Report Highlights

Transportation and the Canadian Economy

• The Canadian economy slowed down in 2001, with only 1.5 per cent growth in real Gross Domestic Product. The decline in the third quarter of the year was the first since 1992.
• The US economic slowdown was a major factor in the Canadian economic slowdown. Canada's exports to the United States fell by 2.4 per cent while imports dropped by 4.6 per cent. This trade performance was despite a 4.1 per cent drop in the value of the Canadian dollar relative to the US dollar.
• The events of September 11 depressed economic activities.
• Canadian business investment fell in 2001, especially in the high-tech sector.
• After increasing at an average annual rate of four per cent over the previous five years, manufacturing output fell by 3.9 per cent in 2001.
• Consumer spending was strong, rising 2.5 per cent, but it did drop during the third quarter. Low interest rates translated into strong housing purchases.
• All major economic regions of the world faced a slowdown in economic growth.
• In 2001, transportation industries accounted for 4.1 per cent of GDP. Transportation-related final demand represented 14.9 per cent of total expenditures in the economy. Investment in transportation made up 3.1 per cent of GDP in 2001.
• In 2000, Ontario and Quebec, together, accounted for 59 per cent of all Canadian commercial transportation; Alberta and British Columbia for another 28 per cent, leaving 13 per cent for the remaining provinces and territories.
• Forty-one per cent of Canadians personal expenditures on transportation came from residents of Ontario, 23 per cent from Quebec residents, 13 per cent from British Columbia residents, ten per cent from Alberta residents.
  The Yukon, Ontario, Alberta and British Columbia were the only regions with per capita spending on transportation above the national annual average of $3,126.

Government Spending on Transportation

• Government spending on transportation in 2000/01 remained within the $17 to $18 billion range observed over the previous five years. Overall, governments transportation expenditures decreased: the federal government increased its expenditures by 0.6 per cent and local and provincial governments decreased theirs by three per cent.
• A total of $13.6 billion of government fees and tax revenues were collected from transport users in 2000/01, an amount slightly less than the one of the previous fiscal year.
• In 2001/02, direct federal transportation expenses are expected to reach $1.6 billion, a 16 per cent increase over the previous year. Of that total, $520 million is expected to be spent by the Canadian Coast Guard, and $225 million is expected to be spent on ports and airports. Federal expenditures on road and bridges are expected to rise, mainly as a result of capital expenditures on bridges.
• Federal direct subsidies are expected to total $828 million in 2001/02, 36 per cent more than in 2000/01. In addition to an increase in VIA Rail subsidies, programs to compensate air carriers for the closure of Canadian airspace following September 11 and to improve airport security, resulted in $189 million new expenditures.
• In 2000/01, provincial government transportation expenditures decreased by $1.2 billion, while local government expenditures increased by $0.7 billion. Variations in provincial expenditures over the years can be explained by exceptional payments one year that are not repeated subsequently, such as special payments to transit systems, for example.
• Federal transfers accounted for 1.2 per cent of local and territorial government spending on transportation.
• Spending on roads and highways is the most significant category of transport-related provincial/territorial expenditures, accounting for almost 100 per cent in Prince Edward Island and 58 per cent in the Northwest Territories.
• By mode, government spending on transportation in 2000/01 can be broken down as follows: 2.4 per cent for air, 5.5 per cent for marine, 1.7 per cent for rail, 13 per cent for transit systems, 74 per cent for roads, and the remaining share for overhead expenditures.

