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SECTION II - ANALYSIS OF PROGRAM ACTIVITIES BY STRATEGIC OUTCOME

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

Resource allocation to this strategic outcome for 2006-07 ($ thousands):

Planned Spending	Total Authorities	Actual Spending
$439,234	$466,454	$429,185

Note: The spending by Strategic Outcome includes a reallocation of departmental administration.

As displayed in the Estimates, the program activities under this strategic outcome include "Policies, programs and infrastructure in support of a market-based framework" and four Crown corporations: Jacques Cartier and Champlain Bridges Inc., the Federal Bridge Corporation, Marine Atlantic Inc. and VIA Rail Canada Inc. This report provides information on the first program activity only. As per section 122 of the FAA, the Crown corporations must submit annual corporate plans to the Minister of Transport, Infrastructure and Communities and are not subject to reporting through this document.

This program activity encompasses the development of transportation policies, legislation, programs and infrastructure support in such a manner that competition and market forces guide 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 of Canadians. Contributing activities include monitoring and analysis of the Canadian transportation system; annual reporting on the health of the system; economic studies; and the development of new policies. Transport Canada also administers airport, port, highway and bridge subsidy programs and performs landlord and monitoring functions for ports, airports and air navigation system sites. Under the infrastructure element of this program activity, Transport Canada negotiates the divestiture of ports, airports and Seaway lands to local interests, and operates airports and ports until their transfer, as well as federally-owned remote airports and remote ports.

Transport Canada's 2006-2007 Report on Plans and Priorities outlined a number of important areas for the department to focus its efforts in contributing to an efficient transportation system. The following section provides highlights of Transport Canada's progress in these areas by program priority.

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

 2.1.1 Market-based Policy Framework

Competition and free market forces stimulate performance and increased productivity. Both public and private sector investments are critical in achieving a competitive, world-class transportation system, but any government interventions should be targeted to situations where market forces are insufficient to achieve desirable outcomes. Transport Canada has been working on several fronts to support a strong and vigorous marketplace framework for our national transportation system. Performance updates concerning some of Transport Canada's activities over the 2006-07 fiscal year follow.

Canada Transportation Act Amendments

The government indicated its intention to proceed with amendments to the Canada Transportation Act based on the former Bill C-44, by dividing the former Bill into three more-manageable pieces of legislation. The International Bridges and Tunnels Act, received Royal Assent on February 1, 2007. It provides the federal government with the legislative authority to ensure effective oversight of the existing 24 international vehicular bridges and tunnels and nine international railway bridges and tunnels, as well as any new international bridges or tunnels built in the future. Bill C-11 contains amendments related to the Canadian Transportation Agency, transportation mergers, air travel, rail passengers, railway noise and the grain revenue cap. It was referred to the Standing Senate Committee on Transport and Communications on March 28, 2007, and followed normal Parliamentary review culminating in Royal Assent on July 5, 2007. During 2006-07, extensive consultations took place on a proposed third Bill which would improve the provisions aimed at protecting rail shippers from potential abuse of market power by the railways. A Bill is expected to be tabled early in fiscal year 2007-08.

Federal Hopper Car Fleet

In Budget 1996, the government announced its intention to dispose of the federal fleet of railway grain hopper cars. This fleet of 12,400 cars has been used for the transportation of western Canadian grain for the past 30 years. On May 4, 2006, Canada's new government announced it would retain the hopper cars in order to maximize benefits for farmers and taxpayers. Negotiations commenced with Canadian National Railway and Canadian Pacific Railway for new operating agreements. Besides making the railways responsible for the day-to-day operation of the federal hopper cars, the new agreements contain provisions that will see the hopper cars refurbished at the railways' expense. In addition, the railways will continue to maintain the hopper cars to industry standards, and Transport Canada will conduct regular inspections to confirm that maintenance and refurbishment work has been completed. The railways will also pay the government for the use of the cars in non-revenue cap movements. Farmers will benefit from refurbished and upgraded cars as well as new higher capacity cars, which the railways will supply, at their own expense. The agreement with Canadian Pacific Railway Company was signed July 2007. The agreement with Canadian National Railway is expected to be signed in fiscal year 2007-08.

