2 TRANSPORTATION AND THE ECONOMY

PRODUCTIVITY AND PRICE PERFORMANCE OF TRANSPORT

In 2005, total factor productivity increased by 2.6 per cent in the rail freight industry (Class I) and by 7.9 per cent in the air industry. Gains in rail resulted primarily from productivity from other materials and services (the residual of labour, fuel and capital), while gains in the air industry were spread among a number of factors. Total factor productivity was up by 2.1 per cent for VIA Rail but down by 4.3 per cent for public transit. Results were not available for the trucking issue due to data issues.

Fuel unit costs (costs per unit of output) increased by 34.4 per cent for the rail freight industry. While fuel consumption was up slightly, the increase in unit costs was due almost entirely to a large increase in fuel prices and the suspension of hedging fuel purchases by the rail carriers. Fuel unit costs also increased in the air industry, by 23.2 per cent. VIA Rail and public transit carriers were also affected by fuel costs, as their fuel unit costs increased by 21 per cent and 17.5 per cent, respectively.

Transport prices were up in many of the industries in 2005. Rail freight prices were up 9.8 per cent, due largely to the inclusion of fuel surcharges. Airline prices increased by 3.6 per cent, while VIA Rail prices were up by 1.7 per cent. Public transit prices increased by 3.5 per cent during the year. Despite the price increases, output (generally measured in terms of passenger-kilometres or tonne-kilometres) also increased in 2005. Output increased by 4.8 per cent in the rail freight industry, 8.2 per cent in the air industry, 4.1 per cent for VIA Rail and 3.6 per cent for public transit. For more information, 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