Transportation Safety and Security

• All transportation modes, except road, had no change or fewer accidents in 2001 than in 2000.
• Fatalities in aviation and road transportation fell in 2001 but rose in marine and, more noticeably, in rail.
• The downward trend in transportation accident rates continued.
• Railways under federal jurisdiction reported 1,064 accidents in 2001, the same number as in 2000. Given that train-miles were higher in 2001 than in 2000, this translated into a drop in the rail accident rate.
• Non-main-track derailments and collisions accounted for 45 per cent of total rail-related accidents reported in 2001; crossing accidents for 26 per cent, main-track derailments and collisions accounted for 13 per cent; and trespasser accidents for seven per cent.
• Accidents involving passenger/commuter trains increased from 61 to 75.
• Nineteen per cent of total reported rail accidents involved dangerous goods.
• There were 92 fatal accidents in 2001, more than in the previous year, due to an increase in fatal crossing accidents.
• In 2000, the most recent year for which motor vehicle traffic collision data are available, 2,917 fatalities resulted from motor vehicle collisions. This is the lowest level in the past 45 years. Nevertheless, the number of casualty collisions from all reportable motor vehicle collisions rose in 2000.
• The highest fatality rates in Canada occurred in Nunavut and the Yukon. Ontario, with the highest number of vehicle registrations, continued to have one of the lowest fatality rates, 1.3 fatalities per 10,000 road motor vehicles registered, the same rate as Newfoundland and Labrador.
• In 1999, 586 fatalities resulted from collisions involving commercial vehicles, compared with 557 in 1998.
• Private automobiles accounted for 53 per cent of the vehicles involved in fatal collisions. Light trucks and vans accounted for 25 per cent and the different categories of trucks, 12 per cent.
• Seat belt use for drivers of passenger cars reached a plateau of just over 90 per cent, more or less the same usage rate since 1995.
• In 2001, the downward trend in shipping accidents was interrupted, with 458 accidents reported, a two per cent increase over 2000. With 159 and 158 shipping accidents, respectively, the Maritimes/Newfoundland region and the western region had the largest proportion of the total shipping accidents.
• A total of 506 vessels were involved in shipping accidents in 2001, 54 per cent of which were Canadian fishing vessels.
  With 25 per cent of shipping accidents, grounding accidents were the most significant.
  A total of 144 shipping accidents involved Canadian commercial vessels in 2001.
• Foreign vessels involved in shipping accidents continued to decline in 2001, with only 77 vessels involved, ten per cent fewer than in 2000.
• In 2001, there were 24 fatal marine accidents, with 33 related fatalities.
• The 295 accidents involving Canadian-registered aircraft represented an eight per cent reduction from the number reported in 2000. Of that total, 58 per cent came from private/corporate/state aircraft. The total number of fatalities involving Canadian-registered aircraft in 2001 was 61, down from the 65 reported in both 1999 and 2000.
• There were more commuter aircraft accidents in 2001.
• Most commercial air accidents, 13 per cent of total air accidents, involved aircraft in the air taxi category.
• The air transport accident rate, measured in terms of number of accidents per 100,000 hours flown, dropped.
• There were 464 reportable dangerous goods accidents, fewer than in 1999 and 2000, but more than the 383 reported in 1997.
• There were no deaths attributed to transportation accidents involving dangerous goods.
• On September 11, 2001 the Canadian airspace was closed to eliminate the possibility of further terrorist acts and more than 33,000 passengers, of flights destined for US airspace, were accommodated.
• Many sectors of the transportation industry were affected by the events of September 11, with air travel and trans-border trucking affected the most.
• A substantial number of enhanced security features and precautionary measures were implemented immediately after September 11 and, as announced in the October anti-terrorism plan and in the December 2001 budget, the Government of Canada has committed $2.2 billion to enhance aviation security, and $1.2 billion to enhance border security and facilitate the flow of goods and people.
• As part of the Budget Implementation Act, 2001, the Canadian Air Transport Security Authority -- a federal crown corporation reporting to the Minister of Transport -- is being established. The authority will be responsible for the provision of several key aviation security services in Canada, while Transport Canada will regulate and monitor its performance.

