Rail Trends - Railway Association of Canada

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2010

R a il Tr ends

The Railway Association of Canada www.railcan.ca

Member Companies

December 2009

6970184 Canada Ltd

Agence métropolitaine de transport

Alberta Prairie Railway Excursions

Amtrak

ArcelorMittal Mines Canada

Arnaud Railway Company

Barrie-Collingwood Railway

BNSF Railway Company

Burlington Northern (Manitoba) Ltd.

Canadian Pacific

Cape Breton & Central Nova Scotia Railway

Capital Railway

Carlton Trail Railway

Central Manitoba Railway Inc.

Charlevoix Railway Company Inc.

CN

CSX Transportation Inc.

Eastern Maine Railway Company

Essex Terminal Railway Company

Goderich-Exeter Railway Company Limited

Great Canadian Railtour Company Ltd.

Great Sandhills Railway Ltd.

Great Western Railway Ltd.

Hudson Bay Railway

Huron Central Railway Inc.

Kelowna Pacific Railway Ltd.

Kettle Falls International Railway, LLC

Metrolinx

Montréal, Maine & Atlantic Railway, Ltd.

New Brunswick Southern Railway Company Limited

Nipissing Central Railway Company

Norfolk Southern Railway

Ontario Northland Transportation Commission

Ontario Southland Railway Inc.

Ottawa Valley Railway

Québec Gatineau Railway Inc.

Québec North Shore and Labrador Railway

Company Inc.

Roberval and Saguenay Railway Company, The

Romaine River Railway Company

Société du chemin de fer de la Gaspésie

South Simcoe Railway

Southern Ontario Railway

Southern Railway of British Columbia Ltd.

St. Lawrence & Atlantic Railroad (Québec) Inc.

Steam Train HCW

Sydney Coal Railway

Toronto Terminals Railway Company Limited, The

Trillium Railway Co. Ltd.

Tshiuetin Rail Transportation Inc.

VIA Rail Canada Inc.

Wabush Lake Railway Company, Limited

West Coast Express Ltd.

White Pass & Yukon Route

Associate Members

December 2009

Absopulse electornics Ltd

Accuworx Inc.

Administration portuaire de Montréal

AECOM

Alexander Holburn Beaudin & Lang LLP

AllTrain – Training Solutions

BMT Fleet Technology Limited

Bombardier Transportation Canada Inc.

CANAC Railway Services Inc.

Canadian Heartland Training

Canadian Rail Collision and Refurbish Inc

Consolidated Logistic Inc.

Davanac Inc.

Dessau

Ecopower Hybrid Systems Inc.

Entretien Ferroviaire JMSR inc.

Envirotec Services Incorporated

Fairplast Industries (8151 9405 Québec Inc.)

GATX Rail Canada Corporation

HDR Engineering - Ottawa

Hewitt Equipment Ltée

IBI Group

Kenneth R. Peel, Barrister & Solicitor

MD-UN Inc.

MMM Group Ltd

Neptec Design Group

Newalta Industrial Services Inc

Nord-Lock Inc.

Ozark Mountain RailCar

Peck & Hale L.L.C.

PNR RailWorks Ltd.

Quantum Environmental Group – B.C.

Railway 101 Consulting Services

RIVA Moling - Riva Online

RTC Rail Solutions Ltd,

Sandy Cooke Consulting Inc.

Siemens Canada Limited

SNC Lavalin Inc.

Soulanges Railway Services Inc.

Stantec Inc.

Tessco Technologies Inc.

Transportation Certification Services/

Rail Temps Inc

VIdal Street Industrial Park Inc.

The Railway Association of Canada www.railcan.ca

99 Bank Street, Suite 901

Ottawa, ON K1P 6B9

Telephone: (613) 567-8591

Fax: (613) 567-6726

Email: rac@railcan.ca

Cover photo courtesy of CN ISBN 978-0-9809464-4-4

Table of Contents

1 Overview

11 Highlights

12 Public Policy and Taxation

Statistical Highlights

14 Ten-year comparison

15 Freight revenue per ton-mile (tonne-kilometre)

16 Track operated, by provinces and territories

Rail Operations in Canada

17 Plant – track operated and equipment in service

18 Freight transportation

22 Fuel consumed

23 Train statistics

24 Intercity passenger transportation

26 Rail commuter

27 Additions to property

28 Employment

29 Productivity

Financial Highlights

30 Operating income

31 Operating expenses

32 Taxes by category

33 Taxes by jurisdiction

Glossary

Overview

T his year marks the 18th edition of the Railway Association of Canada’s Rail Trends , a ten-year composite of financial and operating statistics that provides a comprehensive review of the business of transporting goods and people by rail in Canada. This review covers virtually all interveners of rail – the

Class 1s, regional freight companies, short lines, intercity passenger, commuter rail and tourist train services. When the RAC published its first edition of Rail Trends in 1993, we reported 24 member companies. Today, the RAC has more than doubled its membership to 53 with most of this growth resulting from the emergence of short lines.

Historically, Canada only had a handful of short line and regional railways. But that changed considerably in 1996 with the introduction of the

Canada Transportation Act which paved the way for the transfer of more than 5,200 track miles (8,500 kilometres) from CN and CP to short line operators. These short lines provide localized rail services to communities and industries across Canada and are often partnered with the Class 1 railways. The short lines have been vital in retaining rail infrastructure and rail freight service in areas where it may have otherwise disappeared. However, this restructuring process continues to evolve as the Class 1s have been reacquiring some light-density trackage in recent years.

In 2007, the RAC created the Associate Members category of membership which includes rail suppliers and industrial rail operators as well as lawyers and consultants. Counting more than 50 organizations, Associate Members benefit from common services already available to the RAC core members.

Ushered in by a weakening economy in the last quarter of 2008, 2009 was a challenging year for rail in Canada. Declines in volumes were widespread, whether it was goods, intercity passengers, rail commuters or tourist train travelers, no segment escaped unscathed. Despite the recession in the North

American economy and the contraction of the global economy in 2009, our industry succeeded in recording a profitable year, but not as profitable as during the past decade. This was achieved by making the necessary changes to operations to adjust to reduced freight and passenger volumes.

The Economy

Global developments had a significant negative impact on the Canadian economy during 2009. The financial crisis intensified in late 2008 and early

2009, putting severe strains on financial markets, including those in Canada,

1

Overview

2 and the world economy experienced a sharp decline in output. By the end of the year, economic recovery had begun.