International Air Agreements

A new international air policy (Blue Sky) was adopted in 2006. The announcement was preceded by research, preparation, consultations with a broad range of Canadian stakeholders and approval by Cabinet. Successful negotiations of new or expanded air transport agreements took place with the U.K., Portugal, Algeria, Serbia, Croatia and Japan. Unsuccessful negotiations were held with Venezuela. An important dialogue with the European Commission towards the negotiation of a Canada-European Union comprehensive air services agreement began with an exploratory meeting at the level of officials.

Canada Airports Act

Bill C-20, the proposed Canada Airports Act, was tabled in June 2006, following an extensive series of consultations with stakeholders, and provincial and territorial governments. Additional consultations were undertaken with a view to seeking consensus on means to address any outstanding issues or concerns that became apparent once the actual text of the Bill was available to the public.

Monitoring the National Systems of Airports

Transport Canada has established a system to monitor the financial viability of the National Airports System airport authorities, involving a multi-year approach that has been applied to all 21 airport authorities. As a result, the department now has an airport authority financial database.

Transport Canada is taking a balanced scorecard approach to monitoring airport performance, building to the maximum extent possible on existing financial, statistical and operational databases available. An interim five-year balanced scorecard has been prepared for each of the 21 airport authorities using the existing databases available. The department is now examining the benefits for extending the range of information available, the cost of airing such extra data, and to what extent the extra benefits would justify the incremental costs.

Air Canada Public Participation Act

On June 15, 2006, the Standing Committee on Official Languages released a report recommending that the Government table amendments to the Air Canada Public Participation Act. In its response to the report, the Government committed to tabling legislation that would address the Standing Committee's concerns. On October 18, 2006, the Government introduced Bill C-29, amendments to the Air Canada Public Participation Act that are designed to ensure official language obligations continue to apply to the restructured Air Canada and are restored at its various affiliates. Status of the Bill will be clarified once the next session of Parliament commences.

International Civil Aviation Organization

Canada's Permanent Mission to International Civil Aviation Organization (ICAO) has two roles - as a diplomatic mission and a Transport Canada directorate. The Mission continues to advance the departmental agendas of safety, security, environment and governance, engaging both Transport Canada and Department of Foreign Affairs and International Trade with respect to governance and political/diplomatic concerns. Canada's interventions at ICAO had, and continue to have, a positive effect: transparency in the safety audits, the implementation of guidelines for the carriage of liquids, gels and aerosols onboard aircraft, the development of strategies on the environment, higher profile of the status of women at ICAO, more transparent ICAO hiring practices, the beginning of a staff appraisal system and improved financial management of the organization. In 2006, ICAO went through a year of transition with the re-election of the secretary general and the election of a new president of council after 30 years in office of the previous President. Canada continues to be one of the key players in advocating and facilitating institutional reforms as part of this transition.

Gander International Airport Authority

Gander International Airport Authority (GIAA) has accepted the Government's offer of up to $4.8 million in financial assistance to cover its possible operating and capital shortfalls from April 1, 2007 to October 31, 2008. The purpose of the contribution is to provide the Authority with short-term financial stability while it works towards achieving revenue growth and long-term financial viability. The GIAA has not yet been able to achieve financial viability due to strong competition for passenger traffic, technological and industry changes affecting its technical stop business, and global economic and political factors. The contribution will cover the GIAA's monthly operating and capital losses. GIAA must submit a business plan by Fall 2007 that details the Authority's plan for achieving revenue growth at the airport.

Mirabel Lands

On December 18, 2006, Prime Minister Stephen Harper and Minister Cannon, announced the creation of a program that will allow farmers to buy land they are currently leasing at Mirabel International Airport. In addition, they announced the creation of a Transition Committee. The committee's mandate was to make recommendations to the Minister of Transport, Infrastructure and Communities on the terms of the program. Its report was submitted on April 28, 2007. In accordance with the wishes of the Union des producteurs agricoles (UPA), the committee took into account precedents established through the 1985 Sale Program and the 1989 Long-term Leasing Program. Current tenants will be given first priority to buy the lands. The cost of the program is estimated at $10.9 million over three years.

In accordance with the Treasury Board Real Property Environment Policy, departments must conduct audits on the state of real property from an environmental point of view before selling them. Therefore, Transport Canada sent invitations to tender in order to secure a firm to conduct environmental compliance audits. The firm has been chosen and a contract was awarded. Also, talks are underway with Aéroports de Montréal (ADM) to remove these lands from under their management and will require an amendment to their lease agreement with Transport Canada. The Airport Authority has provided full cooperation. In addition, Transport Canada has, since early December 2006, been corresponding with the Mohawks of Kanesatake to inform them of developments in this file. Information sessions with the City of Mirabel and the Mohawks of Kanesatake Band Council were held this spring, and communications are ongoing.

