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ARCHIVED - RPP 2006-2007
Transport Canada

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Section II - Analysis of program activities by Strategic Outcome

2.1 Plans and priorities by Strategic Outcome

This section identifies activities that Transport Canada will be undertaking over the next three years in addressing priorities toward meeting its three strategic outcomes.

2.1.1 Strategic Outcome: An efficient transportation system that contributes to Canada's economic growth and trade objectives

An efficient transportation system is essential to Canada's economic growth and social development. It directly contributes to Canada's international competitiveness, productivity, and overall quality of life in urban, rural and remote areas. Given the constantly accelerating pace of global trade, the profound connections among transportation, nation-building and prosperity that informed the transportation decisions of previous generations of Canadian leaders have again assumed pre-eminence.

Transport Canada has a key role to play in providing a solid foundation for an efficient transportation system. It develops modal and multi-modal policy frameworks, laws and regulations that govern the economic behaviour of transportation carriers. Competition and market forces are basic tenets of our national transportation policy and will continue to be prime agents in guiding the growth and development of the national transportation system. A strong and healthy marketplace encourages existing competitors and new entrants to innovate and provide new services to meet the transportation needs.

An efficient transportation system also depends on reliable, safe, well-maintained transportation infrastructure to support its development. The departmental activities on this front are wide-ranging and fall under five broad areas: strategic investments in areas that directly support federal priorities, monitoring of transportation infrastructure providers, ensuring appropriate policy and legislative frameworks, divestiture of federal assets to parties that are better placed to manage them, and continued support to federally-dependent facilities and landlords of substantial land assets.

More specifically, Transport Canada continues to implement its well-advanced divestiture program of regional/local airports while continuing to assume responsibilities for airports and ports until their transfer. It supports federally-dependent facilities (ports, airports and ferries) as well as rail and ferry services to remote communities. The department carries out landlord and monitoring functions for strategic assets such as major airports and ports throughout the country. Transport Canada's expertise in policy and program development related to transportation infrastructure and its consideration of the public interest is recognized throughout the federal government. The department develops and implements policies and programs on its own and in partnerships with public and private sector partners.

The department continues to be fully committed to divesting its remaining regional/local ports and is working closely with entities across the country to meet this goal. It ensures that Airports Capital Assistance Program (ACAP) funds are properly managed and directed to those airports most in need of safety, asset protection and operating cost reduction assistance.

The department also contributes funds to the constitutionally mandated Nova Scotia to Newfoundland and Labrador ferry services operated by Marine Atlantic Inc., administers the annual operating and capital subsidies to VIA Rail Canada, supports and provides oversight to numerous federal bridges (Jacques Cartier, Champlain, etc.), provides an annual grant to British Columbia for its coastal and freight services, and provides capital and operating contributions to Ridley Terminals Inc.

In support of these responsibilities and other priorities, the department needs to engage domestic and foreign jurisdictions and private sector stakeholders on an ongoing basis. This is the case, for example, in its negotiation of bilateral air transport agreements or arrangements for international air services and representing the Government of Canada as a member of the International Civil Aviation Organization (ICAO) or co-leading the Canada-U.S. Transportation Border Working Group with the U.S. Federal Highways Administration.

In addition, Transport Canada ensures the effective, strategic direction and coordination of its involvement in international activities (including with multilateral bodies such as the Asia Pacific Economic Cooperation and the European Conference of Ministers of Transport), as well as coordination of key bilateral relationships (for example with the United States and China) and coordination of the minister's and senior management's involvement in international activities.

The department is also actively engaged in bilateral and multilateral trade negotiations that impact trade in transportation services.

Transport Canada has an extensive program of monitoring and analysis of the Canadian transportation system, including reporting to Parliament on the state of transportation in Canada (Canada Transportation Act), conducting economic studies, managing transportation data and monitoring transportation activities throughout Canada. The department contributes to federal science and all departmental priorities by supporting research and development activities, in particular through its Transportation Development Centre.

The department recognizes that progress toward achieving its high-level ultimate outcomes will be influenced by some factors that it does not directly control, such as global economic conditions, international crises or the actions of other governments. At the same time, it understands that performance information is needed to adjust priorities and strategies to ensure that progress continues in the right direction. The box below provides an overview of the indicators that Transport Canada plans to use to monitor its progress in promoting an efficient transportation system.

Indicators of progress

  • Increased productivity of the transportation system
  • Price and service levels
  • Financial viability of the different components of the system
  • Reduction of cost to taxpayer
  • Benefits to industry and consumers from improved harmonization

Efficiency: Challenges and Opportunities

In the face of globalization and the integration of the North American market, increasing Canada's productivity and international competitiveness is critical to the creation of new and viable trade opportunities. Improvements in the productivity of the transportation sector over the past several years have contributed significantly in economic growth. A more recent slowdown in transportation's productivity gains is indicative of the need to keep transportation productivity improvements a priority in the future to sustain Canada's economic growth. Remaining competitive will necessitate that we create the right conditions to encourage further investment in transportation infrastructure to address capacity constraints at key ports and borders. In addition, there is a need for increased coordination and consultation, both nationally and internationally, particularly with our largest trading partner, the United States. While competition within and among modes will continue, successful participation in the global economy will require transportation stakeholders to cooperate in the development of seamlessly integrated national and international transportation systems.

In practice, this means a change in perspective, recognizing that our major ports and airports are engines of economic activity crucial for trade and commerce, and key in creating dynamic urban centres that are magnets for investments and talent. At the same time, a converging set of pressures flows from the pre-eminent role of global supply chains in international commerce. As a result, an ever-higher premium is placed on seamless, secure and rapid movement of goods and people, as production processes are disaggregated and re-aggregated to maximize value. An integrative policy approach that recognizes the interplay of trade, safety, security and other transportation issues is essential for Canada to remain competitive in this evolving global environment.

The air industry has always had a strong international as well as domestic dimension. Competitiveness and access to opportunities are as important as addressing the domestic public good through the availability of services on reasonable terms. The federal role with respect to this largely privatized sector of transportation is to ensure the public good through implementation of appropriate economic policy and legislative frameworks while facilitating service opportunities in a rapidly changing global environment. Issues to be addressed in the near-term include: introduction of a legislative framework for airports to complement the new rent policy announced in May 2005, monitoring and research in support of international air policy development, airport competitiveness, airport financial viability, and continued refinement of the existing legislative framework for the sector.

Enhanced financial and competitive flexibility also needs to be provided to the Canadian marine sector and Canada Port Authorities (CPAs) so they can respond to economic opportunities and realize their potential as economic generators. Issues to be addressed include the potential refinement of legislative and regulatory instruments in order to provide further tools for instilling and promoting an appropriate investment climate for CPAs, as well as other measures to ensure future port competitiveness.

Rail transportation contributes to national competitiveness through its role in the development of strategic North American gateways and trade corridors. The department is increasingly focusing attention, with others in the public and private sectors, in examining challenges associated with transportation capacity to meet ever-increasing trade growth. Particular areas of attention include the west coast - our Asia-Pacific Gateway -where the boom in trade with China is creating significant congestion, and in south western Ontario where work is underway to address short- and longer-term challenges concerning congestion and capacity at the Windsor-Detroit gateway. In addition, the provision of passenger rail services, including those in remote areas of the country, is a continuing area of interest for the department.

