Report Highlights

Transportation and the Canadian Economy

• The year 1999 saw vigorous growth of the Canadian economy. This was due in large part to investment spending on machinery and equipment and sustained consumer spending resulting from rising incomes, which drove growth in manufacturing production.
• The automotive sector did particularly well, including automotive export products.
• The strong US economy also produced strong merchandise export sales for Canadian firms. The energy, forestry, and machinery and equipment sectors enjoyed particularly significant increases.
• Despite the declining natural rate of population increase, the countryís population grows at 1.1 per cent a year as a result of net positive population immigration. An average 300,000 Canadians migrate yearly from one province to another, mainly young adults driven by employment market considerations.
• The aging of the Canadian population and the variation in the age structure across Canada are drivers of changes in transportation demand. In addition, an increasing concentration of the Canadian population in large urban areas is adding pressure to transportation systems, as the automobile is the preferred mode of transportation used by Canadians to get to work.
• In 1999, transportation demand accounted for 13.2 per cent of GDP. Transportation demand grew in 1999 faster than the economy as a whole, as was the case for the last five years. This can be explained partly by the increasing importance of exports to the Canadian economy.

Government Spending on Transportation

• In fiscal year 1998/99, total annual government spending on transportation was $15.7 billion, an increase of 0.5 per cent over 1997/98. (This total does not include expenditures made by new entities such as port and airport authorities.)
• From 1994/95 to 1998/99, local governments increased their net expenditures on transportation by 2.5 per cent a year. Over the same period, the federal government has halved its net expenditures on transportation due to divestiture and commercialization initiatives.
• In fiscal year 1998/99, provincial government expenditures on transportation increased by nine per cent to reach $7.9 billion.
• In 1999/2000, the revenues (excluding fuel tax revenues) accruing to the federal government from transportation are expected to total $402 million, compared with $1.0 billion in 1997/98. Airport lease and marine fees are two of the important sources of federal revenues from transportation.
• In 1998/99, the federal government generated $4.7 billion in fuel tax revenues, while provincial governments generated $6.7 billion.
• With the transfer of the operations of the Air Navigation System to NAV Canada and the divestiture of airports and ports to local authorities, the single largest federal transport expense in fiscal year 1999/2000 is tied to Coast Guard services.
• The two most significant direct federal subsidies, grants and contributions to transport by the federal government went in 1999/2000 to roads ($228.9 million) and VIA Rail ($170.3 million).
• At the provincial/territorial and local government level, spending on transportation represented $14.5 billion in 1998/99. Spending on roads and highways was the most important transport-related provincial expenditure. Ontario and Quebec spend a lot on transit, while the territories spend relatively more on air transportation.
• For 1998/99, the modal breakdown of all government spending on transportation was $14.4 billion on roads and transit systems, $246 million on rail, $740 million on marine transportation and $71 million on air.

Transportation and Safety

• The year 1999 represented a record low in the number of occurrences in air transportation. The most recent year for road accident information (1998) also showed significant improvement in safety records.
• A total of 1,129 rail-related accidents were reported in 1999, with 36 per cent of these accidents off the main track, 25 per cent at railway crossings and 11 per cent being main-track train derailments. The number of trespasser accidents rose from 78 to 94, still below the five-year average of 103. A total of 105 persons were fatally injured in rail-related accidents, down from the five-year average of 111.
• The year 1998 saw 2,927 fatalities on roads, the lowest annual total in 43 years. The number of casualty collisions was also down.
• The number of fatalities involving commercial vehicles increased slightly in 1997, due in part to the bus accident at Les Eboulements, Quebec, in October 1997.
• There were 525 shipping accidents in 1999, up seven per cent over 1998; 280 of these involved fishing vessels. For vessels involved in passenger transportation, ferry and passenger vessels, the number involved in accidents was comparable with the previous five-year average. Marine transport-related fatalities, at 29, were down from the previous year (48) and the five-year average (35).
• Canadian-registered aircraft were involved in 340 accidents in 1999, down 12 per cent from 1998. Of these, only seven involved airliners aircraft, and only one of these involved fatalities (2). Air fatalities, at 67, were down by 19 per cent from 1998.
• In 1999, there were 518 reportable dangerous goods accidents. Total deaths from accidents involving dangerous goods totalled 27, and only two of these fatalities were the direct result of a dangerous good release.

