After a period of economic crisis and natural disasters, 2011 was a year in which the path to recovery finally revealed itself. Canada weathered the downturn better than most, and is proceeding—with care—through still-tentative times.
4.1 Canada's Economic Performance
In 2011, Canada's real gross domestic product ( GDP ) at market prices rose by 2.5% (compared to the previous year's 3.2%). The country, however, has moved well beyond the -2.8% low of 2009 during the economic crisis (please see Addendum Table EC1).
While the first quarter of the year was strong, several temporary factors (including unanticipated disruptions in the energy sector due to unrest in the Middle East and North Africa, and supply chain interruptions caused by the earthquake/tsunami disasters in Japan) caused second-quarter growth to decline to an annual rate of -0.6%. As the impacts of these shocks abated, net exports rebounded and the economy followed suit, with third-quarter growth of 4.2%. Yet, given weakened global economic conditions due to low confidence in the U.S. economy and uncertainty over the European sovereign debt and financial crisis, growth in the fourth quarter slowed to 1.8%.
In Canada, final domestic demand grew by 3.0% in 2011, decelerating from its 4.5% growth rate in 2010. Consumer spending slowed from 3.3% in 2010 to 2.2% in 2011. The expiration of government stimulus measures—such as the tax rebate on home renovation projects—combined with slow income growth, a rising level of consumer debt and relatively high inflation on food, gasoline and energy prices, all contributed to the erosion of household spending power.
Personal disposable income grew by 3.3% in 2011, compared to 4.9% in 2010. Debt levels rose at a faster pace, aided by historically low interest rates that increased the ratio of household credit/market debt to personal disposable income to 149%, from 145% in 2010. On the housing front, residential construction increased slightly to 174,344 units in 2011 from 166,175 units in 2010, in spite of the federal government tightening mortgage regulations in March, making it more difficult for some homebuyers to obtain financing needed to purchase a home.
The personal savings rate fell in 2011 from 4.8% to 3.8% the previous year.
Drivers of growth
Business investment
Business investment continued to serve as an engine of Canadian economic growth in 2011. Firms that had delayed purchasing equipment during the recession began to buy in 2010 and continued into 2011, and investment in machinery and equipment ( M&E ) grew by 13.7%. This was the second year in a row that M&E investment climbed over 11%—surpassing the pre-recession high. Driving this growth were falling prices of machinery and equipment imports due to a strong Canadian dollar boosted by high commodity prices, as well as a growing shortage of skilled labour.
Consumer prices
In 2011, the consumer price index ( CPI ) increased by an annual average of 2.9%, compared to 1.8% in 2010. For the year as a whole, prices increased in all eight major components of the CPI , with gasoline and food experiencing the largest increases. Following a 17.5% decline in 2009 and a 9.1% rise in 2010, gasoline prices increased by 20% in 2011—the largest annual average rise in a decade. Food prices rose 3.7% after increasing 1.4% the previous year. The cost of transportation went up 6.4% on average in 2011; this compares to a 4.3% increase in 2010. In addition to paying higher prices for gasoline, consumers also paid more in passenger vehicle insurance premiums. On an annual basis, the Bank of Canada's Core CPI increased 1.6% in 2011 compared to 1.8% in 2010. The rise in 2011 was the smallest annual average increase in the Core CPI since 2005.
The Canadian dollar
The Canadian dollar remained strong in 2011. For most of the year, the dollar traded close to or above par vis-à-vis the U.S. dollar. The average value of the Canadian dollar against the U.S. dollar was U.S.$0.989, compared to U.S.$1.029 in 2010. The dollar reached its lowest level in July, trading at U.S.$0.944, and also depreciated in early October amid growing fears of another financial crisis in the Eurozone, which caused investors to retreat to the American dollar. By the end of that month, however, the Canadian dollar had returned to above parity and reached its highest trading point for the year at U.S.$1.06. Canada's healthy fiscal situation and strong banking sector, the U.S.'s and Europe's economic woes, and upheaval in oil-producing nations (which caused oil prices to rise) all contributed to the Canadian dollar remaining close to or above parity throughout the year.