Aviation War Risk Liability Program

The Aviation War Risk Liability Program was introduced as an interim measure in the aftermath of September 11, 2001 to provide an indemnity for third party aviation war risk liability to 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. The department continues to monitor the aviation insurance market, and make adjustments to the program as appropriate.

Marine Insurance and Maritime Law Reform

New regulations for marine carriers to acquire and maintain insurance coverage sufficient to meet their liability to passengers have been drafted, however, they have been put on hold pending several amendments to the Marine Liability Act (MLA). These amendments include the ratification of several international liability conventions, changes to common law and an exemption for the marine adventure tourism industry from Part 4 of the MLA. Consultations with stakeholders on these changes have been concluded. The regulations concerning compulsory insurance for marine carriers will be held in abeyance pending the amendment of the MLA.

Marine Simulator Contribution Program

Training of marine personnel will be enhanced thanks to the approval of a $7.2 million Marine Simulators Contribution Program, approved by Order-in-Council on December 18, 2006. This program will provide financial assistance to five provinces that have Marine Training Institutes over a four-year transition period, from April 1, 2007 to March 31, 2011. As a result of the gratuitous transfer of the ten marine training simulators, previously owned by the federal government, Transport Canada will be able to ensure consistent standards of training and performance without being prescriptive as to their use. For further details on the above initiatives and other safety regimes under the Marine Safety Program, visit http://www.tc.gc.ca/marinesafety/menu.htm.

Delivery of Pleasure Craft Licensing

In April 1, 2006, Service Canada began delivering Pleasure Craft Licensing at all of their 320 offices across Canada on behalf of Transport Canada. This service now provides the Canadian public almost three times the number of places where they can process their licensing transaction. In 2006, over 100,000 (preliminary figure) licenses were issued across the country. The new system also allows Search and Rescue personnel to access the information 24 hours a day, seven days a week in the event of an emergency. This could mean the difference between life and death. For more information visit http://www.tc.gc.ca/BoatingSafety/pcl.htm

Port Divestiture

For the past 11 years, Transport Canada has been transferring the ownership and operation of its regional/local and remote ports to other federal departments, provincial governments and local interests, including municipalities. The ultimate results of these port divestiture efforts contribute to transportation's role as an economic enabler. The divestiture program has placed the operation of transferred ports in the hands of those best suited to respond to the local circumstances, contributing to a more effective and efficient transportation system.

As of March 31, 2007, Transport Canada has divested 469 (85 per cent) of its original 549 ports, which includes three transfers during the 2006-07 fiscal year. These transfers have resulted in an estimated savings to the Canadian taxpayer of $531 million that would otherwise have been spent on operating and maintaining the ports. During 2006-07, the department contributed $513,000 to local interests from the Port Divestiture Fund to facilitate divestiture of the ports, bringing the total expenditure from the Fund to $203.8 million since the beginning of the program.

The Port Divestiture Program has recently been extended to March 31, 2012. This extension will allow divestiture negotiations to continue, and permit communities and local interests an opportunity to own and operate port facilities.

The most recent evaluation of the Port Divesture Program is presented in Table 9 - Details on Transfer Payment Programs http://www.tbs-sct.gc.ca/est-pre/estime.asp.

For more information on the Port Divestiture Program, please consult: http://www.tc.gc.ca/programs/ports/menu.htm.

Data Collection

Transport Canada further expanded the Electronic Collection of Air Transportation Statistics (ECATS) programme to Phase II to improve the quality, scope and timeliness of air transportation statistics in support of policy formulation, planning and decision-making. During 2006-07, the cargo portion of Phase II of the ECATS initiative was successfully implemented with ECATS now collecting cargo data from 80 per cent of the air carriers initially in scope. The collection process for cargo data was also integrated with the data collection process put in place during Phase I of ECATS. Initial data collection work has also commenced in general aviation in an attempt to address the Department's data requirements in that segment of the air industry.

