|
|
| |
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.
| Rail in Canada
2005 Overview of rail transport in 2005 In 2005, Canada’s economy showed a sustained growth, while its GDP for all industries registered a growth rate of 2.8%. 1 The Canadian dollar value reached an annual average of 82.5 cents US in 2005, whereas in 2004, its annual average value was 76.8 cents US. 2 This high exchange rate did not seem to affect Canadian exports, since they continued to follow the upward trend that began in 2004. In fact, real exports, that is, exports adjusted for price movements, advanced to a record high of $422.6 billion, compared with $408.0 billion in 2004. United States remained the largest market for Canadian exports, representing 81.4% of all exports from Canada. China continued its ascension in its commercial exchanges with Canada. Canadian exports to China showed an increase of 10.0% to represent $6.6 billion, while imports from China increased by 22.5%, Canadians bought $29.5 billion in merchandise from China. 3 During 2005, there were 208,000 more full-time jobs compared to the previous year, while the unemployment rate went from 7.2% in 2004 to 6.8% in 2005. 4 Finally, the inflation rate remained low at 1.6%. 5 Financial performance of rail carriers Operating revenues continued their upward trend of the past five years 6, recording an increase of 10.8% in 2005 over 2004, to totalled $9.8 billion (see text table 1 ). This increase in operating revenues in 2005 was achieved by a favourable economic climate, increases in exports and imports (particularly from the high demand from China and Asian countries for basic goods) and freight rate increases. From 2004 to 2005, net operating income increased 21.3%, to $2.3 billion, while the net income after income taxes and extraordinary items represented $1.7 billion with an increase of 17.9%. In 2005, the market share of the different railways, based on operating revenues, changed slightly compared to 2004. CN and CP obtained a market share of 50.4% and 37.9% respectively. VIA Rail obtained a market share of 4.4%, while regional and short line railways shared the remaining 7.3%. In 2005, freight transportation generated $8.8 billion or 89.2% of the total operating revenues in the rail sector (see text table 1 ). Revenues from this source showed an increase of 11.2% compared to the $7.9 billion generated in 2004, which was the largest increase in five years. This growth in revenue was mostly a result of, as mentioned by CN and CP in their Annual Report of 2005, the freight rate increases and the higher fuel surcharge that were added following the high prices of crude oil. Between 2001 and 2005, revenues from this source rose 21.4%.
Freight revenues for CN showed a 15.6% increase compared to 2004 and accounted for 93.5% of this company’s total operating revenues in 2005. With this result, CN obtained 52.8% of all industry operating revenues from freight carriage. For CP, freight revenues accounted for 95.3% of total revenues and 40.5% of total freight revenues for the railway transport industry as a whole. CP registered an increase of 14.5% in freight revenue compared to 2004, earning $3.5 billion. Regional and short-haul carriers earned the remaining 6.7% of freight revenues with $587 million. Passenger revenues rose in 2005, from $265.2 million in 2004 to $282.9 million in 2005 (see text table 1 ). During the period from 2001 to 2005, passenger revenues rose 5.4%. The largest annual increase occurred in 2002 (7.0%) to reach $287.4 million. In the wake of terrorist events more people have chosen to travel by rail, which might explain the level reached in 2002 for passenger revenues. VIA Rail, the dominant inter-city transport carrier, collected $255.7 million in passenger revenues in 2005, an increase of 6.4%. VIA’s passenger revenues accounted for 90.4% of all passenger revenues in Canada. These revenues also accounted for 59.5% of all revenues obtained by VIA Rail. The second most important source of income for VIA consisted of government subsidies, which accounted for 39.3% of that company’s total revenues. From 2001 to 2005, government subsidies paid to VIA decreased 3.5%. During this period, the only increase recorded in government subsidies paid to VIA occurred in 2003 with an increase of 19.3% over 2002. In 2005, the total expenses of the industry rose 8.0% compared to 2004, reaching $7.5 billion (see text table 2 ). All expense categories showed increases in 2005. The three mainline carriers, CN, CP and VIA Rail accounted for 91.3% of all the industry’s expenses in 2005. Since 2001, the total operating expenses of the rail industry showed increases each year. In 2005, these expenses increased by 14.0% over the ones recorded in 2001. Rail operating expenses, which include expenses relating to trains, yard stations and terminals, etc., usually account for the largest percentage of operating expenses. In 2005, these expenses amounted to 42.8% of total expenses. This expense category stood at $3.2 billion in 2005, up 9.8% from 2004.
