A brief presentation about railway in Canada, presented for Association of Rail Transport Engineering

1. Presenting for
Iranian Association of Rail Transport Engineering
Railway Operations in Canada
(Potentials and Challenges)
Majid Babaie
2010/01/11

3. Did you know?
 With 48,000 kilometers of track, Canada has one
of the largest rail networks in the world.
 Transport Canada regulations, standards and
programs work to make railway system
safe, secure, accessible, competitive and more
environmentally responsible.

4. Did you know?
 More than 4.8 million passengers travel by rail each year, a
total distance of about 1.5 billion kilometers(trip
average,332 Kilometers). Canada's rail system moves over
300 million tones of cargo each year(400 billion Tone-
kilometers).
 Average cars per freight train(1999-68, 2008- 82)
 Average passenger load factor 59%
 Passenger trains’ on-time performance 75%
 Average annual wage per employee $75000
 There are 13 commuter rail lines in total in
Montreal, Toronto and Vancouver. Commuter trains
handled 58.6 million passengers in 2006.

5. Did you know?
 $1.7 billion of goods traded daily with the U.S;
efficient and cost-effective border is critical
 From 1992 to 2002, goods exports to the US rose from
72% to 85% of Canadian total
 Rail handles a significant share of surface traffic
across the border; Ontario Corridors handle 65% of
all Canada/US trade by value (with 80% of rail traffic
handled through Ontario gateways)

6. Did you know?
 Over 40% of GDP comes from exports of goods and
services. Highest in G-8. Rail moves half of goods.
 Most Canadian exports go to U.S.

7. The Railways’ Commitment
 Be the safest and most reliable mode of
transportation for people and products.
 Provide superior, reliable, and cost-effective service to
Canada's intercity passengers and urban commuters.
 Be the most energy-efficient surface mode of
transportation, reduce highway congestion and
optimize land use for future transportation needs.
 The railway industry employs over 35,000 people
directly, another 60,000 indirectly with
suppliers, from coast to coast.

8. The Railways’ Commitment
.
 Environmentally friendly
- Rail has a significant environmental advantage over
other surface modes of transportation when
comparing greenhouse gas emissions (GHG).
- Despite carrying 65% of the nation’s surface tone-
kilometers of freight, rail produces only 3% of
transportation GHG emissions; rail moves one tone of
freight 168 kilometers on just one liter of fuel

9. For freight: a deregulation success story
• Rates are down, lowest in the world
• CN, CPR now best operating ratios in NA
• Labor productivity up substantially
• Freight subsidies have been eliminated ($ 700M in
1995)
• Lowest level of accidents/incidents in North
America
• Growing the business, competing directly with
trucks
• But short of capital funds

10. Up 18% since 1990
PASSENGER KILOMETRES
1,200
1,250
1,300
1,350
1,400
1,450
1,500
1,550
1,600
1,650
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
millions

11. LOWEST RATES IN THE WORLD...
• Canadian rail rates have declined 40%, now the lowest in the world
U.S. Cents per Tonne-Kilometre
0 2 4 6 8 10 12
Switzerland
U.K.
France
Netherlands
U.S.
Source: RAC
Canadian rates are
60% lower than the
international average
Railroads passing on their efficiency gains
as a result of competition …

12. Up 169% since 1990 …
LABOUR PRODUCTIVITY
CANADIAN RAIL INDUSTRY
1990-2002
Revenue tone-km/employee (000)
Source: RAC
169%
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

13. EXPORTS AND THE RAILWAY ROLE
Canadian GDP Canadian Exports
By Rail
51%
41%
Exports

14. Freight revenue (cents) per ton-mile (tonne-kilometre)
Revenue per Index
ton-mile tonne-kilometre 1999=100
 1999 3.35 2.29 100.0
 2000 3.28 2.24 97.9
 2001 3.27 2.23 97.6
 2002 3.44 2.35 102.7
 2003 3.32 2.28 99.1
 2004 3.37 2.31 100.6
 2005 3.64 2.49 108.7
 2006 3.87 2.65 115.5
 2007 3.84 2.63 114.6
 2008 4.20 2.87 125.3

15. CHALLENGES
 Population growth is significant
 Truck growing rapidly: 61% by 2020
 Congestion is unsustainable in Toronto,
Vancouver, etc.
 Quality of life concerns growing: land use, air,
safety
 Infrastructure costs to government

16. CHALLENGES (cont’d)
Projected growth between 1995-2020
Air freight 90%
Truck freight 61%
Rail freight 38%
Passenger vehicle travel 36%
Air travel 53%

17. PERCENTAGE OF CAPITAL SPENDING TO REVENUES
25%
18%
16%
16%
11%
10%
10%
9%
9%
8%
6%
5%
10%
0 5 10 15 20 25 30
Weighted Group Average
Metals
Forest Products
Steel
Paper Products/Packaging
Industrial Products
Chemicals
Automotive
Transportation
Oil and Gas Services
Cement
Integrated Oils
Railways (Average)
Railways are the most capital intensive industry …
Source: Globe and Mail