The future of our economy depends on efficient trade corridors that allow all modes of transport to capitalize on Canada's competitive advantage as a gateway between North American and other global markets. Ensuring the secure and efficient flow of people and goods at border crossings and along corridors requires both infrastructure improvements and a coordinated approach to implementing enhanced border and transportation processes.

As mentioned under the priority "New Security Policies and Programs", Transport Canada is actively participating in the Security and Prosperity Partnership (SPP) of North America. On the prosperity side, the department is working with its partners to help ensure secure and more efficient border crossings (including a compendium of border infrastructure needs, improved coordination and implementation of infrastructure and technology investments, and the development of a new bridge crossing at the Windsor-Detroit Gateway), to improve aviation safety, enhance airspace capacity and air navigation, and achieve greater air liberalization. Work under the SPP thus provides the opportunity to achieve key departmental objectives within the context of North American growth, competitiveness, and quality of life.

The government's innovation strategy is focused on fostering innovation and developing the necessary skills for this innovation capacity to grow. Research and development supporting transportation innovation will continue to be central to maintaining a competitive and productive transportation system that is safe and secure and environmentally responsible. A steady flow of new ideas is required to advance technologies and science that support intermodal integration, improved infrastructure design, congestion management, supply chain logistics and environmental initiatives, and more public-private partnerships must be fostered to realize these objectives. There is also a need for the transportation sector as a whole to focus on skills development to ensure we have the people and the capacity to continue to operate and improve the system.

Efficiency: Program Priorities

To promote an efficient transportation system that that contributes to Canada's economic growth and trade objectives, Transport Canada will focus its efforts on key activities and initiatives that support the three program priorities of Market-based Policy Framework; Infrastructure, Gateways and Trade Corridors; and Innovation.  MARKET-BASED POLICY FRAMEWORK

This is Transport Canada's third priority for the planning period.

Ensuring the continued improvement of transportation services by providing rules that allow transportation undertakings to adapt, innovate, remain competitive and serve the public -has been the successful focus of federal transportation policy over the years. Experience has demonstrated that competition and free market forces stimulate performance. When government interventions are needed, they should be targeted to situations where market forces are insufficient to achieve desirable outcomes. While much has been accomplished to provide a competitive marketplace and to better focus government actions, there still remains room for improvements.

The Canada Transportation Act (CTA) provides the basic rules that govern the economic behaviour of railways and airlines. A renewed proposal to amend the CTA was introduced in the House of Commons on March 24, 2005. Bill C-44, which replaced former Bill C-26, died on the order paper in November 2005. The intention of Bill C-44 was to ensure that transportation service and capacity remain responsive within a stable policy framework and encourage an investment climate supporting strategic private investment. The government is committed to proceeding, on a priority basis, with most of the proposed amendments to the CTA. The government will develop a legislative strategy to ensure the expeditious passage of these important amendments.

In May 2006, the Government of Canada announced that it had decided to retain ownership of its fleet of hopper cars. Transport Canada will negotiate new operating and refurbishment agreements with the railways.

On November 4, 2004, the government requested the assistance of the Standing Committee on Transport (SCOT) to conduct a review to determine if Canada should further liberalize its approach to the economic regulation of the air industry. On May 19, 2005, the SCOT delivered an interim report with recommendations. The government tabled its response to the recommendations in the SCOT interim report in August 2005. The present government continues to monitor international developments and to pursue opportunities to incrementally liberalize Canada's air bilateral agreements for the benefit of Canada's air industry and air traffic users.

Canada had more than 70 bilateral air transport agreements or arrangements for international air services in place at the end of 2005. Having successfully concluded negotiations in 2005 to liberalize several important agreements (China, India and the United States), priority in the coming year will be given to agreements with which Canada can secure additional economic opportunities. The expansion of Canada's air agreements is intended to secure new operating rights for Canadian carriers as well as to provide Canadian travellers and shippers with better and more economic travel options. The department continues work with its partners to identify and remove impediments to ensure that Canadian industry and consumers can take advantage of new flexibilities.

Canada's Permanent Representative to the Council of the International Civil Aviation Organization (ICAO) is accountable for all aspects of relations between Canada and the 189 member states and the ICAO Secretariat. Key priorities for the coming year will be to continuously advance the agendas for safety, security and the environment, and to assist in the transition related to a new president of the council and a re-elected secretary general. Coordination will remain a critical element of developing Canadian positions.

Consultations have been completed on a revised Canada Airports Act, to be introduced in the new Parliament. Former Bill C-27 died on the order paper in November 2003. The objectives of the new act will include provisions to strengthen governance, transparency and accountability at Canadian airports, especially those operated by Airport Authorities. Work is also underway to better understand the competitiveness of Canada's National Airport System airports.

The Aviation War Risk Liability Program was introduced in the aftermath of September 11, 2001 to provide an indemnity for third party aviation war risk liability for Canadian air transportation companies that could not obtain suitable insurance coverage on commercially acceptable terms. The program has been extended several times, most recently to the end of 2007. The objective of the program is to ensure the continued operation, viability and competitiveness of the Canadian aviation industry. Over the course of 2006, the department will continue to monitor the aviation insurance market, and make adjustments to the program as appropriate.

Transport Canada plans to introduce regulations in 2006-07 to require marine carriers to get and maintain insurance coverage sufficient to meet their liability to passengers under Part 4 of the Marine Liability Act. These compulsory insurance regulations will protect the financial interests of passengers and support competition by ensuring that fully insured operators face no competitive disadvantage from those who would under-insure their operation.  INFRASTRUCTURE, GATEWAYS AND TRADE CORRIDORS

This is Transport Canada's second priority for the planning period.

Creating the conditions that encourage investments in transportation and directly supporting transportation infrastructure that serves the national interest and enhances the quality of life in our communities are key departmental priorities.

Growth in Canadian trans-Pacific trade, both exports and imports, has created the potential for congestion and delays that could have a significant negative impact on the Canadian economy as a whole. In 2005, Transport Canada undertook important new measures for a strategic national approach to trade and transportation issues throughthe Asia-Pacific Gateway Initiative. The government is strongly committed to this initiative that was designed to enhance prosperity and strengthen Canada's position in international commerce by further developing the Asia-Pacific Gateway. This is a pan-Canadian and international initiative, with strong Asia-Pacific and Canada-U.S.A. commercial, investment, and security dimensions. The initiative will focus on issues of improved efficiency of the whole transport system, new infrastructure investments and closely related security, trade, investment, human resource and environmental issues.

Transport Canada will place a priority on working with British Columbia and other western provinces, and with regional and municipal levels of government to further develop Asia-Pacific Gateway measures. The department also recognizes the importance of key private sector stakeholders in Canada's transportation network, and will continue to work with them towards the successful implementation of this government's Asia-Pacific Gateway Initiative.