Transportation sector
In 2011, the transportation services sector represented 4.2%1 of Canada's GDP , or $53 billion (see Table EC1). Truck transportation represented the largest segment of transportation services and accounted for 31% of the sector's share of GDP ; the air and rail segments represented 12 and 11%, respectively, while water transportation represented about 2%. The remaining output came from the transportation support and scenic and sightseeing activities segments, which includes airport operations, operations of terminals and harbours, and arrangement of freight transportation services.
When examining the transportation sector's economic performance, the inventories-to-shipments ratio is useful to consider, as it reflects the level of activity in the freight sector—if the economy is growing, inventories tend to be low and shipments high, and demand for transportation services is healthy. Conversely, when the economy slows, business activity decreases and inventories tend to accumulate, with fewer shipments and thus a lower demand for transportation services. Throughout 2011 the inventories-to-shipments ratio reflected the uncertain global economic context. In January inventory levels had returned to their normal pre-recession levels and stood at 1.28, suggesting that businesses had a little over a month's worth of inventories. However, as a series of economic shocks perturbed the world economy during the first half of the year, business confidence was affected and economic activity slowed. As a result, the inventories-to-shipments ratio increased to 1.38 in June—its highest level for 2011. As the temporary shocks subsided, the ratio gradually decreased as the number of shipments rebounded; by December, the inventory-to-shipment ratio was 1.29, reflecting a return to pre-recession levels of inventory stocks.
The Ivey Purchasing Managers Index ( PM I ) is another useful indicator for the transportation services sector. This economic index measures monthly changes in dollars of purchases from a panel of purchasing managers from across the country. It is often used as an anticipatory indicator for transportation services, as it reflects the order book of businesses. A figure above 50 reflects an increase, while below 50 is a decrease. In 2011, the PM I reflected the same pattern as the inventories-to-shipments ratio: despite a strong start to the year with the PM I posting levels of 70.8 and 73.2 in February and March respectively, it experienced volatile fluctuations ranging from 46.8 to 65.5 mid-year, but ended the year at 63.5 as businesses began to regain confidence and pick up their order books.
In terms of passenger traffic, the observed slowdown in global economic activity for 2011 as compared to 2010 was apparent for air passenger traffic. Although the total number of enplaned and deplaned passengers in Canada increased by 3.2% in 2011, this marked a slowdown from the 4.4% increase in the total number of enplaned and deplaned passengers observed for 2010. The slowdown in air passenger traffic for 2011 stemmed not only from the growing global economic uncertainty, but also from the sharp volatile increases in oil prices, strongly correlated to jet fuel prices, observed in 2011. Given that fuel costs account for roughly 30 per cent of an airlines' operating expenses, in 2011 airlines were forced to increase their prices and reduce capacity in order to recover the losses resulting from the large oil price fluctuations.
Conversely, strong inflationary pressures in 2011, such as a 20% increase in gasoline prices along with other factors, had a notable impact on Canadians' disposable incomes and favoured more economical urban modes. As a result, in 2011 the number of total urban passenger trips for the ten major Canadian urban transit operators2 increased 5.3% to 1.6 billion trips for the year. This was a greater increase than the 4.2% increase observed in 2010.
The rail passenger traffic sector, which is a sector dependent on both domestic and international tourism, was on the bottom end of a slow and uneven recovery for travel markets following the recession. In 2011 this sector had not yet recovered from the recession. Nonetheless, the impacts from the slowdown in economic activity throughout 2011 were still apparent, but to a lesser degree than for the airline sector. The number of passengers recorded in 2011 was virtually unchanged from the previous year and stood at roughly 4.09 million passengers, a very slight decrease from the 4.1 million passengers recorded in 2010. However, still shy from the 4.5 million passengers recorded in 2008.
Overall, for 2011, growth experienced in the transportation sector's GDP surpassed the Canadian average. On a year-over-year basis, the sector's GDP growth increased by 3%, while that for all industries increased by 1.9%. This performance suggests that as demand for Canada's natural resources from emerging economies becomes increasingly significant, traditional trading patterns are changing. This, in turn, affects the rationale for using transportation services.
