economic impact and structure of the manitoba rail … · 2020. 11. 2. · impact to total mb...

ECONOMIC IMPACT AND STRUCTURE OF THE

MANITOBA RAIL INDUSTRY

FINAL REPORT

Prepared for:

Manitoba Transportation and Government Services

March 2002

Prepared by:

The Transport Institute

631 Drake Center University of Manitoba

Winnipeg, MB, R3T 5V4 Tel: 204-474-9842 Fax: 204-474-7530

www.umti.ca

Economic Impact and Structure of the Manitoba Rail Industry

FINAL REPORT

Prepared for: Manitoba Transportation and Government Services

Prepared by:

The Transport Institute

March 2002

Economic Impact and Structure of the Manitoba Rail Industry

FINAL REPORT

Written by:

Erica Vido and Caroline Chapain

This report has been financially supported by the Manitoba Department of Transportation and Government Services. The views expressed do not necessarily represent those of the Department. The Department provides no warranties as to the validity or accuracy of the information presented herein.

Transport Institute - 1 - March 2002

EXECUTIVE SUMMARY

The Manitoba rail industry generates significant economic activity for the Province of

Manitoba. The rail industry has considerable influence on the local economy; providing

jobs, taxes and ongoing business revenues. The continued effect of the direct economic

activity combined with the indirect and induced effects is almost $1 billion, or 2.86% of

Manitoba’s GDP.

Manitoba’s rail industry, as defined in this study, is comprised of freight and passenger

transportation service providers and companies that provide goods and services that

support rail operations. Rail transportation service providers include three Class I

railways and several Class II railways. Twenty-one companies support rail operations in

Manitoba. These are classified as rail equipment manufacturers, sales and distribution

companies and service providers.

The overall objective of this study was to document the structure of this industry and to

quantify the total economic impact this industry has on Manitoba’s economy. The

response rate comprising the survey of primary and secondary linkage organizations

was 67% for rail transportation companies1 and 33% for rail support companies.

Although a complete census could not be obtained, the surveys captured a large

majority of the economic activity attributable to this industry.

This study on rail operations produced the following results:

Table A: Economic Impact of MB Rail Industry Economic Activity Total Economic Impact Increase in GDP at Market Prices $964,830,000

Direct Impact $480,057,000 Indirect Impact $208,608,000

Induced Impact $276,165,000 Impact to Total MB Labour Income $614,531,000 Impact to Total MB Employment (person-years) 15,959

1 All of the Class I carriers, CN, CP and Via Rail are included in this analysis. These companies represent a large majority of Manitoba Rail Industry economic activity.


− In the year 2000, Manitoba’s rail industry contributed

o 2.86% to Manitoba’s GDP.

o 3.57% to Manitoba’s Total Labour Income.

o 27.06% to Manitoba’s Transportation and Warehousing Labour

Income.

o 2.88% to Total Manitoba Employment.

o 14.2% to Total Manitoba Employment in Transportation Services

and Transportation Equipment Manufacturing.


ECONOMIC IMPACT AND STRUCTURE OF THE MANITOBA RAIL INDUSTRY

FINAL REPORT

TABLE OF CONTENTS

Executive Summary………………………………………………………………………….….2 List of Tables …………………………………………………………………………………….6 List of Figures ……………………………………………………………………………………7 1.0 Introduction ………………………………………………………………………………….8

1.1 Study Objectives ………………………….………………………………………10 2.0 Methodology ……………………………………………………………………………….10

2.1 Linkages …………………………………………………………………………...11 2.2 The Survey ………………………………………………………………………..11 2.3 Questionnaires ……………………………………………………………………12 2.4 Economic Impacts to be Measured and Methods of Measurement ………...13 2.5 Multipliers ………………………………………………………………………….13 2.6 Secondary Sources ………………………………………………………………15

3.0 Economic Impact Results …..……………………………….……………………………16 3.1 Economic Impact of Rail Transportation ……………………………………….16 3.1.1 Railway Revenues …………………………………………………….16 3.1.2 Railway Labour Income …………………………………………….…18 3.1.3 Railway Employment ……………………………………………….…19 3.1.4 Railway Employment Trends……………….…………………………21 3.1.5 Railway Taxes ………………………………………………………....24 3.1.6 Railway Fuel Consumption……………………………………………24 3.2 Economic Impact of Rail Support Operations ………………………………....27 3.2.1 Rail Support Operations Revenues ………………………………....27 3.2.2 Rail Support Operations Labour Income …………………….……...28 3.2.3 Rail Support Operations Employment …………………….………...29 3.3 Total Economic Impact of the Manitoba Rail Industry ……………….……….31 3.3.1 Manitoba Rail Industry Revenues ……………………………………31 3.3.2 Manitoba Rail Industry Labour Income ……………………………...32 3.3.3 Manitoba Rail Industry Employment …………………………………33 3.4 Future Perceptions of Survey Participants …………………………………….34 4.0 Structure of the Manitoba Rail Industry………………………………………………….34

4.1 Rail Transportation Companies in Manitoba…………………………………...34 4.2 Railway Company Interviews…………………………………………………….37

4.2.1 Rationalization and Shortline Development…………………………37 4.2.2 General Organizational Structure in Manitoba………………………38

4.2.2.1 Administrative Function……………………………………..38 4.2.2.2 Marketing Function………………………………………….38 4.2.2.3 Operations Function…………………………………………39

4.2.3 General Perceptions and Remarks…………………………………..40


4.3 Rail Support Operations (Secondary Linkages)……………………………….42 4.3.1 Rail Equipment Manufacturing………………………………………..43 4.3.2 Rail Industry Services Providers……………………………………...47 4.3.3 Rail Equipment Sales and Distribution……………………………….48

5.0 Manitoba Rail Network Connections ……………………………………………….……50 6.0 Manitoba Trends in Trade Activity ……..…………………………………………..……51 6.1 Trans-border Traffic ……………………………………………………………...51 6.2 Domestic Traffic ……………..……………………………………………..…..…54 6.3 Overseas Container Traffic …………..……………………………………..…...57 7.0 Conclusion …………………………………………………………………………………59 8.0 References ……………………………………………………………………………..….60 Appendices …………………………………………………………………………………..…61


LIST OF TABLES

Table 1 Rail Industry Operating Ratios, 1999-2000 ……………………………………….14

Table 2 Manitoba Industry Intensity Ratios …………………………………………………14

Table 3 Ratio of GDP at Market Prices to GDP at Factor Cost …………………………..15

Table 4 Target Population and Response Rate of Railway Companies in Manitoba ….16

Table 5 Railway Transportation Economic Activity: Railway Revenues ………………...17

Table 6 Impact to Manitoba GDP at Market Prices ………………………………………..17

Table 7 Rail Transportation Distribution of Revenue, Manitoba ………………….………17

Table 8 Railway Distribution of Freight Revenue, Manitoba, 2000 ……………..………..18

Table 9 Railway Transportation Economic Activity: Railway Labour Income ………..…19

Table 10 Impact to Labour Income, Manitoba, 2000 ………………………………………19

Table 11 Reported Employment……………………………………………………………...19

Table 12 Railway Transportation Economic Activity: Railway Employment …………….20

Table 13 Impact to Employment, Manitoba, 2000 …………………………………………20

Table 14 Rail Transportation Employment, Manitoba, 2000 ………………………..……21

Table 15 Manitoba Rail Transport and Related Services Employment, 1986-1999 …...22

Table 16 Average hourly earnings and weekly hours for hourly employees in rail

transport and related services in Manitoba, (nominal $), 1987-1999 ……………………23

Table 17 Taxes Paid by Railways, Manitoba, 2000 ……………………………………….24

Table 18 Railway Fuel Consumption in Manitoba, 1989-1999 ………………………..…25

Table 19 Fuel Tax Estimates, 1999 ………………………………………………………....26

Table 20 Rail Equipment Manufacturing, Sales and Distribution, and Services, Survey

Response Rates ……………………………………………………………………………….27

Table 21 Rail Support Operations Economic Activity: Revenues ………………………..28

Table 22 Impact to Manitoba GDP at Market Prices, 2000 …………………………….…28

Table 23 Rail Support Operations Economic Activity: Labour Income …………………..29


Table 25 Reported Employment ……………………………………………………………..30

Table 26 Rail Support Operations Economic Activity: Employment ……………………..30

Table 27 Impact to Employment, Manitoba, 2000 …………………………………………30

Table 28 Manitoba Rail Industry Economic Activity: Revenues ……………………….…31

Table 29 Impact to Manitoba GDP at Market Prices, 2000 ……………………………….31

Table 30 Manitoba Rail Industry Economic Activity: Labour Income ………………….…32



Table 32 Manitoba Rail Industry Economic Activity: Employment ……………………….33

Table 33 Impact to Employment, Manitoba 2000 ………………………………………….33

Table 34 Profile of Rail Equipment Manufacturing, Sales and Distribution, and Services,

Manitoba, 2002 ……………………………………………………………………………...…43

Table 35 Profile of Rail Equipment Manufacturers, Manitoba, 2002 …………………….44

Table 36 Manitoba Rail Traffic, Southbound Movements to the U.S. by CN and CPR ..51

Table 37 Manitoba Rail Traffic, Northbound Movements from the U.S…………………..53

Table 38 Manitoba Intra and Inter-Provincial Outbound Rail Movements ………………54

Table 39 Change in Distribution Patterns……………………………………………………55

Table 40 Manitoba Intra and Inter-Provincial Inbound Rail Movements ………………...56

Table 41 Change in Distribution Patterns……………………………………………………56

LIST OF FIGURES

Figure 1 Modal Split Canadian Forecast Trends ……………………………………………8

Figure 2 Manitoba Employment in Railway Transport and Related Services, 1986-

1999..…………………………………………………………………………………………….22

Figure 3 Average Hourly Earnings for Hourly Employees in the Railway Transport and

Related Services Sector, Manitoba (nominal $) 1987-1999 ………………………………23

Figure 4 Average Weekly Hours for Hourly Employees in the Railway Transport and

Related Services Sector, Manitoba, 1987-1999 ……………………………………………24

Figure 5 Fuel Consumption by Manitoba Railways, 1989-1999 …………………………26 Figure 6 Expected Future Markets for Rail Support Operations …………………………34

Figure 7 Manitoba Rail Traffic, Southbound Movements to the U.S……………………..52

Figure 8 Manitoba Rail Traffic, Northbound Movements from the U.S. …………………53

Figure 9 Manitoba Inter and Intra Provincial Outbound Rail Movements ……………….55

Figure 10 Manitoba Inter and Intra Provincial Inbound Rail Movements ………………..57

Figure 11 Manitoba Overseas Container Traffic, 1992-2000 …………………………….58

Figure 12 Manitoba’s Marine Container Imports/Exports by Traffic Corridor …………..58


1.0 Introduction

Winnipeg is a gateway for freight moving between Eastern and Western Canada, and

transborder freight to the U.S and Mexico. Rail plays a crucial role in the long haul freight

transportation (predominantly export movement) of goods moving through Manitoba and

originating from Manitoba, notably grain and forest products. Trucking dominates the

short haul freight traffic at rail’s expense, however rail is becoming increasingly important

for intermodal shippers. The evolving modal split in Canadian freight transport is

illustrated in Figure 1. Today, the railways are specialized long-distance carriers of

intermodal freight and of high volume commodities such as coal, grain, potash, lumber

and petroleum products.

Figure 1: Modal SplitCanadian Forecast Trends

0

20

40

60

80

100

120

140

160

180

1990

1991

1992

1993

1994

1995

1996

1997

1999

F200

0

F200

1

F200

2

F200

3

F200

4

F200

5

year

Inde

x: 1

990=

100

RailFor-Hire TruckingMarine

Source: Transport Canada for forecasts, Statistics Canada

Manitoba’s rail industry is comprised of freight and passenger transportation service

providers and companies that provide goods and services to support rail operations. Rail

transportation service providers in Manitoba include three Class I railways: Canadian

National Railway (CN), Canadian Pacific Railway (CPR) and Via Rail Canada. Several

Class II or shortline railways also operate in Manitoba, the most notable being the

Hudson Bay Railway. Traditionally, rail companies have remanufactured and maintained

their own equipment. Developments through the 90’s have seen these services being

contracted out to third parties. CN and CPR have massively invested in new

locomotives, drastically reducing their re-manufacturing operations. The rail support


sector includes companies that design, manufacture and sell rolling stock, fixed

equipment and other fabricated products and companies that provide supporting

services to freight and passenger rail transportation.

Competition and profitability in rail transportation have been the driving forces of change

in Canadian railway networks and operations. Under pressure from shareholders, the

railways have worked hard to boost profitability. In the last decade, CN and CPR have

massively restructured their networks and operations to minimize costs. In conjunction

with the grain industry’s need for an efficient and lower cost grain handling and

transportation system, the need for profitability has driven system rationalization. The

federal government has responded to the needs of Canada’s rail sector, first in 1987

with the National Transportation Act, and again in 1996 with the Canada Transportation

Act.

Service, access, rates and competition have been the focus of recent regulatory reforms.

A significant outcome has been the emergence of a shortline industry. During the

1990’s, 1727 route-km of track have been transferred from the Class I carriers to

shortlines, while another 1016 route-km have been abandoned. Manitoba’s rail

operations have been profoundly affected by these changes.