The Canadian economy, as measured in Gross Domestic Product (GDP), shrank 2.6 per cent in 2009 after growing by a modest 0.4 per cent during

2008. Since 1961, the only other annual declines in GDP were recorded in 1982 (-2.9 per cent) and 1991 (-2.1 per cent).

In 2009, the Canadian economy recovered from a recession, which lasted three quarters starting in the last quarter of 2008. Production was lower in the first half of 2009, remained essentially flat during the summer, and rose sharply in the last four months. The production of goods dropped

9.2 per cent while the production of services edged down 0.1 per cent. All the goods-producing sectors registered lower output, with manufacturing, mining, oil and gas extraction and construction leading the declines.

Canada’s international merchandise trade was significantly affected by the decline of the global economy in 2009. Canada exported $369.7 billion of merchandise to the world, down 24.5 per cent from 2008. During the same period, imports fell 15.5 per cent to $374.2 billion. As a result, the trade balance went from a surplus of $46.9 billion in 2008 to a deficit of $4.5 billion in 2009, the first deficit since 1975, continuing a declining trade balance trend with the world that started in 2004.

Canada’s trade surplus with the United States tumbled to $34.8 billion in 2009 from $89.1 billion in 2008, the lowest level since 1997. The trade deficit with countries other than the United States narrowed to $39.3 billion in 2009 from $42.2 billion in 2008.

The United States represented 63.0 per cent of Canada’s total merchandise trade (exports and imports combined) in 2009, down from 65.7 per cent in 2008 and 71.1 per cent in 2005. Exports to the United States declined 28.2 per cent to $269.5 billion, led by falling prices of energy products and lower demand for automotive products. Imports fell 17.8 per cent to $186.7 billion, reflecting the weakness of automotive product imports.

For the first time, countries other than the United States accounted for one quarter of Canada’s exports, up from 16.2 per cent in 2005.

Overall, the consumer price index (CPI) increased only marginally by 0.3 per cent in 2009, compared to a 2.3 per cent average increase for 2008. The low percentage increase in the CPI was the lowest since 1994 and reflects a

13.5 per cent decrease in overall energy prices during 2009.

The Canadian dollar began 2009 around U.S. $0.83 but declined against the U.S. dollar to reach a low of U.S. $0.77 in March. By October,

Overview it rose to a high of U.S. $0.98 before finally settling around U.S. $0.95 in

December 2009. The average value of the Canadian dollar against the

U.S. dollar in was $0.876.

Tourism expenditures, including those on transportation, fell 4.4 per cent in 2009. The number of Americans visiting Canada fell 9.2 per cent and the number of foreign visitors other than from the United States fell 12.5 per cent. Overall, total international travel to and from Canada fell 8.8 per cent in 2009.

Industry Workload

The Canadian rail industry’s workload in 2009 was significantly impacted by the global economic slowdown. A key measurement of the industry’s workload is revenue ton-miles (tonne-kilometres). A revenue ton-mile is the movement of one revenue-producing ton of freight the distance of one mile. The industry’s workload shrank to 210.9 billion RTM (307.9 billion RTK) in 2009 from 237.3 billion RTM (346.5 billion RTK) in 2008, a decrease of 11.1 per cent year-over-year. In fact, 2009’s workload was the smallest of the past decade and was 4.4 per cent lower than the 2000 workload of 220.7 billion

RTM (322.2 billion RTK).

Two other industry workload measures are carloads originated and tons

(tonnes) originated. Both these workload measures were down from 2008 levels, 15.5 per cent and 15.6 per cent respectively. Compared to a decade ago, carloads originated were down 19.0 per cent and tons (tonnes) originated contracted 18.0 per cent.

On a percentage basis, the RTM (RTK) workload measures fell less severely than carloads originated and tons (tonnes) originated in 2009 compared to the year earlier. This is explained by the fact that average haul grew

3.1 per cent from 2008 to 2009, lessening the impact of the downturn on the RTM (RTK) workload.

The “Carloads originated by commodity grouping” on page 20 provides us with the year-over-year fluctuations in the number of carloads by major commodity grouping. Note that with the exception of Agriculture and

Manufactured & Miscellaneous, the remaining commodity groupings experienced declines from 2008 volumes. The most severe declines occurred in

Minerals, Metals and Intermodal.

Compared to a decade earlier, 2009 recorded gains in Agriculture, Food

Products, Manufactured & Miscellaneous and Intermodal. With the exception of Intermodal, these gains paled when compared to the declines in

3

Overview

4 the remaining commodity groupings, particularly Coal, Minerals, Forest

Products and Machinery & Automotive. Counts for 2009 Intermodal carloads were 130 thousand higher than 2000, however 2009 also marked the first traffic decline of the decade, Intermodal counts actually shrank by

106 thousand carloads compared to 2008.

Safety

The industry achieved noteworthy improvements in its safety statistics in

2009, by both freight and passenger rail.

Compared to 2004, freight rail lowered the number of federally and provincially-regulated freight rail-related accidents by a third, from

1,681 accidents in 2004 to 1,121 accidents in 2009. The accident rate, representing the number of freight train accidents per billion gross tonmiles of workload, fell to a five-year low of 2.8 in 2009 from 3.8 in 2004, an impressive 26.3 per cent improvement.

Passenger rail recorded 67 train accidents in 2009, down from 80 accidents in 2004. The accident rate for passenger rail is determined by calculating the number of accidents per million intercity passengers and rail commuters. The number of accidents per million passengers/commuters tumbled to 0.95 in

2009 from 1.35 in 2004, a remarkable 29.6 per cent decline.

Rail Accidents and Accident Rate

1,800

1,600

1,400

3.8

3.6

3.5

3.2

2.9

2.8

2.3

1,200

1,000

1.1

2004 2005

Freight train accidents

2006 2007 2008 2009

Freight train accidents per billion gross ton-miles

0

4.5

3.4

1800

4.500

1600

3.375

1400

2.250

1200

1.125

1000

0.000

Overview

Operating Revenues and Expenses

Industry operating revenue totalled $9.6 billion in 2009 representing a $1.6 billion or 14.3 per cent drop compared to 2008. After experiencing gains each year since 2000, the industry experienced its first decline of the decade although still outpacing year 2000 operating revenue of $8.0 billion by

$1.6 billion or 20.0 per cent.

Operating revenue is comprised of three components, freight, passenger and other revenue. Freight revenue of $8.4 billion in 2009 was down

$1.5 billion or 15.2 per cent from 2008 and was the lowest since 2005.

Passenger revenue, representing revenue from intercity, rail commuter and tourist trains, amounted to $627 million in 2009, a drop of $34 million or 5.1 per cent from the prior year. Other revenue totalled $539 million, a decrease of $40 million or 6.9 per cent year-over-year. Freight companies earned 97 per cent of this category of revenue. Other revenue represents revenue for services provided to rail passenger and rail commuter companies, as well as switching, demurrage, miscellaneous rentals and other miscellaneous rail revenue.