4.2 International Trade
2011 Overview
The main risks to the Canadian economy in 2011 were largely external, as the world economy experienced a series of unexpected shocks. During the first half of 2011, unrest in the Middle East and North Africa disrupted the world supply of oil. This caused oil prices to reach record highs and bolstered the Canadian dollar above parity. The persistently strong Canadian dollar continued to be a challenge for Canadian exporters.
In March, the devastating mega-earthquake/tsunami off the coast of Japan severely disrupted that country's critical contributions to the global manufacturing supply chain. This led to depressed world output, including in Canada, in automotive as well as other manufacturing supply chains. Japan is Canada's third largest trading partner in terms of exports. Furthermore, large-scale floods in Australia and the United States reduced demand and disrupted output in sectors such as agriculture and coal. This caused supply shortages and price increases that further hampered the global economy's growth.
In addition to the temporary shocks of 2011, the major element impeding a strong global economic recovery was Europe's inability to quickly resolve and somewhat contain its sovereign debt problems. This significantly impacted global economic expansion by triggering financial-market volatility and damaged investor and household confidence. The effects of the European sovereign debt crisis have rippled through most major developed economies in the world, including the United States, Canada's largest trading partner.
On the whole, the global economic environment in 2011 was volatile, generating uncertainty and causing Canada's trade balance to fluctuate from quarter to quarter. For the year, total merchandise trade, on a customs basis, was $893 billion (see Tables EC6 and EC7), representing an 11.2% increase from 2010. Total exports were $447 billion, increasing 12.1% from 2010 levels, while total imports were $445 billion, 10.4% greater than in 2010. This resulted in a trade surplus of $1.7 billion—an improvement over Canada's trade deficit of $4.4 billion in 2010.
Canada's international trade activity remains largely dependent on the health of the United States economy and is export-oriented. In 2011, Canada's total merchandise trade with the U.S. was $551 billion and represented 62% of Canada's total trade activities (see Table EC6). Canada's total merchandise exports to the U.S. were $330 billion, representing 74% of all of Canada's merchandise exports, while imports from the United States to Canada were $221 billion, representing about 50% of all of Canada's imports. Over the past year, the U.S. economy experienced modest growth, posting GDP growth of 1.7% (compared to 3.0% in 2010), not only as a result of the European debt crisis but also due to the country's own domestic sovereign debt issues. Confidence in U.S. policymaking hit new lows in 2011, as political standoffs hampered compromise on how to cut the U.S. long-term debt ratio. This resulted in growing uncertainty of the U.S. economy's direction and significantly damaged consumer and business confidence. Despite historically low interest rates, heightened risk aversion and low private sector investment ensued. The fact that the fragile economic recovery in the U.S. was most evident in the truck transportation sector is not surprising, given that 57% of the value of Canada's trade with the United States is done by road mode, while 17% is by rail, 16% by pipeline, 6% by marine and 5% by air.
Canada's total trade with the rest of the world in 2011 was $342 billion (see Table EC7), and was import-oriented, as roughly $117 billion were exports and $225 billion were imports. As such, Canada had a trade deficit in 2011 of $107 billion with the rest of the world (excluding the U.S.). Canada's second largest trading partner is China; Canada's total trade with China in 2011 was $64 billion, a 12.4% increase from 2010. Canadian exports to China were $16 billion, while imports from China were $48 billion.
Impact of the global recession on Canada's transportation services sector
The Canadian economy was impacted by the 2008–09 financial crisis but generally fared better than most other countries through the recession. In 2009, the country's GDP 3 contracted by 3.1%, but by 2010, GDP had surpassed its 2008 pre-recession levels, expanding by 3.6% (see Table EC1)
As with most other sectors of the economy, the transportation services sector was impacted by the recession. The sector as a whole contracted by 5% in 2009, but by the second quarter of 2010 returned to its pre-recession levels, and for 2010 as a whole expanded by 5.7%. However, each segment of the transportation sector was impacted differently by the recession; those segments most dependent on industrial activity and international trade—such as rail and water—were impacted to a greater degree.
