moving canada | policy with high impact results


Canada, with strong finance, telecommunications, and energy, has traditionally been an attractive place for global investors. The country’s transportation sector may be its most critical economic segment, through its ability to magnify the benefits of trade agreements and expand markets.

Policy should create an environment in which the public sector and markets can work together and where safety remains a priority. An effective transportation strategy should be aimed at the market processes of supply and demand to determine price, volume, and quality of service. It should promote research and development.

Working against that approach is the lack of a future-focussed strategy for Canada’s transportation sector. Equally harmful is Canada’s reputation as a nation choked by regulation. The Global Competitiveness Index, an annual list put together by the World Economic Forum ranks Canada in 38th place when it comes to the burden of regulation.

Complex, excessive and unnecessary regulation can corrupt an intended policy aim, throttling innovation, investment, and a country’s competitiveness, according to the OECD. Policies, some dating back to 1912, require updating.

At this pivotal moment, the following is required:

1. Canada’s air, rail and grain regulations should be reviewed to ensure they benefit consumers by spurring economic activity, regional connectedness and by allowing the country’s private sector to access larger markets;

2. Canada should promote a new framework for air travel beyond its borders, replacing the archaic protectionism currently underpinning the bilateral trade in air services. A failure to do so will result in less competition and higher airfares, impacting the viability of Canada’s airports and hurting its consumers and its business;

3. Until that is achieved, Canada should ensure its ongoing bilateral agreements (“open skies”), place greater weight on consumers and the growth of its cities;

4. Inflated by federal taxes, Canada’s airfares are amongst the highest in the world. Reform should address the tax portion of an airline ticket;

5. Canada should begin the process of divesting itself of Toronto Pearson International Airport. The not-for-profit airport model has outlived its usefulness: airports are restricted in their ability to raise capital which they do largely through airport improvement fees. Further, the ground rents that airports pay the federal government are passed on to airlines and passengers, resulting in higher airfares.

Toronto Pearson Airport desperately needs new investment to position itself as a transportation hub, with rail connection to Toronto’s suburbs and beyond. As a major global airport, with a doubling of its passenger count forecasted over the next 20 years, rail service is needed to maintain its competitiveness.

6. Freight rail relocation away from Canada’s cities should be undertaken, where viable, as well as high-speed rail connections between large urban areas.

This is Moving Canada.
Mary-Jane Bennett

Providing clients in the transportation and grain sectors with up-to-date knowledge and policy direction.