Compared to ten years ago, 2009 freight revenue was up $1.2 billion or

16.7 per cent, passenger revenue virtually doubled and other revenue rose

$61 million or 12.8 per cent.

Two factors were largely responsible for the 15.2 per cent reduction in freight revenue from 2008 to 2009. Firstly, lower freight volumes in most markets due to economic conditions in the North American and global economies resulted in an 11.1 per cent reduction in the RTM (RTK) workload. Secondly, revenue per RTM was 4.2 cents per RTM (2.87 cents per RTK) in 2008 compared to only 4.0 cents per RTM (2.74 cents per RTK) in 2009, a drop of 4.8 per cent. Revenue per RTM is a measurement of yield and is defined as revenue earned on the movement of a ton of freight over one mile.

The lower revenue per RTM (RTK) was due in part to reductions in fuel surcharges caused by year-over-year fuel price decreases combined with lower fuel consumption volumes. To illustrate, the cost of diesel fuel fell

30.5 per cent in 2009 compared to 2008 and fuel consumption shrank by 14.4 per cent during the same period. Fuel surcharges are intended to enable railways to adjust rates more quickly as fuel prices change and to provide customers with surcharges that are more closely tied to current fuel prices. Fuel surcharges are recorded to freight revenue.

By comparison to a decade earlier, the industry’s 2009 freight revenue grew by 16.7 per cent. This result was due to a 4.4 per cent smaller work-

5

Overview

6 load, as measured in RTM (RTK), which generated 22.0 per cent higher revenue per RTM (RTK) over the same period.

The industry’s operating expenses amounted to $8.4 billion in 2009 compared to $9.2 billion in 2008, a decrease of $815 million or 8.7 per cent. In order to better understand these results we need to isolate the expenses of the freight companies. Freight expenses totalled $7.3 billion in 2009 compared to $8.2 billion in 2008, a reduction of $854 million or

10.4 per cent. The combined effects of an 11.1 per cent contraction in the RTM (RTK) workload and a 0.6 per cent increase in the cost per unit of workload – expense per RTM (RTK), contributed to the 10.4 per cent decrease in freight expenses. Expense per RTM (RTK) inched-up 0.6 per cent from 3.46 cents per RTM (2.37 cents per RTK) in 2008 to 3.48 cents per RTM (2.39 cents per RTK) in 2009.

From 2000 to 2009, the industry’s operating expenses advanced from

$6.5 billion at the beginning of the decade to $8.4 billion in 2009, an increase of $1.9 billion or 29.2 per cent. Looking once again at the operating expenses of the freight companies only, 2009 expenses were $7.3 billion compared to $6.1 billion in 2000, a rise $1.2 billion or 19.7 per cent. Responsible for this 19.7 per cent increase in freight expenses were a 4.4 per cent decline in the RTM (RTK) workload combined with an 18.4 per cent hike in the cost per unit of workload. Freight expense per RTM (RTK) for

2009 was 3.48 cents per RTM (2.39 cents per RTK) compared to 2.94 cents per RTM (2.01 cents per RTK) ten years earlier, representing an increase of

18.4 per cent.

Overview

On a year-over-year basis, 2009 Transportation expenses (excluding fuel) fell $311 million or 13.1 per cent, exceeding the 11.1 per cent reduction in freight workload, the 7.4 per cent drop in intercity passengers and the 1.6 per cent fewer rail commuters in 2009.

Compared to 2008, fuel expenses fell a remarkable $820 million or

40.4 per cent. Two factors were responsible for this result; the quantity of fuel consumed shrank by 14.4 per cent and the price of diesel fuel fell sharply from $4.23 per gallon ($0.93 a litre) in 2008 to $2.94 per gallon

($0.65 a litre) in 2009, a 30.5 per cent price drop. The fact that the 14.4 per cent decline in fuel consumption exceeded the reductions in freight, intercity passenger and rail commuter workloads is indicative of the success of the industry’s ongoing fuel conservation practices.

Maintenance of equipment expenses fell slightly by $9 million or

0.6 per cent and maintenance–of-way and structures expenses declined a more significant $106 million or 6.2 per cent from 2008 to 2009.

General and administrative expenses were the only expense category to experience an increase in 2009 growing by $431 million or 29.2 per cent over 2008. CP’s higher 2009 General and administrative expenses include statutory payments plus a voluntary prepayment of $500 million to its defined benefit pension plan.

Additions to Property

The industry invests in capital programs for the renewal of its basic plant, the acquisition of rolling stock and other investments that contribute to growth opportunities as well as to improving the industry’s productivity and the fluidity of its network.

In 2009, the industry invested $1.5 billion in capital additions to property, representing a $133 million or 9.6 per cent increase over the year prior. Compared to a decade earlier when the industry spent $1.1 billion on capital additions, 2009 expenditures were $464 million or 43.8 per cent greater. Expenditures of $706 million on track and roadway additions represented almost half of 2009’s total expenditures. Track and roadway additions were $18 million or 2.6 per cent higher than 2008 and almost tripled 2000 expenditures of $259 million. The second highest capital additions category in 2009 was rolling stock additions with $317 million.

This category experienced a $27 million or 9.3 per cent hike in spending compared to the previous year and incurred $54 million or 20.5 per cent more expenditures than 2000.

7

Overview

8

Productivity

The key measurement of employee productivity is RTM (RTK) per employee.

In 2009, this measurement deteriorated by 2.9 per cent year-over-year, the direct result of the RTM (RTK) workload diminishing by 11.1 per cent and the slower paced 9.3 per cent contraction of the freight companies’ workforce.

By comparison, the ten-year scenario contains positive results as RTM

(RTK) per employee expanded by 26.0 per cent during this period. The workforce shrank by 24.1 per cent while workload contracted by a much smaller 4.4 per cent. The industry’s long-term investments in people, technology and infrastructure all contributed to this achievement.

Another measurement of productivity is road miles (kilometres) per employee and it is determined by dividing the total miles (kilometres) of first main track of freight companies by the number of employees they employ.

The industry fared well by achieving a 4.3 per cent gain in this productivity measurement from 2008 to 2009 and a 27.3 per cent improvement during the past decade.

Operating revenue per employee is another popular productivity measurement. The industry recorded a 6.7 per cent decline from 2008 to 2009, but a noteworthy 52.0 per cent improvement over the ten-year period since 2000.

As well, the solid long-term gains in employee productivity were achieved by the industry at a reasonable cost. The average annual wage per employee in 2009 increased 0.8 per cent over 2008 and rose 24.0 per cent during the decade from 2000 to 2009.