Extensive collaboration among all levels of government together with private sector partners, and the establishment of a deep level of consensus across a range of issues was a pre-condition for concerted government action pertaining to the Asia-Pacific Gateway. Stakeholders examining similar initiatives in other regions of Canada characterized by major international trade volumes and opportunities are encouraged to work together in developing their vision and priorities.

Transport Canada also works closely with Infrastructure Canada on highways, transit and border projects by providing technical input, analysis and advice on the selection of transportation projects, jointly negotiating and seeking Treasury Board approval of the contribution agreements, and implementing the projects.

As of December 2005, approximately $4 billion had been invested in transportation projects through the Strategic Highway Infrastructure Program (SHIP), the Canada Strategic Infrastructure Fund (CSIF) and the Border Infrastructure Fund (BIF). The SHIP provides for cost-sharing highway and border improvement projects with provinces and territories. It also provides funding for intelligent transportation systems deployments and research and development projects, and for transportation planning and modal integration initiatives. Most of the money available under these funds has been committed. However, many projects remain to be implemented.

For 2006-07, the department's priorities will be to manage and ensure the compliance of transportation projects under the funding programs SHIP, CSIF and BIF. For example, the construction of a four-lane Trans-Canada Highway (Route 2) in New Brunswick ($200 million federal); the studies and other preliminary work (phase 1) on Highway 30 to explore the potential for a public-private partnership to complete this section of highway, spanning 42 kilometres southwest of Montreal, in Quebec ($10.5 million federal); improvements to GO Transit's rail network in the extended Greater Toronto Area ($385 million federal); improvements to highways and border-crossing infrastructure in the Sarnia, Niagara and London areas in Ontario ($154 million federal); and the construction of a light rail transit line, linking central Richmond, Vancouver International Airport and downtown Vancouver in British Columbia ($450 million federal); and, national corridors for Canada in the Northwest Territories ($65 million federal).

Transport Canada will continue negotiations for a number of announced transportation projects, such as the Let's Get Windsor Essex Moving Strategy ($150 million federal); a light rail expansion from downtown Ottawa to Barrhaven in Ontario ($200 million federal); highway rehabilitation projects on Route 1 of the Trans-Canada highway in Newfoundland ($24 million federal); and the construction of a four-lane divided highway (Route 175) between Quebec City and Saguenay ($262.5 million federal).

In Budget 2006, the Government made a strong commitment to providing stable and reliable funding to the provinces, territories and municipalities to help them meet their infrastructure needs. The Budget includes $2.4 billion over the next 5 years for a new Highways and Border Infrastructure Fund (HBIF) for which Transport Canada is developing a framework and program objectives, $2.3 billion to renew the CSIF, $2.2 billion to renew the Municipal Rural Infrastructure Fund, $591 million for the Pacific Gateway Initiative, and $1.3 billion in Public Transit Infrastructure Investments. A key objective of the HBIF will be to cost-share with provinces and territories improvements to the core National Highway System (NHS) and border crossings. In addition, Transport Canada is considering how this Fund could address the multi-modal priorities identified by the Council of the Federation's December 2005 transportation plan. The Budget also commits to maintaining the estimated $3.9 billion in current funding over the next four years under existing infrastructure agreements, and maintaining the gas tax funding agreement under the New Deal for Cities and Communities. Over the next four years, federal support for infrastructure will reach $16.5 billion. Furthermore, the Budget also specifically mentions that infrastructure projects will adhere to best practices, including not funding cost overruns and requiring funding recipients to be accountable to Canadian taxpayers.

Among the most significant infrastructure initiatives announced by the Government in the Budget is the HBIF. This new $2.4 billion program will be managed by Transport Canada. A key objective of the new fund, which will be delivered over five years, will be to cost-share, with the provinces and territories, improvements to the core National Highway System, including the Trans-Canada Highway.

Transport Canada will continue to work with other federal departments and our provincial, territorial, municipal and private sector partners to develop and deliver these programs efficiently and effectively in order to meet federal objectives.

In support of the development of Highway 30 in Quebec, Bill S-31 (Statutes of Canada (2005) Chapter 37) - an act to authorize the construction and maintenance of a bridge over the St. Lawrence River and a bridge over the Beauharnois Canal for the purpose of completing Highway 30- was adopted by the Senate in June 2005 and by the House of Commons in September 2005, and received royal assent on November 3, 2005. This special act contains provisions requiring Quebec to submit plans, specifications and the location of the two bridges for examination and approval by the Governor-in-Council before work commences, and includes a provision under which the Governor-in-Council may, for the purpose of navigation, make regulations respecting the two bridges.

Transport Canada will continue to provide leadership through the development of highway policies that focus on the 38,000 kilometres of federal-, provincial- and territorial-owned National Highway System (NHS), which is comprised of the core, feeder and northern and remote routes.

In September 2005, following a federal/provincial/territorial review of the NHS, the Council of Ministers responsible for Transportation and Highway Safety agreed to add a further approximately 10,500 kilometres of existing highways to the NHS. Most of these routes have been added in 2 new categories: feeder routes and northern and remote routes. The total length of the NHS has increased by 38 per cent from September 2004 when just over 2700 km of additional highways were added to the core routes. The NHS now comprises of 27,608 km of core routes; 4,500 km feeder routes; and over 5,900 km northern and remotes routes. Work will continue over the next year to develop:

  • Criteria to identify key connections to the NHS within major metropolitan areas; and
  • A process and scope for future reviews and reporting on the state of the NHS.

Transport Canada is currently reviewing the governance and operation of all domestic and international bridges within its portfolio with a view to enhancing their ability to be self-sufficient over the long-term. In addition, the department is examining mechanisms to improve the oversight capability to better manage critical infrastructure. In April 2006, Transport Canada introduced legislation that would provide the federal government with the authority to approve the construction of new international bridges and tunnels, alterations to existing bridges and tunnels, the sale or transfer of existing bridges and tunnels, international bridges and tunnels over the St. Lawrence River, and to implement regulations to ensure the safety, security, and efficient operation of these critical components of the international transportation system. As well, the department is currently developing a strategy for the governance and operation of the international bridges within its portfolio to improve the oversight capability and to more effectively manage these structures.

Improving international traffic flows at the Windsor-Detroit gateway is a key government priority. In addition to the Let's Get Windsor-Essex Moving Strategy, which is funding improvements to existing infrastructure in the Windsor area, the department continues to participate in the Canada-U.S.-Ontario-Michigan Border Transportation Partnership, with the purpose of developing a long-term strategy to improve the movement of people, goods and services across the Windsor-Detroit gateway. Through a coordinated environmental assessment (EA) study process the partnership is identifying the location for a new international border crossing, inspection plazas and connecting roads leading from Highway 401 in Canada to the Interstate Highway System in Michigan. This study is expected to be complete in 2007, at which time the partnership will have concluded consultations and developed a preliminary design for the new border crossing. The partnership is also working on the development of a governance regime for the new crossing that is expected to be in place by the completion of the EA. In addition, Transport Canada is also working with the City of Windsor and local railways to examine the opportunities for rail rationalization in the Windsor area.

