REPORT HIGHLIGHTS

TRANSPORTATION AND THE ECONOMY

• In 2005, the Canadian economy continued to fare well, with gross domestic product (GDP) growing by 2.9 per cent in real terms.
• Consumer expenditures, business investment and government spending all contributed to this economic growth.
• During the course of the year, energy prices, interest rates and the value of the Canadian dollar all rose.
• The Canadian dollar rose by an average of 7.4 per cent against the U.S. dollar, reflecting a decline of the value of the U.S. dollar and an increase in commodity prices.
• The value of the Canadian dollar fell in the first part of the year, then rose to a 13-year high of US$0.863 at the end of the year.
• The consumer price index (CPI) increased by 2.2 per cent in 2005. Energy prices and homeownership replacement costs rose by 9.7 and 5.2 per cent, respectively. Transportation prices rose 4.1. per cent as gasoline prices increased by 12.8 per cent.
• In real terms, personal disposable income per capita increased by 1.5 per cent in 2005.
• Canada's population grew by 0.9 per cent, while employment increased by 1.4 per cent.
• All provinces and territories experienced economic growth in 2005, with western Canada faring better than central and eastern Canada.
• Canada's trade with the United States increased by four per cent. China surpassed Japan and Mexico as a source of imports into Canada.
• Trucking accounted for 60 per cent of trade with the United States, rail 17 per cent, pipeline 11 per cent, air six per cent and marine three per cent.
• Almost 76 per cent of Canada–U.S. trade (in value terms) carried by trucks took place at six border crossing points: Windsor/Ambassador Bridge, Fort Erie, Sarnia, and Lansdowne in Ontario, Lacolle in Quebec, and Pacific Highway in British Columbia.
• In 2005, Canada's trade with countries other than the United States totalled $233 billion. Imports were more significant than exports and, in terms of both value and volume, marine and air transportation were the two dominant modes for this trade.
• Of Canada's top 20 trade partners in 2005, five countries had a two-digit average annual growth rate in their trade with Canada from 1995 to 2005.
• In 2005, China ranked second ($29.4 billion) and fourth ($7.1 billion) respectively in terms of Canada's total imports and exports.
• Tourism expenditures, including expenditures on transportation, were up in 2005. Air transportation expenditures rose 13.5 per cent. Both interprovincial and intraprovincial domestic travel were up in 2005.
• Transportation energy use increased by 3.5 per cent in 2004. While pipelines used 6.5 per cent less energy, marine and air used 10.9 and 9.7 per cent more, respectively, in 2004 than in 2003. Rail used 1.7 per cent more energy, compared with 3.5 per cent more used by road transportation.
• In 2005, increases in energy prices affected carriers' operating costs and transport service prices.
• Productivity gains in rail and air transportation in 2004 were due largely to labour productivity improvements. Average price increases for most transportation services were below inflation.
• In 2005, commercial transportation services accounted for 4.2 per cent of Canada's value-added GDP.
• In 2004, the importance of transportation to provincial/territorial GDP was most significant in Ontario and Quebec. Together, these provinces contributed 58 per cent of commercial transportation activity nationally under GDP.
• Investment in transportation accounted for 2.8 per cent of Canada's GDP in 2005.
• Overall transportation-related final demand accounted for 12.5 per cent.

GOVERNMENT SPENDING ON TRANSPORTATION

• In fiscal year 2004/05, all levels of government combined spent $21.9 billion on transportation expenditures net of transfers, $1.5 billion more than in 2003/04. Federal, provincial and local government expenditures all increased. The largest increase was $1.1 billion, spent by provincial/territorial governments.
• In 2004/05, all government levels collected $15.6 billion in permit and licence fees and fuel taxes from transport users, 1.5 per cent more than the previous year.
• In 2005/06, direct federal transport expenses are expected to fall to $2 billion, a drop of 3.4 per cent from 2004/05. The federal government's two main categories of transportation expenditures are a) operations and b) safety, security and policy activities.
• In 2005/06, total direct federal subsidies, grants and contributions are expected to grow to $129.4 million, 46.2 per cent more than in 2004/05.
• Provincial, territorial and local governments spent $18.9 billion on transportation in 2004/05, roughly 6.6 per cent more than in 2003/04. About 80 per cent of this went to highways and roads.
• In 2004/05, governments spent $15.7 billion on roads and $2.7 billion on public transit services. Federal and provincial governments spent $2.4 billion on air, marine and rail transportation.

