2 TRANSPORTATION AND THE ECONOMY

PRODUCTIVITY AND PRICE PERFORMANCE OF TRANSPORT

In 2004, productivity increased by 2.8 per cent and 4.8 per cent in the rail and air industry, respectively. These increases were largely the result of significant gains in labour productivity, estimated at 10.1 per cent for the rail industry and a more modest, but nevertheless significant, 6.4 per cent in the air industry.

The air industry experienced a 15.5 per cent increase in fuel unit costs in 2004; the same increase observed in 2003. increases in fuel unit costs were in general more modest in other industries with the rail industry experiencing an increase of 1.7 per cent and public carriers facing increases of 1.4 per cent and 3.4 per cent for VIA Rail and Transit operators respectively. With respect to total unit costs, the rail and air industries and VIA Rail all experienced a net decrease on average due mostly to lower labour and capital costs. In contrast, total unit costs in the Transit sector increased by 2.2 per cent.

Transport prices and demand fluctuated in the rail and air industries in 2004. In the rail industry, freight prices increased on average by 1.5 per cent while demand rose by 5.9 per cent. In the air industry, prices for air cargo increased by 2.7 per cent while demand increased by 15.9 per cent thereby recouping a portion of the business lost in 2003. In the air passenger transportation area, prices were stable in spite of an increase of 9.4 per cent in demand. The demand for public passenger carriers rose by 2.4 per cent while prices for such services increased by 3.5 per cent on average. (See tables A2-57 to A2-65 in the Addendum.)

Canadian Economic Performance

International Trade and Trade Flows

Areas of Importance to Transportation

Productivity and Price Performance of Transport

Importance of Transportation to the Canadian Economy