Report Highlights

Transportation and the Canadian Economy

• The year 2000 was the ninth consecutive year of uninterrupted growth for the Canadian economy. This sustained growth brought the non-farm goods sector close to production capacity. In some instances, the supply of skilled workers became a constraint. By year end, the first signs of an easing in economic growth began to appear, a reflection of a slowdown of the US economy.
• One of the key sources of increased demand in the Canadian economy in 2000 came from business investment spending.
• Both the manufacturing and primary goods sectors, especially mineral fuel production, experienced a significant increase in the level of activity in 2000. While construction activity, mostly residential construction, grew significantly, retail trade also had a good year. Consequently, transportation activity had its fourth consecutive year of solid growth.
• Growth in merchandise exports surpassed that of imports. The rise in total merchandise exports, as well as the significant increase in imports, came from energy products, and machinery and equipment. In the case of energy products, given that the value of activity is the unit of measurement, the increases in exports and imports of energy products reflected the increase in the price of crude petroleum in 2000, as well as the strength of the US and Canadian economies.
• Real per capita disposable income rose as a result of the strong Canadian economy and tax reductions.
• In 2000, the strong economic growth was spread across all regions of Canada.
• The transportation industries' share of gross domestic product (GDP) was 4.1 per cent in 2000, with trucking having the largest share at 1.7 per cent, and domestic marine transport services the lowest at 0.3 per cent.
• Transportation demand, however, accounted for 13.3 per cent of GDP, the bulk of which came from expenditures on transportation equipment.

Government Spending on Transportation

• In gross terms, total government transportation expenditures in 1999/2000 increased from the previous fiscal year. Federal expenditures on transportation, however, decreased, while provincial/territorial and local governments' expenditures increased. In fact, since 1996/97, non-federal government transportation expenditures have been increasing by an average of 5.5 per cent annually.
• Annual gross government expenditures on transportation have ranged from $17 to $18 billion over the past five fiscal years.
• In net terms, government expenditures on transportation in 1999/2000 were approximately $4.7 billion, but in the mid-1990s they were around $7 billion.
• Between 1996/97 and 1999/2000, annual federal transport expenses fell from $2.2 billion to 1.4 billion. The largest federal government transport expenses are related to the Canadian Coast Guard.
• In 2000/01, total federal subsidies, grants and contributions to transportation are expected to be slightly under $600 million, half of what they were in the mid-1990s.
• Spending on roads and highways remains the most important category of transport-related expenditures by all provinces. Total government spending on roads reached $12.5 billion in 1999/2000, or 69 per cent of overall government spending on transportation.
• In some provinces and territories, spending on other modes of transportation was also significant. The Northwest Territories' expenditures on air transport are a case in point. In 1999/2000, the share of total gross government transportation expenditures devoted to air, marine and rail were 2.3, 11 and 1.3 per cent, respectively.
• Spending on transit systems accounted for 12 per cent of all government expenditures on transportation in 1999/2000. The bulk of spending on urban transit transport services has shifted from provincial to local governments. In 1999/2000, Ontario accounted for 47 per cent of governmental transit expenditures. Quebec, Alberta and British Columbia also had significant transit expenditures.
• In 1999/2000, federal revenues from transportation totalled $5.2 billion, of which $4.8 billion came from fuel tax revenues. Provinces and territories generated revenues of $9.2 billion during the same fiscal year, with $7 billion coming from fuel tax levies.

Transportation and Safety

• While there was a decline in the number of accidents in the aviation, marine and rail transport modes in 2000, the number of road casualty collisions was up slightly from the record low the previous year. Accidents involving dangerous goods also increased. The number of reported fatalities in air and rail transportation was down, while marine and road transportation showed a increase.
• The number of rail accidents reported in 2000 (1,062) was down from 1999. Non-main-track accidents accounted for 47 per cent of rail-related accidents, followed by crossing accidents, with a 25 per cent share, main-track train derailments and collisions with 12 per cent, and trespasser accidents with seven per cent. Dangerous goods were involved in 23 per cent of total rail accidents reported. In 2000, there were 87 rail fatalities, a figure 21 per cent less than the five-year average.
• In 1999, the most recent year for which information is available, there were 2,969 fatalities from motor vehicle accidents, a figure higher than the one reported in 1998, but below the five-year average. Roughly 18.7 per cent of all road fatalities involved collisions with commercial vehicles.
• The downward trend in the number of shipping accidents since 1990 continued in 2000, with fewer Canadian and foreign-flag vessels involved in accidents. The 21 fatal marine accidents in 2000 also represented a slight decline from the five-year average.
• A total of 321 accidents involving Canadian-registered aircraft occurred in 2000, the lowest number in the past 25 years. A slight decrease in the number of air fatalities, compared with 1999, was also reported.
• Two deaths and 42 injuries were caused by dangerous goods in 2000, with most of the accidents behind these statistics occurring at the handling stage rather than during transportation.