General expenses, the second main expense category, accounted for 20.5% of the total expenses of the railway transport industry at $1.5 billion. This represented a decrease of 12.4% compared to the previous year. It was the account “employee benefits” which was responsible in a large part for the increase in general expenses. Employee benefits are mainly composed of pension benefits, salary and wages, health and welfare programs, etc. Equipment and ways and structures showed increases of 5.1% and 2.2%, respectively, over 2004 and represented 19.2% and 17.5% of all expenses generated by the rail industry. Balance sheet and property accounts Total assets of railways were $18.7 billion in 2005 (see text table 3 ), which represented an increase of 1.4% over 2004. Total assets were divided as follows between the carriers: CN held $9.4 billion or 50.2% of the total assets of the rail industry; CP held $7.1 billion (38.0%), VIA had $894.7 million (4.8%), and regional and short line railways held $1.3 billion or 7.0%.
Between 2001 and 2005, the total assets of the rail industry rose 12.1%. During this period, it was CN, in dollar terms (with $2.0 billion more) that showed the greatest increase in its assets. This may be a result of CN’s acquisition of companies in recent years. The balances of two out of three main property accounts increased in 2005. The year-end balance for land was up 28.7% and equipment rose 4.9%, while ways and structures decreased 1.3%. The year-end balance of the property accounts (including land) totalled $25.1 billion in 2005 (see text table 4 ).
For items related to ways and structures, CN accounted for 54.4% and CP for 35.6%. VIA and regional and short line railways accounted for respectively 3.4% and 6.6% for these items. CN accounted for 49.3% of the total value of equipment in the railway transport industry, CP for 37.4%, VIA for 9.9% and regional and short line railways, 3.4%. In 2005, the main financial ratios appear to confirm that the financial situation of rail carriers is continuing to improve. The operating ratio 7 was down by a marginal 0.02 percentage point in 2005 to 0.76. This was an improvement compared to the 0.81 ratio recorded in 2001. The debt-equity ratio 8 increased slightly from 0.65 in 2004 to 0.67 in 2005 (see text table 5 ). In 2001, the debt-asset ratio 9 showed that creditors had supplied 44% of the companies’ total funding, whereas, in 2005, funding by creditors had declined to 40%.
Inventory of equipment in service The inventory of equipment in service on December 31, 2005 consisted of 3,013 locomotives, of which 2,370 were engaged in freight service, 83 in passenger service and 532 in yard work, while 28 were classified as associated equipment (see text table 6 ). CN owned 45.7% of the locomotives in service, while CP owned 40.9%. Between the year-ends of 2004 and 2005, the total number of locomotives increased by 23 units.
The number of freight cars totalled 100,675. CN owned the largest number of cars in the industry with 55,157, or 54.8% of all cars. CP owned 38,790 cars (38.5% of all cars in the industry), and regional and short-haul carriers held the rest with 6,728 cars (6.7% of the total). Passenger cars were up in 2005 at 599, compared to 561 cars in 2004. VIA Rail owned 75.8% of all passenger cars on inventory in the industry. The VIA fleet consisted primarily of coaches (44.9% of its fleet), sleeping cars (29.7%) and meal service cars (17.0%). The number of passenger cars has shown increases each year since 2001. This is in part, a result of a $402 million investment in a 5 year period by the federal government for the modernization of VIA’s passenger rail network, allowing the company to acquire more modern equipment, better infrastructures and stations. The total length of track operated in 2005 was 72,280 kilometres: 57,885 kilometres of track was owned and 14,395 kilometres was operated under lease, contract or trackage rights or was jointly owned (see text table 7 ). Between 2001 and 2005, the total length of track operated declined 1.4%. Together, CN and CP accounted for 77.9% of the total length of track operated in 2005.
Rail carriers consumed over 2 billion litres of diesel fuel in 2005 and spent almost $1.2 billion for it (see text table 8 ). Whereas fuel consumption rose 1.6% compared to 2004, the total cost jumped 36.3% over the same period. Between 2001 and 2005, fuel consumption rose 6.4% while the cost increased by 43.4%.
