations and they will want to continue having fun and possibly keep travelling in groups.
To answer a question that was asked of several witnesses, I for one believe that these very same baby boomers, after living and working in large urban centres, will probably want to travel back to the region where they grew up, be it the Abitibi, the Gaspé or some other region of Canada. They will most certainly want to return home for a vacation, which will put increased pressure on transportation services.
This reversal of the age pyramid will impact the transportation industry as well as the make-up of tour packages or group travel packages, not to mention the fact that the number of people wanting to travel between rural and urban areas will increase.
I forgot to mention this earlier when I was answering one of Senator LaPierre's questions. One of the reasons for the alleged decline in intercity ridership is that intercity travel was once defined as a person travelling three kilometres away from a municipality.
Today, travellers in this category are included in the statistics for urban or suburban transportation systems. These systems are experiencing strong growth which is expected to continue over the next few years.
[English]
Mr. Gervais: There has been a great increase in motorcoach travel due to the increase of tourism in our country. Those tourists obviously arrive in Canada by plane or by other passenger vessels, and they all use motorcoaches.
As well, educational travel and senior travel have experienced tremendous growth over the last 15 or 20 years.
Mr. Crow: To follow up on a point made by Mr. Gervais. A number of studies show that a motorcoach on an overnight tour, more than one day, generates, on average, $7,000 per day of revenue for hotels, food services, attractions, and so forth. In the major cities it is even higher than that.
At one of your earlier meetings you referred to the motorcoaches parked at Parliament Hill. Every one of those is generating $7,000.00 per day for tourism and economic development. We think that is a pretty good contribution to the economy. We have to grow that market, and we can.
Senator Jaffer: Last week one of our witnesses talked about who uses buses. They told us it was normally people who have more time and less availability of funds, or lower income people. They said that statistics indicate that the increased increment will come from immigration, that is, more people coming from abroad to live here. As a national association, have you considered ways to encourage new immigrants to use busses? Do you have any projects or any programs to encourage new immigrants to use busses?
Mr. Crow: Mr. Langis can answer with as it relates to scheduled services. We are currently offering a lot of charters that are ethnic or cultural based. They may be new immigrants to Canada or be part of, say, a Greek or Italian community. We have several charters to New York City from Toronto specifically for the Greek community. These are culture based. They are immigrant based.
The Chairman: M. Langis, vous voulez ajouter?
Mr. Langis: It would be more difficult for me, since I am from the scheduled bus industry segment, to answer that question, unless we had conducted a specific survey to find out exactly where people come from because, even though we are operated by a private company, it is a public service.
Senator Jaffer: Do you have pamphlets in different languages besides English and French going to senior citizen homes, for example in a Chinese senior citizen hom? Do you try to attract people to this service across the country?
Mr. Langis: I do not know about the other companies, but I can talk about mine. We do provide information for different segments that we serve. Two of them are definitely the Asian community and the Spanish community. We produce information in languages used by those two cultures in a sufficient number. We can justify producing it in a sufficient number.
I am sure there are examples of this throughout Canada. I know that carriers here in Montreal serve, in particular, the Italian community. Others serve the Asian community. Depending of the types of communities that gather in one metropolitan area as compared to another, I am sure that there are carriers which are serving those communities well.
Mr. Crow: In Ottawa you have probably seen motorcoaches with different languages painted on the outside of them, perhaps Asian characters. We are not only supplying literature to them, the markings on the motorcoachs are in their languages.
Motor Coach Canada has a tour directory that is being distributed around the world. We are going to marketplaces in Europe and Asia and we are advertising and promoting what we can do in Canada.
Mr. Langis: I believe you were on the bus last night when we presented the video. That video is also available in Japanese.
Senator Jaffer: Mr. Girard, I want to say to you that I went to Chicoutimi on your bus and it was very pleasant. Thank you.
Senator Oliver: I want to follow up on questions put to you by Senator LaPierre on cross-subsidization. Everyone has talked in generalities about it, but can anyone give us some numbers which deal with the amount of cross- subsidization that takes place in Canada today in the provinces which deregulate?
Mr. Langis: I am probably in the best position to answer that. I had read in the proceedings of your last week's meeting that the question was raised, so I followed up on it. From the information I was able to gather, I can tell you that in Canada, on average, approximately 10 per cent of our revenues go into cross-subsidization. In my own network, about 12 per cent of our global revenues serve to cross-subsidize the unprofitable routes.
Senator Oliver: There are still hundreds of thousands of Canadians who are not serviced by any major mode of transportation. I am referring to people who live in rural areas. They do not have access to train service, boats, helicopters or anything. As you know, we trying to find ways to have buses service those people.
Before the four of you leave, I hope each of you will give us some concrete suggestions about how the busing industry can help service those people who are unserved now.
I live on a farm in rural Nova Scotia where several seniors do not have cars and trucks. They would have to travel 25 to 30 kilometres to get to a major hospital or a drugstore. How can they have access to good public transportation?
[Translation]
Mr. Girard: The Quebec Department of Transport currently subsidizes paratransit services to the tune of $70 million. Mini-buses are specially outfitted to carry passengers with physical disabilities. Kéroul talked about paratransit services this morning.