Transportation - Energy and Environment

Energy

• Transportation remains the single largest energy user in Canada, with 35 per cent of total domestic energy use in 1999. Between 1990 and 1999, transportation energy consumption increased by 26 per cent, a figure in line with the 24 per cent rise in real GDP over that period.
• Within the transportation sector, road transportation accounted for 72 per cent of total transportation energy consumption, followed by pipelines with 11 per cent, aviation with nine per cent, marine with five per cent, and rail with three per cent.
• Most of the transportation energy purchases in 1999 came from Ontario (34 per cent), Quebec (19 per cent), British Columbia (15 per cent) and Alberta (14.6 per cent).
• The price of crude oil in Canada more than tripled between February 1999 and November 2000. The retail price of motor gasoline, however, increased by only 51 per cent over the same period, while the price of diesel increased by 40 per cent.

Environment

• On the environment front, Canada's greenhouse gas (GHG) emissions from transportation energy consumption were equivalent to 157 megatonnes of CO2, almost 35 per cent of total greenhouse gas emissions from total secondary energy use. Road transportation accounted for more than 77 per cent of transportation GHG emissions.
• With the increases in transportation energy demand in Canada, there are three major environmental issues to address: climate change, air quality and sustainability in the transportation sector.
• In 2000, Canada's Ministers of Energy and Environment released the first national business plan for the period 2001-2003, which outlines actions that they will take in all sectors of the economy to respond to climate change. The five transportation-related components of the federal contribution to this action plan have to do with fuel efficiency, new fuels, fuel-cell vehicles, freight transportation and urban transportation.
• At the end of 2000, Canada and the United States brought into force their agreement to reduce smog-causing pollutants.
• The Committee on Aviation Environmental Protection of the International Civil Aviation Organization developed a series of recommendations to reduce the environmental impact of aircraft noise and engine exhaust emissions.

Transportation and Regional Economies

• Not surprisingly, in Newfoundland and Prince Edward Island marine transportation has the largest share of provincial gross domestic product (PGDP) of all provinces. Newfoundland also has the highest share of the air mode of all provinces.
• Truck transport is the most important mode in Nova Scotia and New Brunswick, with New Brunswick having the largest trucking PGDP share of all provinces.
• Trucking and public transit are the most important modes in Ontario's and Quebec's PGDP.
• Rail transport has a higher importance in western provinces' PGDP, due largely to the relative importance of primary industries in the region. Saskatchewan has the highest rail PGDP share of all provinces. Trucking has the highest PGDP share in Manitoba, Alberta and British Columbia, followed by rail in Manitoba and Alberta, and marine in British Columbia.
• In the territories, air is the most important mode, with a higher share of PGDP than in any of the provinces.
• Commercial transport growth exceeded PGDP growth in Ontario, New Brunswick and all western provinces.
• In 1999, New Brunswick had the highest level of domestic demand for transportation, followed by Ontario and Quebec.
• The annual growth in domestic transportation demand in 1999 exceeded the growth in provincial final domestic demand in Newfoundland, Prince Edward Island, Quebec, Ontario and British Columbia.

Transportation and Employment

• In 2000, transportation employment, with close to 853,600 jobs, increased by 2.2 per cent over the previous year.
• Trucking, the transportation sector's major employer, accounted for 37 per cent of transportation employment, followed by air transportation.
• In transportation service operations, employment in rail transportation declined by fewer than 2,000 employees between 1998 and 1999. In trucking, medium and large for-hire trucking firms employed more people in 1999 than in 1998. In the bus industry, a two per cent increase in the number of full-time employees was reported in 1999. The number of people working in the marine transport industry reached over 30,000 in 2000, its highest level in the last five years. For the air transportation industry as a whole, the increase in employment between 1998 and 1999 was marginal. Level I-III air carriers had an increase in employment, while Level IV carriers had a decline.
• With respect to transportation infrastructure, rail and port-related employment declined, while airport-related employment increased.
• Transportation-related employment associated with federal and provincial government services declined.
• In 2000, average weekly earnings increased for all modes of transportation. Trucking and urban transit had the largest increases.
• The transport sector in 2000 recorded its highest number of work stoppages since 1996. However, the workers involved were minimal compared to the numbers involved in work stoppages during 1999.