Other factors driving change in the rail sector are international trade agreements such as

CUSTA and NAFTA. Of all freight movements between the United States and Canada,

27.3% was moved by rail in 1999, an increase of 5.8% since 1990. Manitoba is one of

only two Canadian provinces with a U.S. rail terminal. BNSF operates a terminal in

Winnipeg and has connections to its U.S. rail network through an operating agreement

with CN.

Interurban rail passenger transportation, although not Manitoba’s main mode of intercity

passenger transport, is provided by ViaRail Canada. ViaRail provides the only overland

access to Manitoba’s northern communities, with a terminus at Churchill, Manitoba.

As Manitoba’s rail environment evolves, the effects on Manitoba’s economy are not

clear. Statistics Canada provides a brief overview of Manitoba’s transportation industry


but does not give comprehensive information. Furthermore, this data is often aggregated

with all of the Prairie Provinces.

1.1 Study Objectives The primary aim of this study is to assess the total economic impact (EI) of the Manitoba

Rail Industry. Specific objectives are:

• To quantify the total impacts of rail-related revenue, employment, labour income

and tax revenue, including the “multiplier effects” emanating from the initial

revenue; and,

• To establish the exact structure of the Manitoba Rail Industry.

2.0 Methodology

Economic impacts are a result of the economic activity of the individuals and

organizations that define the rail industry. In the case of Manitoba’s rail industry, this

would include rail transportation services expenditures and supporting manufacturing

and services industries’ expenditures, as well as employment income and taxes that

occur in the province, minus the possible linkages between both groups. Care must be

taken to ensure that double counting does not occur and that “leakages” (that part of the

economic activity occurring outside of the provincial economy) are identified. The impact

would also be measured in terms of person-years of employment. The taxation impact of

the rail industry is assessed to the extent that data was available.

Direct Economic Impact

The direct economic impact is defined as the employment, income and other economic

benefit generated by those companies working in rail transportation services and in rail

support operations in Manitoba.

Indirect Economic Activities

Indirect economic activities of the rail industry are attributable to firms that supply

services, materials and other inputs to the organizations involved in the direct economic


activity. Rail-related expenditures from direct activities become the revenue of indirect

activities.

Induced Economic Activities

Induced economic activity is the effect of successive rounds of spending which begin

with the consumption spending of individuals involved in the direct and indirect economic

activities. These “trickle-down” impacts represent the multiplier effects of the direct and

indirect impacts. The result is increased employment and income over and above the

levels for which the direct and indirect activities are responsible.

2.1. Linkages

Primary linkages are defined as those companies that provide rail transportation

services in Manitoba for either passengers or freight. Specifically;

• Class I: Two international freight carriers, Canadian National Railway and

Canadian Pacific Railway and one national passenger carrier, Via Rail Canada

Inc, and their related operations.

• Class II: Other rail carriers involved in rail transportation services. These are

Manitoba’s shortline operations: Central Manitoba Railway, Southern Manitoba

Railway, Hudson Bay Railway and Greater Winnipeg Water District Railway and

two excursion lines: Prairie Dog Central Railway and Assiniboine Valley Railway.

Secondary Linkages comprise all rail support operations, specifically:

• Rail equipment manufacturing companies

• Rail equipment sales and distribution companies

• Rail supporting services companies

2.2 The Survey The quality of any economic impact study is a function of the care and completeness of

the data. It is important to acquire information from as many of these industry


“participants” as possible, particularly from the largest, most important companies. To

accomplish this, there are three main requirements:

• The participants must be well defined – a comprehensive and up-to date list must

be generated;

• The survey must capture the necessary information while at the same time avoid

being difficult or overly time-consuming, and;

• The cooperation of survey participants must be secured – this is critical for the

success of the study.

From this definition of the Manitoba Rail Industry, a list of industry participants was

generated. The survey and the methods of data collection determine the accuracy of the

economic impact study. This study will perform a complete enumeration, rather than

inferring the impacts from a sample.

Class I and Class II railways were easily identified. However, the rail support operations

sector is more diversified and more difficult to determine. Industry Canada provides a

database on Canadian railway suppliers. This database has been complemented by

information from the Canadian Association of Railway Suppliers, the TrainsCan.com

website and Manitoba’s Yellow Pages. A list of 30 participants was generated by these

databases.

2.3 Questionnaires

Three questionnaires, one for freight services, one for passenger services and one for

rail support operations were designed in order to apply MBS input/output model

multipliers to the data collected. Samples of these surveys are presented in the

appendix. All information collected was for the year 2000. Rail transportation services companies’ expenditures on maintenance, equipment and

infrastructure have to be considered specifically. If these expenses accrue to Manitoba

companies, there is risk of double counting. Rail support operations companies were


asked to identify the proportion of their revenues that accrue to rail transportation

services companies in Manitoba. This proportion of their activities is excluded to obtain

the net direct economic impact of the Manitoba Rail Industry.

2.4 Economic Impacts to be Measured and Methods of Measurement

Output, employment and labour income can be used to assess the economic impact of

the Manitoba Rail Industry. Estimates of the taxes paid by the rail industry indicate the

contribution to the local tax base. The units of measurement are defined as follows:

• Rail revenues (output) represent actual sales of goods and services earned

locally.

• Employment is reported in total person-years of rail employment. One person,

employed full time for one year represents one-person year of employment.

• Labour income measures the total annual wages, salaries and benefits received

as a result of rail employment.

• Rail taxes show the contribution to the local tax base, it includes federal,

provincial and municipal taxes and levies paid by rail-related firms and

organizations.

2.5 Multipliers

The economic multipliers used to calculate the direct, indirect and induced economic

impacts are obtained from the Manitoba Bureau of Statistics (MBS). They are derived

from a statistical model of input-output data that traces Manitoba inter-industry flows of

goods and services. The MBS economic multipliers are widely accepted and recognized

as being comprehensive and accurate. The most recent multipliers are from 1998.

This study uses the Manitoba Industry Intensity Ratios for medium industry groups.

These intensity ratios estimate the total impact to Manitoba GDP at factor cost, labour

income and employment based on a given change in industrial output. The result is the

net monetary impact to the industry. This study uses total operating expenditures

information and estimates industrial output by applying the inverse of the operating ratio

to these expenditures (see Table 1). MBS provides an Industry Intensity Ratio for the


transportation sector. This includes rail freight and passenger transportation. It also

provides Industry Intensity Ratios for the transportation equipment sector, which includes

rail equipment. These Industry Intensity Ratios are applied to the industrial output

estimates to obtain the impact to GDP at factor costs.

Table 1 : Rail Industry Operating Ratios, 1999-2000.

Operating Ratio

Canadian National 0.696* Canadian Pacific 0.769* VIA Rail 1.000* Shortline Rail Transportation 0.903** Rail Support Operations 0.711** Source :* Calculated from CN, CPR and VIA Rail’s annual reports; **Calculated from Statistics Canada (2001, Table 1,

p16-19).

To obtain the net monetary impact to the economy, the impact to GDP at factor costs

should be adjusted by applying another multiplier that will give the impact to Manitoba’s

GDP at market prices, inclusive of the value of indirect taxes and subsidies. Direct,

indirect and induced economic impacts can then be calculated using MBS compositional

break downs.

Table 2: Manitoba Industry Intensity Ratios (total economic impact in Manitoba per

value of industry output) GDP at Factor cost Labour Income Employment

(person-year/$million)

adjusted for wage

inflation

Transportation

Equipment 0.727 0.517 12.42

Transportation 0.974 0.675 17.57 Source: Manitoba Bureau of Statistics, Manitoba Economic Multipliers (1998, p. 24) Table 2 presents the Industry Intensity Ratios used for this study that are needed to

calculate the total economic impact at factor cost of the rail industry. These Industry

Intensity Ratios evaluate that part of output that will be spent on Manitoba goods and


services. The Employment Intensity Ratio has been adjusted for wage inflation at a rate

of 4.7%2. Table 3 presents the Ratio of GDP at Market Prices to GDP at Factor Cost used for this

study. This ratio is needed to calculate the total economic impact, at market prices, of

the rail industry. GDP at Market Prices includes the value of indirect taxes and subsidies,

these items are exluded from GDP at Factor Cost (Table 2).

Table 3: Ratio of GDP at Market Prices to GDP at Factor Cost

GDP at market prices composition (%)

Ratio :

GDP at market prices/

GDP at Factor cost

Direct

Impact

Indirect

Impact

Induced Impact

Transportation

Equipment 1.089 54.3% 16.4% 29.3%

Transportation 1.089 49.7% 21.8% 28.6% Source: Manitoba Bureau of Statistics, Manitoba Economic Multipliers (1998, p. 26) 2.6 Secondary Sources

Rail in Canada (2001)3, published by Statistics Canada, gives complementary

information regarding Canadian rail transportation services companies for the year 1999.

This publication, and annual reports from Canadian National Railway, Canadian Pacific

Railway and VIA Rail are used to gather background information.

There is no equivalent publication for rail manufacturing companies. Statistics Canada

surveys manufacturing companies in Canada and breaks down the information by

province4. However, in their most recent publication, they surveyed only 18 companies

that manufacture railroad rolling stock in Canada. Of those 18 companies, 15 were

located in Ontario (10) or Quebec (5). Only one was located in Manitoba.

2 See wage inflation in Manitoba at http://dsp-psd.pwgsc.gc.ca/Collection-R/Statcan/11-210-XIB/0000011-210-XIB.pdf 3 Rail in Canada (1999), Statistics Canada, 52-216-XIB, December 2001. 4 Manufacturing Industries of Canada: national and provincial areas (1998), Feature article, Statistics Canada, 31-203-XPB, June 2001.


3.0 Economic Impact Results

3.1 Economic Impact of Rail Transportation

Nine rail transportation companies were solicited for this study. Six responded, giving a

response rate of 67%. Table 4 identifies the response rate by Class I and Class II

railways. While a complete enumeration was not achieved, the major players are

included, that is, the Class I railways, CN, CPR and Via Rail5.

Table 4: Target Population and Response Rate of Railway Companies in Manitoba

Number in Target

Population

Number of

Respondents6

Response Rate

Class I railways 3 3 100%

Class II railways 6 3 50%

Total 9 6 66.7%

3.1.1 Railway Revenues

Railway transportation revenues in Manitoba during the year 2000 are estimated to be

$880 million as illustrated in Table 5. These are total revenues from actual goods and

services that are sold locally, and directly attributable to the Manitoba Rail Industry.

Railway transportation revenues generated $933 million to Manitoba’s GDP in the year

2000. The direct impact totaled $463 million, while the indirect and induced impacts

totaled $203 million and $267 million, respectively. As illustrated in Table 6, 2.76% of

Manitoba’s GDP7 in the year 2000 is attributable to railway transportation activities.

Table 78 shows that freight is the major revenue earner for Manitoba’s railways. Freight

represented 96% of railway revenues in Manitoba during the year 2000. Passengers

contributed 2.4% to railway revenues during this same time period.

5 These companies represent a large majority of Manitoba Rail Industry economic activity. 6 The railways that participated in the study are: CN, CP, Via Rail, Hudson Bay Railway, Prairie Dog Central and Central Manitoba Railway. 7 2000 Manitoba GDP at Market Prices is $33, 780 million. See CANSIM Label: D24431. 8 The information presented in Table 7 is based on Question #15 in the Rail Freight Transportation Survey (Survey A in the Appendix).


Table 5: Railway Transportation Economic Activity: Railway Revenues

Total Revenues $879,516,000

GDP at factor cost Industry Intensity Ratio 0.974

Increase in GDP at Factor Cost $856,649,000

Ratio: GDP at Factor Cost / GDP at Market Prices 1.089

Increase in GDP at Market Prices $932,891,000

Direct Impact : $462,714,000

Indirect Impact : $203,370,000

Induced Impact : $266,807,000

Table 6. Impact to Manitoba GDP at Market Prices, 2000 Contribution to Railway Transportation MB's Economy

MB GDP at Market Prices (2000) $33,780,000,000 100.00% - Direct Impact $462,714,000 1.37% - Indirect Impact $203,370,000 0.60% - Induced Impact $266,807,000 0.79% Total Impact of Railway Transportation to GDP $932,891,000 2.76%

Table 7: Rail Transportation Distribution of Revenue, Manitoba %

Bulk9 53.0 Carload10 39.0 Intermodal11 1.3 Total Freight12 96.0 Passengers 2.4 Other13 1.6 Total 100

9 Bulk freight includes commodities like agricultural commodities, chemicals or coal that are transported in open or covered hopper cars or gondola cars. 10 Carload freight is non-bulk traffic of various types (forest products, metallic ores and minerals, motor vehicles and equipment, non metallic minerals and products and other carloads) that are transported in rail cars such as auto racks, box cars, flat cars or gondola cars. 11 Intermodal freight usually consists of time sensitive shipments in containers or trailers. 12 Total freight does not equal the sum of bulk, carload and intermodal totals because it includes a small amount of freight that cannot be broken down. 13 Subsidies, mail and concessions.


Table 814 identifies the distribution of freight revenues for Manitoba. Grain represents

almost half of all revenues earned in Manitoba during 2000, followed by forest products

and metals and minerals.

Table 8: Railway Distribution of Freight Revenue, Manitoba, 2000.