Transportation - Energy and Environment

• In November 1999, the Transportation Climate Change Table completed its Options Paper which analyses options for a six per cent reduction of transportationís 1990 greenhouse gas emissions level by 2010. Under current trends, greenhouse gas emissions from transportation are expected to exceed 1990 levels by 32 per cent by 2010. A six per cent reduction from 1990 levels therefore implies a reduction of about 54 megatonnes by 2010.
• Road transport accounts for roughly 70 per cent of transportation emissions. Aviation, off-road uses and on-road diesel are the three transport sources of emissions expected to grow most rapidly between 1990 and 2020.
• The Table looked at costs and benefits of options across the entire transportation system. Measures grouped as passenger, road infrastructure, road vehicles and fuels, freight, and off-road were categorized as: Most Promising Measures, with positive benefits or costs less than $10 per tonne; Promising Measures, with modest cost or complementing other measures; Less Promising Measures, higher cost measures with potential of greenhouse gas reduction in the medium or longer term or requiring significantly more analysis; and Unlikely Measures, those not warranting active consideration.
• Most Promising Measures could generate 10.8 megatonnes of reductions in 2010, while Promising Measures offer the potential to reduce emissions by a further 32 megatonnes. This would still be 11 to 14 megatonnes short of the Kyoto target.
• In 1999, progress was achieved in three areas of Transport Canadaís Sustainable Development Action Plan: the launching of the Moving on Sustainable Transportation Program, which funds project proposals from environmental, industry, academic and other groups; the expansion of Transport Canadaís Environmental Management System to a broader scope of departmental activities and operations; and the development of a draft set of sustainable performance indicators.
• The Canadian Council of Ministers of the Environment accepted Standards for Particulate Matter and Ozone, setting numerical air quality targets for protecting the environment and reducing human health risk.
• In 1999, new regulations under the Canadian Environmental Protection Act were approved, phasing in a reduction of sulphur in gasoline of more than 90 per cent by January 1, 2005.
• The International Civil Aviation Organization (ICAO) approved in 1999 regulatory changes to reduce nitrogen oxide emission levels by 16 per cent for engines produced after December 31, 2003.
• Royal Assent was given in 1999 to the new Canadian Environmental Protection Act, giving stronger powers to government to protect the environment and human health. For transportation, the Act expands the authority to control the components and the handling of fuels, and provides for a national fuels mark to be used at gas station pumps, and transfers regulatory authority for road vehicle emissions from Transport Canada to Environment Canada.
• In 1998, transportation accounted for about one third of energy used in the country.

Transportation and Regional Economies

• In terms of relative size of total transportation, Ontario, Quebec, British Columbia and Alberta are the top provinces, as are their provincial economies.
• Ontario is the only province to show a lower share of Canadaís transport activities than that of total economic activities, which is explained by population density and proximity to key markets.
• Trucking experienced strong growth in 1998 due to exports, particularly in Ontario and Alberta. It declined, however, in British Columbia. Since the construction of the Confederation Bridge, trucking in Prince Edward Island has also grown significantly.
• In 1998, declines in rail transportation were registered in all provinces but Quebec. For marine transportation, declines were observed in British Columbia and Quebec, compared with growth driven by imports in Nova Scotia and Newfoundland. In air transportation, only British Columbia and Nova Scotia registered declines.
• Ontario led the growth in transportation employment in 1998 with 2.6 per cent, followed by Alberta and Quebec. Transportation employment growth was also strong in Newfoundland and Prince Edward Island. British Columbia faced declines. Growth in employment was mainly observed in trucking. Employment in rail declined in all provinces but Quebec. For air, only Alberta, British Columbia and Nova Scotia did not register increases in employment.
• In 1998, growth in total transportation expenditures was driven mainly by British Columbia and Ontario. In British Columbia, it came from government spending, while in Ontario, it was driven by personal expenditures. In Alberta, growth was low. In Quebec, a decline was observed. In Newfoundland, Nova Scotia, New Brunswick and Manitoba, transport-related expenditures grew, while they declined in Saskatchewan.