18. HOW RAIL CAN HELP
 Congestion:
- 1 freight train = up to 280 trucks
- 1 passenger train = up to 1400 cars (GO trains = 48 lanes)
 Emissions:
- 5 times less GHG emissions per unit of work
- Significantly lower on other emissions as well
- Commuter trains generate 25% as many GHG’s as urban
autos/km
 Competitiveness:
 Significant productivity gains which have been passed on
to customers in lower rates
 Service levels increased considerably (new scheduled
services)

19. HOW RAIL CAN HELP (cont’d)
• Cost to Governments/Society:
– Rail corridors are privately owned, built, maintained and financed
– User pay ; mini reliance on publicly funded highways
• Land use:
– 1/3 of that of highways
– Several studies have shown that trucks cover only 50% of their
highway/environmental costs
• Safety:
– Private, dedicated, secure corridors with own police service
– Safest mode of transportation

20. 91%
91%
73%
66%
60%
25%
32%
Perceived Strengths of Rail and Truck
For Freight Transportation
Different modes of transporting freight, such as trucks and trains, have different advantages and
disadvantages. I’m going to read you a list of characteristics and I would like you to tell me
whether that word most accurately describes truck transportation or rail transportation.
Percent Choosing Rail Percent Choosing Trucks
environmentally friendly
Safest
society overall
Most cost effective
reliable
6%
6%
22%
Base = 1,000 adult Canadians

21. Directions to Government
Base = 1,000 adult Canadians
I'm going to read you a list of statements about transportation in Canada, and I would
like you to tell me whether you strongly agree, somewhat agree, somewhat disagree,
or strongly disagree.
92%
82%
76%
75%
74%
6%
17%
22%
24%
24%
Total Agree Total Disagree
Government should invest to improve
tracks for commuter and inter -city
passenger rail
Government should help rail to compete
with other modes of freight transportation
Government should pass laws requiring
more freight be moved by train
Rail transportation should be the highest
transportation priority in Canada
Railways should receive special
assistance from government

22. 29%
31% 32%
34%
40%
44%
47%
49%
52%
57%
60%
62%
65%
0%
10%
20%
30%
40%
50%
60%
70%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
VIA RAIL CANADA : REVENUE / EXPENSE RATIO
Excludes restructuring and non-cash expenses

23. GOVERNMENT’S AGENDA
 These involve six relevant public policy
criteria:
- Congestion
- Emissions
- Competitiveness
- Cost to government
- Land use
- Safety

24. • Competitive equity
• Recognize rail’s role and benefits
• Assist with investment
• Assess rail as solution
What Can Government Do?

25. Infrastructure Overview (New Rail Paradigm)
Past
• Significant rail restructuring in the last twenty years
• Deregulation has benefited shippers and general public – since
1987
• Rates declined 40%
• Productivity improvements of over 200%
Present
• More rail capacity needed in key corridors in North America for full
economic growth potential
• Rail is not a mature industry – it is a growth industry again

26. Rail Association of Canada (RAC)
 Member Companies 54
 Associate Members 40

27. ABOUT THE RAC
• Formed in 1917 to help the war effort. Mandate:
– Promote the benefits of railways in Canada
– Provide input into public policy decisions related to the
railway sector in Canada
– Provide information for public, government and industry
– Coordinate rulemaking and regulatory affairs for industry
– Provide safety and operational assistance to membership

28. ABOUT THE RAC (cont’d)
• Some 60 members: We are the Canadian rail industry
• Represents virtually all Railway operating in Canada today
• Class 1s: CN and CPR
• Short lines: Over 40 across Canada
• Passenger
• Commuter: AMT, GO, WCE, Capital Railway
• Intercity: VIA
• Tourist: 8 across Canada
• Together members carry
• 4 million carloads annually
• 1.8 million containers and trailers
• 53 million commuters and other train travellers

29. ABOUT THE RAC (cont’d)
• Created policy and advocacy capacity
• Bolstered ongoing Safety and Operations capacity
• Working to create a more rail-friendly public policy
environment

30. RAC’s Members of the Board of Directors
 Mr. Mario Brault, President, Genesee & Wyoming Canada Inc.
 Mr. Paul Côté, President and CEO ,VIA Rail Canada Inc.
 Mr. Keith Creel, Executive Vice-President, Operations CN
 Mr. Sean Finn,Senior Vice-President, Public Affairs CN
 Mr. Mike Franczak,Vice-President, Transportation CP
 Mr. Fred Green, President and CEO, CP
 Mr. Gordon Peters, CEO, Cando Contracting Ltd.
 Mr. Peter Touesnard, General Manager, Ottawa Valley Railway