Freight % Petroleum and Chemicals 9.7 Metals and Minerals 12.2 Forest Products 16.2 Coal 1.0 Grain 47.8 Fertilizers 8.5 Intermodal 1.4 Automotive 2.8 Other 0.4

Total 100.0

3.1.2 Railway Labour Income

Railway labour income of $285 million is directly attributable to the economic activity of

railway transportation. In the year 2000, Manitoba’s railways generated impacts to

Manitoba’s Total Labour Income of $594 million, $308 million of which is over and above

the direct labour expenditures of $285 million, as outlined in Table 9. The impacts

generated by railway labour expenditures represented 3.44% of the Total Annual Labour

Income in Manitoba during 200015; this is illustrated in Table 10. Based on reported

employee numbers, this represents an average annual income of $53,162.67 per

employee. Average provincial earnings for Transportation and Warehousing industries in

Manitoba during 2000 were $37,991.7216, a difference of $15,170.95. The

Transportation and Warehousing industry in Manitoba generated $1,084 million in Total

Labour Income17; railway transportation represented 26.31% of this.

14 The information presented in Table 8 is based on Question #16 in the the Rail Freight Transportation Survey (Survey A in the Appendix). 15 For 2000, the total labour income in Manitoba was $17,237 million. See CANSIM Label D24084. 16 Statistics Canada, Cat. No. 72F0023-XIB, 1991-2000. Annual Estimates of Employment, Earnings and Hours Based on NAICS. 17 Ibid.


Table 9: Railway Transportation Economic Activity: Railway Labour Income Total Railway Revenues $879,516,000

Labour Income Industry Intensity Ratio 0.675

Impact to Total Manitoba Labour Income $593,674,000

Railway Expenditures on Labour $285,237,000

Increase in Total Manitoba Labour Income $308,437,000

Table 10. Impact to Labour Income, Manitoba, 2000 Contribution to Railway Transportation

MB Labour IncomeTotal MB Labour Income $17,237,000,000 100.00% Total Impact of Rail Transportation to Labour Income $593,674,000 3.44% MB Transportation and Warehousing Labour Income $1,084,000,000 100.00% Total Impact of Rail Transportation to T&W Income $285,237,000 26.31%

3.1.3 Railway Employment

During the year 2000, the railway companies that participated in this study employed a

total of 5,107 person-years of employment as shown in Table 11. This value was

obtained by dividing the total hours worked by the average hours worked annually.18

Table 11. Reported Employment Railway Transportation

# of Staff # of HoursFull Time 4994 9089080 Part Time 43 52400 Seasonal 339 153000 Total 5376 9294480 TOTAL FULL TIME EQUIVALENCE

5,107


Employment totals are reported in terms of person-years of employment. One person-

year of employment is the equivalent of one person, employed full-time for a period of

one year. Alternatively, two part-time employees who work 17.5 hours per week are

considered to be equivalent to one full-time employee. The employment figures for

Manitoba’s rail transportation sector are reported in Table 12. In the year 2000,

Manitoba’s railways contributed 15,462 person-years to Total Manitoba Employment,

10,355 person-years of which is over and above the direct employment contribution of

5,107 person years.

Table 12. Railway Transportation Economic Activity: Railway Employment Total Railway Revenues (millions) $880

Employment Industry Intensity Ratio (person-year/$million) 17.57

Impact to Total Manitoba Employment (person-years) 15,462

MB Railway Employment (person-years) 5,107

Increase in Total Manitoba Employment (person-years) 10,355

Table 13 shows that railway transportation contributed 2.8% to Total Manitoba

Employment during 2000, or 18% to employment in Manitoba’s Transportation and

Warehousing sector.

Table 13. Impact to Employment, Manitoba, 2000 Contribution to Railway Transportation

MB Employment Total MB Employment (person-years) 554,000 100.00% Total Impact of Rail Transport to MB Employment 15,462 2.79% MB Transportation and Warehousing Employment 28,600 100.00% Impact of Rail Transport to T&W Employment 5,107 17.86%

18 35 hours/week x 52 weeks/year = 1820 hours/year for an average annual work year (40 hours/week – 1 hour for lunch = 35 hours/week; 52 weeks/year because vacation time is paid for by employers).


Table 14 outlines reported rail transportation employment by occupation. Equipment

maintenance consumes the highest amount of human resources in the rail transportation

sector.

Table 14: Rail Transportation Employment, Manitoba, 2000

Full-time Part-time Seasonal

Equipment maintenance (equipment, repair, and maintenance

personnel) 32.6% 65.1% 4.7%

Transportation (locomotive, engineers and traffic supervisor,

operations administration) 21.1% 34.9% 5.9%

Road maintenance (track inspectors, work equipment operators,

maintainers and mechanics) 15.3% 89.4%

General (commercial, sales and marketing personnel) 30.9%

TOTAL number of employees 4994 43 339

3.1.4 Rail Transportation Employment Trends Table 15 and Figure 2 presents hourly and total employment in the railway

transportation and related services sector in Manitoba, from 1986 to 1999. The early part

of the decade shows a steady decline in the number of hourly employees, which

stablizes in the late 1990’s. Statistics Canada does not provide total employment

information after 1996, however, we can assume that it follows a similar trend to hourly

employment. Since 1986, both total and hourly employment has steadily decreased. In

1986, a total of 10,823 people worked in the railway transport and related services

sector. One decade later this number has declined to 6521 employees, a 40% decrease.

Hourly employees represented the majority of rail sector employment near the latter half

of the 1980’s. In 1987, hourly employment represented half of total employment. This

proportion climbed to about 3/5 of total employment by 1996. This data reflects the

evolution of the rail sector since the late 1980’s.


Table 15: Manitoba Rail Transport and Related Services Employment, 1986-1999.

Hourly Employees Total Employees 1986 8473 10823 1987 5172 9549 1988 5273 9400 1989 5257 9187 1990 4920 8571 1991 4660 8146 1992 4409 7796 1993 4343 7528 1994 4266 7173 1995 n.a. n.a. 1996 3596 6521 1997 3400 n.a. 1998 3500 n.a. 1999 3600 n.a.

Source: Statistics Canada, Survey of Employment, Payrolls and Hours, 72-002.

Figure 2 : Manitoba Employment in Railway Transport and Related Services, 1986-1999.

0

2000

4000

6000

8000

10000

12000

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Hourly EmployeesTotal Employees

In contrast, average hourly earnings grew steadily during the 1987 to 1999 time period,

from $13.71/hour to $20.90/hour, a 52% increase in 12 years. This is illustrated in Table 16 and Figure 3. During this same period, the consumer price index increased by

35.6%. As a result, the real hourly wage in Manitoba increased by 16.4%.


Table 16: Average hourly earnings and weekly hours for hourly employees in rail transport and related services in Manitoba, (nominal $) 1987-1999.

Average Hourly Earnings

(nominal $) Average Weekly Hours

1987 13.71 39.7 1988 14.63 41.3 1989 15.52 40.2 1990 16.25 40.2 1991 17.15 39.5 1992 17.38 39.9 1993 18 39.4 1994 18.42 41.4 1995 n.a. n.a. 1996 19.04 41.8 1997 19.64 42.7 1998 18.94 40.7 1999 20.9 40.2

Source: Statistics Canada, Survey of Employment, Payrolls and Hours, 72-002.

Figure 3: Average Hourly Earnings for Hourly Employees in the Railway Transport & Related Services Sector, Manitoba.

(nominal $) 1987-1999

0

5

10

15

20

25

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

$ Average Hourly Earnings


Figure 4: Average Weekly Hours for Hourly Employees in the Railway Transport and Related Services Sector, Manitoba.

1987-1999.

37

38

39

40

41

42

43

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Hou

rs

Average Weekly Hours

Average weekly hours of hourly employees fluctuated around 40 hours during the 1987

to 1993 time period, as illustrated in Table 16 and Figure 4. In 1997, average weekly

hours increased to 43 hours per week and then decreased again to 40 hours in 1999.19

3.1.5 Railway Taxes

Table 17 outlines the taxes paid by Manitoba’s railways. During the year 2000, the

railways paid $67 million in taxes, $46 million of which stayed in Manitoba.

Table 17. Taxes Paid by Railways, Manitoba, 2000.

Total Municipal Provincial Federal

Taxes Paid $66,890,000 $16,273,000 $30,101,000 $20,514,000

3.1.6 Railway Fuel Consumption Table 18 and Figure 5 show fuel consumption by Class I carrier in Manitoba from 1989

to 1999. Prior to 1996, fuel consumption by CN and CPR was relatively constant. There

19 Although average weekly hours in railway transportation fluctuates around 40 hours/week, this study uses 35 hours/week to calculate Full Time Equivalence so that comparisons across industries can be more easily made.


was a dramatic decrease in fuel consumption in 1996 followed by a dramatic increase in

1997. This is followed by a slight decrease in fuel consumption in 1998 and 1999.

Through the 90’s, CN and CPR heavily invested in a newer, more efficient locomotive

fleet and drastically improved fuel efficiency, explaining the observed trends. Via Rail’s

fuel consumption is relatively constant, following a sharp decline in 1990. Fuel

consumption by the Class II operators shows a consistently increasing trend beginning

in 1996.

Table 18: Railway Fuel Consumption in Manitoba, 1989-1999.

Class IIPassenger Carrier Shortline

RailYear Canadian Canadian VIA Operators TOTAL*

National Pacific Rail

1989 92999 69405 9356 1717641990 91233 68178 5792 1652031991 97233 70503 5151 1728871992 92853 65551 5090 1634941993 94230 63473 4987 1625901994 96426 71282 4813 1725221995 92633 67070 4339 __ 1640421996 71833 61732 4408 47 1380201997 104247 67750 4722 2139 1788581998 94432 61408 4310 4749 1648991999 83981 56294 4248 12300 156823

* Includes values for Class II operators and Class I Support Activities (Class III operators).

Source: Statistics Canada, Rail in Canada, 52-216.

000 litres

Freight CarriersClass I


Figure 5: Fuel Consumption by Manitoba Railways, 1989-1999.

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

'000

litr

es

CNCPVia RailShortlinesTotal

Table 19 estimates Canadian railways’ fuel tax payments on diesel consumption in

1999. Canadian railways paid $9.9 million in fuel taxes to the Manitoba provincial

government and $6.3 million to the federal government.

Table 19: Fuel Tax Estimates, 1999.

Manitoba Federal Total

Fuel consumption (litres) 156 823 000

Rail diesel tax ($ per liter) 0.063 0.04

Estimated tax payment (‘000) $9,880 $6,273 $16,153Source : Tax information is derived from Taxation Manitoba, Revenue Canada.


3.2. Economic Impact of Rail Support Operations

Twenty-one rail support operations companies were solicited for this study. Seven

responded20, giving a response rate of 33%. Table 20 identifies the response rate by

operations category.

Table 20. Rail Equipment Manufacturing, Sales and Distribution, and Services, Survey Response Rates

PROFILE OF RAIL SUPPORT OPERATIONS IN MANITOBA

# in Target Population

# of Respondents

Response Rate

Total no. of Manufacturers 8* 4 50.0 % Total no. of Service Providers 6 2 33.3 % Leasing 3 1 33.3 % Repair/maintenance 1 0 0 % Other 2 1 50 % Total no. of companies involved sales ordistribution 7 1 14.3 %

Distributor of other manufacturers' goods 3 1 33.3 % Selling company's own product 4 0 0 % TOTALS 21 7 33.3% * There are two manufacturing companies who also provide services for their own equipment/products. 3.2.1 Rail Support Operations Revenues

Rail support operations revenues for the year 2000 are estimated to be $65 million21 as

illustrated in Table 21. These are total revenues from actual goods and services that are

sold locally and abroad, directly attributable to the Manitoba Rail Industry.

Rail support operations generated an increase of $52 million in Manitoba’s GDP in the

year 2000. The direct impact totaled $28 million, while the indirect and induced impacts

totaled $8 million and $15 million, respectively. Table 22 shows that rail support

operations companies contributed 0.15% to Manitoba’s GDP in 2000.

20 The seven companies included in the economic impact analysis are: Amsco Cast Products, Acklands-Grainger, Mandak Railway Supply, Griffin Canada, Danella Rental Systems and Midland Vegetation and Cando Contracting.


Table 21: Rail Support Operations Economic Activity: Revenues

Total Revenues $65,142,000

GDP at factor cost Industry Intensity Ratio 0.727

Increase in GDP at factor cost $47,358,000

Ratio: GDP at factor cost / GDP at market prices 1.089

Increase in GDP at market prices $51,573,000

Direct Impact : $28,004,000

Indirect Impact : $8,458,000

Induced Impact : $15,111,000

Table 22. Impact to Manitoba GDP at Market Prices, 2000 Contribution to Rail Support Operations MB's Economy

MB GDP at Market Prices (2000) $33,780,000,000 100.00% - Direct Impact $28,004,000 0.08% - Indirect Impact $8,458,000 0.03% - Induced Impact $15,111,000 0.04% Total Impact of Rail Support Operations to GDP $51,573,000 0.15%

3.2.2 Rail Support Operations Labour Income

Rail support operations labour income of $16.1 million is directly attributable to the

economic activity of rail support operations. In the year 2000, Manitoba’s rail support

operations generated impacts to Manitoba’s Total Labour Income of $34 million, $18

million of which is over and above the direct labour expenditures of $16 million, as

illustrated in Table 23. The impacts generated by rail support operations’ labour

expenditures represented 0.2% of the Total Annual Labour Income in Manitoba during

200022, as illustrated in Table 24. Based on reported employee numbers, average

annual income for rail support operations was $43,529.41. Average provincial earnings

for Transportation Equipment Manufacturing industries in Manitoba during 2000 was

21 This is total revenues estimated for the seven companies that responded to our inquiries.


$38,777.96, a difference of $4,751.48. The Goods Producing Industries in Manitoba

generated $3,433 million in total labour income23; as illustrated in Table 24, these seven

rail support companies represented only 0.5% of this.