Transportation -- Energy and Environment

• In 2000, transportation accounted for 34 per cent of the 7,178 petajoules of energy consumed in Canada.
• The energy price increases observed in 2000 slowed the growth rate of energy consumption, and for transportation, translated into a decline over the volume consumed in 1999.
• With a share of 74 per cent, road transportation accounts for most of the energy consumed by transportation activities. Pipelines and aviation each have a nine per cent share, followed by marine with five per cent and rail with three per cent.
• The decline in energy consumption observed within the transportation sector in 2000 came mainly from the pipeline industry. The marine transportation sector is the only other transportation sector to consume less energy in 2000. For the other transportation sectors, the increase in energy consumption was less in percentage terms than in previous years.
• By type of energy, motor and aviation gasoline represented more than half the energy consumed by the transportation sector, followed by diesel fuel with 26 per cent, and by natural gas and jet fuel, each with nine per cent.
• Energy purchases for transportation was highest in Ontario, with 35 per cent of the total. Quebec, with 18 per cent, was second, followed by British Columbia and Alberta, each at 15 per cent. The Atlantic region accounted for eight per cent of the total, Saskatchewan for five per cent and Manitoba for slightly more than three per cent.
• The price of crude oil rose sharply in 1999 and 2000 but dropped in the last part of 2001.
• In Canada, based on 1999 information, the transportation sector accounted for 36 per cent of total greenhouse gas emissions, 161.6 megatonnes of CO2 equivalent.
• Road transportation accounted for almost 77 per cent of the total greenhouse emissions from transportation energy in 1999. Aviation came second with a 10.3 per cent share, while rail and marine combined accounted for less than 9.5 per cent.
• The transportation sector accounts for roughly 20 per cent of Canadas volatile organic compounds (VOC) and more than 50 per cent of its nitrogen oxides (NOX), the two main factors contributing to smog.
• Increasing population and economic growth are likely to increase demand for energy and for transportation, with resulting environmental consequences.
• Transport Canadas Sustainable Development Strategy 2001-2003, which includes seven priority challenges and 29 specific commitments for action, was tabled in Parliament in February 2001.
• Kyoto Protocol negotiators met in Bonn, Germany, and Marrakech, Morocco, and reached agreements on many details important to the ratification process, such as which sinks to recognize, how sinks credits would be counted, and an outline for a compliance regime.
• The federal government has made a commitment in its Canada-wide Standards for Particulate Matter (PM) and Ozone to negotiate and sign the Ozone Annex to reduce transboundary ozone emissions and to put in place a ten-year action plan for cleaner vehicles, engines and fuels.
• VIA Rail was asked in 2001 to prepare a commuter strategy for the Greater Toronto and Montreal areas to complement the transit services already in place.
• Close to $30 million over five years has been allocated in 2001 to fund the development, integration and deployment of Intelligent Transportation Systems across Canada.
• Amendments adopted in 2001 to the Motor Vehicle Safety Regulations have established a safety standard for the protection of occupants in electric vehicles.
• In the December 2001 federal budget, funding was announced for the Green Municipal Enabling Fund and the Green Municipal Investment Fund to help municipalities address environmental challenges.

Transportation and Employment

• Consistent with the downward trend in recent years, employment in the rail industry decreased by a further 5.3 per cent in 2000.
• The number of full-time employees in the bus industry increased by three per cent in 2000.
• Employment in the trucking industry increased by an average of 2.3 per cent a year between 1997 and 1999.
• Total employment in taxi and limousine services increased by a total of 19.7 per cent in 2000 and 2001, an increase that occurred mainly in Ontario, Quebec and British Columbia.
• Total average annual employment in the marine transport industry has been increasing in all regions of the country since 1999, with the most significant increases occurring in Ontario and British Columbia. The level of employment in ferry operations remained stable between 1998 and 2000.
• In 2001, the Canadian Port Authorities reported a slight decline in their employment level for the second year in a row. The St. Lawrence Seaway Management Corporation also reported a decline.
• In 2000, total employment in the Canadian air industry increased by 2.1 per cent. NAV Canada reported a 3.1 per cent increase in employment in 2001. The air industrys travel arrangement and reservation services segment also reported an increase in employment the same year. National Airports System airports, however, reported a 1.5 per cent decline in employment.
• In 2001, the number of jobs directly related to transportation within the federal administration continued the decline started in the mid-1990s.
• Average weekly earnings increased slightly in all segments of the transport industry in 2001.