In terms of passenger travel, VIA Rail is responsible for the safe and efficient provision of inter-city passenger rail services in Canada. VIA receives an annual operating subsidy of $169 million and also relies on Government funding for its capital needs. In 2006, Transport Canada will work with VIA Rail to develop a strategy for ensuring the long-term sustainability of its operations.

In her 2005 Status Report, the Auditor General recommended that Transport Canada update its ability to monitor long-term viability, prepare a strategy for response to financial distress, and develop a framework for the monitoring of airport performance. The department is updating its ability to monitor long-term viability and has developed a process to respond to financial distress of a National Airports System Airport Authority. The department is continuing to develop a framework for the monitoring of airport performance.

Transport Canada is leading a federal-provincial-territorial task group looking at the small airport viability issue, including the identification of options for the future.

The Canada Marine Act (CMA) established the first single, comprehensive piece of legislation to govern many aspects of Canada's marine sector, including the establishment of Canada Port Authorities (CPAs), the commercialization of the St. Lawrence Seaway and federal ferry services, and improvements to the way in which pilotage authorities operate in Canada. Bill C-61, An Act to amend the Canada Marine Act and other Acts, was introduced in Parliament in 2005. This legislation, which proposed amendments to the CMA, aimed at allowing the marine sector (especially CPAs) to respond more effectively to capacity demands and deal with aging infrastructure, died on the order paper in 2005. Subsequent steps related to this proposed legislation will rest with the new Parliament.

Transport Canada is working with the U.S. Department of Transportation, the U.S. Army Corps of Engineers and the Canadian St. Lawrence Seaway Management Corporation on a comprehensive study of the future infrastructure needs of the St. Lawrence Seaway, including the engineering, economic and environmental implications of those needs. The principal focus of the study is to assess the long-term maintenance and capital needs to sustain and optimize the existing Seaway infrastructure.

Ridley Terminals Inc. (RTI) is a parent Crown corporation, which operates a bulk terminal on lands leased from the Prince Rupert Port Authority. This terminal was created to provide a direct route for the shipment of northeast British Columbia coal to Asian markets. RTI has experienced financial difficulties relating largely to the fortunes of northeast British Columbia coalmines and low volume of throughput at the terminal. In 2004 and 2005, the department provided financial support to RTI through contribution agreements and, in 2006, will be providing additional funding to allow RTI to operate as a going concern. Financial projections indicate that RTI will require federal government support to cover operating and capital requirements for the first two quarters of 2006, and there is reasonable expectation -based on increased demand in world coal markets and new developments in the Canadian coal industry -that RTI will reach its break-even throughput level and will likely become self-sufficient and have financially viable operations by early 2007.

Marine Atlantic Inc. (MAI) is a parent Crown corporation that fulfills Canada's constitutional obligation to Newfoundland and Labrador (NL) to provide year-round ferry service between North Sydney, Nova Scotia and Port aux Basques, NL. MAI relies on Government funding for its capital and operating needs. In the coming year, Transport Canada will continue to work closely with MAI to develop a long-term strategy to address the corporation's financial requirements. The strategy will consider important elements for MAI's revitalization, including a renewed rate structure, governance and future capital and fleet requirements.  INNOVATION

This is Transport Canada's eighth priority for the planning period.

Innovation is key to Transport Canada's objectives and, in particular, to reconciling the three strategic outcomes (safety and security, efficiency, and environmental responsibility) of the department's vision of a sustainable transportation system. Innovation and skills development can make the transportation sector stronger, more resilient, adaptable and responsive to changing demands and pressures.

Transport Canada has launched an initiative aimed at measuring the full costs of all transportation activities. Full costs include both economic costs as well as social costs. This initiative will help to develop an additional analytical tool to better guide decisions related to sustainable transportation.

Transport Canada also continues to review its approach to research and development (R&D). The department will establish a comprehensive vision for R&D at Transport Canada to provide direction for future activities by conducting R&D into safety, security, efficiency and environment and energy use to advance the development of a sustainable transportation system for the efficient and effective movement of people and goods; providing leadership and acting as a catalyst for partnerships, collaborative efforts and integration across the transportation community; and encouraging the flow of information on R&D activity results.

Key activities to be undertaken in the planning period at Transport Canada's Transportation Development Centre include enhanced networking for creative solutions, partnership opportunities, the demonstration of the functionality of newly developed transportation systems and technologies and pursuing the transfer and commercialization of our successful research outcomes to the community.

Through the Intelligent Transportation Systems (ITS) Plan for Canada, "En Route to Intelligent Mobility", Transport Canada continues to promote awareness of these innovative technologies. Through targeted funding, Transport Canada will continue to accelerate research, development, deployment and integration of ITS in support of national objectives (e.g. the Innovation Agenda, Asia-Pacific Gateway Initiative, Let's Get Windsor-Essex Moving Strategy), as well as departmental priorities such as safety, security and efficiency of the transportation system. Given that the national strategic plan is now more than six years old, Transport Canada will commence the process to review and update this policy framework.

Transportation-related innovation and skills development offers the promise of increased productivity and efficiency, a more environmentally sustainable transportation system and the creation of an investment-friendly business environment through more efficient movements of goods and people. In 2006, Transport Canada will continue its efforts with public and private sector partners to identify and seek ways to address top skills development challenges, and to identify opportunities for joint federal-provincial-territorial action. The department will also explore opportunities to support a limited number of specific transportation-related initiatives undertaken by academics and/or public and private sector partners to promote transportation innovation and skills development and to increase interest and awareness of transportation-related research and careers. Any activities to support the department's overall approach to innovation and skills development will take into accountother initiatives already underway, such as the Asia-Pacific Gateway Initiative.

2.1.2 Strategic Outcome: A safe and secure transportation system that contributes to Canada's social development and security objectives

Transport Canada promotes the safety and security of Canada's transportation system consisting of the air, marine, rail, and road modes of transportation. A safe and secure system protects people from acts of terrorism, accidents and exposure to dangerous goods, enables the efficient flow of people and goods, and protects the environment from pollution. It is an essential element for a healthy population, a high quality of life and a prosperous economy.

Policy development, rule-making, monitoring and enforcement and outreach activities support the safety and security objective. Through its policy development and rulemaking efforts for all the modes of transportation, the department establishes and implements legislation, regulations, standards and policies. Monitoring and enforcement activities include issuing licences, certificates, registrations and permits, monitoring compliance through audits, inspections and surveillance, and taking appropriate enforcement action in instances of non-compliance. In particular, the department's inspectors monitor the system to make sure the rules are being followed, and, if required, enforce the policies and rules. Outreach activities involve efforts to promote, educate and increase awareness of safety and security issues and make users and industry aware of requirements.

Transport Canada is responsible for the security of the Canadian transportation system and plays a lead role in the security of the travelling public. The department dischargesthat responsibility through activities such as establishing security rules and standards for transportation facilities; screening air travellers and their baggage; responding to security incidents and threats; restricting access to certain parts of airports to authorized personnel only, training and qualifying security screeners and securing aircargo and mail. Transport Canada also regulates the Canadian Air Transport Security Authority (CATSA), a Crown corporation responsible for the screening of passengers and their belongings and certain other specific initiatives to improve air passenger and airport security. In the fall of 2005, the Minister of Transport, Infrastructure and Communities appointed an Advisory Panel to conduct a review of the provisions and operations of the CATSA Act to ensure it provides a sound and adequate statutory basis for its air transport security mandate. The Minister has also asked for the Panel's advice on future aviation security requirements that may impact on CATSA's future operations. The Panel may also make observations on other important matters that come to its attention during the course of its work.