Another closely watched measurement of productivity is workload per gallon (litre) of fuel consumed. Freight companies reached a record high in

2009 by attaining an average of 545 RTM per gallon (175 RTK per litre) of fuel consumed. Both the year-over-year change and the ten-year change in

RTM per gallon (RTK per litre) of fuel consumed improved by 4.8 per cent.

It is interesting to note that on an industry basis, total fuel consumption in 2009 shrank by 5.9 per cent compared to a decade earlier. During that same period, freight workload contracted by only 4.4 per cent, the number of intercity rail passengers grew 11.6 per cent and the number of rail commuters expanded a significant 40.6 per cent. These gains are achieved through the implementation of fuel-efficiency initiatives, such as scheduling trains based on capacity to minimize congestion, better matching of horsepower to tonnage, improved train handling techniques and the use of fuel-saving devices on locomotives. The single most effective initiative has

Overview been the industry’s ongoing renewal of its fleets as older locomotives are replaced with higher horsepower, more fuel-efficient locomotives.

Productivity gains are also measured in terms of asset utilization. As previously mentioned, freight workload decreased 4.4 per cent from 2000 to

2009 and the number of intercity rail passengers and rail commuters both grew. During this same time, the industry down-sized its locomotive fleet

12.0 per cent, reduced freight car inventory 26.9 per cent and reduced miles

(kilometres) of track operated 2.5 per cent. The industry is certainly doing more with less. However, improved asset utilization cannot be achieved by plant reductions alone. Ongoing plant modernization is another important component and includes upgrading infrastructure, locomotive and freight and passenger car renewal programs as well as investments in information technology.

Passenger Transportation Services

Passenger transportation services represent intercity, rail commuter and tourist train services. Revenue from these three services totalled $627 million in 2009, down $34 million or 5.1 per cent from the year prior. Compared to a decade earlier, passenger transportation services revenue almost doubled in 2009. However, much of this increase was due to companies reporting their financial results in 2009 but not reporting in 2000. Excluding these companies from 2009 for comparability, results in a $32 million or 10.6 per cent increase in revenue over the decade.

Intercity passenger services generated $268 million in 2009, a reduction of $36 million or 11.8 per cent compared to 2008. The same period recorded a 7.4 per cent decrease in the number of passengers which fell from 4.9 million in 2008, a record high for the decade, to 4.5 million in 2009. Compared to a decade earlier when ridership totalled 4.1 million passengers, 2009 was

11.6 per cent higher.

Intercity passenger miles (kilometres) were down 9.3 per cent yearover-year, reflecting the combined effects of a 7.4 per cent lower ridership and a 1.5 per cent drop in the average length of journey. From 2000 to

2009, the average length of journey deteriorated 14.7 per cent from a high of 238 miles (383 kilometres) in 2000 to a decade low of 203 miles

(327 kilometres) in 2009.

VIA represents the majority of Canada’s intercity passenger services, it transported 93 per cent of total intercity passengers in 2009. VIA operates up to 500 trains weekly on 7,665 miles (12,336 kilometres) of track,

9

10

Overview connecting over 450 Canadian communities. Not unlike the freight rail,

VIA also had to deal with the economic recession of 2009. VIA’s passenger revenue slid 11.5 per cent in 2009 compared to the prior year while its passenger miles were down 9.8 per cent. Because the rate of revenue decline was greater than the drop in passenger miles, VIA’s yield or the revenue generated per passenger mile, declined 1.9 per cent. Passenger revenue was affected both by a declining demand for passenger services and by a highly competitive pricing environment as VIA discounted fares throughout the year in order to protect its market share.

During 2009, VIA negotiated improved agreements with the freight railways, thus providing VIA with better access to the national rail infrastructure. These agreements and a revised schedule that better reflects current operating realities resulted in significantly improved on-time performance.

Overall on-time performance climbed eight percentage points to 83 per cent in 2009. In the busy Quebec City – Windsor corridor, on-time performance reached 84 per cent, a 13.0 per cent betterment over 2008.

The Government of Canada provided an additional $407 million investment in passenger rail through the 2009 Economic Action Plan, bringing the total for VIA’s Capital Investment Program to $923 million over the 2007-2011 period. In 2009, capital spending totalled $117 million

(by comparison, the previous two years amounted to $55 million). VIA

Photo courtesy of Matthew G. Wheeler/VIA Rail

Overview proceeded to rebuild and renew its locomotives and passenger cars and began major infrastructure projects throughout the Quebec City – Windsor corridor, as well as station improvements in all parts of its network.

Capital spending will continue to accelerate over the next two years, with over $300 million per year in capital spending planned for 2010 and 2011.

Rail commuter services generated $299 million in 2009 compared to

$270 million a year earlier, representing a $29 million or 10.7 per cent improvement. Commuter trains in British Columbia, Ontario and Quebec carried

66.0 million riders in 2009, down 1.1 million or 1.6 per cent from 2008. It was the first year that ridership recorded a decline since 1997 when the RAC began tracking this statistic. Compared to a decade ago when rail commuters totalled 46.9 million, 2009 experienced an impressive 19.1 million or 40.7 per cent growth in rail commuters. Rail commuter services are contributing to less highway congestion, reduced pollution and better fuel conservation.

Highlights

• A severe, global economic downturn that began in late 2008 impacted the transportation industry as a whole and caused a sharp drop in demand for its services in 2009. Freight workload, as measured in revenue ton-miles (tonne-kilometres) fell 11.1 per cent year-over-year.

The number of passengers travelling on intercity trains experienced a

7.4 per cent reduction in 2009 compared to the prior year. The number of rail commuters fell less sharply during the same period, recording a

1.6 per cent drop in ridership.

• The ten-year statistics fared somewhat better. Freight workload was down only 4.4 per cent compared to 2000 but was the smallest workload of the decade. The number of intercity passengers grew by 11.6 per cent and rail commuter ridership surged 40.7 per cent.

• Total industry revenue of $9.6 billion slid $1.6 billion or 14.3 per cent year-over-year. Freight revenue, the largest component of industry revenue, fell $1.5 billion or 15.2 per cent and was at its lowest level since 2004. The decline in passenger revenue was less severe, down

$34 million or 5.1 per cent from 2008. Other revenue for 2009, almost totally generated by freight rail, experienced a $40 million or 6.9 per cent reduction from the year prior.

• Total operating income of $1.2 billion fell $0.8 billion or 38.6 per cent in 2009 compared to 2008 as the $1.6 billion revenue decline was only partially offset by the $0.8 billion reduction in operating expenses. The industry recorded its lowest operating income of the past decade.

