May 1, 2001
The Secretary
Canadian Transport Agency
15 Eddy Street
Hull, Quebec
K1A 0N9
Dear Sir/Madam:
The Alberta Association of Municipal Districts and Counties (AAMD&C) represents the
elected councils of Alberta's 67 rural municipal governments. Our mandate is to represent
the interests of Alberta's rural local governments, and to strengthen their ability to provide
effective and efficient services to their ratepayers, thereby enhancing the quality of life of all
rural residents. Now in our 91st year, we are justifiably proud of our long history of
representing not only rural local governments, but also the broad interests of the more than
400,000 citizens who make their homes in rural Alberta.
The efficiency of Canada's transportation system is of critical importance to our member
municipalities and the citizens they serve. Rural Albertans rely heavily on air, rail and road
networks to allow them to deliver their goods and services to market, as well as to remain
socially and culturally connected to the broader community.
Our comments on the following pages will focus on those aspects of transportation policy
which our members have told us are most critical to them: road infrastructure, rail
abandonment, rail competitiveness, and the viability of regional airport facilities.
Road Infrastructure
Canada is the only nation in the developed world in which the national government does not
play a significant role in supporting major highway infrastructure. Virtually all of Canada's
major competitors in the global economy have recognized the importance of a national
commitment to a high quality highway system; for example, the United States federal
government commits some $35 billion annually to highway projects. The growing gap in
productivity between Canada and the U.S. will only continue to increase if our national
government does not take immediate steps to make meaningful contributions to our nation's
highway infrastructure..The AAMD&C believes that there is a pressing need for a National Highways Strategy, and
corresponding federal funding to support that strategy. A great deal of work has been done
in recent years to identify possible priorities in this area, and initial studies have suggested
that the cost of properly upgrading our existing national highway system exceeds $17 billion.
While current federal initiatives like the Infrastructure Canada program do provide needed
financial support to Canadian local governments, the dollars committed under these
programs are nowhere near sufficient to address the required investment merely to bring
existing infrastructure up to acceptable standards, let alone do any meaningful expansions or
improvements to the system.
The lack of federal financial support for highways infrastructure is all the more perplexing in
light of the massive revenues taken in by the Government of Canada each year through fuel
taxes. Federal fuel tax revenues are estimated at $4 billion per year, while federal funding
support for highway infrastructure absorbs only a tiny fraction of these funds.
The AAMD&C believes that the Government of Canada must undertake a comprehensive
and immediate review of Canada's road infrastructure requirements, in concert with
provincial and local governments. Through a collaborative and consultative process
involving all three levels of government, we believe that a progressive and urgently needed
National Highways Policy can be developed to guide the future development of Canada's
critical road infrastructure. The CTA should be amended to more clearly reflect the federal
government's responsibilities in these areas.
Rail Abandonment
The AAMD&C is also greatly concerned with the condition and viability of local road
networks throughout rural Canada. While local governments face a number of challenges in
financing the construction and maintenance of their road networks, one of the critical factors
impacting these networks is the ongoing migration of traffic from rail lines onto local roads.
Federal policy initiatives over the past decade or more have significantly encouraged this
trend, and municipalities have been left to deal with the implications, in terms of increased
traffic on local roads, increased maintenance costs for those roads, and increased demands
for construction or upgrading of these roads to a higher standard.
The AAMD&C welcomes the Government of Canada's initiative in at least partially
offsetting some of these costs through the new Grain Roads program. However, at this point,
it does not appear that the funding available under this program will fully address the
additional costs imposed on municipalities by rail line abandonment. We certainly
encourage the Government of Canada to increase the funding allocated under this program,
and ensure that the program remains in place to address future needs of municipalities
confronting abandonment of local rail lines..The AAMD&C also welcomes the legislative amendments introduced in 2000, introducing
compensation of $10,000 per mile of abandoned rail line for affected municipalities, for 3
years following abandonment. Unfortunately, there is already evidence of "creative"
approaches by rail companies in finding ways to avoid these compensation requirements;
most notably the transfer of lines to short line companies prior to abandonment, and/or the
removal of lines from the list of grain dependent lines in Schedule One of the CTA prior to
abandonment proceedings.
The AAMD&C recommends that the legislative provisions regarding the compensation
provisions be revisited, to eliminate the possibility of this kind of corporate maneuvering,
with a view to ensuring that municipalities affected by rail line abandonment will in fact
receive the compensation which they have been promised as a result of last year's legislative
initiative. One approach which has been suggested, and which bears serious consideration, is
the establishment of a requirement that railway companies transferring grain dependent lines
to short line companies be required to provide the $10,000 per mile compensation in trust for
a period of 3-5 years, to ensure that these funds will be available for affected municipalities if
the line is in fact abandoned within that time frame.
