No. H230/05
For release November 17, 2005

NEW ENVIRONMENTALLY FRIENDLY
PROJECTS IN BRITISH COLUMBIA TO RECEIVE
FUNDING UNDER FREIGHT INCENTIVES PROGRAM

VANCOUVER — Funding for four new projects in British Columbia under Transport Canada’s Freight Incentives Program was announced today by David L. Emerson, Minister of Industry and co-Senior Minister responsible for British Columbia, on behalf of Transport Minister Jean-C. Lapierre.

The Government of Canada is investing $878,073 in these projects. The organizations selected to receive the funding are BC Ferries, Canadian National, Pioneer Rail Services Ltd., and the Southern Railway of British Columbia.

“The Government of Canada is committed to helping companies in the Province of British Columbia make environmentally sound improvements to their operations,” said Mr. Emerson. “I applaud these companies for helping the environment and I look forward to seeing the results of their projects.”

“Today’s announcement will enable companies in various modes of transportation to be more environmentally friendly,” said Mr. Lapierre. “The selected projects will result in a significant reduction of greenhouse gas emissions for the freight companies involved.”

The Freight Incentives Program is a four-year, $5-million program designed to encourage the adoption and use of technology and equipment that reduce greenhouse gas emissions cost-effectively in the rail, marine and air freight transportation sectors. To achieve this goal, the program provides funding to eligible applicants to purchase and install efficiency-enhancing technologies.

The program began accepting its first round of proposals in May 2004. This is the second round of funding under the current program authority. The deadline to apply for the next round of Freight Incentives Program funding is May 31, 2006.

This initiative was announced as part of the 2002 Climate Change Plan for Canada.

A backgrounder with more information on Transport Canada’s Freight Incentives Program and the winning projects is attached.

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BACKGROUNDER

FREIGHT INCENTIVES PROGRAM

On August 12, 2003, the Government of Canada announced it would invest $1 billion towards the implementation of the 2002 Climate Change Plan for Canada. This investment is part of the Budget 2003 allocation and builds on the $1.7 billion the government has invested in reducing greenhouse gas emissions over the past five years. Part of this investment is funding the four-year, $5-million Freight Incentives Program.

The Freight Incentives Program is designed to encourage the adoption and use of technology and equipment that reduce greenhouse gas emissions cost-effectively in the rail, marine and air freight transportation sectors. To achieve this goal, the program provides funding to eligible applicants to purchase and install efficiency-enhancing technologies. Preference will be given to technologies previously demonstrated under the Freight Sustainability Demonstration Program.

Applications are accepted annually until 2006, and projects can last up to a maximum of two years. All projects must be completed by March 31, 2007. The deadline to apply for the next round of Freight Incentives Program funding is May 31, 2006.

The program funds the purchase and installation of greenhouse gas reduction technologies to a maximum of:

• 50 per cent of total eligible costs;
• $500,000 over a two-year period; and
• 50 units or 75 per cent of a company fleet, whichever is lowest.

Total government assistance from all levels of government cannot exceed 100 per cent of total eligible costs.

Applications are first screened by Transport Canada to ensure eligibility. To be eligible, applicants must:

• belong to a private Canadian air, marine or rail carrier enterprise, or a Canadian not-for-profit organization that provides air, marine or rail freight services;
• be planning a project that involves the purchase and installation of technology and equipment that reduce greenhouse gas emissions cost-effectively in the freight transportation sector; and
• demonstrate that at least 50 per cent of total eligible project costs will be secured from sources other than the Government of Canada.

Applications that meet the program’s eligibility criteria are evaluated based on the:

• degree to which the project’s proposed technology has the potential to reduce greenhouse gas emissions effectively;
• degree to which the project will provide benefits other than greenhouse gas emission reduction, such as saving time, reducing operating costs or improving air quality;
• level of risk associated with implementation of the project and its benefits;
• degree to which project technology can be adopted by other organizations;
• degree to which project technology represents good value in terms of cost per tonne of reduced greenhouse gas emissions; and
• degree to which the applicant demonstrates experience and competence in establishing a work plan and schedule and assigning resources to report results and control quality.

Successful applicants are required to enter into a contribution agreement — a legal contract between the funding recipient and Transport Canada. The agreement clearly defines the nature and scope of the work to be performed, and the maximum contribution to be made by the program. The agreement also specifies project milestones, anticipated results, payment schedules and financial reporting requirements.

Applicants must identify all sources of project funding when the contribution agreement is negotiated. Applicants must also notify Transport Canada of any changes to funding prior to project completion.

The four successful projects in British Columbia under the second round of funding of the Freight Incentives Program are:

Stellar Marine Electronic Speed Control 1000, Victoria, British Columbia
BC Ferries will receive $78,500 to purchase two Stellar Marine Electronic Speed Control 1000 Systems. This technology uses precise electronic throttle controls to time an engine and propeller to match ocean conditions. This project aims to reduce fuel oil consumption by a minimum of four per cent, which translates into an annual fuel saving of close to 428,500 litres.

Portec Rail Trackside Lubricators (dispensing Keltrack Top of Rail Friction Modifier),
British Columbia (from Kamloops to Vancouver)
Canadian National will receive $220,000 to purchase and install 21 Portec Rail Trackside Lubricators with Kelsan’s Keltrack Friction Modifier. These trackside lubricators will dispense friction modifier to reduce curving and rolling resistance, which will lead to lower fuel consumption and reduced greenhouse gas emissions. This project will also reduce rail wear by 35 per cent and extend the life of the rail clips, pads and ties by 30 per cent.

Railpower Hybrid Green Goat Locomotives,
Prince George, British Columbia
Pioneer Rail Services Ltd. will receive $427,000 to purchase two Railpower Hybrid Green Goat Locomotives. By using a hybrid power design instead of the conventional yard switch engine, the project team will eliminate engine idle time and reduce greenhouse gas emissions by 60 to 90 per cent.

ZTR SmartStart Technology, New Westminster, British Columbia
The Southern Railway of British Columbia will receive $152,573 to purchase 18 ZTR SmartStart Systems. The systems will ensure that outfitted locomotives are always in a “ready to operate” condition, while also minimizing idling time. This project aims to save approximately 45 to 60 litres of fuel daily per locomotive.

November 2005