Transportation and Trade

• In 1999, the value of domestic trade reached $1,459 billion, two thirds of which was related to services, and one third to goods. Intraprovincial trade dominated domestic trade, with 87 per cent of the activity.
• In terms of volume, 471 million tonnes of traffic moved domestically in 2000: 45 per cent by rail, 43 per cent by truck and 12 per cent by marine. More than half (55 per cent) of this domestic traffic included primary products and crude materials, such as grains, iron ore, lumber, logs, potash, bauxite, coal and other non-metallic minerals.
• Ontario took part in 40 per cent of intraprovincial trade activities by value in 1999, the largest share of all the provinces. Trucking was the dominant mode of transportation for this trade, used in 55 per cent of intraprovincial activities.
• Nearly 60 per cent of the total value of interprovincial trade was related to goods. Ontario was present in eight of the top 10 interprovincial flows.
• In 2001, exports to the United States accounted for 87 per cent of Canadas total exports, while imports from the United States represented 64 per cent of Canadas total imports. Canadas trade with the United States declined, decreasing two per cent for exports and five per cent for imports. With the exception of Manitoba and the territories, all other provinces had exports to the United States that exceeded their imports.
• Daily trade between Canada and the United States totalled $1.6 billion in 2000, $1 billion of which was carried by trucks. In terms of value, close to two thirds of Canadas total trade with the United States in 2000 moved by truck, accounting for nearly 57 per cent of exports and 80 per cent of imports. Seventy per cent of these trucks used an Ontario border crossing. In terms of volume, pipelines carried the most trade, followed by trucks, rail and marine for exports to the United States. For imports from the United States, trucking was again dominant, followed by marine and rail.
• Trucking and air transportation were the two modes most affected by the trade reductions that resulted from the 2001 economic slowdown.
• In terms of tonnage, the marine mode was capturing over 90 per cent of the volume shipped between Canada and overseas countries and it registered an increase in 2001. In terms of value, Canadas trade in 2001 with overseas countries by air and marine declined by six per cent.

Transportation and Tourism

• In 2000, spending on tourism reached $54.1 billion in Canada, 7.9 per cent more than in 1999. Canadians spent $37.9 billion of this amount, while visitors from other countries spent the remainder. Transportation expenditures accounted for $22.4 billion of tourism spending, more than half of which was spent on air travel, and one third on vehicle transportation.
• Ontario benefitted the most from spending by international visitors, followed by British Columbia, Quebec, Alberta and the Atlantic provinces.
• In 2001, record spending by foreign visitors inside Canada and reduced spending by Canadians outside of the country reduced Canadas travel deficit to $1.3 billion.
• A total of 90.3 million international travellers crossed Canadian borders, 5.7 per cent less than in 2000.
• In international travel, only the number of Canadian travellers to countries other than the United States did not decline.
• Total CanadacUS travel, in both directions, fell sharply by 6.3 per cent. This decline was likely because more than half of Canadian overnight trips usually occur as part of tourist travel, and are more likely to be affected by changes in economic conditions. The declines were the greatest in air travel.
• For same-day travel between Canada and the United States, the automobile remained the dominant mode with 96.8 per cent of Canadian trips and 92.6 per cent of American trips.
• The number of overseas visitors to Canada declined in 2001 by 7.9 per cent due to a drop in visitors from Asia and Europe. Just a few countries showed increases: China, India, South Korea and Mexico.
• Canadians increased their visits to countries other than the United States. About sixty per cent of these visits were pleasure trips, compared with about 49 per cent of overseas visitors who came to Canada on pleasure trips.
• Air transportation was the most common mode of transportation for trips to and from overseas countries, accounting for 83.4 per cent of trips by foreign visitors and almost 100 per cent of trips by Canadians.