TRANSPORTATION SAFETY AND SECURITY

• A recent public opinion survey indicated that in the case of all four transportation modes, over 95 per cent of Canadians give transportation in Canada either a moderately or a very safe and secure rating.
• In 2005, Transport Canada maintained its regulatory and safety oversight responsibilities, implemented a number of improvement initiatives, and continued to implement Safety Management Systems in the air, rail and marine industries. In 2005, there was an increase in the number of aviation and rail transportation accidents and a decrease in marine accidents. There were fewer road and marine transportation fatalities; however, there was an increase in both aviation and rail transportation fatalities.
  • Rail-related accidents increased from 1,138 in 2004 to 1,249 in 2005. Rail-related fatalities increased from 101 to 103. Fatalities due to trespasser accidents decreased from 68 to 63. Crossing accidents at public automated crossings increased from 117 to 161, while at public passive crossings they increased from 65 to 73.
  • In 2004 (latest data), there was a 3.6 per cent decrease in road casualty collisions, a 1.3 per cent decrease in road-related fatalities and a 4.5 per cent decrease in road-related injuries.
  • There were 405 Canadian vessel accidents in 2005, down from 441 in 2004. As in previous years, the majority of marine accidents were shipping accidents. A total of 12 lives were reported lost in 2005, down from 21 reported the year before and below the previous five-year average of 15.4. A total of 22 confirmed vessel losses were reported. Fishing vessels accounted for 55 per cent of the total reported marine accidents, while commercial vessels accounted for 34 per cent.
  • There were 245 Canadian-registered aircraft involved in reported accidents, compared with 241 in 2004. Of these, 107 involved commercially operated aircraft, while the remaining 138 were associated with recreational aviation. Of the five commuter operations accidents reported in 2005, one was fatal. Of the 55 accidents related to air taxi operations, seven were fatal accidents causing 10 fatalities.
  • In a context of approximately 30 million shipments of dangerous goods a year, a total of 412 accidents in the transportation of dangerous goods were reported in 2005, up from 370 in 2004. Also in 2005, seven fatalities and 41 injuries resulted from accidents involving dangerous goods. Of these, six injuries and no fatalities were directly associated to the dangerous goods themselves.
• Transportation security continued to be strengthened in Canada in 2005. Transport Canada continued to take action with other federal departments, other countries and international organizations, labour organizations, industry and other stakeholders.
  • Important aviation security initiatives in 2005 included legislative and regulatory enhancements, programs such as the Aviation Transportation Security Clearance, and international initiatives.
  • The development of a national marine security regime was pursued through regulatory enhancements, inspection and enforcement, the Marine Security Contribution Program, and the work of the Interdepartmental Marine Security Working Group.
  • Following the March 2004 train bombings in Madrid, Spain, a rail and transit intelligence sharing network was developed for Canada. In 2005, an Action Plan was announced to address security priorities and to enhance security for passenger rail, public transit and ferry operations.
  • In 2005, Transport Canada continued to work with others on the development of a National Critical Infrastructure Protection (CIP) Strategy. Transport Canada continued to enhance its ability to prepare for and respond to emergencies and crises.
  • Transport Canada continued to share information and best practices, increasing its capabilities to respond in the event of an incident in relation to the Chemical, Biological, Radiological, and Nuclear (CBRN) Response Project for the transportation of dangerous goods.

