RE: Need and opportunities to revitalize rail and improve safety

Dear Minister Cannon:

Transport 2000 Prairie represents Canadians living in Alberta, Manitoba, and Saskatchewan who are deeply concerned about the future of intercity passenger and freight rail in our region.

We fear that VIA Rail’s aging and unrebuilt locomotive and rolling stock will deteriorate to the point where they will break down, leading to service disruptions that will drive away ridership and lead to a further reduction in the network. We are worried about derailments and other rail safety issues, rail capacity limits, branch line deterioration and abandonment.

Understanding that the Government also shares these concerns, and are looking for imaginative and cost-effective solutions to address them, Transport 2000 Prairie has come up with several suggestions for your review. They fall under two categories:

1. Reforming and providing a stable source of funding for VIA Rail

2. Enabling more investment in rail infrastructure and in rail safety

Let’s look at these in-depth:

1. Reforming and providing a stable source of funding for VIA Rail

VIA Rail has from its outset been the “unwanted stepchild” of Canadian transportation. It has been underinvested and sliced back almost at whim.

Federal policymakers turned against CN’s successful efforts to expand passenger train service in the 1960s by denying it capital while financing airports and highways, and by putting in a train discontinuance and subsidy arrangement that invited attempts to kill off the services.

VIA Rail’s status as a Crown corporation created by Order-in-Council and its dependence on year-to-year appropriations from Parliament has prevented it from making and implementing plans and investments, including private financing and partnerships, that would boost ridership and revenues, gain efficiencies, and reduce costs.

There is no place at present in VIA’s structure for Provincial or private participation in its financing or operations.

In contrast, in the USA, Amtrak, VIA’s counterpart, has in its founding legislation the ability of states to support Amtrak services. Several states, including most notably California, a leader in reducing greenhouse gas emissions, and Washington State, have developed a growing network of Amtrak intercity rail services.

Washington State supports a daily Amtrak train from Seattle to Vancouver. The Province of British Columbia, in a groundbreaking move, announced that it is investing $4.5 million to enable a second Seattle-Vancouver train in time for the 2010 Olympics.

There is also active private participation in publicly-supported intercity passenger rail services that helps offsets the costs. In Alaska, the cruise ship lines partner with the state-owned Alaska Railroad, providing their own rolling stock and paying the railway to pull them on its trains.

To address these issues, Transport 2000 Prairie would like to suggest:

(a) Creating a new VIA Rail Act that provides for Provincial partnership, similar to Section 403(b) of the Rail Passenger Service Act under which passenger rail service is operated by Amtrak, at the request of a State government, which then compensates Amtrak for the costs of operating the train(s), and private participation, including franchising routes.

(b) Fully funding VIA’s $808 million four-year Corporate Plan, presented to the House of Commons in July 2005, plus money to enable VIA Rail to comply with the Supreme Court of Canada decision requiring it to make the Renaissance fleet accessible

(c) Dedicating a portion of Federal gas tax revenues also to intercity rail operating and capital expenses: VIA, plus Ontario Northland, and other intercity rail operations including cross-border Amtrak and joint Amtrak-VIA services.

These moves would enable a more efficient, effective, and more popular passenger rail service. For example, it could permit daily VIA operation through the Rockies and reinstatement of Vancouver-Calgary-Regina-Winnipeg service, with private firms providing luxurious accommodation to their guests while enabling year-round service to smaller markets that private-only operations could not afford. Remote services, such as on the E&N Railway, can be contracted out to local operators.

2. Enabling more investment in rail infrastructure and in rail safety

There is a crisis in rail. For example, Canadian National Railway Company (CN) has suffered at least one major derailment every month since the beginning of 2007. CN has long argued that its safety record is the best in the industry. If this is the case, then the entire industry has some work to do to overcome a disturbing trend of insufficient investment and deferred maintenance.

The solution is a balanced blend of incentives and enforcements, recognizing the fact that unlike trucking and shipping companies and airlines, railways must finance the construction and upkeep of their infrastructure directly from earnings and from investors. Also, in most cases railways pay property taxes, plus motor vehicle excise taxes whose outflows often benefit their competition.

(a) Require the railways to improve their safety record and to create a safety culture. One possible solution would be to require the railways to pay for third-party-provided safety audits and inspections, whose results would be analyzed by the Transportation Safety Board.

(b) Allow railways to depreciate their locomotives and freight cars sooner, which would have make it possible for railways to modernize their fleets faster with safer, more environmentally-friendly equipment. This would level the playing field with other modes. The current allowable depreciation rates are just 15 percent for rail compared with 25 per cent for aircraft, 33 per cent for, ships and 40 per cent for trucks.

(c) Grant tax credits for investments in qualifying intermodal or freight infrastructure and equipment, including track, intermodal and reload facilities, in exchange for ensuring reliable operation of intercity passenger and commuter trains - at least 90% on-time performance. The magnitude of the benefits could be increased where the investment speeds up scheduled running times and-or permits more frequent passenger train operation.