Table 23. Rail Support Operations Economic Activity: Labour Income Total Rail Support Operations Revenues $65,142,000

Labour Income Industry Intensity Ratio 0.517

Impact to Total Manitoba Labour Income $33,679,000

Rail Support Operations' Expenditures on Labour $16,105,000

Increase in Total Manitoba Labour Income $17,574,000

Table 24. Impact to Labour Income, Manitoba, 2000 Contribution to Rail Support Operations

MB Labour IncomeTotal MB Labour Income $17,237,000,000 100.00% Total Impact of Rail Support Ops. to Labour Income $33,679,000 0.20% MB Goods Producing Industries Labour Income $3,433,000,000 100.00% Impact of Rail Support Ops. to GPI Income $16,105,000 0.47%

3.2.3 Rail Support Operations Employment

During the year 2000, the rail support operations that participated in this study employed

a total of 386 person-years of employment as shown in Table 25. This value was

obtained by dividing the total hours worked by the average hours worked annually24.

22 For 2000, the total labour income in Manitoba was $17,237 million. See CANSIM Label D24084. 23 Statistics Canada, Cat. No. 72F0023-XIB, 1991-2000. Annual Estimates of Employment, Earnings and Hours Based on NAICS. 24 35 hours/week x 52 weeks/year = 1820 hours/year for an average annual work year.


Table 25. Reported Employment Rail Support Operations

# of Staff # of Hours Full Time 364 665780 Part Time 1 480 Seasonal 25 37000 Total 390 703260

TOTAL FULL TIME EQUIVALENCE 386

Table 26 shows that in the year 2000, Manitoba’s rail support operations companies

contributed 807 person-years to Total Manitoba Employment, 421 person-years of which

is over and above the direct employment contribution of 386 person-years.

Table 26. Rail Support Operations Economic Activity: Employment Total Rail Support Operations Revenues (millions) $65

Employment Industry Intensity Ratio (person-year/$million) 12.42

Impact to Total Manitoba Employment (person-years) 807

MB Rail Support Operations Employment (person-years) 386

Increase in Total Manitoba Employment (person-years) 421

Table 27 shows that the rail support operations companies that participated in this study

contributed modestly (0.15%) to Total Manitoba Employment in 2000. The contribution to

employment in the Transportation Equipment Manufacturing sector by these companies

was 3.86%.

Table 27. Impact to Employment, Manitoba, 2000 Contribution to Rail Support Operations

MB Labour Income Total MB Employment (person-years) 554,000 100.00% Total Impact of Rail Support Ops. to MB Employment 807 0.15% MB Transportation Equipment Mfg. Employment 10,000 100.00% Impact of Rail Support to Equip. Mfg. Employment 386 3.86%


3.3 Total Economic Impact of the Manitoba Rail Industry

3.3.1 Manitoba Rail Industry Revenues The information in sections 3.1 and 3.2 were combined to calculate the total economic

impact of the Manitoba Rail Industry. The primary linkages between both groups were

subtracted from rail support operations revenues to ensure that double counting does

not occur. The rail support operations revenues, excluding the linkages with Manitoba’s

rail transportation sector were $40 million in 2000, as illustrated in Table 28. This gives a

total economic impact of $965 million. The direct economic impact totaled $480 million,

while the indirect and induced impacts totaled $209 million and $276 million,

respectively.

Table 28: Manitoba Rail Industry Economic Activity: Revenues

Revenue Railway EI Rail Support EI* Total EI Total Revenues $879,516,000 $40,343,000 $919,859,000Increase in GDP at factor cost $856,649,000 $29,329,000 $885,978,000

Increase in GDP at market prices $932,890,000 $31,940,000 $964,830,000Direct Impact : $462,714,000 $17,343,000 $480,057,000

Indirect Impact : $203,370,000 $5,238,000 $208,608,000Induced Impact : $266,807,000 $9,358,000 $276,165,000

*Excludes primary linkages.

The entire Manitoba Rail Industry contributed 2.86% to Manitoba’s GDP in 2000. This is

illustrated in Table 29.

Table 29. Impact to Manitoba GDP at Market Prices, 1999 Contribution toManitoba Rail Industry MB's Economy

MB GDP at Market Prices (2000) $33,780,000,000 100.00% - Direct Impact $480,057,000 1.42% - Indirect Impact $208,608,000 0.62% - Induced Impact $276,165,000 0.82% Total Impact of the Manitoba Rail Industry to GDP $964,830,000 2.86%


3.3.2 Manitoba Rail Industry Labour Income

Railway labour income and rail support operations labour income were combined to

obtain total Manitoba Rail Industry labour income. Table 30 lists total Manitoba Rail

Industry labour income as $293 million. The Manitoba Rail Industry generated impacts to

Manitoba’s Total Labour Income of $615 million, $321 million of which is over and above

the direct labour expenditures of $293 million.

Table 30. Manitoba Rail Industry Economic Activity: Labour Income Rail Transportation Rail Support* Total Rail Industry

Total Revenues $879,516,000 $40,343,000 $919,859,000

Impact to MB Labour Income $593,674,000 $20,857,000 $614,531,000

Expenditures on Labour $285,237,000 $8,063,000 $293,299,000

Increase in MB Labour Income $308,437,000 $12,795,000 $321,232,000 *Excludes primary linkages

The Manitoba Rail Industry contributed 3.6% to Total Manitoba Labour Income, or 27%

to Manitoba’s Transportation and Warehousing labour income. This is illustrated in

Table 31.

Table 31. Impact to Labour Income, Manitoba, 2000 Contribution to Manitoba Rail Industry

MB Labour IncomeTotal MB Labour Income $17,237,000,000 100.00% Total Impact of MB Rail Industry to Labour Income $614,531,000 3.57% MB Transportation & Warehousing Labour Income $1,084,000,000 100.00% Total Impact of MB Rail Industry to T&W Income $293,299,000 27.06%


3.3.3 Manitoba Rail Industry Employment

The combined impact to Total Manitoba Employment of the Manitoba Rail Industry totals

15,959 person-years of employment, as illustrated in Table 32.

Table 32. Manitoba Rail Industry Economic Activity: Employment Rail Transport Rail Support* Total Rail Industry

Total Revenues $879,516,000 $40,343,000 $919,859,000

Impact to Total MB Employment 15,462 497 15,959 *Excludes primary linkages

Manitoba’s Rail Industry contributed 2.9% to Total Employment in Manitoba during 2000;

this is illustrated in Table 33. When the Transportation Services and Equipment

Manufacturing sectors are combined, the Manitoba Rail Industry accounts for 14% of

employment in this sector in Manitoba.

Table 33. Impact to Employment, Manitoba, 2000 Contribution to Manitoba Rail Industry

MB Labour Income Total MB Employment (person-years) 554,000 100.00% Total Impact of MB Rail Industry to MB Employment 15,959 2.88% MB Transport Svcs & Equipment Mfg. Employment 38,600 100.00% Impact of MB Rail to Trans. & Equip. Mfg. Employment 5,493 14.23%



3.4 Future Perceptions of Survey Participants

Manitoba’s freight railways expect a 5% to 10% increase in revenues in the next 3 years.

One-third of rail support operations companies expect revenues to remain the same in

2005, 2/3 of rail support companies expect a 25% increase in sales. Their future

expected markets are illustrated in Figure 6.

Figure 6: Expected Future Markets for Rail Support Operations

Rest of Canada49%

Manitoba22%

United States29%

4.0 Structure of the Manitoba Rail Industry 4.1 Rail Transportation Companies in Manitoba

The following section provides background information on the Class I and Class II

carriers involved in this study.

Canadian National Railway Operates the largest rail network in Canada and the only

transcontinental network in North America, almost 18,000 miles of track. The company

operates in eight Canadian provinces and 14 U.S. states. CN spans Canada and mid-

America from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of

Vancouver, Prince Rupert, Thunder Bay, Duluth, Montreal, Halifax, New Orleans and

Mobile, and the key cities of Toronto, Buffalo, Chicago, Detroit, Memphis,

Minneapolis/St.Paul, St. Louis and Jackson. CN revenues derive from the movement of

a diversified and balanced portfolio of goods including petroleum and chemicals, grain

and fertilizers, coal, metals and minerals, forest products, intermodal and automotive.25

Canadian Pacific Railway operates a 14,000-mile network in Canada and the United

States. CPR's network serves major Canadian ports and cities from Montreal to

Vancouver, and key centres in the U.S. Midwest and Northeast. Its Vancouver-Chicago

corridor provides shippers with the most direct route between these two key

transportation centres, while its Montreal-Chicago corridor is part of the most direct route

from Europe to the U.S. Midwest. With eight Canada/U.S. border crossings, CPR's

international reach extends far beyond its own network. Through alliances with other

North American Class 1 railways, CPR customers have access to the Pacific Northwest,

the southern U.S. and Mexico.

CPR serves virtually every major industry. Main commodities include grain, coal, lumber

and potash, but also include many consumer products such as cars, household

appliances, food and furniture.26

VIA Rail Canada is an independent crown corporation set up in 1978. VIA Rail operates

trains in all regions of Canada over a network spanning the country from the Atlantic to

the Pacific, and from the Great Lakes to Hudson Bay. The company carries roughly 3.87

million passengers annually and has staff numbering close to 2900. They operate 460

trains weekly on 14,000 km of track serving some 450 Canadian communities. VIA Rail

does not own track in Manitoba. They operate on tracks belonging to CN, CPR or

Hudson Bay Railway.27

Central Manitoba Railway Inc. (CEMR) is a wholly owned subsidiary of Cando

Contracting Ltd. It operates on the former CN Pine Falls and Carman subdivisions as a

shortline railroad. The Pine Falls subdivision consists of approximately 67 miles of track

running from Winnipeg to Pine Falls. The Carman subdivision runs between Winnipeg

and Graysville and consists of approximately 50.5 miles of track. Commodities moved by

25 Canadian National, www.cn.ca 26 Canadian Pacific Railway, www.cpr.ca 27 Via Rail Canada, www.viarail.ca


CEMR include grain, lumber, and petroleum and chemicals. In 2002, Cando reached

agreement with CPR rail to lease the rail line serving Selkirk and Gimli.

A relatively new entrant to Manitoba’s shortline market, it was established in January of

1999, and began operations in April of 1999. With a current fleet of 4 locomotives,

CEMR carries freight to and from shippers along the lines and is also responsible for line

maintenance and rehabilitation. CEMR employs 21 operational and maintenance

employees. Administration and management functions are handled out of their Brandon

office. An average of 7500 carloads are moved annually. A map of CEMR can be found

in the appendix.28

Hudson Bay Railway (HBRY) is owned by OmniTRAX and operates over 810 miles of

former CN track. It is a vital transportation link, providing service to Northern Manitoba's

remote communities and resource-based industries. Major customers include Hudson

Bay Mining & Smelting, Tolko Industries, the Canadian Wheat Board, and

merchandisers of specialty crops. Wheat and barley marketed by the Canadian Wheat

Board and specialty crops are exported through the Port of Churchill, the northern

terminal of HBRY. Other major commodities handled by HBRY include ores and

concentrates, copper and zinc metal, logs, kraft paper, lumber, petroleum products and

general merchandise. HBRY offers a scheduled intermodal train service. A map of

HBRY can be found in the appendix.29

Southern Manitoba Railway (SMNR) operates over 144 miles of former CN track from

Morris to Elgin in Southern Manitoba. Established in July 1999, SMNR carries mainly

cereal products. A map of SMNR can be found in the appendix.30

Greater Winnipeg Water District (GWWD) operates 100 miles of track from Winnipeg

to Waugh in Southern Manitoba, located near Shoal Lake. GWWD was created in 1914

to facilitate the construction of the Winnipeg water aqueduct. The aqueduct carries

potable water from Shoal Lake to containers and pump stations in Winnipeg. A private

28 Cando Contracting, www.candoltd.com 29 OmniTrax, www.omnitrax.com 30 TrainsCan, http://www.trainscan.com/coy/smry_rw.html#SMR


carrier owned by the City of Winnipeg, GWWD carries chemicals used to treat water and

materials for the aqueduct. A map of GWWD can be found in the appendix.31

Prairie Dog Central is a vintage excursion railway line owned and operated by the

Vintage Locomotive Society, a non-profit charitable organization. The Prairie Dog

Central train operates from Inkster Junction Station on Prairie Dog Trail near Inkster and

Sturgeon in Winnipeg to Warren, MB.32

Assiniboine Valley Railway is a large-scale, model excursion railway line. It runs on

7.5" gauge and is located on a six-acre site immediately west of Assiniboine Park in

Winnipeg. It began operations in 1995 and has 3063 feet of track.33

4.2 Railway Company Interviews

Interviews were conducted with CN and CPR to assess Manitoba’s shortline industry, to

understand the current organizational structure of these firms within Manitoba and to

gauge their perceptions on several issues that confront the rail industry in Manitoba.