Rail and water are two transportation industries that have not yet fully recovered from the recession. Given that two thirds of the goods carried by rail move across Canada's land or sea borders, this sector is highly sensitive to global economic conditions. In 2009, the rail sector's GDP contracted by 13%, yet expanded by 11.5% in 2010. For 2011, the sector expanded only by 0.4%. As a result of the marked slowdown in global economic activity in 2011, the rail sector's GDP still remains below its 2008 pre-recession levels.
Of the entire transportation sector, the water transportation sector fared the worst. This sector's GDP contracted by 14.3% in 2009 and expanded only by 3.6% in 2010 and 1.0% in 2011. The Canadian water transportation industry is highly dependent on international trade, mostly U.S. markets. It is estimated that 40%4 of industry activity is derived from the international movement of goods or foreign passengers. It is important to note that in this context, water-borne traffic that passes through Canadian ports is not captured within the industry, since that traffic is carried by foreign-flagged ships. One reason why water transportation has not recovered as quickly as rail is that a large part of the growth in rail-related exports was driven by Asia, and Canada does not have many water transportation companies covering those international routes.5 The recovery in the water transportation sector has been delayed by the long and slow recovery in the U.S. economy.
The air transportation mode is also dependent on international trade—more than half of the passengers that enplane or deplane at Canadian airports are travelling to or from international destinations. In 2009, the air sector contracted by 3.6% as the number of Americans entering Canada by plane dropped by 9%, and the number of tourists from the United Kingdom, Mexico and Japan was also very low in 2009 and 2010. Table A18 shows overall passenger enplanement and deplanement, and reflects a 5.3% drop in volumes between 2008 and 2009. However, in 2010, the air sector's GDP had expanded by 8.0%. This sector recovered the fastest from the recession. The fact that the Canadian economy recovered much more quickly from the effects of the recession than other countries resulted in Canadians travelling more, both domestically and internationally. Growth in Canadian international travel was particularly robust, as the strong Canadian dollar made foreign destinations cheaper. Furthermore, the emergence of developing countries as economic powers also helped offset some of the losses, as visitor counts from emerging markets—particularly China and India—have continued to rise.6
The trucking sector also recovered fairly quickly from the recession. In 2009, this sector's GDP contracted by 6.7%. It reached its lowest point during the second quarter of 2009, but by the second quarter of 2010 it had regained its pre-recession level and expanded 8.1% for the year as a whole. The key characteristic that helped the trucking sector recover from the recession is its reliance on the domestic economy—particularly the retail, manufacturing and wholesale sectors. Given that Canada's economy has recovered faster than most other countries from the recession, declines observed in other transportation sectors highly dependent on international trade were much smaller for trucking firms. However, the impact of the recession on the U.S. economy, Canada's largest trading partner, was particularly evident in the trucking sector, where 57% of the value of goods traded between Canada and the U.S are moved by truck. During the recession, the number of two-way truck border crossings decreased from 11.5 million to 9.8 million in 2009 (see Table RO19). In 2010, the number of two-way truck border crossing increased to 10.5 million, and have remained at this level in 2011, therefore full recovery from the recession has not yet occurred.
4.3 Demographics
One of Canada's greatest long-term economic challenges is its aging population. In 2010, the number of Canadians aged 65 and older was 4.8 million, or 14.1% of the country's total population. By 2030, this is projected to reach 9.5 million, or 22.5% of the total population. In 2011, the 55-years-and-over age group formed one third of the working age population, up from one quarter 15 years ago. This demographic transition will see an increasing share of Canadians move out of their prime working age and into their retirement years, resulting in slower growth in the labour force. In fact, the Parliamentary Budget Office projects that slower labour growth as a result of Canada's ageing population will reduce annual average real GDP growth from 2.6% observed over 1977–2010 to 1.8% over 2011–2086.
This is a structural issue that cuts across all regions and sectors of the economy, and one that sits front and centre in the transportation sector. During the last decade, the number of persons 55 years of age or older employed in the transportation sector doubled. In 2011, of the 843,400 people employed in the transportation sector, 22% were 55 years of age or older, compared to 11.4% in 2000. Meanwhile, the number of people employed in the 15 to 24 age group has declined from 7.9% in 2000 to 5.9% in 2011, and those in the 25 to 54 age group fell to 72.3% in 2011 from 80.7% in 2000. As compared to the business sector in general, the number of employees in the 55 years of age or older group increased from 10% in 2000 to 17% in 2011, while those in the 25 to 54 age group declined from 74% to 68% and those in the 15 to 24 age group only declined by 1% from 2000 to 2011, going from 15% to 14%.