Transport Canada also establishes safety standards for rail transportation, the manufacturing of motor vehicles and aircraft, the navigation of commercial vessels through Canadian waters and the transportation of dangerous goods. In addition, Transport Canada maintains a small fleet of aircrafts for the non-military use of the Government of Canada.

Transport Canada works in partnership with other governments, industry, stakeholders and international organizations to develop the laws and rules that promote the safety and security of the transportation system. The department contributes to enhancing Canada's influence and reputation on the international stage by leading and participating in activities at international levels through organizations like the International Civil Aviation Organization and the International Maritime Organization.

Transport Canada works to ensure the safe movement of dangerous goods. The Canadian Transport Emergency Centre (CANUTEC) is the department's 24-hour response centre that assists personnel in handling dangerous goods emergencies. An Emergency Response Guidebook has been developed and distributed to firefighters and emergency personnel across Canada. It is available in 18 different languages.

Transport Canada puts into place regulatory, educational and promotional programs that reduce the probability of an incident occurring and mitigates the consequences if one does occur.

In partnership with the Department of National Defence (DND) and the National Search and Rescue Secretariat (NSS), Transport Canada also supports and facilitates search and rescue activities including response services by providing regulations for the carriage of emergency equipment to protect the survivors of accidents and alerting devices to find them. Transport Canada receives funding from the Search and Rescue New Initiatives Fund administered by the NSS to manage programs that contribute to search and rescue in Canada. This funding (included in Vote 1 - Operating, Table 3) will total $459,976 in 2006-2007, $367,000 in 2007-2008 and $207,752 in 2008-2009.

In the event of investigations after an accident, Transport Canada provides the required assistance to the Transportation Safety Board. The department learns from these investigations to better identify the causes of the accidents and further improve the rules and policies to better protect the public as required.

A safe and secure transportation system contributes to the quality of life for all Canadians and supports safe and secure communities, as outlined in Canada's Performance 2005.

Indicators of progress

  • High level of public confidence in transportation safety and security
  • Reduction in accident/incident rates relative to the increase in traffic
  • Reduction in fatality rates relative to the accident/incident rates
  • Progress in implementing safety management systems and security management systems

Safety and Security: Challenges and Opportunities

Canada has one of the safest and most secure transportation systems in the world. However, the dramatic growth of new markets and the changing dynamics of global trade represent immense challenges for the transportation system. Bottlenecks are beginning to develop at key ports and there are concerns about the ability of our rail and marine systems to meet current demands and future growth. New technologies will affect the way planes, trains, vehicles and vessels operate and their level of safety and security. These changes will put new pressures on the transportation system and introduce new risks. Transport Canada will be challenged to ensure that, while traffic in all modes is increasing, the levels of safety and security are also continuously improving, and that the department's policies and rules adapt to these changes. Transport Canada will continue to work closely with industry and other stakeholders to develop innovative approaches to research, rule-making, outreach, monitoring and enforcement.

A fundamental role of the federal government is to help ensure the safety and security of the nation's citizens, which is addressed through the National Security Policy (NSP) - a long-term strategic framework that provides a blueprint for action on national security issues, including actions in the transportation sector. The policy recognizes that everyone has a role to play in public safety and security. The policy also recognizes the essential nature of collaboration, including the mechanisms to ensure collaboration. Transportation security is addressed under the NSP and is an essential component of a successful transportation system. Many of the major terrorist attacks of the last 30 years have been linked to transportation. Within this context, the Government of Canada has taken major steps to enhance the security of the aviation and marine transportation systems.

Given the importance of the marine industry to Canada's economic prosperity, marine security has been a particular focus of attention. Global movements of vessels, their cargo and their passengers, as well as potential threats to marine infrastructure, have resulted in major securityenhancement projects at Canadian ports and marine facilities.

In the rail mode, Transport Canada has a Memorandum of Understanding on rail security with the Railway Association of Canada that establishes voluntary implementation of security procedures such as incident reporting and emergency response. The department is also involved in developing and implementing initiatives to improve the secure and efficient flow of traffic along key trade corridors. Following terrorist attacks in Madrid in 2004 and in London in July 2005, the department expanded a rail information-sharing network to include major urban transit authorities. In partnership with Public Safety and Emergency Preparedness Canada, Transport Canada is reviewing passenger rail and transit security needs in collaboration with the many partners in this sector.

Transportation safety and security is an essential requirement for a healthy population, a high quality of life and a prosperous economy. The department's challenge is to find innovative and cost-effective ways to identify and mitigate safety and security risks in the transportation system without harming the environment or hindering economic growth.

Safety and Security: Program Priorities

To promote a safe and secure transportation system that contributes to Canada's social development and security objectives, Transport Canada will continue to focus on the three program priorities of New Security Policies and Programs, Smart Regulation, and Safety and Security Management Systems.  NEW SECURITY POLICIES AND PROGRAMS

This is Transport Canada's first priority for the planning period.

Implementing a comprehensive National Security Policy will ensure a more focused and integrated approach to securing our own society. Within this context, cooperation with the United States (U.S.) to strengthen our economic and security relations is an essential requirement for Canada's security and economic objectives. The National Security Policy contains three transportation-related deliverables: a six-point action plan to strengthen the marine security regime; enhancement of security in aviation, including air cargo; and improving and extending security background check requirements for transportation workers.

Transport Canada will continue to implement aspects of Securing an Open Society: Canada's National Security Policy in 2006-07, including: developing a comprehensive program for enhancing air cargo and airmail security; exploring the expansion of requirements for background checks to a broader range of transportation workers; and continuing work with the United States, G8 and other partners to further develop security measures in areas such as airport security. Transport Canada will also continue to develop a Transportation Security Action Plan. The plan will identify transportation security priorities across all modes of transportation and will include formal threat and risk assessments that will be integrated withdepartmental policies, regulations and enforcement activities. To further advance air security, Transport Canada will continue working with other government departments and key interested parties to implement a Canadian air passenger assessment program. This Passenger Protect Program will provide an additional layer of aviation security by preventing individuals who pose an immediate threat to air security from boarding aircrafts.

As an efficient transportation system is closely intertwined with its safety, Transport Canada continues to support programs instrumental in improving aviation safety worldwide. Specifically, our continued participation in the International Civil Aviation Organization Cooperative Development of Operational Safety and Continuing Airworthiness Program will enable designated areas of the world to improve their air transport safety oversight capabilities. This program will provide financial and in-kind assistance to developing states. Through the provision of international technical cooperation, Transport Canada continues to advance its policy objectives as well as open opportunities for Canada's aviation industry in international markets.