In 2005, CN accounted for 48.3% of total diesel fuel consumption, CP for 41.1%, VIA 2.8% and regional and short-haul carriers 7.8%. Ontario, with over 699 million litres of diesel fuel, and British Columbia, with 480 million litres, registered the highest consumption of diesel fuel in Canada (see Table 7 in the section entitled Statistical tables). This is a result of the large amount of track in these two provinces and the amount of rail activity that it serves. Operating statistics – Freight transportation In 2005, the tonnage of revenue freight carried by rail companies in Canada rose slightly to reach nearly 370 million tonnes, up 2.2% from 2004 (see text table 9 ). The result obtained in 2005 represent the highest level ever attained. Total tonne-kilometres increased by 3.9% in 2005 over 2004. The average haul rose 1.6%, from 937 kilometres in 2004 to 952 kilometres in 2005. Also, from 2001 to 2005, total tonne-kilometres rose 9.6%. During this five year period, the average haul on each railway, rose 2.5%, from 929 kilometres in 2001 to the above mentioned figure of 952 kilometres in 2005.
Total train-kilometres grew by 3.1% in 2005 compared to the previous year, while car-kilometres rose 5.7%. In 2005, the average train length went from 78 cars to approximately 80 cars, an increase of 2.6% compared to 2004. From 2001 to 2005, train-kilometres rose 6.9%, car-kilometres increased 16.4% and the average number of cars per train rose 9.0%. The use of more powerful locomotives may largely explain the results. Operating statistics – Passenger transportation The total number of passengers increased by 5.2% in 2005, from 4,048 million in 2004 to 4,257 million in 2005 (see text table 10 ). This was the best result of the past five years after a peak in 2002. Between 2001 and 2005, the number of passenger increased by 1.9%.
Passenger-kilometres also registered an increase in 2005 over the previous year by 3.7%, to almost 1.5 billion in 2005. The average passenger journey per ticket went from 351 kilometres in 2004 to 346 kilometres in 2005, a decrease of 1.4%. For the period 2001 - 2005, passenger-kilometres declined 5.2%. The average passenger journey per ticket in 2001 was 372 kilometres. In 2005, train-kilometres increased 0.6% to 11,792, while car-kilometres recorded an increase of 0.7% over 2004. During the 2001-2005 period, train-kilometres recorded a decrease of 0.5%, while car-kilometres showed an increase of 3.8%. The number of employees of rail companies stood at 34,995 in 2005, down 1.7% from 35,591 employees in 2004 (see text table 11 ). This result follows the downward trend that began many decades ago. In 2005, CN still had the largest number of employees, with 43.2% of all employees in the railway transport industry. CP and regional and short-haul carriers accounted for respectively 37.9% and 9.9% of total employment. VIA Rail held the remaining 9.0%. Between 2001 and 2005, the number of employees of railways decreased by 11.3%. In 2005, employees received compensation totalling nearly $2.5 billion, up 5.5% from the $2.3 billion paid them in 2004.
Transportation service employees, the largest group, accounted for 42.7% of employment and 46.3% of total compensation (see table 11 in “Statistical tables” section). They were followed by road maintenance employees, who accounted for 23.0% of the workforce and 20.9% of total compensation. Employees in the “general” category formed the third largest group, representing 17.7% of total employment and 18.6% of total compensation. The fourth and final group consisted of equipment maintenance employees, who accounted for 16.6% of total employment and 14.2% of total compensation paid. Average annual compensation rose 7.3% from $65,856 in 2004 to $70,689 in 2005. The transportation services group had the highest average annual salary in 2005, namely $76,557. Total average hourly compensation went up, from $26.8 in 2004 to $27.9 in 2005, the highest level ever achieved. In 2005, the average annual compensation at CN and CP was respectively $76,450 and $69,922. It was marginally lower at VIA, where the average annual wage was $57,359, whereas regional and short line railways wages averaged $60,626. Commodity origin and destination Statistics on the origin and destination of commodities are based on CN and CP data and data on the traffic of regional and short-haul carriers. For further details, see the section entitled Data quality, concepts and methodology — Survey methodology, coverage and data limitations at the end of this publication. The terms “origin” and “destination” used in this publication refer to origins and destinations of railway transport and not to the “real” origin or destination of commodities. Some commodities may enter or leave Canada by marine, surface or air transport and be transferred to or from rail. The transfer point is the origin or destination referred to in this publication.