Transportation and Employment

• In 1999, almost 827,000 full-time employees worked in transportation, accounting for 6.9 per cent of total full-time employment in Canada. Of that total, 613,500 jobs were tied to transport services, 94,600 to transport-related services and 85,600 to the development and maintenance of transportation infrastructure. The rest were associated with transport jobs within governments.
• In 1998, the total number of rail-transport service employees declined by 4.5 per cent. Medium and large trucking firms engaged 0.8 per cent more employees, while small carriers employed 2.7 per cent fewer workers in 1997, the last year with official data. Employment in private trucking firms was down, while the number of owner-operators was up. Total employment in bus transportation increased in 1998. Growth in air transportation employment was 11 per cent in 1998 and six per cent in 1999. Average annual employment in marine transport was up by 2.1 per cent in 1999.
• In transport infrastructure, the number of people employed in both rail infrastructure services and road construction and maintenance did not change significantly in 1998. There were 12 per cent (estimated) more people working at airports in 1999. Ports authorities also increased their personnel in 1999. A decrease of eight per cent in 1999 was reported by the St. Lawrence Seaway Management Corporation. A slight increase in marine pilotage-related employment was noted in 1999.
• With respect to government services, the number of employees tied to transportation was down in 1999.
• The increase in average weekly earnings across all modes was in the order of 0.3 per cent in 1999, less than the increase for the economy as a whole.
• From 1990 to 1999, rail employees enjoyed the largest increase in average weekly salaries.
• A total of 12 labour stoppages was recorded for transportation during the first six months of 1999.

Transportation and Trade

• The value of domestic trade increased by an average annual rate of four per cent from 1992 to 1998. In 1998, domestic trade totalled $1,354 billion; 87 per cent of this was intraprovincial and 13 per cent was interprovincial.
• From 1992 to 1998, the value of services traded rose from $792 billion to $996 billion, of which 90 per cent was traded intraprovincially.
• By volume, rail accounted for the largest share of domestic trade in 1998, followed by for-hire trucking. But the share of rail and marine from 1992 to 1998 declined, while that of trucking increased. In 1998, 429 million tonnes of traffic were tied to domestic traffic. Of this, 70 per cent of rail and marine activity was tied to the movement of primary goods and materials, while the same share in trucking was tied to manufactured goods and fabricated materials.
• By tonnage, for-hire trucking and rail filled the freight transport demand related to intraprovincial trade.
• A limited number of two-way trade route flows - QuebecñOntario, OntarioñAlberta, OntarioñBritish Columbia, OntarioñManitoba/Saskatchewan - accounted for over two thirds of total interprovincial trade.
• Between 1992 and 1998, Canadaís exports and imports grew at an average annual rate of 11.9 and 10.9 per cent, respectively. This trade was dominated by goods (between 82 and 84 per cent of Canadaís international trade).
• Trucking dominated Canadaís trade with the US in 1998, accounting for 63 per cent of exports and 80 per cent of imports. Pipeline was third for exports while air was second for imports.
• The share of daily CanadañUS border crossing by trucks of Canadian firms increased from 57 to 66 per cent between 1991 and 1998. Canadian-based for-hire trucking carriers have been shipping goods over greater distances in the CanadañUS market.
• In 1998, Canadaís trade with non-US countries fell, because of recessions and financial crises in Asian and Latin American economies. Marine and air are the primary modes used in trade with non-US countries. Airís share of this trade grew from 16 to 19 per cent in exports and from 15 to 22 per cent in imports between 1992 and 1998.