Transport Canada will continue to implement transportation-related aspects of the Canada-U.S. bilateral Smart Border Declaration and its companion 30-point action plan, including participating on the working group for the protection of critical infrastructure such as airports, ports, bridges and tunnels. This working group serves as a forum for identifying critical infrastructure of shared interest that crosses the border and for sharing of information.

Building on the success of the Smart Border Declaration, Transport Canada will develop and implement new transportation security policies and programs under the Security and Prosperity Partnership (SPP), a trilateral initiative among Canada, the U.S. and Mexico. The SPP is designed to further enhance the security of North America and to promote the quality of life of citizens. Transport Canada, in close collaboration with other government departments, provinces and territories, Canadian stakeholders and the U.S. and Mexico, will play a key role in developing and implementing North American transportation security strategies that deal with, among other issues, aviation security, marine security, emergency preparedness and critical infrastructure protection.

Marine security continues to be a high priority for Canada as it supports a vital trade gateway, connecting Canada to the world. To date, a total of $930 million has been invested toward marine security initiatives across government. As part of this investment, the Interdepartmental Marine Security Working Group (IMSWG) was developed under the leadership of Transport Canada to coordinate marine security efforts on behalf of the Government of Canada. Over the next three years, the IMSWG will continue to identify federal government actions in support of national and international marine security obligations, enhance effectiveness in delivering marine security initiatives, and facilitate communication with federal departments and agencies, other levels of government, the private sector, and regional committees with interest in or responsibilities for marine security.

The security at Canada's ports and marine facilities will be enhanced under the Marine Security Contribution Program, a three-year $115 million initiative that commenced in 2004-05. In 2006-07, the program will continue to fund projects to strengthen security at Canada's ports.

Transport Canada will fortify the marine security regime and continue to implement a Marine Security Regulatory Oversight and Enforcement Program, which includes the development of standards, inspection and compliance, awareness education and support activities. The program is critical to reducing the vulnerability of Canada's ports and ships on international voyages to terrorist attack and for enhancing the security of Canadian citizens and our trade and economic well-being. Transport Canada will also continue to work diligently toward establishing the Marine Security Operations Centers in cooperation with other federal partners.

Transport Canada will also continue to work with stakeholders to establish and implement the Marine Transportation Security Clearance Program. The aim of this program is to ensure the security of persons at ports as well as the prevention of unlawful acts of interference with marine transportation.

Internationally, Transport Canada will enhance transportation security and implement new security policies and programs to establish a common approach to security. Efforts include initiatives to: improve aviation security (including air cargo); establish comparable standards for screening (e.g. of passengers and their luggage) and background checks; and, improve container security. In addition, over the next three years, in collaboration with other government departments as well as international partners, Transport Canada will create a compatible maritime regulatory environment with a consistent approach to vessels and cargo destined to and within North American waters.

Canada's transportation emergency preparedness and counter-terrorism capabilities will be enhanced. The department will continue to participate in the North Atlantic Treaty Organisation activities and national and international emergency response planning, training and exercises, with an emphasis on rail and urban transit security, and pandemic influenza. The department will also be initiating a program to access trained emergency responders to assist first responders (at the request of local authorities) in handling chemical, biological, radiological, and nuclear agents in the event of terrorism in Canada.  SMART REGULATION

This is Transport Canada's fourth priority for the planning period.

In the coming year, Transport Canada, as a major regulatory department, will continue to support the government's Smart Regulation Initiative. In practical terms, this means regulations that are more focused on safety and security results with targeted interventions, and with the flexibility to be innovative in meeting outcomes.

A key initiative in Transport Canada this year will be progressing toward an agreement with the automotive industry concerning the manufacturing and use of in-vehicle telematics devices, such as navigation, Internet access and cell phones. This agreement will include a safety standard and the general principles and process elements that will guide product design and evaluation. Producing safer telematics devices will help reduce incidents of driver distraction and collisions. The agreement will give industry more flexibility and opportunities for innovation in product design and will not require the department to issue new or adapt old regulations to respond to new technological advances. Consultations on the terms of the agreement are underway and should be completed in spring of 2007.

Transport Canada is committed to developing more performance-based regulations that deal with safety management systems for aviation organizations. The civil aviation regulatory framework recognizes the importance of implementing systematic approaches to further improve safety performance. An amendment to the Canadian Aviation Regulations will allow the Canadian Business Aviation Association to issue certificates for Canadian privately operated aircraft. This initiative is being undertaken in recognition of the very low accident rate for private operators. This regulatory change will provide private operators with additional opportunities to improve the efficiency of their operations by allowing the operators to play a more direct role in managing their own safety systems while not compromising safety.

Transport Canada will continue to develop responsive marine security regulations, which will keep Canada in step with a continuously evolving marine security regulatory environment. Key areas of development include domestic ferries, Administrative Monetary Penalties and Events of National Significance (i.e., tall ships at the Olympics).

Other key aspects of Transport Canada's regulatory strategy are the creation of rules that align with the rules of other regulatory agencies, both within Canada and internationally, and having meaningful consultations with both industry and the public. Rigorous and thorough consultation processes have helped to ensure that upcoming reforms associated with key acts will result in rules that reflect the needs and concerns of both industry and the public:

  • the review of the Transportation of Dangerous Goods Act, 1992, continues. Amendments are expected to be proposed in the fall of 2006;
  • the Canada Shipping Act 2001, will encompass up-to-date requirements of the International Maritime Organization and International Labour Organization Maritime Labour Conventions and bring clarity and consistency, more rapid adaptability and general applicability of maritime instruments; and,
  • the Motor Vehicle Safety Act will include modernized provisions regarding regulatory efficiency and harmonization, certification and enforcement, and importation.  SAFETY AND SECURITY MANAGEMENT SYSTEMS

This is Transport Canada's fifth priority for the planning period.

Safety management systems (SMS) and security management systems (SeMS) are formalized frameworks for integrating safety and security into the daily operations of a transportation company. They involve setting clear goals and performance targets, conducting risk assessments, establishing clear responsibilities and authorities, maintaining rules and procedures that are well documented and communicated to all employees, and regularly conducting internal inspections and evaluations. In the larger sense, this leads to a more thorough identification and resolution of potential systematic safety or security problems. Transport Canada believes that safety/security management systems will make a safe and secure transportation system even safer and more secure.

Working closely with industry, labour and other key interested parties, the department will develop plans to implement SMS/SeMS. The implementation of SMS in aviation, rail, and marine organizations is the cornerstone for improving the safety, security and economic performance of industry. In 2006-07, the department will continue to actively implement this new approach.

With the expected global shift to more open markets and fewer regulatory resources, Transport Canada's vision is that safety management systems will be implemented in all regulated civil aviation organizations. Thisopens the door for the growing involvement of industry associations in further delegation, an important strategy to address future challenges. In 2006, the department is committed to publishing in the Canada Gazette the next series of safety management system regulations for smaller aviation operations, as well as airports and flight training units. These regulations will provide aviation organizations with the flexibility of deciding how to meet the safety requirements. This will allow for innovation, while continuing to improve safety. An up-to-date table of forecasted implementation dates is available on the department's website: The department will continueto organize regional information sessions to prepare the civil aviation industry for the implementation of safety management systems.