In 2005, the total tonnage of commodities for all origins and destinations totalled 280.6 million tonnes (see text table 12 ). This was an increase of 3.4% compared to the total of 271.4 million tonnes transported in 2004. The ten main commodities accounted for 58.2% of all commodities for all origins and destinations in 2005. Coal remained the main carried commodity with an increase of 5.3% from the previous year. Coal, at 34.1 million tonnes, was ahead of the next commodity, mixed loads or unidentified freight, by more than 10 million tonnes, showing the importance of this raw material to the Canadian economy. The second and third main commodities, mixed loads or unidentified freight and iron ores and concentrates, both showed increases in 2005 compared to 2004, measuring 8.6% and 29.9% respectively. Strikes and work stoppages in the mining sector in 2004 explain, at least in part, what seems to be a large increase for this commodity in 2005. Wheat showed a 5.6% decrease in 2005. However, in 2004 there was a strong demand for this commodity after the harvests of 2002 and 2003 were affected by droughts. Compared to the result of 2003 (16.0 million tonnes), there was 2.6 million more tonnes of wheat being carried in 2005.
Text table 13 shows the top three commodities between an origin and its main destination, total tonnage between these origins and destinations and total traffic for origins. This table also shows the percentage change between 2005 and 2004, the market share of each variable with regards to the total between an origin and a destination, and the market share of these variables with regards to the origin’s total traffic. The following text contains the highlights of the table. Atlantic – Quebec Iron ore and concentrates remained the main commodity transported from the Atlantic region to ports in Quebec. This commodity, at 20.5 million tonnes, accounted for 94.0% of all commodities transported between these two regions. Total commodities from the Atlantic region to all destinations stood at 31.5 million tonnes in 2005, up 17.6% from the previous year. Strike resolutions in the mining sector might, in part, explain this increase over 2004. Quebec – United States and Mexico Traffic from the province of Quebec to the United States and Mexico accounted for 46.2% of all traffic originating from Quebec. In 2005, the three main commodities transported from Quebec to the United States and Mexico were mixed loads or unidentified freight (1.7 million tonnes), lumber (1.7 million tonnes) and paper and paper board, except printed products (1.6 million tonnes). Only paper and paper board, except printed products showed an increase in 2005, whereas mixed loads or unidentified freight and lumber were down from 2004, by 12.2% and 5.9% respectively. Ontario – United States and Mexico In 2005, traffic from Ontario to the United States and Mexico stood at 17.3 million tonnes, up 3.6% from 2004. The United States and Mexico accounted for 43.5% of all of Ontario’s markets. The main commodity transported from Ontario to the United States and Mexico was lumber, which rose 16.4% to 1.3 million tonnes. Manitoba – Ontario In 2005, the main commodity transported from Manitoba to Ontario remained wheat, at 1.7 million tonnes, down 16.5% from the previous year. Wheat was by far the main commodity in this market, as it accounted for 49.2% of the total tonnage of all commodities originating in Manitoba and destined for Ontario. Saskatchewan – British Columbia In 2005, British Columbia was the main destination for commodities originating from Saskatchewan, accounting for 37.7% of the traffic for all destinations having that province as its origin. At 5.9 million tonnes, potash was the main commodity in this market. Wheat with 3.6 million tonnes was ahead of the next commodity (other cereal grains), which weighed in at 1.6 million tonnes in 2005. Alberta – British Columbia In 2005, among the three main commodities transported from Alberta to British Columbia only coal showed an increase with 3.2 million tonnes. With this result, coal ranked in third place for the market of Alberta to British Columbia. Sulphur was the main commodity of this origin and destination with 5.2 million tonnes in 2005, a 1.8% drop from 2004. Wheat was second at 4.1 million tonnes in 2005. British Columbia – British Columbia Coal remained by far the leading commodity with British Columbia as both its origin and destination at 23.7 million tonnes with an increase of 3.2% over 2004. Coal accounted for 67.6% of all commodities with this origin and destination. Wood chips and wood pulp were far behind with tonnages of 3.2 million tonnes and 2.5 million tonnes respectively. United States and Mexico – Ontario Of the three main commodities that originated in the United States or Mexico with Ontario as their destination, only other basic chemicals showed a decrease in 2005. They went from 1.1 million tonnes in 2004 to 1.0 million tonnes in 2005, a decrease of 5.4%. Coal and the combination of plastic and rubber were up from the previous year with 1.8 million tonnes and 823.2 thousand tonnes respectively. Ontario was the main destination with 30.1% of all traffic originating from the United States and Mexico in 2005. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