11

Public Policy and Taxation

12

C anada’s railways are an important enabler of economic activity in Canada, moving approximately 70 per cent of freight on a tonne-km basis and over 70 million passengers last year. The country’s strength as an exportoriented trading nation depends on a stable regulatory environment and a competitive taxation system in order to attract investment necessary for future economic growth. Rail is also a green transportation solution and is well positioned to assist efforts in achieving Canada’s environmental performance goals. Rail is the most efficient form of freight surface transportation as it can move one tonne of freight more than 180 kilometres on just one litre of fuel.

Canadian railways continue to face a significantly higher tax burden than their U.S. competitors. The federal government took a step towards improving the taxation environment for rail in the 2008 Federal Budget by increasing the capital cost allowance (CCA) for locomotives from 15 to 30 per cent.

However, more needs to be done with respect to fuel, excise, property, capital and income taxes in order to have a true levelling playing field with U.S. rail. A competitive taxation system will allow Canadian rail to renew their locomotive fleet and rolling stock at a more effective pace and to increase capital investments, thereby improving productivity and environmental performance.

The 2009 Federal Budget Plan announced a $4 billion Infrastructure

Stimulus Fund which is to be allocated by March 31, 2011. To date, $18 million was announced, in partnership with the Government of New Brunswick, to improve New Brunswick Southern Railway infrastructure. Further, in

October 2010, the Federal Government and the Government of Ontario announced a $30 million infrastructure investment in the Huron Central line.

Additional short line infrastructure proposals, totalling $9 million, in Ontario have been presented to the federal and Ontario governments.

On the public policy front, the federal government continues efforts in developing the Ontario-Quebec Continental Gateway and Trade Corridor and the Atlantic Gateway . This focus on improving trade flows and the competitiveness of Canada’s multi-modal transportation are welcomed by Canada’s rail community. In addition, the federal government continues to invest in the Asia-Pacific Gateway and Trade Corridor .

The rail community is anticipating the completion of the Federal Rail

Freight Service Review. Over the last two years, freight rail have continued to work with their customers in developing commercial based services offers that meet the requirements of both parties. Clearly a commercial based approach, as opposed to regulatory measure, to optimize service will benefit rail customers and all participants in the rail freight supply chain.

Public Policy and Taxation

The continued success of Memorandums of Understanding to achieve common goals involving safety, security, community relations and the environment demonstrate the rail community’s commitment to public policy management in the best interests of Canadian industry and society. The guiding principles of non-regulation and flexibility have shown positive results and should continue.

Highlights

• The industry’s taxes totalled $853 million in 2009 compared to $930 million a year earlier, a $77 million or 8.3 per cent reduction. All categories of taxes fell or remained flat year-over-year. Compared to a decade earlier, 2009 taxes climbed $213 million or 33.3 per cent.

• Most of the year-over-year decline in the industry’s taxes was due to lower income taxes which fell $58 million or 18.0 per cent, a reflection of the 38.6 per cent drop in operating income. The ten-year snapshot is significantly different as 2009 income taxes were seven-fold greater than

2000’s income taxes of $38 million.

• Locomotive fuel and excise tax was $10 million or 5.3 per cent less than

2008. This reduction falls short of the year-over-year 14.3 per cent reduction in fuel consumption due in part to the timing of the introduction of the carbon tax in British Columbia. The carbon tax took effect in the second half of 2008 whereas 2009 includes the full year impact of this tax. Compared to a decade earlier, 2009 locomotive fuel and excise tax was $1 million or 0.6 per cent less.

• In 2009, payroll taxes were $7 million or 4.5 per cent lower than the previous year as the smaller workforce resulted in a 7.4 per cent reduction in total compensation. Canada and Quebec Pension Plan payments and unemployment insurance premiums both fell $3 million and Health taxes were down $1 million. Payroll taxes dropped $2 million or 1.3 per cent from 2000 to 2009.

I hope that you find “ Rail Trends ” interesting and useful. Your feedback is always welcome.

Sincerely,

J.C. (Cliff) Mackay

President and Chief Executive Officer

The Railway Association of Canada

13

Statistical Highlights

14

Ten-year comparison

2000 2008 2009

Revenue ton-miles (billions) 220.7 237.3

Revenue tonne-kilometres (billions) 322.2 346.5

Miles of road operated (1) 28,889 29,366

210.9

307.9

(2) 28,162

Kilometres of road operated (1) 46,491 47,258 (2) 45,322

Locomotives

Freight cars (000)

Gallons of fuel

Litres of fuel

Employees

(millions)

(millions)

Annual wage per employee ($)

3,115

104

437

1,989

3,046

84

481

2,185

2,742

76

412

1,871

41,118 35,208 32,337

60,795 74,790 75,415

1. Miles (kilometres) of road operated include road over which a railway has operating rights.

2. 2008 “Miles of road operated” (kilometres) were restated.

Percentage change

2009 versus:

2000 2008

-4.4

-4.4

-2.5

-2.5

-12.0

-26.9

-5.8

-5.8

-21.4

24.0

-11.1

-11.1

-4.1

-4.1

-10.0

-9.5

-14.3

-14.3

-8.2

0.8

Freight revenue ($) per ton (tonne)

Freight revenue per ton (tonne) is calculated by dividing freight revenue by total tons

(tonnes) originated.

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009 ton

22.03

22.43

22.89

22.53

23.47

25.60

27.78

28.16

31.24

31.34

Revenue per tonne

24.29

24.73

25.23

24.83

25.87

28.22

30.63

31.04

34.44

34.55

Index

2000=100

100.0

101.8

103.9

102.3

106.5

116.2

126.1

127.8

141.8

142.3

Consumer Price

Index

100.0

102.5

104.8

107.8

109.7

112.2

114.4

116.9

119.6

120.0

Statistical Highlights

Freight revenue (cents) per ton-mile (tonne-kilometre)

Revenue per ton-mile tonne-kilometre

Index

2000=100

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

3.28

3.27

3.44

3.32

3.37

3.64

3.87

3.84

4.20

4.00

2.24

2.23

2.35

2.28

2.31

2.49

2.65

2.63

2.87

2.74

100.0

99.7

104.9

101.2

102.7

111.0

118.0

117.1

128.0

122.0

Freight revenue (cents) per ton-mile

4.50

4.00

3.50

3.00

2.50

2.00

1.50

1.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

15

Statistical Highlights

16

Track operated, by provinces and territories (3)

Alberta

British Columbia

Manitoba

Newfoundland & Labrador

New Brunswick

Nova Scotia

Ontario

Quebec

Saskatchewan

Northwest Territories

Total

Intercity passenger trains

Commuter and tourist trains

Segments terminating in the U.S.