Transportation and Tourism

• Travel within, to and from Canada increased in 1999 as the Canadian dollar appreciated slightly and the Canadian economy performed really well. The number of visitors from the US to Canada increased, as did the number of overseas visitors.
• Of the $47.1 billion of tourism spending in Canada in 1998, 39 per cent was on transportation; 70 per cent of this was by Canadians, a share that has been declining in the 1990s.
• Tourism expenditures on transportation were $18.5 billion in 1998. Of this, 57 per cent was on air, 35 per cent on motor vehicle transportation, three per cent on intercity bus, and one per cent on rail transportation. The remaining four per cent went to other transportation spending.
• The automobile maintained its dominance as the most common means of transportation in Canada, accounting for 91.8 per cent of all trips taken in 1998 and also increasing its share for overnight business travel. For CanadañUS travel, automobile trips were the most significant part of same-day travel; they were less dominant for overnight travel but still the most important mode of transportation.
• Canadians spent a total of $16.7 billion outside the country in 1999 while foreign travellers spent $14.9 billion in Canada, 5.1 and 6.7 per cent increases, respectively. In 1999, Canadians only marginally increased their trips overseas, virtually all via air transportation.

Transportation Infrastructure

• In 1999, Canadian railways operated slightly less than 50,000 kilometres of track, with CN reducing its network by over eight per cent and CPR by 1.6 per cent. In contrast, the Canadian regional and shortline railway network grew by over 12 per cent, representing at year-end 30 per cent of the countryís rail network. This was the third consecutive year of decline in the amount of track discontinued.
• Alberta dominated rail rationalization activities in 1999 with 993 route kilometres transferred and 110 abandoned.
• On the National Highway System, traffic increased almost nine per cent between 1993 and 1996, and almost 40 per cent over 1986. Ontario and Quebec accounted for over 60 per cent of the total vehicle-kilometres on the National Highway System, with 36 per cent for Ontario and 25 per cent for Quebec. British Columbia was the with 14 per cent of the total, followed by Alberta with nearly 11 per cent, Saskatchewan with four per cent, Nova Scotia with slightly more than three per cent, New Brunswick with about three per cent, Manitoba with nearly three per cent, and Newfoundland and Prince Edward Island with two per cent together.
• Toronto and Montreal are two of the busiest traffic centres in Canada. Traffic levels exceed 400,000 vehicles per day on some sections of Highway 401 passing through Toronto, and exceed 150,000 vehicles per day on some sections of Highway 40 in the Montreal core.
• In 1998, almost 90 per cent of total CanadañUS truck movements passed through 20 border crossing sites. The busiest border crossings are in Ontario: Ambassador Bridge, Peace River Bridge, Blue Water Bridge and Queenston Bridge.
• By the end of 1999, 17 of the 18 ports designated to become Canada Port Authorities had received their CPA status and had established their boards of directors. In addition, Transport Canada had divested 357 public ports since 1996, leaving 192 regional, local and remote ports under federal control. A total of 1,070 fishing harbours were still under the inventory of the Department of Fisheries and Oceans, which had divested a total of 846 recreational harbours since 1995.
• The year 1999 was the first year of management by the St. Lawrence Seaway Management Corporation.
• Traffic along the Seaway in 1998 was estimated at $7.5 billion, up 4.4 per cent from 1997. The increase came from the MontrealñLake Ontario section of the Seaway, as the Welland Canal section saw a decrease. Volume in 1999 was about 47.6 million tonnes, seven per cent lower than in 1998.
• Pilotage authorities reported positive net income in 1999.
• NAV Canada closed its North Bay tower in March 1999. It made investments in technology of over $100 million in 1999/2000.
• Increases to NAV Canadaís user fees, scheduled for November 1, 1998, were deferred to March 1, 1999. Then in September 1999, NAV Canada introduced service charge reductions.
• The airports in Saskatoon, Regina, Charlottetown and Saint John were transferred to not-for-profit authorities in 1999, and Halifax in early 2000, leaving only four National Airport System airports under Transport Canada management.