4.2.1 Rationalization and Shortline Development

Canadian National CN’s network rationalization in Manitoba is now virtually complete. Three shortlines have

been established including; HBR, CEMR and SMR. CN reports they have a good

operating relationship with the three shortlines in Manitoba. They are currently working

with each of them to build up traffic on these lines. According to CN representatives,

Manitoba’s shortline industry is in good shape. CN has implemented a moratorium on

branchline discontinuances on the Prairies, effective March 29, 2001.

Canadian Pacific In 2002 CPR reached a conditional agreement with CEMR to lease the Winnipeg Beach

subdivision, which serves Selkirk and Gimli and they are currently marketing the Arborg

31 City of Winnipeg, www.city.winnipeg.mb.ca 32 Vintage Locomotive Society, www.vintagelocomotivesociety.mb.ca 33 Assiniboine Valley Railway, www.swedenfreezer.com/avr


subdivision. Declining grain traffic on the Prairies has become a long-term trend and is

factored into CPR’s ongoing analysis of its network.

4.2.2 General Organizational Structure in Manitoba

4.2.2.1 Administrative Function

Canadian National The Prairie Division is one of six divisions that have evolved in CN’s North American

network. The Prairie Division is headed by a Vice President located in Winnipeg. The

general responsibilities of the Prairie Division include:

• Operations

• Engineering

• Small Customer Marketing (i.e. non-national accounts / accounts wholly

within the Prairie Division)

• Intermodal Terminals – Previously, the intermodal operation was

controlled by the Intermodal Marketing and Operations unit in Toronto.

Now, the Prairie Division is responsible for the intermodal terminals.

Canadian Pacific

CPR has no central administration in Manitoba. CPR’s operating and maintenance

boundaries are called “Service Areas”, of which the Manitoba Service Area is one of

eight in Canada. Operating and maintenance departments report independently to

functional executives in the Calgary Headquarters. There are three service area

managers in Manitoba responsible for operations, equipment and engineering

respectively.

4.2.2.2. Marketing Function Canadian National CN has operated a Grain Business Unit in Winnipeg for many years. Three years ago,

fertilizer products were added to the grain unit. The business unit is headed by the Vice

President, Grain and Fertilizers, Canada.


The Customer Support Centre in Winnipeg maintains the day-to-day customer contact

for all U.S. and Canadian operations. A billing group remains within the Customer

Support Centre, but revenue management is located in Toronto. Canadian Pacific CPR’s Grain Office has responsibility for all CPR grain movements in both Canada and

the United States. It is headquartered in Winnipeg and headed by a General Manager,

who reports directly to the Calgary Headquarters. The Customer Service Centre for all

Canadian operations is also located in Winnipeg. The Director of Customer Service

reports to the Calgary Headquarters. Two intermodal employees, who report directly to

CPR’s Toronto Intermodal Office and CPR’s Border Services personnel are also located

in Winnipeg.

4.2.2.3. Operations Function Canadian National The Vice President of the Prairie Division is responsible for yard and line operations,

engineering track maintenance and major track maintenance, which includes a system

engineering component. CN’s specific operational functions include:

• Symington Yard is a facility for routine running maintenance on cars and

locomotives (separate shops for each). It also serves as a major crew change

point.

• The Hump Facility in Symington Yard is a major traffic classification yard on

CN’s transcontinental system.

• Transcona Shops reports directly to CN headquarters in Montreal. Transcona

houses CN’s backshops and is responsible for all heavy repairs and rebuilds

on cars and locomotives in Canada. As well as major repairs and overhauls.

Transcona’s capability includes a Paint Shop, a Wheel Shop and a Supply

Management operation.

• CN’s Intermodal Yard remains unchanged. However CN is conducting a

business analysis on the merits of moving the yard.


Canadian Pacific In Manitoba, there are three service area managers who report directly to the Calgary

Headquarters. These are: Transportation and Field Operations, Mechanical Operations,

and Engineering.

CPR’s Winnipeg Yard is one of the largest in the company’s North American network.

CPR’s central track component depot is located at the Transcona Yard in Winnipeg.

CPR’s Weston Shops also houses several operations functions:

• Weston Shops (the back shops) are managed by Progress Rail and staffed

by CPR employees. At this shop they perform major maintenance and

rebuilds, and minor car and locomotive maintenance. CPR also

manufactures or rebuilds parts and car components at this facility.

• The Running Shop performs minor running repairs on locomotives. It

employs 175 people.

• The Car Shop performs minor running repairs on cars. It employs 45 people.

• The Intermodal Yard is also located at Weston Shops.

• A high technology Test Lab is located at Weston Shops. The main function of

this lab is materials testing

4.2.3 General Perceptions and Remarks

Regulatory Environment

• Transportation deregulation has provided many benefits to the railways and

their customers. Efforts by some to re-regulate transportation, especially in

grain are a concern to many in the industry. Specifically, the Open Access

issue, which many feel has been a disaster everywhere it has been

implemented, is being thrust to the forefront. The key railway strategy is to

argue for negotiated commercial agreements, as opposed to regulated

measures. Open Access will fragment the existing traffic base and affect the

maintenance of infrastructure.


• The revenue cap for grain traffic is a concern to the railways. Railway

operations have significant revenue requirements to operate and maintain the

large amounts of infrastructure necessary for their operations. Abolishment of

the WGTA and the resultant revenue cap has increased the freight costs for

farmers, while at the same time, reduced revenues to the railways.

• The railways would like to see a tax balance with other modes and with

railways in the United States. Unlike trucking, railways own and maintain

their own infrastructure. As such, fuel taxes paid by railways are distributed

elsewhere in the economy. Conversely, fuel taxes paid by the trucking

industry can be re-invested into its publicly funded road infrastructure. In

addition, unlike other modes of transportation, railways also pay property

taxes on the rights-of-way they own. Finally, the tax load paid by Canadian

railways far exceeds that paid by their competitors in the United States.

Productivity Improvements

As well as typical productivity improvements such as scheduled train service, reliability

and cost control, CN has implemented a new program called Top Line Revenue Growth.

This program is aimed at smaller customers to reclaim market share from trucking. As

part of this initiative, CN has beefed up their divisional sales forces in Winnipeg, Thunder

Bay, Saskatoon and Regina.

Average Train Length

Canadian National At present, CN’s maximum train length is up to 10,000 – 11,000 feet. There are plans to

extend 5 sidings in Manitoba this summer to allow for trains to be 12,000 feet long.

Currently, the 10,000-foot trains are running West, but with the planned siding

extensions, longer trains will run both directions.

Canadian Pacific CPR's average train length was unavailable at the time of this reporting, but their

average train length has increased slightly over the last couple of years.


The Economy and Open Border

The effect of September 11 on operations varied considerably across transport modes.

The railways operating environment in the post September 11 period was satisfactory.

The railways appear to be far ahead of trucking when it comes to border crossing issues.

They have become strategically active on border issues and do a lot of joint work with

U.S. interests. Both CN and CPR support proposals to develop processes and policies

for a “smart border”. These include:

• Aligning Canadian and American customs policies;

• Pre-clearing freight that does not pose security risks;

• Harmonizing computer systems and other technology between Canadian and

American customs; and

• Moving customs activities away from the border wherever possible.

4.3 Rail Support Operations (Secondary Linkages) The last decade has seen significant changes in the rail industry, in both transportation

and in support operations. The businesses involved in rail support operations in

Manitoba are a small and diminishing group of firms. They can be classified into three

categories; rail equipment manufacturing, sales and distribution, and services.

Thirty companies, sourced from Industry Canada34, the Canadian Association of Railway

Suppliers35 and the Trainscan website36 were solicited for this study. Nine firms were

eliminated from this list after initial contact had been made with each company. Of these

nine firms, five have no presence in Manitoba, although they are active with the rail

industry outside Manitoba, and four firms had left the rail industry altogether.

Discussions with rail support operations companies revealed a common sentiment

among this group of firms. That is, the rail industry in North America, including Manitoba,

34 See Canadian Railway Suppliers Directory on Industry Canada website: http://strategis.ic.gc.ca/SSG/ti01108e.html 35 See Canadian Association of Railway Suppliers website: http://www.railwaysuppliers.ca/website/website/about.asp 36 http://www.trainscan.com/coy/mb.html.


http://strategis.ic.gc.ca/SSG/ti01108e.html

is in decline. Operational efficiency and cost reduction is the chief priority among rail

transportation companies. As a result, many railways are getting out of non-transport

service activities altogether. Subletting maintenance shops and cutting back repair

requirements seem to be common experiences among these firms as the proportion of

rail support operations’ revenues derived from railway companies contracts slightly each

year.

Twenty-one rail support companies remain in Manitoba and can be categorized into rail

equipment manufacturers, sales and distribution, or services. Table 34 highlights the rail

support operations categories and lists the number of companies involved in this study.

The survey response rate for the economic impact analysis was 33%, meaning 7 of the

21 companies identified and solicited responded to our inquiries.

Table 34: Profile of Rail Equipment Manufacturing, Sales and Distribution, and Services, Manitoba, 2002

PROFILE OF RAIL SUPPORT OPERATIONS IN MANITOBA

No. in Target Population

Subsidiary of U.S.-Based

Company Total Equipment Manufacturers 8* 3 Total Services Providers 6 5 Leasing 3 2 Repair/Maintenance 1 1 Other 2 2 Total Sales and Distribution Companies 7 5

Distributor of another manufacturers' goods 3 3 Selling company's own product 4 2 TOTAL PARTICIPANTS CONTACTED 21 13 * Two manufacturers also provide services for equipment. 4.3.1 Rail Equipment Manufacturing

Rail equipment manufacturing is the largest group associated with rail support

operations. It is made up of eight companies who design, process, and/or manufacture


rail equipment for sale in Manitoba or for export. U.S. companies play an important role

in Manitoba’s rail equipment manufacturing sector: 62% of the companies contacted are

branches or subsidiaries of U.S. based companies. Three of these firms have plants in

Manitoba, with head offices located in the U.S.

These eight firms produce a wide range of fixed equipment and rolling stock for use in

freight and passenger rail services. Industry Canada37 subdivides the rail equipment

manufacturing sector into eight sub-sectors. The eight sub-sectors are as follows:

1. Car builders – design and engineer passenger and freight rail cars; fabricate and assemble their car body shell; select, install, and connect major subsystems; perform final assembly and testing of the complete vehicle; and provide after-sales service in conformity with contractual arrangements;

2. Locomotive builders – do the same as car builders, but for locomotives;

3. Component suppliers – design, engineer and manufacture components and sub-

systems for cars and locomotives;

4. Material suppliers – supply sheet and formed metal, plastics, glass, fasteners, wiring, piping, etc.;

5. Signaling equipment suppliers – electronic, electrical, and electro-mechanical

equipment used for train protection and control: this includes track and wayside signaling equipment, equipment for train and route control; central control equipment, etc.;

6. Rail and track equipment suppliers – including rail, ties, fasteners, turnout

motors, turnout snow blowers, etc.;

7. Repair and rebuilding shops; and

8. Rail and transit consultants38

Table 35 divides the rail equipment manufacturers into the above sub-sectors. Three

companies are materials suppliers and process metals for the railways. There are three

rail and track equipment suppliers that supply or rebuild rail and track. One component

supplier fabricates wheel components and one repair and rebuilding shop services

railcars and locomotives.

37 See Industry Canada website: http://strategis.ic.gc.ca/SSG/ti00127e.html. 38 The Rail and Transit Consultants sub-sector is excluded from this study.


Table 35: Profile of Rail Equipment Manufacturers, Manitoba 2002. Sub-Sector Categories Total Firms 1. Car Builders 2. Locomotive Builders 3. Component Suppliers 1 4. Materials Suppliers 3* 5. Signaling Equipment Suppliers 6. Rail and Track Equipment Suppliers 3* 7. Repair and Rebuilding Shops 1 Note: * One company is both a materials supplier (category 4) and a rail and track equipment supplier (category 6).

The following section provides background information on the rail equipment

manufacturers involved in this study.

Materials Suppliers Amsco Cast Products (Canada) supplies castings globally. The foundry is located in

Winnipeg, and the company’s head office is located in Edmonton. They also have sales

offices throughout North America, and a U.S. based distribution warehouse. Amsco

supplies railway insert frogs, heel blocks, and switch stand castings. They are also a part

of the rail and track equipment supplier sub-sector.39

Ancast Industries is a Winnipeg based manufacturer, processor and producer of iron

foundries. At one time they supplied a significant amount of iron for the railways for tie

placements and rail clamps. However, when CN consolidated some operations, Ancast

lost much of this business. Currently Ancast manufactures metal rail braces, and they

supply iron parts to General Motors plants in London, ON for Locomotive production.

Their involvement in the rail industry is 10% of what it used to be 10 years ago40.