To encourage freight rail investments in the USA, U.S. Senators Trent Lott (R-Mississippi) and Kent Conrad (D-North Dakota) have introduced the Freight Rail Infrastructure Capacity Expansion Act (S. 1125) http://thomas.loc.gov/cgi-bin/query/z?c110:S.1125: , which proposes to provide a 25 percent tax credit for capital expenditures made by railroads, shippers, ports, trucking companies and other transportation businesses to build or expand track, intermodal facilities, yards or other rail infrastructure, or to acquire locomotives.

S.1125 has the backing of a broad range of businesses and associations including the U.S. Chamber of Commerce, National Retail Federation, American Association of Port Authorities, National Mining Association, Arch Coal, Chevron Phillips Chemical Co., Evergreen America and the Waterfront Coalition. A companion bill, H.R. 2116, has been introduced in the House http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.2116:

(d) Offer financial assistance to branch lines, provided they show enhanced viability if those investments were made, and railbank abandoned urban and rural rail lines for possible reuse.

(e) Give top preference in financial assistance to branch lines acquired and owned by communities, which ensures that the benefits stay within the communities, and look at other ways to encourage community ownership.

Community railway ownership is starting to roll in Canada. The largest, most prominent example of this is the Island Corridor Foundation www.islandcorridorfoundation.ca , which is made up of Vancouver Island municipalities and First Nations. The ICF acquired the E&N Railway from the Canadian Pacific Railway and RailAmerica in 2006. It is now seeking money to bring the long-neglected right of way to a state of good repair, and to improve and expand freight and VIA passenger operations, including possibly commuter rail out of Victoria.

In Saskatchewan, principals of Transport 2000 Prairie are involved with starting a similar project to save and revitalize CN’s Craik subdivision between Regina and Saskatoon.

Benefits of action

There are many payoffs in creating these incentives, making these investments, and passing such legislation that will enable a strong and vital freight and rail passenger network.

* Railways improve Canada’s productivity by their ability to carry more goods (and people) per unit of labour and for the amount of land than any other mode.The State of Iowa estimates that 2 trains (1-100-car, 1-125 car), 2.75 miles in length carries the same load as 870 large semis 11.5 miles in length (bumper to bumper).

* Rail passenger service can help grow economies. The single daily VIA train from Victoria to Courtenay, BC pumps in over $3 million in tourism dollars, exceeding its net costs.

* Railways can alleviate predicted shortages of long distance truck drivers as the current baby boom workforce retires. A single train crew replaces hundreds of operators. Teamsters’ union officials have told us that they foresee a long-distance haulage labour crunch within 10 years. Young people still want to drive for a living but they also want greater quality of life by staying closer home and to their families.

* Shifting freight to rails will save tax dollars on highway construction and maintenance. A State of Ohio report: “Freight Impacts on Ohio’s Roadway System” points out that 1 legally loaded 80,000 lb. truck incurs the same road wear and tear as 9,000 to 10,000 cars and creates the same road demand as 3 to 4 cars on flat terrain and 15 cars on uphill grades.

The payoffs are there. AASHTO, which represents US federal, state and local transportation officials, reports that investments that boost US freight rail market share by just 1% would shift 600 million tons of freight and 25 billion truck vehicle miles-traveled off the highway system, save shippers $239 billion, save highway users $397 billion, and reduce highway costs by $17 billion. Inclusion of costs for bridges, tunnels, and interchanges could double this estimate.

* Railways are part of the solution to climate change. Freight trains emit just half the greenhouse gases per tonne-km than trucks. According to a 2006 Hydro-Quebec study, heavy diesel trucks produce 42-71 grams of CO2 per tonne-km while trains generate just 20-28 grams. Canadian railways already carry 65 per cent of surface freight in Canada, yet only produce three per cent of transportation greenhouse gas emissions.

On the passenger side, a half-full VIA train emits 56 grams of CO2 per passenger-kilometre (passenger-km). In contrast, a flight of 1,000 km or less produces 204-340 grams per passenger-km. A midsized car and driver and one passenger, which represent a fair average for Canadian intercity trips releases 95 grams per person-km.

* Railways, because they are more fuel-efficient, can withstand energy price hikes better than other transportation modes. Commercial air services to smaller communities and tourist travel by car are the first victims of long-term fuel price jumps.

· Trains consume less greenspace than other modes. The European Environmental Agency reports that rail occupies 3 hectares per kilometre compared with 7.5 hectares for expressways. The land efficiency is much higher because far more people and goods can be moved by rail than

· by highway over the same distance. Rail stations can also process many more people than airports in only a fraction of the space.

Thank you very much for your time,

(Signed)

Martin Wooldridge

President Transport 2000 Canada (Prairie Region)