1 INTRODUCTION

The 2005 Annual Report presents the state of transportation in Canada using the most current information available.

In the Canada Transportation Act (1996), a statutory responsibility exists for the Minister of Transport to table, every year, an annual report on the state of transportation in Canada. Section 52 of the Act defines the mandate and the nature of this responsibility:

"Each year the Minister of Transport shall, before the end of May, lay before Parliament a report briefly reviewing the state of transportation in Canada in respect of the preceding year, including:

1. the financial viability of each mode of transportation and its contribution to the Canadian economy and the development of the regions;
2. the extent to which carriers and modes of transportation were provided resources, facilities and services at public expense;
3. the extent to which carriers and modes of transportation received compensation, indirectly or directly, for the resources, facilities and services that were required to be provided as an imposed public duty; and
4. any other transportation matters the Minister considers appropriate."

This annual report, Transportation in Canada 2005, is the tenth submitted by the Minister since the Canada Transportation Act came into force. To produce this document, the most current data and information available was used to present an overview of transportation in Canada. It is important to note that data for 2005 was not always available. While the scope of the report goes beyond federal transportation responsibilities, urban and intermodal transportation matters receive limited coverage. Nevertheless, the document offers broad and comprehensive coverage of the country's transportation system.

An Addendum, posted on Transport Canada's Web site, contains more detailed information on subject matter covered in the report. Readers interested in more detailed and/or greater time series information are invited to consult this Addendum at www.tc.gc.ca. Individual references to the Addendum are found either in the main text of the report or in footnotes to the tables and figures. Information contained in tables or used to produce figures in last year's report are either updated in the report or found in tables in the Addendum. In addition, all annual reports since 1996 are accessible on Transport Canada's Web site at www.tc.gc.ca.

Transportation is omnipresent in all social and economic activities. It opens markets to natural resources, agricultural products and manufactured goods, it supports service industries, and it alleviates the challenges delimited by topography. Transportation also links communities and reduces the effects of the distances separating people from each other. Such essential roles of transportation are indicative of transportation's intertwined and interdependent relationships with the economic and social fabric of our society. However, transportation needs evolve over time as circumstances and conditions change.

Changes in economic activities impact transportation demand. The changes can take place at various levels, such as at the regional or sectoral level. It is important to remind ourselves that the demand for transportation services is a derived demand and originates from all sectors of the economy.

The review of the state of transportation starts with a review of the performance of the Canadian economy (Chapter 2). Detailed information related to employment, trade and tourism can be found in the Addendum. Detailed information on transportation energy consumption is also accessible in the Addendum.

Chapter 3 presents the most recent information on government transportation spending and revenues. This chapter addresses the Section 52 (b) requirement related to the statutory mandate for the annual report. Some of the government transportation spending is directed at specific transportation system infrastructure assets. Although the private sector also makes expenditures on and investments in Canada's transportation system, these are not covered in this chapter. The reader must keep in mind that the public sector does not plan nor fully control all such expenditures and investments.

In Chapter 4, a review of safety and security in the transportation system is presented. The safety of the country's transportation system remains a fundamental priority for Canada. The most recent accident and incident statistics by mode are reported in the chapter, providing an up-to-date overview. The more recent enhancements to security since the events of September 11, 2001, are also covered in this chapter.

Chapter 5, a review of transportation and the environment, devotes special attention to environmental trends in transportation, including the aspects related to climate change. An overview of the climate change initiatives is presented. This chapter also reviews environmental management-related matters associated with Transport Canada responsibilities and activities.

Chapters 6 to 9 give the most recent information on transportation by modes. Rail (Chapter 6), marine (Chapter 8) and air transportation (Chapter 9) cover special events in 2005, infrastructure, industry structure, freight and passenger transportation activity levels, and, where applicable, intermodalism and performance. All road-related transportation is regrouped in Chapter 7, with coverage of the same subject matter that can be found in the three modal chapters.

Most of the data presented in this report or in the Addendum came from organizations other than Transport Canada. The onus for data validation rests with such external sources. Proper care and attention to data quality and limitations was taken during the production of this report, and footnotes are used where needed to flag issues. When issues were identified, they were flagged to the source of the information and if the validity of the information was confirmed, the issue was not pursued further given the constraint of the statutory deadlines under which the report has to be produced. With only a few exceptions, which are noted, no attempts were made to circumvent data limitations by estimating. Finally, this report does not attempt to present a prospective view of Canada's transportation system.