Quebec's Department of Education subsidizes school busing across the province. Bus operators provide public transport services across the provinces, as do taxis. Two years ago, the provincial Department of Transport funded a number of regional pilot projects in an effort to mobilize regional leaders to provide school busing, paratransit, intercity busing and taxi services using resources that have already been invested in the region.
These pilot projects are still under way. Working with the minister responsible for the regions, the Department of Transport announced in December that it would be allocating $2 million a year over the next five years to upgrade regional services. The subsidies will be awarded to municipal leaders, not to the carriers.
Local leaders will be responsible for pooling existing services with a view to providing public transport services. To this end, regional governments will receive subsidies from the Quebec provincial government.
When such matters are discussed, the reference is almost to regions without any public transit services. Specialized services may be available, but there are no services for the general public. The terms of the agreements have yet to be announced but once things move forward, we will begin to see some regional services in place, with the goal of moving people to the corridor indicated on the map. Realistically, we are looking at one to two years before we begin to see results in certain areas. However, within the next few years, as a result of government funding, once neglected regions will begin to receive transit services.
[English]
Senator Oliver: That is an excellent answer. Is it $2 million dollars to start?
Mr. Girard: Yes, per year, for the next five years.
Mr. Langis: I cannot find a better answer to give you.
Mr. Crow: I will add another component. We would like to see, and more than just in Ontario, a commitment or at least a signal from government that we should invest in adding services. We have had too many instances where we have invested in a service, added it on, and government enters brings in subsidized competition. For example, in Ottawa we had a carrier that wanted to transport people from a rural area into Ottawa, and every time he used the ``Buses Only'' lanes in Ottawa, he was charged. He could not use those lanes in Ottawa. That also happens elsewhere.
We have experienced too many incidents where we have added new services and a government at some level or another, municipal, provincial or Federal, will add a service to compete against us. In Toronto Greyhound and Coach Canada were prepared to put $20 million into a new bus terminal. The city stepped in and would not allow us to do that. We have to stay in the existing bus terminal. We can't move to Union Station.
I understand that someone gave evidence in Ottawa to the effect that the bus companies are moving to be part of the VIA Station in Toronto. That is absolutely incorrect. The government has said that we have to stay at the existing terminal, away from Union Station.
If government could give us some commitment, some signal that they want us to invest in our industry, we would love to do that. We will provide those services. In rural Canada we are the only industry that can provide that service, and we want to do it. We are in business. Give us the ability to do it.
Mr. Gervais: I agree with everything that has been said by my association confreres.
[Translation]
The Chair: Messrs. Crow, Langis, Gervais and Girard, thank you very much for your presentations and answers. We get the feeling that everyone is pleased with the situation and that everyone is making a healthy profit.
Mr. Langis: If the industry were not profitable, we would not be here today and we would not have survived for so long.
With your permission, we would like to make a few closing remarks.
Mr. Gervais: Madam Chairman, in conclusion, our respective associations would like to emphasize the following points:
[English]
One, our four associations have arrived at a common position on major issues.
Two, our industry is not homogenous, since it applies different sectors of activities such as charter motorcoaches, schedule line run carriers, transit, sightseeing, and tour operators, as well as shuttle services, which must all be taken into consideration in this government's decision process.
Three, charter motorcoach carriers transport 35 million people or more. Some come to Canada for sports events or demonstrations, some are tourists from abroad who arrive by plane or passenger vessels, and that greatly stimulates our tourism industry. Therefore, whatever action the government takes, it must be uniform with scheduled and charter services so that everybody operates under the same rules.
Four — and this is my opinion — I find it sad that we should be talking about the past when we should be addressing the the future. I would refer to the brief document on the decline of the intercity bus industry.
Five, the different parts of our beautiful nation's territorial differences must be equated in the national matrix.
Finally, we sincerely ask that you accept the set of six basic principles that Mr. Langis mentioned and the recommendations that we have put forward in our position paper.
[Translation]
The Chairman: Thank you, Mr. Gervais.
Mr. Langis: The claim that our industry is in the throes of a terrible decline is false. This begs the question as to whether different data collection methods are needed. We made the effort of presenting a paper which may not provide all of the answers. However, the truth lies somewhere between our account of the facts, and what you may have heard from others.
In terms of moving people, we are not the problem. Rather, we would like to think that we are part of the solution for the future, given that our mode of transportation is flexible, economical and cost effective.
[English]
In terms of policy development, we believe that governments should make choices based on principles and goals that are the product of consultation with all major stakeholders, including carriers, but most importantly, the travelling public from the different regions of the country.
Based on our experience of the industry, we have suggested six principles to you. We will let you have a look at it and then make your own recommendations.
[Translation]
Summing up, our association was very much in favour of the government holding hearings of this nature so that our industry's role in the field of public transportation in Canada would be clarified once and for all. We also hope as a group that any future role we may be called upon to play will also be clearly defined.
Canada has its own unique geographic and socio-economic features. We urge you in the course of your proceedings to meet with as many industry stakeholders as possible, as you are doing today, because they stand to be the most deeply affected by your recommendations to the minister. Indeed, you must not lose sight of this fact as you go about your work.
[English]
The Chairman: Senators, we will meet again tomorrow morning in Halifax.
The committee adjourned.