During 2006-07, surveyors employed by Transport Canada interviewed truckers as part of a National Roadside Survey (NRS) at key Canada/U.S. border locations and at strategic points in the Quebec-Windsor corridor. The NRS is a joint federal-provincial-territorial data collection and analysis project, using passive data gathering technology to obtain traffic count data coupled with surveys undertaken at specific locations to gather information on trucking operations. The scope of the coverage of the trucking operations includes the National Highway System network and encompasses not only Canadian-based commercial trucking firms but also U.S.-domiciled trucking firms operating in the Canada-U.S. trade context and private trucks operated by shippers for their own account.

Full Costs of Transportation in Canada

In 2006-07, Transport Canada in collaboration with the provinces and territories, completed a series of studies supporting the assessment of the full costs of transportation in Canada. The work carried through during this multi-year, multi-phase project yielded a new analytical tool that will provide policy-makers with a detailed valuation of the financial and social costs of all modes of transportation in Canada. This includes the capital and operating costs of both infrastructure and vehicles, the economic valuation of land occupied by transportation infrastructure and, cost estimates of the social impacts of transportation (accidents, road congestion, air pollution, climate change and noise).

2.1.2 Infrastructure, Gateways and Trade Corridors

Supporting the smooth flow of people and goods as well as creating the right conditions to encourage investments in transportation infrastructure remain key areas of focus for this department. Transport Canada works in co-operation with other levels of government to ensure the viability and competitiveness of our transportation system. Strong and sustainable infrastructure is necessary to support the ever-increasing volume of trade and tourism traffic accessing Canada's highways, borders, gateways and trade corridors.

Using the "gateway" approach, we can move strategically to take advantage of the convergence of opportunities related to international commerce, geography and transportation. Its objective is to maximize the efficiency of our major trade-based gateways and corridors, and to ensure policies are coordinated in order to take full advantage of them.

Asia-Pacific Gateway and Corridor Initiative

Budget 2006 committed $591 million for the Asia-Pacific Gateway and Corridor Initiative (APGCI) to address the challenges and opportunities in the further development of Canada's Asia-Pacific Gateway and Corridor. The APGCI aims at establishing the best transportation network facilitating global supply chains between North America and Asia. In particular, it seeks to: increase the Gateway's share of North America-bound container imports from Asia; improve the efficiency and reliability of the Gateway's service to Canadian and other North American exports as Asia's economies grow; and expand commerce with the Asia-Pacific region.

The APGCI is an integrated package of investment and policy measures that will advance the capacity and efficiency of the Asia-Pacific Gateway and Corridor and Canada's ability to take advantage of it. Prime Minister Harper formally launched the APGCI in October 2006. A number of immediate measures were announced at the launch, totalling $321 million including both transportation infrastructure and non-infrastructure/competitiveness components. Decisions on the remaining funds will be made following a fast track planning and consultative process.

Minister of International Trade and Minister for the Pacific Gateway and the 2010 Olympics, and the Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, are jointly responsible for the development and implementation of the APGCI. Its development and implementation is led by Transport Canada in collaboration with the following four federal departments/agencies: Department of Foreign Affairs and International Trade (DFAIT); Canada Border Services Agency (CBSA); Parks Canada Agency; and Western Economic Diversification (WD).

More information on the APGCI can be found at http://www.tc.gc.ca/majorissues/APGCI/menu.htm.

Strategic Highway Infrastructure Program (SHIP)

SHIP Highway Construction Component

In 2006-07, the highway construction component of SHIP, with a $485 million allocation, resulted in the completion of 13 projects across Canada including the Yukon, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Nova Scotia. These projects will enhance the safe and efficient movement of people and goods, support trade and economic development, and promote sustainable transportation.

SHIP Border Crossing Transportation Initiative

A new alignment connecting the Trans-Canada Highway to the Sault Ste Marie International Bridge in Ontario and major capital improvements to Highway 15 leading to the Lacolle border crossing were completed under the Border Construction component of SHIP in 2006-07. These projects improve the safety, efficiency and capacity of the road network leading to the U.S. border, and help to facilitate the cross-border movement of goods and people. As well, working with provinces/territories, electronic traffic counting and classifying devices were installed at selected points across Canada. This will provide a new source of data in order to better understand freight movements and improve policies and programs.

The environmental assessment phase of the bi-national effort to develop a new border crossing in the Windsor-Detroit area continued through 2006-07, under the auspices of the Canada-U.S.-Ontario-Michigan Bi-national Partnership. Environmental and technical studies on possible locations for a new border crossing were undertaken in both Canada and the U.S., as part of a coordinated bi-national study to develop an end-to-end solution to cross-border traffic issues in this region.