The railway safety management system regulations, which came into effect on March 31, 2001, require railway companies subject to the Railway Safety Act to implement and maintain safety management systems. A stakeholder forum on the experiences to date on implementing SMS in rail will be held, and a review of the department's rail SMS regulations and guidance material will be conducted.

Canada was one of the member countries of the International Maritime Organization that was instrumental to implementing requirements for Safety management systems on all ships trading internationally. The systems were mandated for Canadian international shipping through the Safety Management Regulations, which introduced the International Safety Management (ISM) Code in 1998 and expanded the scope of its application in 2002. Transport Canada has had some success in promoting voluntary adoption of the ISM Code by domestic shipping companies. The department has also developed guidance material for small passenger vessels operating internationally for which a full-blown ISM would not be feasible. Transport Canada is examining ways to increase the implementation of such systems and is assessing various shipping sectors for opportunities for increased participation. Transport Canada will continue to work with the marine industry over the coming years to identify opportunities to utilize an SMS philosophy in the continued enhancement of the marine safety and security regime in Canada.


2.1.3 Strategic Outcome: An environmentally responsible transportation system that contributes to Canada's sustainable development objectives

Although transportation provides many economic and social benefits, the movement of people and goods can have significant environmental consequences, which in turn have social and economic repercussions. Effective Sustainable transportation decision-making necessitates that the environment be considered alongside economic and social factors. Environmental impacts from transportation include air, water and noise pollution, greenhouse gas emissions, and the loss of agricultural land and wildlife habitat. These stresses are caused by various transportation activities, including: construction of infrastructure; airport and port operation; road system operation and maintenance; production, operation, maintenance and disposal of vehicles; and consumption of energy.

Transport Canada will continue to promote a sustainable transportation system through developing and implementing programs and policies in support of sustainable development to protect the natural environment. As sustainable transportation is a shared responsibility, the department will work with its partners and stakeholders, including the general public, the transportation industry, other federal government departments, provinces, territories and municipalities, as well as international organizations.

Transport Canada is in the process of developing its fourth successive three-year Sustainable Development Strategy. The strategy outlines principles for sustainable development, includes concrete deliverables and performance measures, and defines what the department can do better to integrate sustainable development into its activities. It brings more precision to the concept of sustainability. The next strategy (for 2007-09) will be tabled in December 2006. Over the 2006-07 fiscal year, the department will hold national consultations with various stakeholders. In the short-term, the department will continue to implement the commitments and targets that it set out for 2004-06 and develop the next strategy for 2007-09.

Transport Canada, in its Sustainable Development Strategy 2004-2006, has included a key challenge involving the improvement of environmental management on Transport Canada lands and in their operations. The department has met this continuing challenge through its Environmental Management System (EMS). The EMS helps the department better understand the nature of the environmental impacts of transportation. It has led to the development of programs in the areas of environmental assessment, site remediation, environmental protection and real property management. In 2006-07, EMS will continue to aid the department in facilitating an understanding and management of the environmental impacts of transportation.

Transport Canada's climate change programsstrive to reduce the growth of greenhouse gas (GHG) emissions in the transportation sector through a broad range of partnerships, commercialization of near-term fuel-efficient technologies, and sharing the risks and costs of innovation. The programs draw upon the best ideas identified by the Transportation Climate Change Table in 2000 in three main areas. Partnerships established through the Urban Transportation Showcase Program assist in encouraging more sustainable urban transportation. Energy-efficiency is continually improving within the freight system through the Freight Efficiency and Technology Initiative and the Freight Efficiency Program. The introduction of new fuel-efficient technologies for vehicles is promoted through the Advanced Technology Vehicles Program. Main activities under these programs include demonstrations and pilot projects, technology purchase incentives, industry awareness and capacity-building initiatives, and the negotiation of voluntary GHG reduction agreements with modal associations. The programs have developed a substantial presence in these sectors, and are effectively reducing GHG emissions as many projects near completion. Transport Canada is currently seeking the resources necessary to strengthen all of these programs and to place them on a more sustainable footing.

Since 1999, Transport Canada's Moving on Sustainable Transportation (MOST) program has funded innovative, smaller-scale projects to expand the range of sustainable transportation options for Canadians. The program aims to improve air quality and health, and realize other benefits by supporting the work of non-profit organizations across Canada.

The following box provides some high-level performance indicators that will be used to track progress towards the department's sustainable transportation goals.

Indicators of progress

  • Reduction of total GHG emissions per mode (road gasoline, road diesel, aviation fuel, rail diesel, marine fuel)
  • Average fuel efficiency for light duty vehicles, light trucks, heavy duty trucks, locomotives and aircraft
  • Reduction of freight GHG emissions by tonne-km for light trucks, medium trucks, heavy trucks, locomotives and vessels
  • Average air pollutant per light-duty vehicle (where data is available)
  • Decreased in air pollutant per tonne-km for for-hire-trucking, marine, rail and air
  • Reduction of GHG emissions from Transport Canada activities
  • Number of Transport Canada contaminated sites that have undergone remediation or risk management

Environmental Responsibility: Challenges and Opportunities

Transportation accounts for about a quarter of our GHG emissions, and two-thirds of transport emissions originate in our urban areas. The sector also accounts for about 52% of all nitrogen oxides emissions, 40% of carbon monoxide, 20% of volatile organic compounds, 5% of sulphur oxides and 5% of particulate matter - the major constituents of urban smog.

Multiple factors from passenger and freight transportation affect the interplay with the environment, specifically in urban areas, where about 80 per cent of Canadians reside. To encourage sustainable transportation, Canada has relied significantly on education and awareness, voluntary measures and initiatives that promote new technologies and best practices. These actions are important, but much more is needed to ensure that the environment is more fully incorporated into transportation decisions. Furthermore, there is a growing need to address systemic challenges and opportunities - to make certain that there is greater integration where possible. Efforts to influence both transportation supply and demand will be critical in terms of forging a more sustainable transportation system - one that is safe and secure, efficient and respectful of the environment.

Additional emphasis is needed on what can be achieved through other measures such as transportation demand management, transit pass, road pricing/user pay systems, parking policies and alternatives to the single occupancy vehicle. Future efforts will also increasingly focus on ensuring the efficiency of the urban transportation system, relieving congestion and improving air quality.

Influencing the choices of transportation users and shippers is a major long-term challenge. Federal leadership is key to achieving real progress in improving modal use and choice. A continuing challenge is to acknowledge the issue of full-cost pricing by identifying and measuring both financial and external costs of transportation, and how best to integrate them in decision-making. Transport Canada will also continue to advance new technologies in support of sustainable transportation and will investigate opportunities to expand its role in research and development for sustainable transportation. The federal government will continue to promote vehicle fuel economy. Transport Canada will champion the integration of technology options for cleaner or more efficient vehicles/fuels in all modes, and optimize the overall efficiency of transportation systems.

The ultimate challenge is to adopt a systemic approach to achieve a sound integration of environmental issues into transportation policy. To this end, Transport Canada will take an integrated and comprehensive approach in developing and managing policies and programs to address government-wide sustainable development and environmental issues as they relate to the transportation sector. The department will work with its partners and stakeholders, to overcome the challenges outlined above.