In 2011, the water transportation mode of the transportation sector had the largest number of older workers: roughly 27% of employees in that sector were in the 55 to 64 age group. However, the transit and ground passenger sector as well as the trucking sector also had a large number of older employees. The transit and group passenger sector had 23% of its employees in the 55 to 64 age group, while the trucking sector had 17%.
It is predicted that labour shortages will affect the operations of the economy significantly in the coming years. For example, persistent shortages will force businesses to find new ways of increasing productivity levels—such as becoming more capital-intensive—in order to stay productive.
4.4 Financial performance of major transportation stakeholders
In 2010, Canada's transportation industry registered strong growths in revenues and income as the economy recovered from the 2008–09 recession. A summary of the financial performance of the transportation industry can be found in Table EC71.
Air
Canadian air carriers in 2010 had operating revenues of $17.4 billion, up from $15.4 billion in 2009, representing a 12.7% increase year over year. Operating expenses grew at a slower pace than revenues, increasing by 8% between 2009 and 2010. This translated into an industry-wide profit of $868 million, up 581% compared to the $127 million in profits reported in 2009. More detailed information on the financial performance of Canada's major air carriers for 2011 can be found in Section 6.2.
Marine
Due to the discontinuance of Statistics Canada's Annual Survey of Water Carriers, no information is available on the financial performance of the marine mode.
Rail
In 2010, Canadian rail freight carriers had operating revenues of $9.4 billion. This represents an increase of 12.2% from 2009 revenues of $8.4 billion, which declined 15.2% compared to 2008 revenues. Operating expenses increased 11.3% in 2010, reaching $7.5 billion. This provided a favourable decrease in operating ratio to 80.3%. More detailed information on the financial performance of Canada's major railways in 2011 can be found in Section 8.2.
Road
According to Statistics Canada's Annual Trucking Survey (ATS), the for-hire trucking industry posted a 4.9% increase in operating revenue, from $38.9 billion 2009 to $40.8 billion in 2010. This compares to a 4.6% increase in operating expenses, from $36.2 billion in 2009 to $37.9 billion in 2010. The largest increase in operating expenses was fuel, at 12.2%.
4.5 Productivity of the transportation sector
Overall transportation
In 2011, Transport Canada conducted a study on productivity in the Canadian air and rail sectors. One key finding was that labour productivity growth in the Canadian air and rail transportation sectors from 1997–2010 outperformed that of the business sector. For example, output per labour advanced at a 5.0% average annual rate for air transport and 3.4% for rail transport, compared to only 1.3% in the business sector (see Tables EC68 and EC69).
Output levels in the transport sector—generally measured as tonne-kilometres or passenger-kilometres—grew 9.9% in 2010, as economic activity regained its footing from the 2009 global economic crisis. Public carriers7 outpaced private carriers8 with a 13.7% increase in output compared to 9.3%, respectively. Total factor productivity ( TFP ) levels rose by 5.6%, which indicates that output increased more than the amount of input used to produce it. In terms of mode-specific total factor productivity levels, only the levels for the air and rail mode are reported. Due to data limitations, the TFP levels for the truck and marine modes cannot be examined here.
Air
The air sector raised its output by 8.1%, with TFP productivity levels increasing 3.1%. An increase in the efficiency of capital use (10.0%) helped offset a decline in labour productivity (-14.6%). The airline industry used 12.1% more labour in 2010 than in 2009, while output grew by only 8.1%.
Rail
Freight
Total output for freight rail carriers in 2010 increased 11.3% compared to 2009, but shipments of agricultural goods rose only 0.5%. Most of the growth in shipments was seen in the category “Other Commodities”, which includes chemicals, petroleum, building materials and machinery equipment, among others. Tonne-kilometres increased 20.6% in 2010. Total productivity for the sector rose 5.1%, due primarily to increases in labour (8.1%) and capital (11.4%) efficiencies.