In fiscal year 2006-07, the focus was narrowed to three river crossing alternatives, three customs inspection plaza locations, and one centrally located access road from Highway 401 to the customs plaza facilities. This project will ease traffic congestion and will result in a safer and more efficient highway system for all Canadians.

For further project-specific details on the Windsor Gateway, please consult: http://www.partnershipborderstudy.com/ and http://www.tc.gc.ca/mediaroom/releases/nat/2005/05-gc003e.htm.

SHIP Transportation Planning / Modal Integration Initiative

Transport Canada has made $5 million available for academic research studies and applied transportation initiatives that advance transportation planning and modal integration (TPMI) in urban areas and along transportation corridors. The department has funded several TPMI studies in British Columbia, Alberta, Ontario, Quebec and Nova Scotia related to rapid transit links, rail corridors, supply chain, short sea shipping and goods movement studies. As well, a second call for proposals issued in November 2005 was successfully completed with the announcement, in June 2006, of 13 winning projects. These will receive federal funding of approximately $1-million. To date, most of the $5 million available for funding has been granted to 45 projects across the country. By encouraging the development of innovative approaches to transportation issues, these projects will increase the efficiency of the transportation system as a whole and improve its sustainability. For further project-specific details concerning the two TPMI call for proposals, consult: http://www.tc.gc.ca/mediaroom/releases/nat/2004/04-h061e.htm and http://www.tc.gc.ca/mediaroom/releases/nat/2006/06-h057e.htm.

SHIP - Nunavut

This program has resulted in the construction of three air terminal buildings in Pond Inlet, Coral Harbour and Gjoa Haven; and a 3.2 km road in Chesterfield Inlet. The program has also funded two fish habitat studies in Pond Inlet, and Clyde River and partially funded the Nunavut-Manitoba Route Study. Together the program has contributed $4.2 million to the Nunavut economy.

An evaluation of the SHIP components was conducted in 2006. The results are presented in Table 9 - Details on Transfer Payment Programs http://www.tbs-sct.gc.ca/est-pre/estime.asp.

Additional information on SHIP is available at http://www.tc.gc.ca/SHIP/menu.htm.

Canada Strategic Infrastructure Fund

Transport Canada worked closely with Infrastructure Canada on the strategic implementation of key surface transportation infrastructure projects. Significant resources were allocated to reviewing projects and negotiating contribution agreements for the new funding. Major Highway projects are now under construction across Canada that will enable the safer and faster movement of people and goods on Canada's major land transportation routes; reduce production of greenhouse gases and airborne pollutants; encourage more effective urban development; increase economic activity including tourism; and encourage the use of innovative technologies and practices to minimize greenhouse gas emissions. Five major highway infrastructure projects were completed under this program in 2006-07 in the Yukon, the Northwest Territories and New Brunswick, resulting in safety and efficiency benefits to Canadians.

In addition to the above projects, the department continued to work with Infrastructure Canada to implement projects aimed at improving and increasing the capacity of Canada's public transit systems. Project construction has started on projects in the Greater Toronto Area (GO Transit, York VIVA Bus Rapid Transit, and the Toronto Transit Commission) and in Vancouver, British Columbia (the Canada Line). As an example, substantial progress on the construction of Canada Line occurred during the year, with construction approximately 30 per cent complete, and on track to be operational by its scheduled November 30, 2009, completion date. The first of two bored tunnels under downtown Vancouver was approaching a terminus point near the waterfront, and major bridges over the north and middle arms of the Fraser River are progressing well. Overall,the Transit projects will mitigate the growth of congestion and the corresponding environmental impacts. In Quebec, significant progress was realized on Phase 1 of Autoroute 30. A framework for the public-private partnership was developed; a call for qualifications was issued and the final three candidates were selected; the federal environmental assessment was completed; and, approval was received from the Governor-in-Council for the development of a bridge that will allow for crossings of the St. Lawrence River and the Beauharnois Canal.