Transportation and Trade

• In 1999, domestic trade of both services and goods increased. The split between intraprovincial and interprovincial trade remained the same at 85 per cent and 15 per cent, respectively.
• Between 1993 and 1999, the volume of goods generated by domestic trade increased from 372 million tonnes to 456 million tonnes. The greatest share, between 46 and 50 per cent, moved by rail, followed by trucking, which increased its share from 38 to 43 per cent over this period. The marine share decreased and air carried less than one per cent of the total goods' traffic.
• In 1999, containerized freight represented approximately seven per cent of rail tonnage and almost one per cent of domestic marine tonnage.
• The increased level of trucking activity was due to an increase in manufacturing shipments.
• In 1999, exports and imports of both goods and services amounted to $391 billion and $362 billion, respectively, compared with $189 billion for total interprovincial trade.
• Of total Canadian exports in 2000, 87 per cent went to the United States. Trucking accounted for 60 per cent of exports to the United States and 80 per cent of imports from the United States. On a tonnage basis, pipelines ranked first, followed by trucking, rail and marine. Ontario accounted for nearly two thirds of Canada's trade with the United States.
• One third of Canada's total imports came from countries other than the United States, with the marine mode responsible for 70 per cent of such trade activities. The air mode, however, continued to increase its share of non-US imports to Canada.

Transportation and Tourism

• In 1999, tourism spending in Canada totalled $50.1 billion, a 6.5 per cent increase over the previous year. Of this amount, $20.1 billion was spent on transportation, with air accounting for $11.6 billion. The increase in the price of fuel in 2000 translated into an increase of transportation spending related to tourism.
• Of total tourism expenditures in Canada in 1999, Canadians spent 69 per cent. Foreign visitors' spending in Canada rose by 7.7 per cent. Ontario had the lowest percentage increase in non-resident tourism spending.
• The number of domestic travel trips taken by Canadians increased by just under one per cent in 1999. On a per capita basis, each Canadian took 4.8 trips throughout the year. Thirty nine per cent of Canadians' total trips were for pleasure. The automobile was used for close to 92 per cent of all trips.
• The number of travellers crossing Canada's borders in 2000 rose by 0.3 per cent. Overall travel between Canada and the United States increased by about 0.4 per cent in 2000, with US travel to Canada falling and Canadian travel to the United States rising. The number of Canadians making overnight business trips to the United States continued to increase. The automobile was used for most Canada-US travel in 2000.
• A total of 4.6 million visitors from overseas countries came to Canada in 2000, a 4.9 per cent increase from 1999. The increase in visits by Asians to Canada, at 6.8 per cent, was significant, but visitors from Australia, New Zealand, and the United Kingdom also increased substantially.
• The number of Canadians travelling overseas increased 6.2 per cent in 2000.