Passenger
Output in the passenger rail sector decreased by 1.1% from 2009 to 2010. This was due to a reduction in passenger counts in most corridors. Fuel and labour productivity helped offset a reduction in capital efficiency to stabilize total productivity of the sector at 0.5% growth in 2010.
4.6 Energy Prices and Usage
For all segments of the transportation sector, energy costs represent an important part of operating expenses. The fact that oil and energy prices dropped during the economic downturn helped reduce some of the sector's costs while revenues were low. However, a challenge for the transportation sector is that energy prices are uncertain and can quickly fluctuate, making it difficult to predict how these prices will affect operating costs on an ongoing basis.
Crude oil prices
The annual average price of crude oil continued to increase from its five-year low of U.S.$61.80 in 2009. The average price of a barrel of West Texas Intermediate ( WTI ) rose 19.6% from 2010 to U.S.$94.87 in 2011.9 Meanwhile, the average annual price of Brent crude oil reached a record $111.26 per barrel in 2011, up 39.8% from 2010. In April 2011, the average price for Brent reached $123.26, the highest it's been since July 2008 and the third highest ever in nominal value.10 Table EC63 provides more information on the price of crude oil for both WTI and Brent.
Energy analysts are increasingly of the view that the price of Brent is a better proxy for the international price of oil, while WTI is a better proxy for the U.S. market. In 2010, the price for both was on average almost identical, but 2011 brought a growing disparity between the two as Brent prices increased more rapidly than WTI prices. On average, the price for Brent was 17.3% higher than for WTI during 2011, with a peak difference of 31.9% in July 2011. This trend continued in the first quarter of 2012, as Brent prices rose 16.3% compared to 7.7% for WTI .
Refined fuels prices
The retail price of unleaded motor gasoline climbed 19.6% from its average price in 2010. The 2011 national average price for unleaded gasoline was $1.23 per litre, compared to $1.03 per litre in 2010. Crude oil remained roughly half (49.3%) of the total cost of the pump price, while taxes11 (30.7%), refinery operating margins (13.9%) and marketing operating margins (5.9%) made up the rest. Table EC64 provides retail gasoline prices for select cities.
The 2011 Canadian average retail price of diesel increased 23.5%, from $1.00 per litre in 2010 to $1.24 per litre in 2011. The 2011 price was comprised of crude oil (49.0%), taxes (24.4%), refinery operating margins (18.3%) and marketing operating margins (8.1%). Table EC65 provides retail diesel prices for select cities while Table EC66 provides a breakdown of the price components of road fuels.
The Canadian price for jet fuel rose 32.1% from 2010 to $0.77 per litre in 2011. The 2011 average price is still lower than the historical high of $0.85 seen in 2008. The price of aviation gasoline increased 16.3% from 2010 to 2011, to reach $1.09 per litre.
The average spot price12 of ultra-low sulphur number 2 diesel used for rail transportation rose 28.2%, to $0.81 in 2011.
The average spot price of marine bunker fuel grew 32.6%, from $0.56 per litre in 2010 to $0.75 per litre in 2011.
It should be noted that for both aviation and marine, there are tax exemptions for fuel purchased for an international voyage. Table EC67 provides retail prices for aviation, marine and rail fuels.
Consumption
Overall Canadian economy
Energy consumption in the Canadian economy rose 2.1% from 2009 to 2010. This included increases in energy demanded in the mining, forestry, construction and agriculture sectors. Energy demand in the transportation sector, including motor gasoline and diesel consumption, increased 3.0%.
Transportation sector
Gasoline sales increased 1.1%, from 40.2 billion litres in 2009 to 40.6 billion litres in 2010. This includes retail pump sales as well as refinery sales of gasoline to the manufacturing and commercial sectors. Total sales of diesel fuel rose 6.6%, from 16.5 billion litres in 2009 to 17.6 billion litres in 2010, which includes a substantial increase of 29.1% in refinery sales to rail companies. Retail pump sales of diesel grew 1.7%.