TRANSPORTATION AND THE ENVIRONMENT

• In 2003, 25.7 per cent of greenhouse gas (GHG) emissions in Canada came from the transportation sector: 74 per cent from road transportation, four per cent from domestic aviation, three per cent from rail and three per cent from marine. Off-road and pipelines accounted for the remaining 16 per cent of total transportation-related GHG emissions.
• Between 1990 and 2003, GHG emissions from on-road passenger travel increased by roughly 14 per cent; from on-road freight transport activity, they increased by 60 per cent. The passenger and freight transport activities over the same period increased by 23 and 120 per cent, respectively. This indicates that activity levels and GHG emissions had not tracked each other.
• Over the same period:
  • aviation GHG emissions grew by 17 per cent;
  • rail emissions dropped by about 17 per cent, despite a 30 per cent traffic growth; and
  • marine emissions decreased by four per cent.
• In 2005, on-road and off-road diesel engines accounted for roughly 70 per cent of transportation-related PM_2.5 emissions and 54 per cent of transport-related NO_x emissions. Gasoline engines accounted for 87 per cent of transportation-related VOC emissions. Marine transportation accounted for 41 per cent of transportation-related SO_x emissions due to its use of a mix of diesel and heavy fuel oil. Since 1990, overall emissions of all these pollutants have declined.
• The voluntary Memorandum of Understanding between Environment Canada and the Railway Association of Canada on rail emission controls expired on December 31, 2005.
• The use of glycol, a fluid used to de-ice aircraft surfaces for safety purposes prior to flight departures, was reviewed in 2005.
• On April 5, 2005, the Government of Canada and the Canadian automobile industry signed an agreement whereby the carmakers will voluntarily work to reduce annual GHG emissions from light vehicles by 5.3 Mt in 2010.
• With respect to federal transportation-related initiatives:
  • As of December 2005, the Advanced Technology Vehicles Program assessed 126 vehicles for their fuel efficiency, emissions and safety performance, including the Mercedes-Benz Smart Car. In addition, 7.1 million Canadians have been reached through 145 special events undertaken to showcase and raise public awareness of advanced technology vehicles.
  • Approximately $1.85 million were allocated in 2005 to 14 new demonstration projects under the Freight Sustainability Demonstration Program, one of the three components of the Freight Efficiency and Technology Initiative.
  • An agreement was signed in June 2005 with the Air Transport Association of Canada to voluntarily improve energy efficiency and so reduce GHG emissions by an average of 1.1 per cent a year.
  • In 2005, $2.2 million were allocated under the Freight Incentive Program to ten projects aimed at purchasing and installing efficiency-enhancing modal transportation technologies and equipment.
  • Halifax, Waterloo, Toronto/Hamilton, Whitehorse and Vancouver received some support for their innovative community-based projects encouraging more sustainable transportation under the Moving on Sustainable Transportation program.
  • In 2005, a total of 27 projects were ongoing under the Moving on Sustainable Transportation Program.

RAIL TRANSPORTATION

• The rail system network remained relatively stable in 2005. The only track discontinuances (89 kilometres) were in Saskatchewan and Alberta made by Canadian Pacific Railway (CPR).
• Approximately 341 kilometres of track were transferred in 2005, and an additional 339 kilometres was the object of a reversion back to CN.
• Of total rail revenues in 2004, 90 per cent were generated by CN, CPR and VIA Rail.
• Class I railways consumed 2.1 billion litres of fuel in 2004, slightly more than in 2003 but less than in 1990.
• CN reported a five per cent increase in revenue tonne-kilometres in 2004, while CPR's output increased by almost 8.7 per cent.
• In 2005, rail car loadings increased five per cent to reach 284 million tonnes. In western Canada, volumes moved by rail increased five per cent to reach 157 million tonnes. In eastern Canada, volumes moved increased by four per cent to reach 128 million tonnes.
• Shipments of coal and coke increased to 35 million tonnes in 2005, chemicals decreased four per cent to 15.3 million tonnes, iron ore increased to 32 million tonnes, and forest products increased slightly to 50 million tonnes. Grain shipments totalled almost 27 million tonnes, still below the volumes reported in the 1990s, while rail shipments of fertilizer materials held steady in 2005 at 30.1 million tonnes, and automotive products fell almost six per cent to 4.9 million tonnes.
• Export rail tonnage decreased 0.3 per cent in 2005 to 76.4 million tonnes.
• Forest products and chemicals were the largest contributors to the rail export tonnage.
• The largest share of rail export volume to the United States originated in Ontario (23 per cent).
• In 2005, import rail tonnage increased by 15 per cent to 24.6 million tonnes. Imports of metals increased significantly. Automotive imports increased by 3.4 per cent.
• Fort Frances and Sarnia, both in Ontario, accounted for 20.2 and 16.2 per cent of rail-exported trade, respectively. Forest products and chemicals were the major commodities exported at these border crossings. In terms of value, the leading border crossing points for imports were Sarnia and Windsor, with automotive products topping the commodities exported through these locations.
• Class I railways moved 97.6 million tonnes of goods to and from Canadian ports in 2004, up significantly from the 83 million in 2003.
• British Columbia, Saskatchewan and Alberta experienced increases in rail–marine exports in 2004. Coal, forest products, grain, and fertilizer exports all increased. Rail–marine imports increased by 10.9 per cent in 2004, and Quebec and Ontario remained the two major destinations for this traffic.
• Intercity rail passenger traffic increased slightly in 2004. VIA Rail reported 2.6 per cent more passengers carried.
• The productivity of rail freight carriers increased by 2.8 per cent in 2004, while VIA Rail's productivity increased by 3.2 per cent.

