7 ROAD TRANSPORTATION

PRICE, PRODUCTIVITY AND FINANCIAL PERFORMANCE

TRUCKING INDUSTRY

In 2005, total operating revenues¹⁵ of the trucking industry with motor carriers earning annual revenues of $1 million and more were $26.1 billion, up 8.6 per cent from 2004. Total operating expenses reached $25.1 billion, up 11 per cent. As a result, the for-hire trucking industry saw its 2005 operating ratio increase to 96, compared with a ratio of 94 the year before. Return on assets was five per cent, slightly lower than the 2000 – 2005 average of six per cent.

Revenues generated per driver (excluding owneroperators) reached $196,450 in 2005, up from $192,388 in 2004. Revenues per kilometre for road tractors (excluding owner-operators) reached 2.8 cents, compared with an average of 2.3 cents for the 2000 – 2004 period. For 2005, fuel intensity per dollar of revenue generated remained the same as that for the previous five-year, that is, a yearly average of $5.5 of operating revenues for every litre of fuel consumed. Tonne-kilometre figures over the same period were not available.

URBAN TRANSIT SYSTEMS

Revenues (excluding subsidies) generated by urban transit carriers’ operations rose by 7.2 per cent in 2005. Quebec transit authorities registered the strongest growth, at 11.3 per cent. The Quebec results were achieved through increases of 6.2 per cent in the average fare and 4.3 per cent in the number of passengers carried, as well as a 19.2 per cent rise in non-passenger revenues.

Overall, total transit output in Canada increased by 2.7 per cent, based on increases of 3.9 per cent in passengers carried and 1.6 per cent in non-passenger revenues. Average fares also rose, by 3.5 per cent.

Transit systems are both labour- and capital-intensive, more so than other transport industries. These two factors of production represented 52 and 23 per cent, respectively, of total costs in 2005.

In 2005, total factor productivity of transit systems declined by 4.3 per cent. Capital productivity fell by 9.3 per cent and labour productivity decreased by 1.9 per cent. Energy efficiency declined by 1.1 per cent, while the productivity of other variable factors of production fell by 6.8 per cent.

Transit costs per unit of output rose by 2.8 per cent in 2005. Since 1998, total unit costs have increased by 22.9 per cent, for an annual average increase of 3.0 per cent.

The total costs of transit systems in Canada were estimated at $5.6 billion in 2005. Cost recovery was measured at 46.7 per cent, a slight improvement over 2004 and the highest ratio registered since 1986. Annual operating subsidies rose to $2.1 billion, up 10 per cent from 2004. Capital subsidies increased by $367 million to $1.2 billion. The federal government increased its capital contribution from $73 million in 2004 to $223 million in 2005.

Cost recovery ratios for 2005 were 49.7 per cent in Ontario, 44.7 per cent in Quebec, 44.6 per cent in British Columbia and 37.3 per cent in Alberta. Urban transit operations in the rest of Canada, which account for only five per cent of overall transit revenues, consistently show higher cost recovery rates than the four selected provinces. This ratio has been hovering around 50 per cent since 1996 and was at 48.9 per cent in 2005, slightly below Ontario’s ratio.

Table 7-15 provides details of the performance of transit system in 2005.

Source: Transport Canada, based on Statistics Canada and CUTA information

¹⁵ Financial data based on Statistics Canada Q5 Annual Supplement, which is more appropriate for analysis of for-hire trucking firms’ balance sheets. Return

Major Events in 2006

Other Issues of Significance

Infrastructure

Industry Structure

Passenger Transportation

Freight Transportation

Trucking Freight Transportation

Price, Productivity and Financial Performance