Structure of the Transportation Industry

• Since the late 1980s, over 40 shortline rail carriers have formed, operating more than 9,600 kilometres of track and generating aggregate annual revenues of almost $140 million.
• In 1999, the makeup of the Canadian shortline industry changed when Rail America Inc. purchased both RailLink and RailTex, increasing its ownership to nine operations in Canada. Four of the five major corporations operating shortline railways in Canada are US-owned.
• On December 20, 1999, Canadian National Railway Company and Burlington Northern Santa Fe Corporation announced the decision of their boards of directors to approve a definitive agreement to combine their businesses.
• In 1999, Mullen Transportation, Contrans Corporation, H&R Transport Limited and Trimac Transportation were among trucking firms acquiring interest in other trucking firms. Acquisitions were either of other Canadian-based carriers or of US-based ones.
• Almost 60 per cent of for-hire trucking revenues in 1998 were generated by general freight carriers. Extra-provincial activities accounted for 75 per cent of for-hire trucking revenues.
• The courier industry is concentrated, with 80 per cent of all courier traffic and revenues generated by nine carriers.
• Bankruptcies in trucking were up in 1999.
• The bus industry was a $5.9 billion industry in 1998, with $4.2 billion coming from urban transit, $1.3 billion from school bus operations and $473 million from intercity activities.
• In 1999, three container shipping lines, Zim, the China Ocean Shipping Company and Norasia, made Vancouver their first port of call. CN and CPR provided double-stack rail services at this port.
• Maersk Inc. acquired the international liner services of Sea-Land Services Inc. Maersk and Sea-Land decided to stay with New York/New Jersey as their main local centre port on the east coast of North America. The Port of Halifax finished second in the competition for Maerskís east coast business.
• The Transpacific Westbound Rate Agreement (TWRA) and the Asia North America Eastbound Rate Agreement (ANERA), the main shipping conferences on the US transpacific routes, were dissolved in the spring of 1999.
• On the domestic marine transport front, Algoma Central Corporation increased the size of its tanker fleet by purchasing three Canadian-registered tankers of EnerChem Corporation. Canada Steamship Lines took delivery of the CSL Niagara in 1999.
• Canadaís cruise ship industry continued to grow and diversify in 1999.
• The restructuring of the Canadian airline industry received a lot of attention in 1999. The major phases of this restructuring were the August 13 Order in Council establishing a 90-day facilitating process; the release on October 26 of ìA Policy Framework for Airline Restructuring in Canadaî detailing the federal governmentís public policy objectives; and the December 21 announcement allowing the acquisition of Canadian Airlines on the basis of commitments from Air Canada and 853350 Alberta Ltd. made to the Minister of Transport and the Commissioner of Competition.

Freight Transportation

• CN and CPR experienced a drop in output in 1998, while Class II railways experienced an estimated increase of six per cent.
• Rail imports from the US reached 15.4 million tonnes in 1998, an increase of 4.6 per cent, while rail exports to the US reached 56.1 million tonnes, an increase of 5.2 per cent. Half the rail export growth took place in the forest product sector. Increased imports were recorded for chemicals, ores and mine products, and gasoline and fuel.
• In 1998, Class I railways moved 72.1 million tonnes of traffic to Canadian ports for export, compared with only 7.1 million tonnes of goods inland from Canadian ports.
• Grain, fertilizers, ores and mine products, coal, forest products, industrial products and intermodal products made up 97 per cent of rail traffic in Canada in 1999. The first three showed declines from 1998 levels and the other four showed increases.
• The number of tonne-kilometres attributed to for-hire trucking carriers totalled 76.7 billion in the domestic market and 61.4 billion in international markets in 1998. The average annual growth of traffic since 1991 has been seven per cent in the domestic market and 15.1 per cent in international markets. The two major sources of growth in freight truck traffic have been the general freight sector and the food product sector.
• Domestic marine traffic flows, at 48.3 million tonnes in 1998, were 31 per cent less than in 1988. Transborder flows of 100.1 million tonnes in 1998 surpassed, by almost six per cent, the record traffic level reached in 1997, while overseas activities, at 179.5 million tonnes, were down by 4.7 per cent from 1997.
• The most important sources of traffic for domestic marine services in 1998 were iron ore and concentrates (14 million tonnes), pulpwood and chips (12.4 million tonnes), fuel oil (9.7 million tonnes), stone and limestone (9.3 million tonnes) and wheat (nine million tonnes).
• Of transborder marine export traffic, 80 per cent was made up of iron ore, crude petroleum, gypsum, stone and limestone, fuel oil, salt and gasoline. On the import side, the significant commodities, accounting for 78 per cent of the total volume, were coal, iron ore, stone and limestone, fuel oil, other petroleum products, and alumina and bauxite. Major commodities shipped overseas from Canada were coal, iron ore, wheat, containerized freight, woodpulp, sulphur and potash. Key unloadings were made up of alumina/bauxite, containerized freight, iron and steel, fuel oil, iron ore, and gasoline.
• On the export side of Canadian liner trade activities in 1998, non-conference carriers handled 8.2 million tonnes of traffic, compared with 5.4 by conference lines. On the import side, 6.6 million tonnes were handled by non-conference carriers and 4.3 million tonnes by conference lines.
• Air cargo revenues represented 6.6 per cent of Air Canada and Canadian Airlines revenues in 1998. For Canadian air carriers, domestic cargo operations generated 67 per cent of their total cargo operating revenues. A total of 487,583 tonnes of domestic traffic was carried by air in 1998, five per cent less than in 1997.