The domestic consumption of jet fuel declined by 1.0%, from 4.7 billion litres in 2009 to 3.4 billion litres in 2010. This includes a decrease of 7.0% in fuel sold to Canadian airlines, which fell from 4.1 billion litres to 3.8 billion litres. Total energy demand in the aviation sector fell 1.4%, from 205 petajoules13 in 2009 to 203 petajoules in 2010.
Marine energy consumption rose marginally from 117 petajoules in 2009 to 118 petajoules in 2010, while rail energy consumption remained stable from 2009 to 2010 at 88 petajoules.
In the road mode, total energy demand climbed 2.8%, from 2.05 petajoules in 2010 to 2.11 petajoules in 2011. Alberta had the highest increase in use, consuming 7.0% more energy in 2010 than in 2009. Finally, pipeline energy consumption dropped almost 10.0%, from 137 petajoules in 2009 to 124 petajoules in 2010.
The data above show a strong dependency of the transportation sector on fossil fuels. As these fuels become increasingly expensive, the transportation sector is seeking innovative ways to reduce its dependency on them. In aviation, for example, the International Civil Aviation Organization's Committee on Aviation and Environment Protection has been examining issues such as alternative fuels with a lower carbon footprint, improved air navigation to reduce fuel burn and advanced materials to make lighter aircraft. Canada's railways have invested heavily in purchasing new, more fuel efficient locomotives, which has translated into reduced energy consumption per tonne-kilometre carried (see Table EN29). In the marine mode, programs like shore power help ships reduce their fuel consumption while docked by using the local electricity grid rather than their own engines. Slow steaming—meaning to reduce the cruising speed of ships—has also helped them become more fuel efficient. Finally, in the road mode, improved engines, long-combination vehicles, aerodynamic aids, electric and hybrid vehicles, and the use of public transit all reduce dependency on fossil fuels. This will not only help the industry contain its operating costs, but will also help it be more environmentally sustainable by reducing its carbon footprint. Sections 6.5, 7.5, 8.5 and 9.5 all present various ways in which the air, marine, rail and road modes manage to reduce their fuel consumption.
However, while individual modes have shown some success at reducing their energy intensity (i.e., their energy use per unit of output), they still need to decouple economic growth from growth in energy use to help reduce the total level of emissions from transportation.
- Excludes warehousing and pipelines.
- Passenger trips based on the 10 major Canadian urban transit operators, represents about 80 per cent of total urban transit traffic in Canada. The top 10 transit properties in Canada are: Toronto Transit Commission, Société de transport de Montréal, Vancouver Regional Transit System, OC Transpo (Ottawa), Calgary Transit, Edmonton Transit, GO Transit (Toronto), Réseau de transport de la capitale ( RTC - Québec City), City of Winnipeg Transit System, Montreal Region Transit.
- Refers to GDP at basic prices in 2002 constant dollars; All-industries by North American Industrial Classification System code.
- Conference Board of Canada estimate.
- Conference Board of Canada document produced for Transport Canada.
- Conference Board of Canada document produced for Transport Canada.
- VIA Rail and urban transit operators.
- Freight railways and airlines.
- Source: Energy Information Administration.
- Not taking inflation into account.
- Taxes that apply on gasoline prices include the federal excise tax of 10¢/l, a provincial fuel tax that varies between 6.2¢/l in the Yukon to 20.06¢/l in British Columbia, a local fuel tax in Montreal, Vancouver and Victoria, the 5% Goods and Services Tax (which is also charged on the aforementioned taxes) and the provincial sales tax or the provincial component of the Harmonized Sales Tax in Newfoundland and Labrador, Nova Scotia, New Brunswick, Quebec and Ontario.
- A spot price reflects the price paid for immediate purchase and delivery, as opposed to a contract where terms are agreed in the present but delivery and payment will take place in the future.
- When modelling energy consumption due to economic activity, it is sometimes useful to convert various fuels to a common energy measurement, one of which is known as a petajoule. The conversion multiplier for one million litres of a certain fuel to a petajoule is as follows: motor gasoline = 0.035, diesel = 0.0383, turbo jet fuel = 0.0374, aviation gasoline = 0.03352, heavy fuel oil = 0.0425.