Grand total

Miles

4,277

4,252

2,994

286

721

411

7,069

3,844

5,437

75

29,366

7,751

2,186

154

39,456

2008

Kilometres

6,883

6,843

4,818

459

1,160

661

11,376

6,186

8,750

121

47,258

12,474

3,518

248 (4)

63,498 (4)

Miles

2009

Kilometres

4,234

4,158

2,764

286

721

406

6,851

3,844

4,823

75

28,162

7,824

2,116

154

38,256

6,814

6,692

4,448

459

1,160

654

11,026

6,186

7,762

121

45,322

12,592

3,405

248

61,567

3. First main track only. Excludes second and other main track, passing tracks and crossovers, industrial tracks, spurs and yard tracks.

4. 2008 “Segments terminating in the U.S.” (kilometres) and “Grand total” (kilometres) were restated.

Freight Transportation

Intermodal traffic originated (5)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Trailers

(000)

206

192

214

217

149

112

106

102

101

83

Containers

(000)

1,595

1,636

1,820

1,937

2,010

2,134

2,251

2,334

2,396

2,033

Total

(000)

1,801

1,828

2,034

2,154

2,159

2,246

2,357

2,436

2,497

2,116

5. Reflects both Canadian and U.S. operations of Canadian Class 1 railways. Intermodal units are actual counts of trailers and containers, regardless of size, and are not “twenty-foot equivalent units (TEUs)”.

Rail Operations in Canada

Plant – track operated (6)

Miles

Index

Kilometres 2000=100

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

28,889

28,951

29,087

29,138

30,551

30,380

29,978

29,713

29,366

28,162

46,491

46,591

46,811

46,893

49,167

48,893

48,243

47,816

47,258

45,322

100.0

100.2

100.7

100.9

105.8

105.2

103.8

102.9

101.7

97.5

Equipment in service

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Freight cars Locomotives in service

103,976

102,790

98,001

97,039

99,141

101,606

99,946

92,373

83,984

75,836 in service

3,115

3,142

3,129

3,170

3,234

3,253

3,271

3,165

3,046

2,742

6. First main track only. Excludes second and other main track, passing tracks and crossovers, industrial tracks, spurs and yard tracks. Excludes intercity passenger trains, commuter & tourist trains and segments terminating in the U.S.

Miles of track operated

32,000

31,200

30,400

29,600

28,800

28,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

17

Rail Operations in Canada

Freight Transportation

Carload traffic

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Carloads originated

(000)

4,157

4,017

3,992

4,092

4,212

4,290

4,260

4,196

3,984

3,367

Tons originated

(000)

328,172

321,127

317,432

327,126

337,923

343,464

339,394

337,989

318,688

269,028

Tonnes originated

(000)

297,718

291,326

287,974

296,768

306,563

311,590

307,897

306,623

289,114

244,062

7. Tons (tonnes) per carload: Tons (tonnes) originated divided by carloads originated.

Tons per carload (7)

80

80

80

81

80

80

79

80

80

80

Tonnes per carload (7)

73

73

73

73

73

73

72

73

73

73

Carloads Originated (000)

4,500

18

4,000

3,500

3,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Rail Operations in Canada

Freight transportation

Freight train miles

(000)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

72,453

70,704

72,194

72,873

74,284

76,400

76,451

74,100

71,712 (8)

59,576

8. 2008 “Freight train miles” were restated.

Freight train kilometres

(000)

116,598

113,784

116,185

117,278

119,548

122,953

123,035

119,253

115,409

95,877

Revenue ton-miles

(millions)

220,678

220,374

211,500

221,653

235,114

241,745

243,744

247,709

237,323

210,898

Revenue tonne-kilometres

(millions)

322,157

321,714

308,759

323,581

343,232

352,912

355,831

361,619

346,457

307,880

Revenue ton-miles (millions)

250,000

225,000

200,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

19

Rail Operations in Canada

20

Freight Transportation

Carloads originated by commodity grouping (9)

Agriculture Coal Minerals

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

457,089

452,423

364,754

345,025

412,099

416,473

453,151

454,034

430,292

474,980

370,467

349,992

342,432

327,182

337,592

353,197

321,266

349,983

324,931

277,048

479,240

495,078

601,004

627,288

639,764

657,410

600,823

609,422

574,645

368,631

Fuels &

Chemicals

Paper

Products

Forest

Products

398,466

398,430

403,908

430,662

442,689

433,138

388,035

317,158

253,279

182,395

Food Manufactured &

Products Miscellaneous Intermodal

Metals

282,470

250,153

289,619

284,718

326,020

295,022

362,000

359,982

369,475

273,800

Total

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

445,575

425,976

469,514

474,342

485,197

469,655

470,833

470,876

443,125

401,141

240,624

237,380

274,219

302,994

333,061

333,830

274,092

252,150

228,072

175,693

33,894

38,322

30,391

32,652

40,587

44,169

41,454

41,822

42,365

42,232

68,346

56,269

55,624

51,652

63,890

65,629

66,333

65,923

75,160

79,445

611,765

646,692

691,417

712,377

3,654,848

3,598,153

3,800,170

3,859,303

722,412

769,936

819,552

832,663

4,056,314

4,073,939

4,041,934

3,988,843

847,647 3,784,299

741,807 3,165,295

9. Not all member companies record carloads originated by commodity grouping. The Intermodal counts represent an average load factor that determined the number of carloads reported.

Machinery &

Automotive

266,912

247,438

277,288

270,411

253,003

235,480

244,395

234,830

195,308

148,123

Rail Operations in Canada

Freight Transportation

Revenue from carloads originated by commodity grouping ($millions) (10)

Agriculture Coal Minerals

Forest

Products Metals

2002

2003

2004

2005

2006

2007

2008

2009

2002

2003

2004

2005

2006

2007

2008

2009

732

761

875

948

1,125

1,157

1,161

1,259

Fuels &

Chemicals

777

739

771

804

836

837

902

818

416

405

513

738

676

709

706

502

Paper

Products

502

518

595

642

582

541

531

423

623

645

763

811

764

819

833

525

619

615

798

969

928

780

646

478

364

360

404

429

489

476

531

317

Food Manufactured &

Products Miscellaneous Intermodal

55

58

70

74

81

81

89

94

92

96

93

112

114

116

126

113

1,679

1,760

1,885

2,152

2,377

2,452

2,702

2,273

10. Not all member companies record revenue by commodity grouping.

Machinery &

Automotive

477

460

397

414

433

445

443

337

Total

6,336

6,417

7,164

8,093

8,405

8,413

8,672

7,139

Carloads originated by commodity grouping

15% Agriculture

9% Coal

12% Minerals

6% Forest Products

9% Metals

5% Machinery & Automotive

12% Fuel & Chemicals

5% Paper Products

1% Food Products

3% Manufactured &

Miscellaneous

23% Intermodal

21

Rail Operations in Canada

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

F uel Consumed

Total fuel consumed gallons (000) litres (000)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