ROAD TRANSPORTATION

• In September 2005, the Council of Ministers Responsible for Transportation and Highway Safety adopted a criteria-based National Highway System (NHS) made up of three categories of route types: Core, Feeder, and Northern and Remote. As a result of this decision, the NHS totalled 38,021 kilometres.
• On June 29, 2005, the date that the revised Motor Vehicle Transport Act (MVTA) would come into force was fixed by an Order published in the Canada Gazette Part II at January 1, 2006. On that same day, the Motor Carrier Safety Fitness Certificate Regulations also come into force, allowing the provinces and territories to monitor the safety performance of all extra-provincial motor carriers licensed in their jurisdictions. Revisions to the Federal Hours of Service Regulations for extra- provincial commercial vehicles (bus and truck) drivers were published in the Canada Gazette Part II on June 29, 2005 and will come into force on January 1, 2007.
• Heavy trucks crossing the Canada–U.S. border decreased about one per cent in 2004.
• TransForce Income Fund topped the list of for-hire trucking companies in Canada for total number of vehicles (tractors/trailers) in their fleet.
• Trucking firms carrying general freight accounted for almost 60 per cent of total revenues of large for-hire trucking firms in 2004, while the share of specialized trucking firms increased marginally.
• According to the 2004 Canadian Vehicle Survey, there are 17.7 million (in scope) light vehicles (i.e. gross weight less than 4,500 kilograms) in Canada. This includes 10.1 million passenger cars and station wagons, 2.8 million vehicles listed as vans, 3.4 million pickup trucks and 1.7 million sport utility vehicles (SUVs).
• Vans, SUVs and light trucks accounted for 45 per cent of vehicle-kilometres in 2004. They were driven on average more than cars and station wagons (17,000 versus 15,300 kilometres) and had a marginally higher vehicle occupancy ratio (1.75 persons) compared with 1.57 for cars and station wagons.
• In 2004, for the category of light vehicles, cars and station wagons accounted for 154 billion vehicle kilometres while vans and light trucks accounted for 128 billion.
• In 2004, there was an average of 555 vehicles per 1,000 people in Canada.
• According to the Canadian Vehicle Survey, there were 600,000 (in scope) heavy trucks (gross weight of at least 4,500 kilograms) in Canada, of which 325,000 were medium-sized, weighing between 4,500 and 15,000 kilograms. Almost 277,000 were Class 8 (heavy) trucks, weighing more than 15,000 kilograms.
• Ontario (37 per cent), Alberta (25 per cent) and Quebec (13 per cent) accounted for 75 per cent of the heavy truck fleet.
• Heavy trucks accounted for 20 billion vehicle-kilometres in 2004, compared with seven billion for medium-sized trucks.
• Empty haul movements accounted for 14 per cent of heavy truck vehicle-kilometres in 2004, compared with about six per cent for medium-sized trucks.
• More than two thirds of all truck vehicle-kilometres were driven intraprovincially.
• In 2004 and 2005, the exports from Canada shipped by trucks totalled $186.7 billion and $188.8 billion, respectively. The imports from the U.S. shipped by trucks amounted to $162.6 billion in 2004 and $164.5 billion in 2005.
• In domestic activities, construction materials are the top commodities moved by trucks intraprovincially, followed by agricultural products, primary metals, metal and mineral products, and energy products.
• The main interprovincial trucking flow was the Quebec–Ontario route (both directions) accounting for $41 billion worth of commodities or 30 per cent of the total interprovincial trade.
• Five commodity groups represented almost 80 per cent of total exports in 2004 and in 2005: automobiles and transport equipment, machinery and electrical equipment, other manufacturing products, plastics and chemical products, and base metals/articles of base metal. The same five commodity groups represented almost 88 per cent of imports.
• The busiest transborder trucking routes were Ontario–U.S. central region, Ontario–U.S. south region, and Ontario–U.S. northeast region, the three together accounted for almost 80 per cent of the shipments.
• Heavy truck activity across the Canada–U.S. border fell about one per cent in 2005 to 13.3 million two-way trips.
• The revenues of urban transit operators increased by 6.2 per cent in 2004. Overall, total transit output in Canada increased by 2.7 per cent, while prices rose by 3.4 per cent.
• In 2004, total factor productivity of transit systems decreased by 0.9 per cent.