Passenger Transportation

• Rail passenger traffic declined in 1998, for both VIA Rail and Class II railways.
• In 1998, 6.1 million passengers travelled approximately 46 million kilometres on scheduled intercity bus service operations. The average use made of charter buses increased, while the number of passengers using urban transit remained constant.
• In 1999, a total of 16.5 million light vehicles were registered across the country, vehicles used by Canadians to satisfy a significant portion of their travel needs.
• The passenger count from cruise business at the Port of Vancouver was 948,000 in 1999, a 17th consecutive year of growth. Halifax also had a good year, with 108,000 passengers. Montreal and Quebec city recorded fewer cruise visitors in 1999.
• Growth in domestic air passenger traffic continued in 1998 but at a lower rate than in 1996 and 1997, reaching 26 million passengers. The year 1998 was the fifth consecutive year of growth in transborder air traffic, totalling 18.7 million passengers. Total traffic of 12.6 million passengers was reported in other international air services, an increase of 5.9 per cent from 1997. Preliminary statistics for 1999 suggest that air traffic continued to increase at a moderate rate in all these sections.

Price, Productivity and Financial Performance in the Transportation Sector

• Rail freight transport service prices did not change in 1998 but declined by four per cent in the first nine months of 1999.
• Total factor productivity of Class I railways slowed down in 1998.
• The Canadian operations of CN and CPR continued to generate improved financial performance in 1999.
• VIA Rail generated an increase of ten per cent in its operating revenues in 1999. The growth in VIAís operating revenues since 1991 has come mainly from increased prices, 4.8 per cent a year on average. Labour productivity decreased in 1998.
• Total factor productivity in the trucking industry increased by 2.1 per cent a year between 1991 and 1998. The increase of 8.8 per cent in revenues from 1991 to 1998 came from an increased level of activity. In 1998 and 1999, the domestic activities surpassed those in the transborder market.
• The financial performance of the trucking industry improved in 1998.
• The revenues of the intercity bus industry jumped by 12 per cent in 1998, mainly because of an increase in outputs. Productivity gains and moderate factor price increases have allowed unit costs to decline by two per cent a year between 1991 and 1998. An improvement in the industryís operating ratio was achieved again in 1998.
• Between 1991 and 1998, prices of urban transit service operators increased on average by 4.2 per cent a year. In 1997 and 1998, average productivity improved by around 1.8 per cent per year. Users of urban transit services paid 47 per cent of the total cost of the system.
• In air transportation, prices increased by three per cent in 1998, with the largest increases noted in transborder markets.
• In 1998, airline productivity dropped by 6.5 per cent and unit costs increased by five per cent, which explains the deterioration in the profitability of the industry that year. In 1999, major carriers saw their total costs go up, translating into a deterioration of their operating ratios.