Environmental Responsibility: Program Priorities

To promote an environmentally responsible transportation system that contributes to Canada's sustainable development objectives, Transport Canada will focus its efforts on key activities and initiatives that support the three program priorities of Climate Change and Clean Air, Environmental Assessment and Environmental Protection and Remediation.  CLIMATE CHANGE AND CLEAN AIR

This is Transport Canada's sixth priority for the planning period.

The Government of Canada is committed to the development and implementation of a Made-in-Canada Plan for reducing greenhouse gases and ensuring clean air, water, land and energy for Canadians. The Made-in-Canada approach will be effective, realistic and focus on achieving sustained reductions in emissions in Canada while ensuring a strong economy. The Government will develop solutions that have clear environmental benefits to Canada and improve our ability to market new technologies around the world.

Transport Canada plays a lead role on climate change and clean air policy as it relates to transportation. It works with other government departments and stakeholders to develop and analyze new policies and measures for reducing emissions from the transportation sector. In 2005-06, the department proposed new programs in support of greenhouse gas reduction and will continue to examine new opportunities in 2006-07.

On April 5, 2005, the Government of Canada and the Canadian automobile industry signed an agreement to act on climate change. Under the agreement, carmakers will voluntarily work to reduce annual GHG emissions from light-duty vehicles by 5.3 Megatonnes (Mt) in 2010. The agreement reached gives consumers fuel-saving choices, focuses on immediate action to achieve GHG reductions and provides a cost-effective solution for government, industry and consumers. Natural Resources Canada, Transport Canada, Environment Canada and Industry Canada were actively involved in this issue.

A joint government-industry monitoring committee has been established to track the Canadian automotive industry's performance under this Memorandum of Understanding (MOU). Transport Canada, Environment Canada and Natural Resources Canada are represented on this committee. Emissions reductions will be monitored year by year, with interim goals in the years leading up to 2010. The annual reports from the committee will be available to the public as is the MOU.

At the same time, the government is examining other ways to promote the production and purchase of more environmentally friendly vehicles. This includes the possible use of economic instruments, such as feebates and rebates. Work conducted by the Transport Canada-led interdepartmental working group on economic instruments will be important in terms of positioning the government to promote further advances in vehicle fuel-economy.

The Advanced Technology Vehicles Program (ATVP) evaluates advanced technology vehicles to determine their role in meeting the program objectives and to showcase these technologies demonstrating to Canadians their benefits in achieving a sustainable transportation future for Canadians. Some findings of the program point to new construction materials and methods, such as using recycled materials, lightweight material including aluminum, magnesium and plastics, playing a major role in reducing fuel consumption. The ATVP is also examining the use of advanced and low carbon fuels. The introduction of lower sulphur gasoline in 2005, and lower sulphur diesel in 2006, will play a major role in reducing emissions in years to come. In 2006-07, the ATVP will continue its public outreach programs with a minimum of 10 events and the addition of 10 new advanced technology vehicles. The program will continue to participate in interdepartmental efforts to support the recent GHG emission reduction memoranda of understanding with vehicle manufacturers' associations. The knowledge gained from the monitoring and testing of advanced technologies as they enter the marketplace will be one key contribution to these efforts.

The Motor Vehicle Fuel Consumption Program's (MVFCP) goal is to promote public awareness of vehicle fuel efficiency. By encouraging the use of standardized fuel consumption labels on each new vehicle, and by publishing the same information in the annual Fuel Consumption Guide booklet, the MVFCP assists the consumer in making an informed energy efficient decision. Another goal is to monitor the average fuel consumption of the new Canadian fleet by collecting detailed motor vehicle fuel economy and engine technology data and by testing selected new model vehicles. In addition, the program encourages improvements in the fuel efficiency of the new vehicle fleet by setting annual company average fuel consumption (CAFC) goals for the motor vehicle industry. Manufacturers and importers strive to meet or improve upon the CAFC goals established under the voluntary program. Additional incentives are also available to encourage the industry to increase the production of vehicles that operate on alternative fuels. In 2006-07, the MVFCP will continue to provide the services listed above. An additional 35 to 50 vehicles will be purchased for compliance testing and improvements will be made to the data submission and processing component of the MVFCP.

Transport Canada has partnered with municipal and regional governments to demonstrate innovative and integrated approaches to reducing GHG emissions from the urban passenger sector through the Urban Transportation Showcase Program. These showcase demonstrations are encouraging modal shifts away from single occupancy vehicles by offering residents a wider variety of sustainable transportation options. The lessons from these demonstrations and from other successful Canadian case studies are being disseminated to encourage broader uptake of successful approaches.

As we know, the Arctic is vulnerable to climate change and its impacts. Historically, the harsh environment has made resources difficult to access. In the past half-century however, technological advances and demand for resources have increased the rate of development and climate change has become a major force shaping the future of the North. While an increase in accessibility and marine activity will require greater support and pose increased environmental risks, it will also lead to social and economic development through increased investment, infrastructure, and improved access to goods, services and supplies. Under the PAME (Protection of the Arctic Marine Environment) working group, Transport Canada, Finland and the United States will lead a three-year study called the "Arctic Marine Shipping Assessment". The final report is to be presented to the 6th Arctic Council Ministerial in Autumn 2008.  ENVIRONMENTAL ASSESSMENT

This is Transport Canada's ninth priority for the planning period.

During 2005-06 the conduct of environmental assessments pursuant to the Canadian Environmental Assessment Act for projects requiring a Navigable Waters Protection Act approval continued to represent a significant workload for both headquarters and regional personnel. Environmental assessments are underway or completed for many projects, including bridges, dams, liquefied natural gas facilities, mines, aquaculture and hydro-electric plants. In 2006-07, the department will continue to review procedures and develop guidance material with a view to maintaining a high quality of environmental assessment, delivered in an efficient manner.  ENVIRONMENTAL PROTECTION AND REMEDIATION

This is Transport Canada's seventh priority for the planning period.

Beginning in late 2004, Transport Canada launched a Transit Pass Program enabling employees of the 92 federal departments and agencies in the National Capital Region (NCR) to access discounted annual transit passes through payroll deduction or pre-authorized debit payment. With 80 departments enrolled in the program, the NCR program has been a notable achievement. Employee participation has reached 12,000 and the program has stimulated a 5-7 per cent increase in transit ridership among federal employees. The demand to expand this program beyond the NCR has been growing and so, in 2006-07, Transport Canada will work with the Canadian Urban Transit Association (CUTA) and its members to explore the feasibility of offering discounted annual transit passes through payroll deduction to federal employees in other areas of the country.

In 2006-07, Transport Canada will also continue to undertake work detailed in its departmental Contaminated Sites Management Plan. The plan is a Treasury Board requirement that outlines the department's five-year strategy for managing its contaminated sites and identifying suspected contaminated sites. In addition to funding from within the department, the Federal Contaminated Sites Accelerated Action Plan Fund will be utilized to initiate or accelerate assessment work and remediate high-risk sites.