Transportation Infrastructure

• In 2001, changes in Canadas rail network were marginal, with a 0.1 per cent reduction in the total number of route-kilometres. Of the 144.5 kilometres of lines rationalized, 71 per cent were transferred. Line discontinuances occurred in Ontario, while transfers to other operators occurred in Alberta, Saskatchewan and Ontario.
• Canadas road network was over 1.4 million kilometres, 1.2 million of which were classified as local roads. The remaining 200,000 kilometres of roads were classified as freeway, primary highway, provincial highway, and other arterial roads.
• The number of trucks crossing CanadacUS borders fell, dropping four per cent after nine consecutive years of growth.
• The twenty busiest border crossings accounted for 89.2 per cent of crossborder truck traffic and 83.5 per cent of crossborder traffic in general.
• At the end of 2001, 420 of the 549 public ports and public port facilities under Transport Canadas control and administration had been transferred, deproclaimed or demolished.
• Traffic on the two sections of the St. Lawrence Seaway was 41.6 million tonnes in 2001, down by nearly five million tonnes from 2000 levels. The decline came from cargoes related to the steel industry, which were down by nearly 40 per cent.
• All four Pilotage Authorities faced financial deficits at the end of 2001.
• The net expenditures of the Canadian Coast Guard increased in fiscal year 2001/02.
• At the end of 2001, Canada had a total of 264 land airports with scheduled passenger service. Financial results of 19 airport authorities for 2000 showed an average of $15.40 of revenue generated per passenger and $12.99 of expense incurred. In 2001, 25 airports had projects approved for funding under the Airport Capital Assistance Program.

Industry Structure

• There were modest changes to the Canadian rail industry structure. Some shortline operators experienced financial difficulties, which resulted in the bankruptcy of Iron Road, a holding company for a number of US and Canadian shortline railways. In addition, RailAmerica E&N shortline announced at the end of 2001 that it would cease operations in 2002.
• CN completed the acquisition of the Wisconsin Central, a US-based shortline company. This acquisition will allow CN to have a firm connection for western Canada to move goods to US markets via its Fort Frances gateway. CN also acquired the Algoma Central Railway with this purchase.
• Among the mergers, acquisitions and alliances of motor carrier firms in 2001, TransForce Inc., Clarke Inc, Cabano/Kingsway Transport Inc. and Highland Transport were active Canadian carriers. TransForce Inc, Cabano/Kingsway Transport Inc. and Highland Transport were also active in the CanadacUS marketplace.
• The number of trucking bankruptcies reported in 2001 was the highest in the last ten years.
• Laidlaw, a major school bus operator and the largest scheduled bus service operator in North America, filed for bankruptcy protection in both Canada and the United States to allow the company to restructure.
• The concentration trend in liner shipping continued in 2001, with the top 20 companies controlling 76 per cent of the world fleet. CP Ships acquired TMMs shares in Americana Ships and Christensen Canadian African Line.
• In the domestic marine industry, Upper Lakes Group, an operator of traditional self-propelled tug and barge operations, formed a joint venture with McAsphalt Industries to construct and operate a new tug/barge unit to carry heavy oils and asphalt products on the Great Lakes and the St. Lawrence River. Canada Steamship Lines purchased the assets of Parrish & Heimbeckers Shipping Division.
• Canada 3000 grew through merger and acquisitions of Royal Aviation and CanJet. By mid-2001, the company had become the second largest provider of domestic, transborder and other international air services in Canada, next to Air Canada. Canada 3000 declared bankruptcy in November 2001. WestJet, another competitor for Air Canada in domestic air services, grew by expanding flight frequencies, capacity and network during 2001.
• Four reports were issued in 2001 on the progress in airline restructuring that began in 1999: two by the Air Travel Complaints Commissioner and two by the Transition Observer on Airline Restructuring.