Transportation Infrastructure

• In 2000, changes in Canada's rail network were minimal, with the total number of route-kilometres reduced by 0.1 per cent. Of the 1,100 kilometres of lines rationalized in 2000, 77 per cent were transferred. About 70 per cent of line discontinuances occurred in Alberta, while 63 per cent of the transfers to other operators were observed in Saskatchewan.
• Canada's road network is over 1.4 million kilometres, of which 1.2 million kilometres fall under the local roads classification. The remaining 200,000 kilometres is made up of primary and secondary highways under provincial/territorial jurisdiction and major urban arterial and collector roads under municipal/local control.
• Over 140 billion vehicle-kilometres were driven on the primary highway network for an annual average of 4,700 vehicles per day. Annual car traffic between Canada and the United States has stabilized at 77 million crossings, while truck traffic has grown at an average rate of over seven per cent per year since 1991 to reach the current 13.6 million crossings per year. Twenty Canada-US border crossing sites accounted for 73 per cent of total vehicle movements.
• At the end of 2000, 382 of the 549 public ports and public port facilities under Transport Canada's control and administration had been transferred, deproclaimed or demolished.
• Traffic on the two sections of the St. Lawrence Seaway was down in 2000 by over one million tonnes from 1999, reflecting a decrease in traffic of iron ore, coal and other bulk commodities.
• Three of Canada's four pilotage authorities faced financial deficits at the end of 2000.
• The net expenditures of the Canadian Coast Guard increased slightly in 1999/2000 from the previous fiscal year.
• Aircraft arrivals and departures at Canadian airports during the first eight months of 2000 totalled 4.9 million, close to a five per cent drop below the same period in 1999.
• The eight per cent reduction in NAV Canada's user fees introduced in 1999 was maintained in 2000.
• New airport authorities took over the operation of the Halifax International and Jean Lesage International (Quebec City) airports. Financial results of 16 airport authorities for 1999 showed that on average they generated $14.81 in revenues per passenger and incurred $11.35 in expenses per passenger. In 2000, 39 airports had projects approved for funding under the Airports Capital Assistance Program.

Industry Structure

• Changes to the structure of the Canadian rail industry in 2000 were modest. While several new shortlines were created, there were only marginal changes to the ownership structure of the shortline sector.
• Canadian motor carriers TCT Logistics, Kleysen Transport, Kayway Logistics, TransForce Inc., Clarke Inc. and Trimac were among the trucking firms involved in mergers and acquisitions in 2000. The latter two firms were also active in the Canada-US marketplace.
• The number of bankruptcies in the trucking industry increased in 2000 for a second consecutive year, bringing the total very close to its highest 1990s level.
• In 2000, FirstGroup PLC of the United Kingdom acquired Hertz, a group of companies primarily involved in school bus sales and services in Saskatchewan and the Northwest Territories. Laidlaw, a major school bus operator and the largest scheduled bus service operator in North America, faced financial difficulties in 2000.
• The concentration in ownership trend in liner shipping continued in 2000, with the top 20 companies controlling 76 per cent of the world fleet. CP Ships acquired TMM's shares in Americana Ships, as well as the Christensen Canadian African Line.
• In the domestic marine industry, Algoma Central Corporation and Upper Lakes Group pooled their fleet in 2000 into a single new entity, Seaway Marine Transport. CSL Group purchased the Upper Lakes group stake in Marbulk Canada. Rotterdam-based Smit International acquired Rivtow Marine Ltd., an important tugboat company in British Columbia.
• During the first half of 2000, Air Canada completed its acquisition of Canadian Airlines Corporation. In response to this restructuring of the airline industry, the federal government introduced Bill C-26. Bill C-26 addressed the government's plan to protect the public interest, increase consumer protection and ensure competition in air service.

Freight Transportation

• The combined Canadian rail operations of CN and CPR generated an increase in total revenue tonne-kilometres in 1999, totalling 271 billion. The output of their North American systems also increased in 2000, reaching 379 billion tonne-kilometres. Exports were a major source of this rail traffic growth.
• Between 1989 and 1999, Canadian for-hire trucking firms saw their international traffic increase at an average annual rate of 12.4 per cent, compared with a 4.2 per cent increase in their domestic traffic. In 1999, international traffic represented 76 billion tonne-kilometres, compared with 82 billion tonne-kilometres for domestic traffic.
• In 2000, over 270,000 Class 8 trucks (gross weight of 15,000 kilograms or more) were registered in Canada, three per cent more than in 1999. There were also over 390,000 registered trucks with gross weights between 4,500 and 15,000 kilograms.
• Marine handled freight traffic totalled 334 million tonnes in 1999, 1.9 per cent more than in 1998. Of this total, 105.8 million tonnes came from domestic flows, 101.9 million tonnes from Canada-US traffic and 179.2 million tonnes from overseas flows. Canada-US traffic flows increased by 1.8 per cent from 1998, while the overseas flows decreased by 0.1 per cent.
• The change in the total tonnes of air cargo carried by Canadian air carriers between 1998 and 1999 was not significant. In 1999, they carried a total of 826,000 tonnes. Of this total, 501,000 tonnes came from domestic flows, 91,000 from Canada-US flows and the remaining 234,000 tonnes from other international flows.