437,495

444,245

451,100

458,023

480,499

485,915

486,218

492,125

480,661

411,612

1,988,749

2,019,436

2,050,729

2,082,207

2,184,384

2,209,007

2,210,384

2,237,237

2,185,120

1,871,221

Gross ton-miles Gross tonne-km

(millions) (millions)

401,506

399,457

398,681

415,290

441,467

457,950

459,633

463,356

449,922

397,293

586,140

583,149

582,016

606,263

644,478

668,540

670,997

676,433

656,821

579,990

Revenue ton-miles Revenue ton-km per gallon of per litre of fuel consumed fuel consumed

1.78

1.82

1.65

1.73

1.81

2.38

2.81

3.07

4.23

2.94

520

522

495

510

513

523

527

529

520

545

Cost of diesel fuel per gallon ($) per litre (cents)

167

168

159

164

165

168

169

170

167

175

39.1

40.1

36.2

38.0

39.8

52.5

61.8

67.6

93.0

64.8

22

Fuel consumed in gallons (000)

500,000

450,000

400,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Rail Operations in Canada

Train Statistics

Average: Length of haul/Cars per train

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Miles (kilometres) hauled by transcontinental railways (CN and CP)

Miles

787

789

795

794

787

789

803

807

818

830

Kilometres

1,267

1,270

1,279

1,278

1,267

1,270

1,292

1,299

1,316

1,336

Miles (kilometres) hauled by regional/short line railways

Miles Kilometres

187

162

150

151

161

149

159

151

146 (11)

159

301

261

241

243

259

240

256

243

235 (11)

256

11. 2008 “Miles (kilometres) hauled by regional/short line railways” were restated.

Average cars per freight train

Cars

78

79

79

81

82

87

73

73

74

74

Average cars per freight train

90

80

70

60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

23

Rail Operations in Canada

Passenger Transportation

Intercity passenger transportation

Passenger cars in service

Number of passengers

(000)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

450

421

473

505

465

538

537

538

540

559

4,068

4,112

4,223

4,024

4,181

4,322

4,320

4,478

4,899

4,538

12. 2008 “Passenger kilometres” were restated.

miles

(millions)

Passenger kilometres

(millions)

954

965

992

931

894

919

906

912

986

894

1,535

1,553

1,597

1,498

1,439

1,479

1,458

1,468

1,588 (12)

1,439

Number of passengers (000)

5,000

24

4,500

4,000

3,500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Rail Operations in Canada

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Intercity passenger transportation miles

Passenger train

(000) kilometres (000)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

7,236

7,338

7,406

7,252

7,214

7,415

7,381

7,330

7,414

7,334

11,645

11,809

11,919

11,671

11,611

11,933

11,879

11,796

11,932

11,803

Average intercity passengers per train

132

132

134

128

124

124

123

124

133

122

Average passenger load factor (%)

53

55

54

55

59

57

56

57

57

53

Passenger car miles (000) kilometres (000)

46,945

47,991

50,035

50,087

49,707

49,966

49,400

48,708

49,140

47,290

75,549

77,232

80,523

80,607

79,995

80,412

79,501

78,388

79,083

76,106

Average length of journey miles kilometres

238

238

238

226

219

217

214

209

206

203

383

383

383

364

352

349

344

336

332

327

On-time performance (%)

70

81

84

77

75

83

83

85

84

73

25

26

Rail Operations in Canada

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Passenger Transportation

Rail commuter miles

Commuter passenger

(000) kilometres (000)

2002

2003

2004

2005

2006

2007

2008

2009

199,957

204,198

214,089

224,833

237,781

247,066

256,123

245,942

Average rail commuters per train

321,801

328,626

344,544

361,834

382,672

397,615

412,190

395,806

Commuter train miles (000) kilometres (000)

2,592

2,724

2,749

2,820

2,730

2,808

2,832

2,876

4,171

4,384

4,425

4,539

4,394

4,518

4,558

4,628

Rail commuters (000)

British Columbia, Ontario and Quebec

284

260

287

283

300

339

340

301

46,918

47,968

50,132

52,688

54,905

58,235

60,634

63,393

67,052

65,962

Rail commuters (000)

70,000

60,000

50,000

40,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Rail Operations in Canada

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Additions to Property

Additions to property ($millions)

Track & roadway

Buildings & related machinery

& equipment

259

331

374

333

364

582

613

618

688

706

334

236

310

202

188

189

212

255

189

257

Rolling stock

263

315

208

313

337

416

352

350

290

317

Intermodal

30

39

48

30

29

34

32

56

16

25

Work equipment

& roadway

Signals, communications

& power

95

64

42

47

38

95

74

44

79

72 equipment machines equipment

21

13

34

41

36

31

44

41

68

42

Other

39

15

28

18

22

72

23

16

14

21

Terminals & fuel stations

11

27

37

43

26

24

33

44

17

24

Total additions

1,060

1,075

1,015

1,006

1,043

1,394

1,408

1,399

1,391

1,524

27

Rail Operations in Canada

Employment

Employment

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Total compensation

($millions) (13)

2,498

2,474

2,392

2,412

2,387

2,548

2,535

2,566

2,633

2,439

Average number of employees

41,118

39,511

37,296

36,599

35,736

35,389

34,558

34,938

35,208

32,337

Average annual wage per employee

60,795

62,675

64,229

65,901

66,804

71,994

73,356

73,440

74,790

75,415

($)

13. Compensation includes salaries and compensation paid and excludes company paid benefits such as Canada/Quebec

Pension Plan, Unemployment Insurance and health taxes.

28

Average number of employees

50,000

40,000

30,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Rail Operations in Canada

Productivity

Revenue ton-miles per employee

Revenue ton-miles per employee (000)

Revenue tonne-kilometres per employee (000)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

5,878

6,167

6,319

6,764

7,352

7,679

7,963

8,045

7,625 (14)

7,404

8,581

9,003

9,225

9,874

10,733

11,210

11,625

11,745

11,132 (14)

10,809

14. 2008 Productivity statistics were restated.