Enduron Custom Inc. is a Manitoba owned and operated business that custom

fabricates metal alloys. For rail operations they manufacture aluminum signals and

communication bungalows, relay cases, signal masts and ladder assemblies,

cantilevered traffic signals, associated brackets and other special components. They

also manufacture instrument and control consoles, fan shrouds, ventilation ductwork

components, cab components, and hydraulic reservoir tanks.41

39 Amsco Cast Products, www.amscocast.com/ 40 Telephone conversation with representative from Ancast Industries. 41 Enduron Custom Inc. www.enduron.net/


Rail and Track Equipment Suppliers

Harmer Steel is a North American rail product supplier. They provide a variety of rail

fabrication services, stocking both new and used rail accessories for railroads, mines

and other industries. Manitoba is one of four Harmer steel manufacturing locations. The

Manitoba plant serves Saskatchewan, Manitoba and Eastern Canada.42

Cando Contracting Ltd. is based out of Brandon and maintains a 13,000 square foot

shop area facilitating research and development, fabricating specialized equipment, and

providing regular maintenance to their fleet of equipment. They manufacture specialized

vehicles and machinery capable of providing a full range of services for railroad,

shortline, and industrial customers. They also own several shortline operations, the most

notable being Central Manitoba Railway.43

Mandak Railway Supply is a division of Gerdau MRM Steel located in Selkirk. Mandak

dismantles railway cars for all railways in Canada and some U.S. railways. They also

provide Canadian and U.S. railways with various components such as wheels, side

frames, bolsters and air brakes. Their markets are in Manitoba, Canada and the U.S.44

Component Suppliers

Griffin Canada Inc. supplies the rail industry with curved plate (parabolic deep-dish)

low-stress wheels. Their focus is on developing railroad wheels and improving their

performance, safety and wear resistance. Griffin’s global head office is located in

Chicago, Illinois and Griffin Canada’s head office is located in Boucherville, Quebec.

Griffin has one manufacturing plant located in Winnipeg.45

Repair and Rebuilding Shops

Progress Rail Services Corporation is a supplier of rail, rail anchors and trackwork

components. They also provide maintenance services for railway equipment, railway

42 Harmer Steel, www.harmersteel.ca 43 Cando Contracting Ltd. www.candoltd.com 44 Mandak Railway Supply, www.mandakrail.com/ 45 Griffin Canada, www.griffinwheel.com/


signal devices, reconditioned freight car parts, and lease railcars and locomotives.

Progress Rail Services Corporation has expanded to become one of the largest

providers of railway products and services in North America, with facilities in 27 states,

Canada and Mexico.

Progress Rail Transcanada Corporation manages the operations at Weston Shops for

Canadian Pacific Railway using CPR employees. At Weston Shops, Progress Rail

provides a variety of services to the rail industry. The major business areas are:

wheelset assembly and reprofiling for railcars; axle reprofiling and new axle profiling for

railcars, locomotives and light-rail transport systems; manufacture and assembly of rail

components; railway equipment repair and component part repair and

manufacture/remanufacture; and track development. The bulk of their business is

attributed to CPR, but services for other Class I and Class II carriers are also provided.46

4.3.2 Rail Industry Services Providers

Six companies, identified in Table 34, provide services to the rail industry. They can be

divided into three sub-sectors: leasing, repair and maintenance and other. The following

provides background information on rail industry services providers:

Leasing

Danella Rental Systems Canada Ltd. is a retail outlet for rail vehicles with a head

office located in Philadelphia, Pennsylvania. Danella Canada’s office is located in

Winnipeg, and they lease Hy-rail trucks to Canada’s rail industry.47

Procor manages a rail car rental fleet in excess of 22,000 conventional and special

purpose tank and freight cars. They maintain a sales division in Winnipeg.48

Whiting Equipment Canada Inc. is a subsidiary of Whiting Corporation based out of

Harvey, Illinois. They design and manufacture heavy industrial equipment. In Winnipeg,

Whiting Equipment provides Trackmobile Sales and Service.49

46 Telephone conversation with representative from Progress Rail. 47 Danella Companies, www.danella.com. 48 Procor, www.procor.com


Repair/Maintenance

SafeTran. Systems is a supplier of switch machines, railroad wayside signal systems,

rail transit signaling and rail-highway grade crossing active warning systems. The

Winnipeg branch provides repair services for rail crossing switching components.50

Other

Midland Vegetation Management Inc. applies herbicides, cuts brush, and mows grass

along railroad tracks. With headquarters in Calgary, they have offices in Ontario,

Saskatchewan, Alberta and Iles Des Chenes, Manitoba.51

Phillips Paint Products manufactures high performance industrial coatings for original

equipment manufacturers and after market refinishers of agricultural and off-highway

equipment, transport trailers, railcars and locomotives, and electrical equipment. They

have a modern 25,000 square foot manufacturing complex in Winnipeg.52

4.3.3 Rail Equipment Sales and Distribution

Seven companies are involved in sales and distribution. The companies classed as

sales companies sell products manufactured by a parent company outside Manitoba.

Distributors sell products manufactured by companies other than their own. The

following provides background information on rail equipment sales and distribution

companies.

Distributors

Acklands - Grainger Inc. is located in Chicago, Illinois. They have numerous retail

outlets throughout North America, 15 of which are located in Manitoba. They sell

industrial, MRO, safety, electrical, welding, and fleet automotive.53

49 Whiting, www.whiting.ca 50 SafeTran Systems, www.safetran.com/division/canada.htm#top 51 Midland Vegetation Management, www.midlandvegetation.com/ 52 Phillips Paint Products, www.phillipspaint.mb.ca/ 53 Acklands-Grainger, www.acklandsgrainger.com/acklands?S_appName=agi


Applifast Power and Tool Fasteners Inc. is a distributor of a variety of industrial goods

in the U.S. and Canada.54

Electro-Sonic is a full-service electronic component distributor. In Manitoba their sales

office provides maintenance, repair and overhaul equipment to the major rail

companies.55 Sales

Harsco Track Technologies is a global supplier of railway track maintenance

equipment and services. Harsco Track Technologies designs and manufactures an

extensive line of equipment including tamping machines, ballast regulators and brooms;

tie inserters and removers; spike drivers, pullers and reclaimers; rail grinders; track

geometry vehicles; Hy-Rail® attachments; ballast undercutters; tie handlers; track

construction and renewal. There is one service representative in Manitoba.56

Ronsco Inc. is a Canadian owned distributor of railroad transportation equipment and

services. Their expertise is in distribution, product development, maintenance repairs

and engineering. They have a sales branch in Winnipeg.57

Russel Metals is a metals distribution and processing company. In Manitoba, they

operate under the name Drummond McCall.58

Wabtec is a supplier of products, services and systems for the global rail industry.

Through its subsidiaries, the company manufactures a range of components for

locomotives and freight cars, including electronic train-control systems. They also

provide aftermarket services such as locomotive overhaul and remanufacturing and

locomotive and freight car fleet maintenance. For many years they had a manufacturing

plant in Winnipeg, which closed in 1995. They also owned a warehousing distribution

54 Applifast Power and Tool Fasteners, http://www.huck.com/industrial/distrib/distrib.html 55 Electro-Sonic, www.e-sonic.com/electrosonic/home.asp 56 Harsco Track Technologies, www.fairmonttamper.com/ 57 Ronsco Inc., www.ronsco.com/index.htm 58 Russel Metals, www.russelmetals.com/


facility in Winnipeg, which closed in 1999. Wabtec now has one sales representative in

Winnipeg who represents all of Western Canada.59

5.0 Manitoba Rail Network Connections

The railway network in Manitoba is a link in a system that extends from the Atlantic coast

to the Pacific coast and from Hudson Bay to the Gulf of Mexico. Mergers and alliances

between different rail companies have allowed single companies to gain control of large

portions of North America’s railway network, which allow carriers to offer single line

service to many points throughout the continent.

CN and CPR have responded to the growing importance of North American north-south

trade by developing alliances with several U.S. rail companies. CN’s Duluth, Winnipeg

and Pacific subsidiary connects Duluth, Minnesota with the Winnipeg-Thunder Bay line

at Fort Frances, Ontario. The Duluth, Winnipeg and Pacific subsidiary and the recently

acquired Wisconsin Central Railway is CN’s route to Chicago. The major commodities

on this line are coal, lumber and intermodal.

CPR’s American Soo Line Division links Moose Jaw and Winnipeg with Minneapolis,

Chicago and Detroit. Grain, potash and coal are the dominant commodities on this line.

The CPR mainline in Manitoba east of Winnipeg to Ontario has seen a decrease in

traffic. As a result, CPR has reduced capacity on the track.

Burlington Northern Santa Fe (BNSF) has connections at Emerson. This allows prairie

region southbound traffic to be moved onto BNSF lines that serve the majority of the

Western U.S. BNSF also has access to Winnipeg via its subsidiary Burlington Northern

Manitoba Limited. BNML owns and operates terminal and yard facilities in Winnipeg and

has trackage rights over CN lines from Winnipeg to the Emerson border crossing.

Predominantly forest products, chemicals and other general merchandise are moved on

this line.

CN and CPR both have classification yards / terminals in Winnipeg. CN’s Symington

Yard contains a hump facility that blocks inter-regional freight trains headed for Eastern

59 Wabtec Corporation, www.wabtec.com/railroad/railroad_home.asp


and Western Canada. It also originates trains headed for Superior and Chicago. CPR’s

Winnipeg Yard is a mini-hump facility, blocking trains bound for Eastern and Western

Canada and the U.S. via Emerson. It also maintains locomotives. Both companies

operate truck/rail intermodal terminals in Winnipeg.

6.0 Manitoba Trends in Trade Activity

6.1 Trans-border Traffic

Table 36 and Figure 7 show the Southbound movement of goods by rail to U.S. regions,

by destination. These figures include freight that has been transshipped through

Manitoba to the U.S. The North-Central area receives the largest proportion of goods

from Manitoba, followed by the Southern portion of the United States. A high probability

exists that at least some of these goods are destined for Mexico and are being trans-

shipped through the Southern U.S.

The bulk of goods were moved to the North-Central U.S. region. In 1999, 1.6 million

tonnes (57 percent) was moved from Manitoba to the U.S. North-Central region, and a

total of 2.9 million tonnes were moved to all regions.

Table 36: Manitoba Rail Traffic, Southbound Movements to the U.S.

by CN and CPR ('000 tonnes) U.S. Destination

Manitoba North-east North-central South West Total

1988 70 2883 593 43 3589 1989 97 2683 613 22 3415 1990 86 2866 579 35 3566 1991 42 2327 509 65 2943 1992 19 2085 410 65 2579 1993 31 2387 268 93 2779 1994 7 911 184 97 1199 1995 0 1118 7 70 1195 1996 7 2826 302 56 3191 1997 12 4026 348 111 4497 1998 109 3300 671 165 4245 1999 216 1613 636 385 2850 Total 696 29025 5120 1207 36048

Source: Statistics Canada, Rail in Canada (52-216).


During the late 1980’s to the mid 1990’s the southbound movement of goods declined.

The sharpest reduction occurred in 1994 when 1.2 million tonnes were moved to the

U.S., compared to the 2.8 million tonnes delivered in 1993, a reduction of 57 percent in

one year. By 1995 almost all goods were moved exclusively to the North-Central region,

accounting for 94 percent of total U.S.-bound shipments.

Figure 7: Manitoba Rail Traffic, Southbound Movements to the U.S. by CN and CP

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Year

'000

Ton

nes

North-eastWestSouthNorth-central

After 1995 the southbound movement of total goods (3.2 million tonnes) increased. This

increase was primarily due to an increase in U.S. North-central traffic (2.8 million

tonnes), accounting for 89 percent of total southbound rail traffic. The major source of

this increase in traffic was exports of oil-seed meals and lumber. Southbound rail traffic

volumes peaked in 1997 at 4.5 million tonnes. The Northeast, South and West regions

increased their combined share to 43 percent of the 1999 total of 2.9 million tonnes.

Table 37 and Figure 8 show the northbound movement of goods by rail from U.S.

regions to Manitoba. Northbound movements are less significant than Southbound

movements. From 1988 to 1999, 36 million tonnes were moved south, compared to 6.8

million tonnes Northbound.

Previously, the North-central U.S. shipped the largest volumes of goods into Manitoba.

However, in 1999 0.5 million tonnes of goods shipped to Manitoba originated in the west,

indicating a general shift in origins from North-central to Western U.S. regions.


The declining trend in total movement of goods during the early 1990’s coincides with a

similar trend on the southbound movement of goods. After bottoming-out in 1995, strong

growth was experienced in the total northbound movement of goods and reached nearly

1 million tonnes in 1998, declining to 0.7 million in 1999.

Table 37: Manitoba Rail Traffic, Northbound Movements

from the U.S. by CN and CPR ('000 tonnes)

U.S. Origin Manitoba North-east North-central South West Total

1988 5 339 82 43 469 1989 4 499 85 42 630 1990 3 380 141 71 595 1991 3 242 133 84 462 1992 9 267 161 65 502 1993 8 317 172 88 585 1994 8 212 120 87 427 1995 0 99 73 127 299 1996 3 225 162 52 442 1997 2 289 180 205 676 1998 14 272 185 506 977 1999 10 155 97 501 763 Total 69 3296 1591 1871 6827

Source: Statistics Canada, Rail in Canada (52-216).

Figure 8: Manitoba Rail Traffic, Northbound Movements from the U.S. by CN and CP.

0100200300400500600700800900

1000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Year

'000

Ton

nes

North-eastWestSouthNorth-central

The relative share of the North-Central region declined over the review period, whilst the

share of other regions increased. In 1999 the North-Central region represented 20


percent of total goods moved Northbound. Goods received from the U.S. West region

increased in share from 11.8 percent in 1996 to 66 percent in 1999. This is the largest

increase in the share of total northbound movement of goods by rail of all regions over

this period. This growth is mainly due to increased imports of bituminous coal from the

North-western United States. In 1999 the U.S. South and Northeast regions respectively

had a 12.7 and 1.3 percentage share of the total.