The AAMD&C also has a number of more specific suggestions with respect to the current rail
abandonment process:
 the designation of individual rail lines as "grain dependent" or not should be
subject to regular review, with full consultation with all affected parties. Some
lines may experience significant changes in their dependence on grain traffic due to
changing local economics (e.g. closure of a local mine, etc.), and their status with
respect to "grain dependency" should be re-evaluated at that time.
 railways should be required to clearly identify those rail lines which they consider
"core" lines, and which they fully intend to continue operating into the foreseeable
future. All other lines should be eligible for sale to any parties interested in paying
appropriate market value for that property, and who offer a clear commitment to
continuing the operation of that rail line.
 rail sidings should be protected from abandonment, given their critical importance
to the operation of rail lines.
 The CTA should be amended to clearly require that, once a decision to abandon a
rail line has been made, the line in question should be offered on a first right of
refusal to federal, provincial and municipal governments, followed by adjacent
landowners. Only after all of these parties have declined the opportunity to
purchase the rail line should the property be made available to other interested
purchasers.
 The Act should include specific requirements to notify the Canadian Transport
Agency, shippers, local municipalities, and other affected parties of any impending
transfer of the rail line to a new owner.. The CTA should include specific provisions requiring the rail owner to provide
information to local governments relative to the viability of the rail line and/or
potential viability of a short line operation.
 The CTA should be amended to clearly exclude the value of government funding
for rail line rehabilitation from the net salvage value of the rail line. Recent rulings
on this issue have effectively left taxpayers in affected municipalities paying at
least twice for the rehabilitation of these rail lines: once when the grant was first
provided, and again when the rail line is purchased upon abandonment.
 The CTA should include specific provisions governing the reclamation
requirements relating to abandoned rail lines, requiring rail companies to properly
reclaim these properties prior to completion of abandonment.
Rail Competitiveness
The AAMD&C is a strong supporter of joint running rights as a means of ensuring that
Canadian shippers, particularly prairie farmers, have access to competitive alternatives for
rail service. We have formally supported the Omnitrax/Hudson Bay Railway application for
joint running rights currently before the Canadian Transport Agency, and continue to
advocate an immediate move to implement joint running rights in Canada's rail network.
Regional & Small Airports
The viability of Canada's small airports is of substantial concern to our membership. Many
rural communities, particularly in more remote parts of Canada, rely very heavily on these
airport facilities as their primary link to the rest of Canada, including as a key means of
transporting goods to and from the community.
Since the Government of Canada began divesting itself of the responsibility for operating
these airports over the past decade, the viability of many of these facilities has come into
serious question. Many local communities are now finding themselves forced to make
extremely difficult choices between providing substantial financial subsidization which they
can ill afford to these airport operations, or possibly losing these critical transportation links
to the rest of the country.
The AAMD&C believes that the Government of Canada needs to establish a multi-stakeholder
task force to review the viability of Canada's small and regional airport network,
and develop recommendations on maintaining these critical infrastructure assets. Without
prejudging the outcome of such a review, we strongly believe that there is a clear need for
meaningful federal funding support for Canada's small airports. The current Airport Capital
Assistance Program (ACAP) has provided much needed support, but does not include
sufficient funds to meet the overall financial requirements of Canada's small airports..Another item of substantial concern is the proposed new emergency response regime as
outlined in CAR308. The AAMD&C does not support the imposition of new financial
requirements on local airport authorities and the municipalities which often support these
operations, particularly when the Government of Canada did not require the same standard
of performance of itself when it was responsible for the administration of these facilities. As
a general rule, the AAMD&C believes that all federal legislation should include provisions
requiring the Government of Canada to compensate provincial and local governments for
any additional costs incurred as a result of new standards or requirements imposed by the
federal government.
In closing, I would note that the AAMD&C's primary concern in addressing the various
issues outlined in this submission is our desire to ensure that rural Canadians have access to
an efficient, effective and affordable transportation system. We believe that the various
recommendations we have provided will result in a more competitive and efficient rail
system, a more productive and reliable highway network, and an airport system which
ensures that rural and remote communities have access to services which are taken for
granted by citizens in this country's metropolitan areas.
Thank you for your consideration of our recommendations. We wish you well in your
important deliberations.
Yours truly,
Jack Hayden
President
JH/gs
cc: Hon. Ed Stelmach, Alberta Minister of Transportation
Federation of Canadian Municipalities
Saskatchewan Association of Rural Municipalities
Association of Manitoba Municipalities