Road miles per employee

0.77

0.81

0.87

0.89

0.93

0.96

0.98

0.96

0.94

(14)

0.98

Road kilometres per employee

1.24

1.30

1.40

1.43

1.50

1.54

1.58

1.54

1.51

(14)

1.58

Revenue ton-miles per employee (000)

8,500

7,500

6,500

5,500

4,500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

29

Financial Highlights

30

Operating Income

Operating revenue ($millions)

Freight

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

7,231

7,203

7,266

7,369

7,931

8,794

9,430

9,516

9,957

8,433

Passenger (15)

323

346

389

364

386

576

622

624

661

627

Other

478

503

487

484

506

570

561

564

579

539

Total

8,031

8,052

8,142

8,217

8,823

9,940

10,613

10,704

11,197

9,599

15. Federal, provincial and municipal funding of $435 million in 2009 for Intercity passenger and commuter services is excluded.

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Operating income ($millions)

Income

1,576

1,434

1,428

1,484

1,704

2,164

2,402

2,209

2,030

1,247

Financial Highlights

Operating expenses

Operating expenses ($millions) (16)

Transportation

2000

2001

2002

2003

2004

2005

2006 (17)

2007

2008

2009

1,920

1,997

2,037

2,086

2,180

2,241

2,224

2,337

2,376

2,065

Fuel

777

798

734

781

862

1,159

1,367

1,513

2,032

1,212

Maintenance of equipment

1,416

1,476

1,300

1,280

1,290

1,382

1,575

1,634

1,564

1,555

2000

2001

2002

2003

2004

2005

2006 (17)

2007

2008

2009

Maintenance-of-way and structures

1,254

1,227

1,374

1,421

1,421

1,493

1,408

1,549

1,718

1,612

General and administrative

1,088

1,120

1,269

1,165

1,366

1,501

1,637

1,462

1,477

1,908

16. Charges for restructuring, relocation and write-down of assets are excluded.

17. CN restated 2006 Maintenance of equipment and Maintenance-of-way and structures expenses.

The net impact on 2006 Total operating expense was nil.

Total operating expense

6,455

6,618

6,714

6,733

7,119

7,776

8,211

8,495

9,167

8,352

31

Financial Highlights

32

Taxes by category ($millions)

Total

Locomotive fuel & excise tax

Property tax

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

640

654

654

742

698

716

1,084

989

930

853

178

164

168

173

174

180

188

188

187

177

134

139

143

139

141

155

155

154

152

152

Other Capital tax sales & customs Income Payroll tax duties tax taxes

103

104

118

101

90

98

102

97

99

97

37

58

42

64

25

31

21

15

14

14

38

36

27

110

118

101

471

381

323

265

150

153

156

155

150

151

147

154

155

148

Payroll taxes ($millions)

Canada/Quebec

Pension Plan

Unemployment

Insurance

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

71

72

72

75

77

74

58

65

68

73

37

36

32

33

33

30

52

47

45

42

Health

Taxes

40

41

43

40

42

43

43

46

45

44

Total

150

153

156

155

150

151

147

154

155

148

Financial Highlights

Taxes by jurisdiction ($000)

Alberta

British Columbia

Manitoba

Nfld. & Labrador

New Brunswick

Nova Scotia

Ontario

Quebec

Saskatchewan

Northwest Territories

Federal

Total

Alberta

British Columbia

Manitoba

Nfld. & Labrador

New Brunswick

Nova Scotia

Ontario

Quebec

Saskatchewan

Northwest Territories

Federal

Total

Locomotive fuel

& excise tax

2008

10,553

0

0

2009

4,458 4,066

20,565 26,230

9,376

0

1,477

0

1,138

0

30,613 24,301

4,735 4,984

36,011 38,732

0

78,755 68,569

Fuel tax per litre

(cents)

2009

1.5

3.0

6.3

0.0

4.3

0.0

4.5

3.0

15.0

11.4

4.0

Property tax

2008 2009

11,153 12,778

37,035 37,771

13,654 13,588

69 65

1,463

1,754

1,500

2,518

38,250 37,517

33,295 32,843

15,558 13,649

71 96

0 0

187,168 177,396 152,302 152,325

Other sales tax

2008

0

2009

0 0

24,848 21,659

10,444 10,402

0 0

22

1,598

0

0

30,474 30,441

9,663 10,733

6,408 6,035

0

15,098 17,598

0

13

3,323

0

252

206

4,238

5,009

872

0

162

Capital tax &

customs duties

2008 2009

Income tax

2008 2009

2,926

0

0

2

0

286

5,594

4,894

19,396 15,029

24,666

12,200

0

4,462

1,786

35,466

12,296

353

0

0

1,740

413

29,059

14,093

-179

0

15,966

226

420 196,376 204,793

0

0

98,554 96,868 14,075 13,943 322,840 265,480

33

34

Glossary

Average length of haul: Calculated by dividing revenue ton-miles by revenue tons.

Average cars per freight train: Calculated by dividing loaded and empty car miles by train miles.

Container: A large, weatherproof box designed for shipping and/or transferring freight between rail, truck or marine modes.

Specialized containers are equipped with heating and cooling capabilities for perishable products.

Gross ton-miles (Gross tonne- kilometres): The sum of ton-miles handled, calculated using the total weight of the trailing tonnage (both loaded and empty cars) of the trains moved. It excludes the weight of the locomotives pulling the trains.

Intermodal service: The movement of trailers or containers by rail and at least one other mode of transportation. Import and export containers generally are shipped via marine and rail. Domestic intermodal service usually involves truck and rail.

On-time performance: The ability to meet customer requirements as to pick-up and delivery schedules.

Reload centre: A transfer facility enabling the railway to expand market share through truck-to-rail service.

Revenue ton-miles (Revenue tonnekilometres): The sum of ton-miles handled, calculated using the total weight of the commodities in the cars of the trains moved.

It excludes the ton-miles involved in the movement of railway materials or any other non-revenue movement.

Scheduled railroad: A railroad that handles individual car movements according to a specific plan where possible and manages expectations to meet agreed upon customer commitments.

Track operated: First main track only.

Excludes second and other main track, passing tracks and crossovers, industrial tracks, spurs and yard tracks.

Trip plan: A detailed chain of train handling events describing car handling from shipper’s door to consignee’s door. Trip plans are expressed in hours and are tailored for each specific customer location.

Unit train: A train with a fixed, coupled consist of cars operated continuously in shuttle service under load from origin and delivered intact at destination and returning usually for reloading at the same origin.

Conversion factors miles to kilometres tons (short) to metric tonnes gallons to litres revenue ton-miles to revenue tonne-kilometres kilometres to miles metric tonnes to tons (short) litres to gallons revenue tonne-kilometres to revenue ton-miles

1.6093

0.9072

4.5461

1.4599

0.6214

1.1023

0.2200

0.6850

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