6.2 Domestic Traffic

Table 38 and Figure 9 show railway freight tonnage originating in Manitoba and

destined for other Canadian Provinces and the U.S. After a slight decline from the late

80’s to the early 90’s, freight movements originating in Manitoba and destined to other

Canadian provinces or the U.S. peaked in 1994-1995 and increased slowly after 1995 to

reach 8 million tonnes by 1999 compared to only 3.5 million tonnes ten years earlier.

Table 38: Manitoba Intra and Inter-Provincial Outbound Rail Movements (‘000 tonnes). Canadian Destination Atlantic Quebec Ontario Manitoba Sask. Alberta B.C. U.S. (rail) Total 1987 104 414 1203 892 572 198 197 452 3580 1988 99 393 1170 754 469 188 180 532 3785 1989 71 296 941 564 385 180 122 527 3086 1990 72 325 909 691 351 168 127 534 3177 1991 70 444 1063 578 267 168 143 568 3301 1992 70 525 1110 380 205 158 131 709 3288 1993 97 555 1203 437 208 226 148 801 3675 1994 92 558 2990 364 166 169 160 930 5429 1995 75 420 3133 329 163 172 256 1199 5747 1996 57 470 1865 485 189 150 379 1839 5434 1997 63 540 2141 391 224 287 302 2224 6172 1998 50 495 2833 120 224 243 480 2380 6825 1999 55 640 3259 131 181 212 851 2850 8180 Total 975 6075 23820 6116 3604 2519 3476 15545 61679Source: Statistics Canada, Rail in Canada (52-216).

Table 39 shows that Ontario is the major destination for Manitoba’s inter-provincial

freight movements. By 1999, the share of Manitoba’s freight destined for Ontario

reached 3.3 million tonnes (40 percent). This is followed by the U.S. (35%), British

Columbia (10%) and Quebec (8%). The largest decline in Manitoba’s freight destinations

were intra-provincial shipments within the province, these shipments declined by 23%


during 1987 to 1999. During this same time period, shipments destined to the U.S.

experienced the most growth at 22%.

Figure 9: Manitoba Inter and Intra Provincial Outbound Rail Movements by CN and CP.

0

1000

2000

3000

4000

5000

6000

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

'000

tonn

es

B.C.AlbertaSask.ManitobaOntarioQuebecAtlantic

Table 39: Change in Distribution Patterns Manitoba Intra and Inter-Provincial Outbound Rail Movements.

Canadian Destination

Atlantic Quebec Ontario Manitoba Sask. Alberta B.C. U.S. (rail) Total 1987 2.91% 11.56% 33.60% 24.92% 15.98% 5.53% 5.50% 12.63% 100.00%1999 0.67% 7.82% 39.84% 1.60% 2.21% 2.59% 10.40% 34.84% 100.00%

% change -2.23% -3.74% 6.24% -23.31% -13.76% -2.94% 4.90% 22.22% 0.00% Table 40 and Figure 10 show railway freight volumes from provincial origins to

Manitoba. From 1988 to 1992, movements destined to Manitoba from other provinces

declined. They then slightly increased and remained stable thereafter.

During the late 1980’s and early 1990’s, total railway freight from provincial origins to

Manitoba declined unabatedly. The remainder of the decade saw steady annual

increases and much of the earlier losses were recovered. By 1999 4.4 million tonnes of

freight was shipped to Manitoba by rail from all provincial origins, equaling the tonnage


hauled in 1987. It is interesting to note that imports originating in the U.S. more than

doubled from 1996 to 1999.

Table 41 shows that in 1999 Alberta was the major origin of Manitoba’s inter-provincial

freight movements, at 25%. This is followed by Saskatchewan (23%), Ontario (19%) and

the U.S. (17%). During 1987 to 1999, the largest decline in freight shipments to

Manitoba were shipments within the province. The intra-provincial shipments declined by

18.5%. During this same time period, shipments originating in the U.S. experienced the

most growth at 13%.

Table 40: Manitoba Intra and Inter-Provincial Inbound Rail Movements

by CN and CPR (‘000 tonnes). Canadian Origin Atlantic Quebec Ontario Manitoba Sask. Alberta B.C. U.S. (rail) Total 1987 30 236 1042 892 948 740 265 197 4153 1988 28 238 1032 754 1344 720 256 193 4565 1989 28 233 1017 564 876 680 232 3872 1990 32 199 890 691 762 611 237 248 3670 1991 25 181 828 578 630 716 206 235 3399 1992 26 184 817 380 716 750 181 325 3379 1993 34 209 928 437 744 781 238 420 3791 1994 37 237 982 364 741 879 211 411 3862 1995 28 203 962 329 752 877 219 472 3842 1996 33 231 881 485 925 898 196 328 3977 1997 62 234 942 391 822 1002 213 605 4271 1998 71 224 963 120 832 1088 211 811 4320 1999 76 284 845 131 1006 1074 214 762 4392 Total 510 2893 12129 6116 11098 10816 2889 5239 51493Source: Statistics Canada, Rail in Canada (52-216).

242

Table 41: Change in Distribution Patterns Manitoba Intra and Inter-Provincial Inbound Rail Movements.

Canadian Origin

Atlantic Quebec Ontario Manitoba Sask. Alberta B.C. U.S. (rail) Total 1987 0.72% 5.68% 25.09% 21.48% 22.83% 17.82% 6.38% 4.74% 100.00%1999 1.73% 6.47% 19.24% 2.98% 22.91% 24.45% 4.87% 17.35% 100.00%

% change 1.01% 0.78% -5.85% -18.50% 0.08% 6.64% -1.51% 12.61% 0.00%


Figure 10: Manitoba Inter and Intra Provincial Inbound Rail Movements by CN and CP.

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

'000

Ton

nes

B.C.AlbertaSask.ManitobaOntarioQuebecAtlantic

6.3 Overseas Container Traffic

Manitoba’s container traffic had recorded rapid growth. Since 1995 marine container

traffic has increased by more than 12 percent per annum, and double-digit growth is

expected to continue annually over the next decade. Figure 11 highlights the growth in

provincial marine container traffic since 1992, with forecast data for 1999 and 200060.

The majority of Manitoba’s overseas container traffic flows along two corridors: west to

Vancouver, and east to either Montreal or Halifax. Analysis of Manitoba’s container

traffic by import and export lanes reveals that western-bound trade is growing faster than

eastern-bound trade, both for actual volumes shipped and percentage-based growth.

For instance, since 1992 Pacific Rim exports in container shipments have increased by

more than 91 percent while imports have risen by 60 percent. Eastern traffic has also

demonstrated considerable growth. During the same period, eastern-bound export

volumes have increased by nearly 50 percent, while imports have increased by almost

30 percent. Figure 12 highlights the export and import growth in Manitoba’s overseas

container traffic through Canada’s principal traffic lanes.

60 Data for intermodal traffic is incomplete because not all shipments are source loaded. This data was collected by UMTI from a shipper survey:


Figure 11: Manitoba Overseas Container Traffic, 1992-2000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

TEU

's

1992 1994 1996 1998 2000Year

Variance

Throughput

Source: The University of Manitoba Transport Institute

Figure 12: Manitoba’s Marine Container Imports/Exports by Traffic Corridor, 1992-2000

0 10,000 20,000 30,000 40,000 50,000 60,000

TEU

's

1992 1994 1996 1998 2000Year

Atlantic Corridor ImportsPacific Rim Imports

Atlantic Corridor ExportsPacific Rim Exports

The University of Manitoba Transport Institute


The differentiated growth pattern of imports and exports evident in Figure 12 indicates

an imbalance in container supply that necessitates costly repositioning charges for

shippers. The data suggests this gap between container imports and exports is

increasing. The ideal situation would be to have a one-to-one movement of loaded

containers between markets. However, this is rarely, if ever, the case. In terms of total

traffic, the imbalance in the Pacific Rim export/import ratio has grown steadily from

2.97:1 in 1992 to 3.34:1 in 1997. This means that for approximately every 3 TEU’s of

Pacific Rim exports from Manitoba, only one import TEU from the same region is

realized. Similarly, with Eastern trade an imbalance in the export/import ratio has risen

from 2.47:1 to 2.86:1 during the same period.

7.0 Conclusions

Significant levels of economic activity can be attributed to the Manitoba Rail Industry.

The direct impact of economic activity combines with the indirect and induced impacts to

generate millions of dollars in expenditures, as labour income generated by rail

operations is re-spent elsewhere in the economy. Furthermore, thousands of jobs are

created as a direct result of this economic activity.

The community as a whole, both as taxpayers and residents, has a vested interest in the

Manitoba rail industry, but no practical economic way to appreciate its economic

contribution. People are more likely to complain about being stopped at a rail crossing

than to appreciate the valuable contribution of this industry to GDP, employment and

taxes. By understanding the economic impact of the rail industry, the public is better able

to form an opinion regarding railway operations. Likewise, the rail industry and Manitoba

Transportation and Government services requires current and complete information to

effectively communicate with the community. The study provides the wide perspective

needed to assess the major significance of Manitoba’s rail industry within the Province’s

economy.


8.0 References

Canadian Pacific Railway, “Annual Report”, 2000. Canadian National Railway, “Annual Report”, 2000. DS Lea Consultants, et al. “Prairie Provinces Transportation System Study”, Prepared for Transport Canada, December 1998. Hackston, Schwier and Lake, “Railway Industry Profile”, prepared for Industry Canada, Research and Traffic Group, March 2000. Industry Canada, “Rail Equipment Manufacturing, Industry Profile”, www.strategis.gc.ca. Manitoba Bureau of Statistics, “Manitoba Economic Multipliers, 1998”, April 1999. Prentice, Bekker, Lapkin, “Transportation Trends in Manitoba”, Transport Institute, University of Manitoba, July 2001. Shurvell and Prentice, “Economic Impact of Winnipeg International Airport”, prepared for Winnipeg Airports Authority, Transport Institute, University of Manitoba, September 1998. Shurvell and Prentice, “Methodological Issues of Economic Impact Studies: The Good, The Bad, and The Ugly”, Canadian Transportation Research Forum, Montreal, May 16-19, 1999. Statistics Canada, “Rail in Canada, 1999” Catalogue No. 52-216-XIB Statistics Canada, “Annual Estimates of Employment, Earnings and Hours, 1991-2000”, Catalogue No. 72F0023-XIB, 2000. Statistics Canada, “Manufacturing Industries of Canada, National and Provincial Areas”, Catalogue No. 31-203-XPB. Statistics Canada, “Survey of Employment, Payrolls and Hours”, Catalogue No. 72-002. Transport Canada, “Transportation in Canada 2000, Annual Report”, July 2001. Transport Institute, “Economic Impact, Structure and Market Perspectives of the Manitoba Trucking Industry”, prepared for Manitoba Department of Highways and Government Services and Manitoba Trucking Association, September 2000. Transport Institute, “Manitoba International Container Traffic”, 1998. Via Rail Canada Inc., “Annual Report”, 2000. Weisbrod and Weisbrod, “Measuring Economic Impacts of Projects and Programs”, Economic Development Research Group, Boston, April 1997.


http://www.strategis.gc.ca/

APPENDICES

APPENDIX 1 : Shortline Network Maps

APPENDIX 2 : The Surveys Distributed for the EI Study

APPENDIX 3 : Calculation Details


APPENDIX 1: MANITOBA’S SHORTLINE NETWORKS

CENTRAL MANITOBA RAILWAY


Y

Transport Institute March 2002

GREATER WINNIPEG WATER DISTRICT RAILWA

SOUTHERN MANITOBA RAILWAY

- 63 -

HUDSON BAY RAILWAY


APPENDIX 2: QUESTIONNAIRES DISTRIBUTED FOR THIS STUDY

A: Freight Carriers

B: Passenger Carriers

C: Manufacturers


A: Economic Impact Survey of the Rail Transportation Sector in Manitoba

ALL INFORMATION WILL BE KEPT STRICTLY CONFIDENTIAL. If you have any questions or concerns when filling out this survey, please contact Caroline Chapain or Erica Vido at the University of Manitoba Transport Institute at (204) 474-9842.

Section A. COMPANY INFORMATION

1.) Please verify the following information:

NAME OF COMPANY:_______________________________________________

ADDRESS: ________________________________________________________

2.) Please make any corrections here:

NAME OF COMPANY:_______________________________________________

ADDRESS: ________________________________________________________

3.) Please provide us with the following contact information:

YOUR NAME: ____________________________________________________

TITLE/POSITION:__________________________________________________

PHONE NUMBER:_________________________________________________

FAX NUMBER: ___________________________________________________

EMAIL: _________________________________________________________


Section B: OPERATING EXPENSE INFORMATION

4.) For the year 2000, please provide the following financial information attributable

to your rail-related business ONLY. Please round off the dollar figures to the nearest

thousand.

Operating Expenses Total

Percent (%)

paid in

Manitoba

Percent (%)

paid to other

sectors

TOTAL operating rail-related expenses.

5.) We are also interested in having detailed information about total wages, salaries

and benefits. For the year 2000, please provide the following financial information

attributable to your rail business ONLY.