MARINE TRANSPORTATION

• The National Marine and Industrial Council — an industry–government forum — was established in 2004 to enhance dialogue between the federal government and the marine industry, to promote linkages and coordination on marine sector initiatives, and to provide cohesiveness across a core group of federal departments with mandates and interests in marine transportation. The Council has held bi-annual meetings since its establishment.
• By 2005 year-end, 87 regional/local and remote ports and port facilities remained under Transport Canada's control.
• Total operating revenues of Canada Port Authorities (CPA), which are financially self-sufficient ports critical to domestic and international trade, reached $310 million in 2004, up 3.4 per cent from 2003. Vancouver and Montreal accounted for roughly 55 per cent of this total.
• Tonnage handled at CPA ports totalled 237 million tonnes of cargo in 2004.
• In 2004, CPAs handled 52 per cent of total port traffic.
• Of all fishing harbours, 682 were managed by harbour authorities at the end of 2005, while 322 were small craft harbours managed by the Department of Fisheries and Oceans Canada.
• Three of the four pilotage authorities experienced a deficit in 2005, a loss of less than $4 million, somewhat less than the one reported in 2004.
• The Canadian Coast Guard's net expenditures in 2004/05 were $502.9 million.
• The two main sections of the St. Lawrence Seaway — the Montreal–Lake Ontario section and the Welland Canal section — attracted an estimated 43 million tonnes of traffic in the 2004 season, basically the same volume as in 2004.
• In 2005, international cruise ship traffic decreased at Vancouver as well as at the four Eastern Canada ports served by cruise ships: Montreal, Quebec City, Halifax and Saint John.
• In 2004, marine freight traffic was estimated at 387 million tonnes, up 3.2 per cent from 2003. This total is made up of 69.4 million tonnes related to domestic flows, 128.6 million tonnes to transborder traffic and 189 million tonnes of other international traffic.
• A total of $117.5 billion in trade was handled by marine transportation services, $63.4 billion in imports and $54.1 billion in exports.
• The value of Canadian international marine trade in 2004 was $117.5 billion, including shipments via U.S. ports, a 9.3 per cent increase over 2003.

AIR TRANSPORTATION

• Jetsgo ceased operations on March 11, 2005.
• On May 9, 2005, a new rent policy was announced for federally owned airports, providing close to $8 billion of rent relief for Canada's airport authorities over the course of existing leases.
• On November 10, 2005, the Government of Canada and the United States further liberalized the 1995 Canada–U.S. Air Transport Agreement, liberalizing access for air carriers to the other country's third country markets.
• Effective March 1, 2005, the Air Travellers Security Charge, introduced to fund the costs of the enhanced air travel security system put in place after the September 11, 2001, terrorist attacks, was further reduced to $5 for one-way domestic travel, $8.50 for transborder travel and $17 for other international air travel.
• Under the Multiple Designation Policy, the Minister of Transport in 2005 announced that Air Transat was to serve Greece, and Skyservice would serve Russia.
• In 2005, new air bilateral agreements were negotiated with the People's Republic of China, Greece and India.
• Negotiations with France and Panama were inconclusive.
• In 2005, a total of 64 projects at 48 airports were announced under the Airports Capital Assistance Program.
• Several large airports experienced increases in passenger volume handled in 2004, yet operating revenue performance for airport authorities was mixed, as one third experienced declined revenues, and one third experienced increases of more than 10 per cent.
• Air Canada, with its subsidiaries, remained Canada's largest airline in 2005, with $9.5 billion in revenues between October 1, 2004, and September 30, 2005, and serving 12 points in Canada, 33 in the United States and 59 internationally. The Air Canada family of companies includes Jazz operating on less busy domestic and transborder routes, Air Canada Vacations offering tour packages, and Jetz offering premium charter services to sport teams and businesses. Three independent local service operators offered regional services on behalf of Air Canada: Air Georgian, Exploits Valley Air Services and Central Mountain Air.
• Low-cost, no-frills carriers offering domestic and transborder services in 2005 included WestJet, and CanJet.
• Canadian leisure carriers providing international services to leisure destinations in 2005 included Air Transat, Skyservice Airlines, and Harmony Airways.
• Airlines providing year-round scheduled and charter services across northern Canada included First Air, Canadian North and Air North. Aklak Air, Kenn Borek Air and North-Wright Airways complement the other airlines by offering flights to the most remote communities in the Arctic.
• Twenty-five U.S. airlines served 20 Canadian cities, and 43 foreign airlines provided services from Canada to 57 international destinations in 39 countries.
• A number of all-cargo airlines provided jet service in 2005 on behalf of Canada Post, courier companies, freight forwarders, consolidators and shippers: Cargojet Canada, Kelowna Flightcraft and Morningstar Air Express.
• At the end of 2005, more than 2,300 airline licences were active, an indication of the wide number of airlines operating in Canada.
• The business segment of air activity continued to grow in 2005, mainly as a result of fractional ownership.
• Canada's air trade with countries other than the United States increased significantly in 2004.
• The number of tonnes carried by Canadian air carriers increased by five per cent in 2004.
• Air passenger traffic in 2005 set record levels at over 63 million passengers, six per cent more than in 2004. Domestic traffic grew by four per cent, while the transborder and international sectors grew by seven per cent.