Freight Transportation

• Both CN and CPR reported an increase in their total revenue tonne-kilometres in 2000 to reach 291 billion tonne-kilometres.
• Between 1990 and 2000, transborder for-hire truck traffic to and from the United States rose from 23.1 billion to over 80 billion tonne-kilometres, an average annual growth of 13.3 per cent.
• In 2000, domestic truck traffic represented 84.7 billion tonne-kilometres, compared with 80.2 billion tonne-kilometres for transborder traffic.
• In 2000, the Canadian Vehicle Survey estimated a total fleet of 320,000 mid-size trucks (between 4,500 and 15,000 kilograms) and 255,000 heavy trucks (over 15,000 kilograms) in Canada.
• Marine freight traffic totalled 349 million tonnes in 2000, 4.7 per cent more than in 1999. Of that total, 55.5 million tonnes came from domestic flows, 105.5 million tonnes from CanadacUS traffic, and 188 million tonnes from overseas flows.
• There was no significant change in the total tonnes of air cargo that Canadian air carriers moved in 2000, compared with 1999. The total tonnage carried in 2000 was 853,110 tonnes, of which 517,741 tonnes came from domestic flows, 100,060 tonnes from CanadacUS flows and the remaining 235,309 tonnes from other international flows.

Passenger Transportation

• Rail passenger traffic increased in 2000 by almost five per cent to 4.3 million passengers. VIA Rail accounted for almost 92 per cent of this traffic, while four Class II rail carriers accounted for the rest. In passenger-kilometre terms, the increase in traffic was approximately 1.2 per cent, reaching 1.61 billion passenger-kilometres. All carriers contributed to this growth.
• The passenger traffic of commuter rail passenger services offered in Vancouver, Toronto and Montreal increased by 6.8 per cent between 1999 and 2000, but declined slightly in 2001.
• The number of passengers using scheduled intercity bus services increased in 2000 by 568,000 passengers. While there are no passenger traffic data available for charter bus services, the 210.8 million bus-kilometres reported in 2000 for sightseeing/shuttle and charter services combined are indicative of an increase in passengers.
• Urban transit ridership reached 1.49 billion passengers in 2000, the highest ridership level since 1990, and a 10.4 per cent increase over the previous year.
• In 2000, the Canadian Vehicle Survey estimated a total fleet of 16.6 million cars and light trucks. Their distribution more or less followed Canadas population distribution.
• In marine transportation, international cruise ship traffic increased at three of the five major ports in 2001. Once again, Vancouver handled over one million passengers. Halifax and Quebec City reached new cruise traffic heights, but traffic was down in Montreal and Saint John.
• British Columbia Ferry Corporation carried 21.5 million passengers and 7.8 million vehicles in 2000. Marine Atlantic traffic decreased, handling 481,600 passengers and 232,800 vehicles.
• The number of domestic air passengers decreased by 1.6 per cent in 2000, but the number of transborder air passengers increased by 4.4 per cent.

Price, Productivity and Financial Performance in the Transportation Sector

• In 2000, productivity growth reached 2.4 per cent in the transportation industry, compared with 1.1 per cent in the economy.
• The transportation industry saw real-term price increases of 0.6 per cent between 1996 and 2000. This change resulted in large part from measures introduced in 2000 to offset the impact of fuel price increases that year.
• In 2000, the two continental freight railways achieved a nine per cent productivity gain, bringing their unit costs down by 5.8 per cent despite a 3.3 increase in their factor prices.
• Productivity in passenger transportation services grew by close to six per cent per year in 1999 and 2000, allowing VIA Rail s unit costs to fall sharply.
• Between 1996 and 2000, rail freight total factor productivity increased by 4.4 per cent a year on average. Over the same period, trucking achieved an average annual 1.6 per cent productivity gain, and VIA Rail achieved a 2.9 per cent annual productivity gain. The intercity bus industry achieved a 0.9 per cent gain, while the air transportation industry achieved a 0.2 per cent gain.
• In 2000, Class I rail freight carriers reported operating income increases. VIA Rail improved its revenueccost ratio, bringing it to 48.5 per cent. Transit systems also improved their cost recovery ratio in 2000, while the intercity bus industrys ratio deteriorated. The financial performance of the air transportation industry also deteriorated in 2000. The financial challenge facing the industry was exacerbated in 2001 by the economic slowdown and the September 11 terrorist attacks.