Operating Expenses Total Percent (%) in

Manitoba

Total Salaries, wages and benefits


Section C: TAXATION INFORMATION IN MANITOBA

Governments of all levels derive substantial revenue from the rail sector through

taxation. Tax information obtained can demonstrate the importance of your

contribution to this source of government revenue.

For the year 2000, please provide the following financial information attributable to

your rail business ONLY in Manitoba:

6.) Total dollar amount of rail-related taxes: $__________________________________

7.) Please break down your company’s rail-related taxes into the following categories

by percentage (%):

Municipal (property, water and sewer, business, etc.) %

Provincial (payroll, etc.) %

Federal (GST, corporate, etc.) %

TOTAL (should equal 100%) %


Section D: GOVERNMENT TRANSFER INFORMATION

Did you receive any government transfers (tax exemptions, forgiveable loans, etc…) in the year 2000? Yes No

If, Yes, for the year 2000, please provide the following financial information attributable

to your rail business ONLY:

8.) Total dollar amount of rail-related government transfers: $____________________

9.) Please break down your rail-related government transfer into the following

categories by percentage (%):

Federal %

Provincial %

Municipal %

Total (should equal 100%) %

Section E: EMPLOYMENT INFORMATION

Providing people with jobs contributes to the overall well-being of the economy and

the community. Information on the employment that your business creates is very

important in revealing the economic impacts of the rail sector.

10.) For the year 2000, please provide the information attributable to your rail

employees residing in Manitoba in the following categories:

Number

Full-time employees residing in Manitoba

Part-time employees residing in Manitoba

Seasonal / Term employees residing in Manitoba

Note: We define full time as working 35 hours and more per week.


11.) For the year 2000, please provide your best estimate of the total hours these

part-time employees residing in Manitoba worked: __________________________hours


seasonal / term employees residing in Manitoba worked: __________________hours

13.) For the year 2000, please break down the number of rail employees residing in

Manitoba in the following categories:

Number of employees residing in Manitoba

Full-time Part-time Seasonal

Equipment maintenance

(equipment, repair, and

maintenance personnel)

Transportation

(locomotive, engineers and traffic

supervisor, operations

administration)

Road maintenance (track inspectors, work equipment

operators, maintainers and

mechanics)

General

(commercial, sales and marketing

personnel)


Section F: INFRASTRUCTURE

Information on rail infrastructure that your business owns or has access to is

important. When combined with all rail infrastructure, the importance of rail

transportation infrastructure in Manitoba can be derived.

14.) For the year 2000, please provide the following information attributable to your

rail infrastructure ONLY:

Miles

Line owned in Manitoba

Primary and secondary main lines

Branch lines

Sidings and yards

Line operated under lease, contract, trackage rights

or jointly owned in Manitoba


Section G: FREIGHT MOVEMENTS IN MANITOBA

Freight movements are important information about your business. When combined

with all rail freight movements, they help to reveal the importance of the railways for

freight movements in Manitoba.

15.) For the year 2000, please provide the following information on your rail freight

movements originating and/or terminating in Manitoba ONLY:

We are not asking for specific revenue information, but we would like to know the proportion of your revenue derived from the following categories of rail movement: Percentage (%) of your revenues in

Manitoba that are derived from Bulk Carload Intermodal Passenger service (i.e. VIA rail contribution) Other revenue: ________________________ Total 100%

Notes:

Bulk: Bulk freight includes commodities like agricultural commodities, chemicals or coal that are

transported in open or covered hopper cars or gondola cars.

Carload: Carload freight is non-bulk traffic of various types (forest products, metallic ores and minerals,

motor vehicles and equipment, non metallic minerals and products and other carloads) that are

transported in rail cars such as auto racks, box cars, flat cars or gondola cars.

Intermodal: Intermodal freight usually consists of time sensitive shipments in containers or trailers.


16.) Below is a list of commodity groupings. Please identify the contribution to revenue (%) attributed to each commodity that originated and/or terminated in Manitoba during the year 2000. 1. Petroleum and Chemicals: _________________________________%

2. Metals and minerals: ______________________________________%

3. Forest products: __________________________________________%

4. Coal: ____________________________________________________%

5. Grain: ___________________________________________________%

6. Fertilizers: _______________________________________________%

7. Intermodal: _______________________________________________%

8. Automotive: _______________________________________________%

9. Other (specify):_____________________________________________%

Section H: FUTURE

In uncertain times we know that it is difficult to predict the future. Please provide

your best estimate on the future of your revenues.

17.) What do you think your revenue in Manitoba will be 3 years from now (2005)?

Please check one.

Lower If lower by what percentage (%): _________________________

Same

Higher If higher by what percentage (%): _________________________


18.) Your place in this industry is critical and your perceptions on the future of your

business can help us to determine the important role that rail will play. During a follow

up interview, I may ask you some questions to obtain your anecdotal perceptions on

various issues. These issues can include: rationalization and shortline development,

closures of yards/terminals and the resultant impacts to your firm and your suppliers, the

future of freight movements of bulk, carload and intermodal and education and training

needs. These questions go beyond the scope of this questionnaire and involve complex

answers that are more convenient to discuss in an interview. In preparation for such a

conversation, please think about the three most important issues that you believe

confront the rail industry in Manitoba.

Thank You for Your Time and Effort.

ALL INFORMATION WILL BE KEPT STRICTLY CONFIDENTIAL.


B: Economic Impact Survey of Rail Transportation Sector in Manitoba




NAME OF COMPANY:_______________________________________________

ADDRESS: ________________________________________________________


NAME OF COMPANY:_______________________________________________

ADDRESS: ________________________________________________________


YOUR NAME: ____________________________________________________

TITLE/POSITION:__________________________________________________

PHONE NUMBER:_________________________________________________

FAX NUMBER: ___________________________________________________

EMAIL: _________________________________________________________


Section B: OPERATING EXPENSE INFORMATION

Expenses are important information about your business. When combined with all rail and rail-related businesses’ expenses, they help to reveal the total economic impact to the local economy.


to your rail business ONLY:

Operating Expenses

(on company owned property/equipment) Total

Percent (%) in

Manitoba

TOTAL operating expenses.

5.) Please indicate the percentage of the TOTAL operating expenses that are paid to

other railways in Manitoba (see list below): __________________________________%

List: Other railway companies in Manitoba: Canadian National, Canadian Pacific, Burlington Northern

Manitoba, Greater Winnipeg Water Railway, Hudson Bay Railway, Southern Manitoba Railway, Central

Manitoba Railway.

6.) We are also interested in having detailed information about total wages, salaries

and benefits. For the year 2000, please provide the following financial information

attributable to your rail business ONLY:

Operating Expenses Total Percent (%) in

Manitoba

Total Salaries, wages and benefits


Section C: TAXATION INFORMATION IN MANITOBA

Governments of all levels derive substantial revenue from the rail sector through

taxation. Tax information obtained can demonstrate the importance of your

contribution to this source of government revenue.


your rail business ONLY in Manitoba:

7.) Total dollar amount of rail-related taxes: $__________________________________

8.) Please break down your company’s rail-related taxes into the following categories

by percentage (%):






In the year 2000, did you receive any government transfers (tax exemption, forgiveable loans, etc…)? Yes No

If, Yes, for the year 2000, please provide the following financial information

attributable to your rail business ONLY:

15.) Total dollar amount of rail-related government transfers attributable to your

Manitoba operations: $____________________

16.) Please break down your government transfers into the following categories by

percentage (%):

Federal %


Provincial %

Municipal %



Providing people with jobs contributes to the overall well-being of the economy and

the community. Information on the employment that your business creates is very

important in revealing the economic impacts of the rail-related sector.

11.) For the year 2000, please provide the following information about your rail-

related employees residing in Manitoba in the following categories:

Number










14.) For the year 2000, please break down the number of rail-related employees

residing in Manitoba in the following categories:

Number of employees residing in

Manitoba

Equipment maintenance

(equipment, repair, and maintenance personnel)

Transportation

(locomotive, engineers and traffic supervisor)

Road maintenance (track inspectors, work equipment operators, maintainers

and mechanics)

General

(commercial, sales and marketing personnel, operations

administration, passenger services personnel)

Section F: INFRASTRUCTURE

Information on rail infrastructure that your business owns or has access to is

important. When combined with all rail infrastructures, the importance of rail

transportation infrastructure in Manitoba can be derived.


rail infrastructure ONLY:

Miles

Line owned in Manitoba

Line operated under lease, contract, trackage rights

or jointly owned in Manitoba

Station properties


Section H: PASSENGER MOVEMENTS WITHIN MANITOBA

Passenger movements are important information about your business. When combined

with all passenger movements, they help to reveal the importance of rail for the

movement of people in Manitoba.


rail business ONLY:

PASSENGERS MOVEMENTS IN MANITOBA Passengers Number

Other locations in Manitoba

East Bound Canada

Passengers originating

in Manitoba going to: West bound Canada

East Bound Canada

Passengers coming

to Manitoba from: West bound Canada

East Bound Canada

Passengers passing

throughout Manitoba from:

West bound Canada


16.) It is not necessary to provide revenue data, but we would like to know the

proportion of revenue derived from each category. Please break down your revenues

in the following categories:

Percentage (%) of your revenue in

Manitoba that is derived from Passengers Freight (including mail) Other revenue (concessions, etc.)

Section I: FUTURE

In uncertain times we know that it is difficult to say for certain what the future holds.

Please provide your best estimate on the future of your revenues.

17.) What do you think your rail revenues will be 3 years from now (2005)?

Please check one.


Same





C: Economic Impact Survey of the Rail Transportation Sector in Manitoba




NAME OF COMPANY:_______________________________________________

ADDRESS: ________________________________________________________


NAME OF COMPANY:_______________________________________________

ADDRESS: _______________________________________________________


YOUR NAME: ____________________________________________________

TITLE/POSITION:_________________________________________________

PHONE NUMBER:_________________________________________________

FAX NUMBER: ___________________________________________________

EMAIL: _________________________________________________________

4.) In which city or town and in which province or state is your company’s head office

located? ______________________________________________________________

5.) What are the main goods or services that your company provides to railway

operations: (a) in Manitoba? And (b) outside Manitoba?

(a)___________________________________________________________________

____________________________________________________________________________

____________________________________________________________________________

(b)__________________________________________________________________________

____________________________________________________________________________

Section B: EXPENDITURES INFORMATION


Expenditures are important information about your business. When combined with all

rail and rail-related expenditures, they help to reveal the economic impact to the

local economy.


to your business:

General Expenditure Information TOTAL % in Manitoba

Total expenditures $ %

Total expenditures attributable to the production

of railway equipment, supplies or other inputs to

railway operations

$ %

Specific Expenditure Information TOTAL % in Manitoba

Salaries, wages and benefits related to the

production of railway equipment, supplies or

other inputs to railway operations

$ %


Section B: TRADE

7. For the year 2000, please provide the following information attributable to your rail-related business ONLY:

Proportion of your revenue derived from Percentage (%)

Total In Manitoba

In Other

Canadian

Provinces

Outside

Canada

A. Supplying goods or

services to railway

companies (see A below)

%

%

%

%

B. Supplying goods or

services to any other rail

enterprise (see B below)

%

%

%

%

Notes:

A. Railway companies in Manitoba: Canadian National, Canadian Pacific, Burlington

Northern Manitoba Ltd., Greater Winnipeg Water District Railway, Hudson Bay

Railway, Southern Manitoba Railway, Central Manitoba Railway, Via Rail, Prairie

Dog Central, Assiniboine Valley Railway.

B. Any company involved in the rail sector except the companies listed in A above.


Section C: TAXATION INFORMATION

Governments of all levels derive substantial revenue from rail and rail-related

businesses through taxation. Tax information obtained will demonstrate the

importance of your contribution to this source of government revenue.


your rail-related business:

8.) Total dollar amount of taxes: $_______________________________

9.) Please break down your taxes into the following categories by percentage (%):






During the year 2000, did you receive any government transfers (tax exemptions, forgiveable loans, etc…)? Yes No

If, Yes, for the year 2000, please provide the following financial information attributable

to your rail-related business ONLY:

10.) Total dollar amount of rail-related government transfers: $____________________

11.) Please break down your rail-related government transfer into the following

categories by percentage (%):

Federal %

Provincial %

Municipal %





rail-related business ONLY:

Number









Section F: FUTURE

In uncertain times we know that it is difficult to say for certain what the future holds.

Please provide your best estimate on the future of your revenues.

15.) What do you think your rail-related sales will be 3 years from now (2005)?

Please check one.


Same


16.) Where do you expect your future markets to be in 2005?

Manitoba………………….. ________________%

Rest of Canada…………. ________________%

US……………………………… ________________%

Other……………………….. ________________%

If other please specify:________________________________________________



Please Forward Your Completed Survey Using the Enclosed Stamped

And Addressed Envelope.




APPENDIX 3: Calculation Details

In Table 1, we estimated Canadian Pacific Railway’s operating expenses to calculate

their revenue. We calculated the following ratio:

R= salaries, wages and benefit expenses in Manitoba/ salaries, wages and benefit expenses in Canada We applied this ratio to their total operating expenses in Canada in order to obtain their

operating expenses in Manitoba.

In Table 14, seasonal and part time employees are included in full time employees for

Canadian Pacific Railway.

economic impact and structure of the manitoba rail … · 2020. 11. 2. · impact to total mb...

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