Passenger Transportation

• Rail passenger traffic increased in 1999 by three per cent to over 4.1 million. VIA Rail accounted for 92 per cent of this traffic, with four Class II rail carriers carrying the rest. In terms of passenger-kilometres, traffic increased by about nine per cent to 1.59 billion. All carriers contributed to this growth. In Vancouver, Toronto and Montreal, passenger traffic on commuter rail lines increased by 44 per cent between 1994 and 1999.
• The number of passengers using scheduled intercity bus services declined in 1999 by almost one million passengers. While there is no passenger traffic data available for charter bus services, the bus-kilometres figures are indicative of an increase in patronage in the 1990s, with the 1999 figure being equivalent to that of the preceding year. Urban transit ridership showed an increase of 2.2 per cent in 1998 and one of 1.5 per cent in 1999.
• In 2000, 16.8 million cars and light trucks were registered, a slight increase over 1999. The distribution of the cars and light trucks more or less follows the distribution of Canada's population.
• In marine transportation, international cruise ship traffic increased at each of the five major ports in 2000. Vancouver passed the one million threshold for the number of cruise passengers handled annually, while the Port of Halifax also reached new heights at over 138,000 passengers. Cruise traffic was also up at Montreal and Quebec City but the largest increase was at Saint John, with a traffic level of over 100,000 passengers. This traffic could have been even higher had it not been for the bankruptcy of Premier Cruise Lines of Florida in September 2000.
• British Columbia Ferry Corporation carried 21.4 million passengers and 7.9 million vehicles in 1999/2000. Marine Atlantic Inc. increased its traffic, handling 478,000 passengers, 150,000 passenger vehicles and 77,000 commercial vehicles.
• The number of international air passengers increased by four per cent in 1999, with the growth coming from the Atlantic and southern markets. Preliminary statistics for 2000 showed a seven per cent increase in international passenger traffic. In domestic air services, the increase in passenger traffic in 1999 was about 2.8 per cent. In transborder air services, there was an increase of 4.8 per cent in the total number of passengers carried.

Price, Productivity and Financial Performance in the Transportation Sector

• Between 1998 and 1999, the productivity increase in the transportation industry was about 2.4 per cent, compared with 1.7 per cent for the economy.
• Shippers received a portion of the benefits of the productivity gains achieved in different transportation sectors. Between 1994 and 1999, there were real term price declines of 0.8 per cent per year in rail freight transportation, 0.3 per cent annually in trucking.
• With respect to passenger transportation services, from 1994 to 1999 VIA Rail's long-haul service output grew by 3.1 per cent per year, while prices increased by 4.3 per cent per year; on its corridor services, prices increased on average by 2.5 per cent per year while demand grew by 0.7 per cent per year. In the bus industry, output increased by 2.6 per cent per year, and prices declined by 0.4 per cent per year. In air transportation, output of domestic air services grew at the annual rate of 6.3 per cent, while for international services, the annual rate of growth was 10.4 per cent. With respect to prices, in domestic services, they grew on average by 0.5 per cent per year between 1994 and 1999, compared with 1.8 per cent for international services.
• Between 1994 and 1999, rail freight total factor productivity increased by 3.9 per cent per year on average. In trucking, an average annual two per cent productivity gain was achieved over the same period. In VIA Rail's operations, a 5.1 per cent annual productivity improvement was achieved over this period, compared with 3.6 per cent in the bus industry and 3.8 per cent in the air transportation industry.
• In 1999, increased profits were reported by Class I rail freight carriers. VIA Rail improved its revenue/cost recovery ratio in 1999, achieving a 56.7 per cent ratio. Transit systems also improved their cost recovery ratio in 1999. A slight deterioration in operating ratios was observed in both the trucking and intercity bus industries in 1999. The improvement in the air transportation industry's financial performance in 1999 was insufficient to restore viability.
• A simulation of the effects of the increase in fuel prices in 2000 showed that transport fuel costs would have increased by 30 per cent, consequently raising total costs by 3.5 per cent. Assuming that such cost increases were all passed on to users, transport price increases of approximately 3.9 per cent would have been needed to offset the fuel cost increases. By mode, the impact of fuel price increases on prices would have been 3.2 per cent for rail freight services, four per cent for VIA Rail services, 3.3 per cent for trucking, 2.3 per cent for intercity bus services, 2.2 per cent for transit services, and 5.7 per cent for air services.