Additional details are available at http://www.infrastructure.gc.ca/index_e.shtml and http://www.infrastructure.gc.ca/ip-pi/csif-fcis/index_e.shtml

Border Infrastructure Fund

The department continued to work with Infrastructure Canada to implement projects aimed at improving border efficiency and reducing congestion. Over $500 million in federal funding for border improvement projects has been announced under the Border Infrastructure Fund. Construction of new infrastructure is being undertaken at five major commercial crossings under this program: Windsor, Sarnia, Niagara and Fort Erie, Ontario; and Douglas, British Columbia. These projects will reduce border congestion and expand existing infrastructure capacity to support ongoing economic growth. Specific projects completed in 2006-07 included intelligent transportation systems that were installed on Highway 402 in Sarnia leading to the U.S. border and a major plaza reconfiguration at the Peace Bridge in Fort Erie was completed under this program in 2006-07 to help improve our surface transportation link with the U.S. Additional details can be found at http://www.infrastructure.gc.ca/index_e.shtml and http://www.infrastructure.gc.ca/ip-pi/bif-fsif/index_e.shtml.

Domestic and International Bridges

Transport Canada has been reviewing the governance of domestic and international bridges within its portfolio with a view to strengthen accountability and to improve the long-term financial sustainability of these structures. In particular, in the past year a significant amount of work has been completed with respect to the Sault Ste. Marie International Bridge, including a proposed new operating agreement with the State of Michigan and the recommendation for a more effective governance model for Canadian ownership. Ongoing work will address long-term funding needs at several bridges, including Sault Ste. Marie and the Thousand Islands International bridges.

The International Bridges and Tunnels Act, S.C. 2007, c.1 (formerly Bill C-3), received Royal Assent on February 1, 2007, and came into force on April 25, 2007. The Act gives the Government the authority to develop regulations concerning security, maintenance and repair and operations and use over international bridges and tunnels. The Act also provides for Ministerial approval of construction of new international bridges or tunnels, or alteration of existing facilities, as well as the sale or transfer of these bridges or tunnels.

Small Airport Viability

At the September 2004 Council of Ministers Responsible for Transportation and Highway Safety, Ministers recognized that small airport viability was a complex issue touching all levels of government. A joint federal/provincial/territorial Task Force was established to identify the missions of small airports and identify options for future action. The Task Force presented its final report to the Council of Ministers in September 2006, which is posted on the Council of Ministers website http://www.comt.ca/default.htm. The report lays out the Task Force's findings regarding the missions and roles of small airports in Canada and a proposed suite of options for future action, recognizing that a "one size" fits all solution does not exist.

Airports Capital Assistance Program

The Airports Capital Assistance Program (ACAP) assists eligible airports with the financing of capital projects related to safety, asset protection and operating cost reduction. There have been two program evaluations since the program started, the first in February 2000 and the second in June 2004. Both concluded the Program was meeting its objectives and there was a need for it to continue. As a result of the 2004 evaluation, Transport Canada has obtained approval for the renewal of ACAP until March 31, 2010. Since the Program started in 1995, the Government of Canada has announced a total of $422.7 million for 510 safety improvement projects, under ACAP, at 159 airports. Over 99 per cent of these projects were airside safety-related projects such as runways, taxiways, visual aids, etc, and heavy airside mobile equipment. In anticipation of the April 2010 renewal of ACAP, a third evaluation of the Program is scheduled to be undertaken in 2008 and completed in 2009.

The most recent evaluation of the ACAP is presented in Table 9 - Details on Transfer Payment Programs http://www.tbs-sct.gc.ca/est-pre/estime.asp.

Canada Marine Act

In 2006-07 the government proceeded with additional consultations with key stakeholders to further enhance a revised package of amendments to the Canada Marine Act (CMA)based primarily on the CMA Review, reactions to former Bill C-61, emerging trends and the priorities and directions of the new government. Any amendments will support a strategy to encourage competitiveness in the marine transportation sector, and will consider the long-term role of ports in Canada and surrounding communities. A new Bill is intended to be tabled in Parliament.

Port Amalgamation

As part of Transport Canada's ongoing efforts to provide Canada Port Authorities (CPAs) with enhanced financial and competitive flexibility, amendments to the Port Authorities Management Regulations were pre-published in the Canada Gazetteadding generic amalgamation provisions. Amalgamation is seen as a way for CPAs to handle changing economic conditions and concomitant impacts on the transportation system, especially in the British Columbia Lower Mainland. In July 2006, under the umbrella of the Asia Pacific Gateway and Corridors Initiative, the Minister of Transport, Infrastructure and Communities invited the three CPAs of Vancouver, Fraser River and North Fraser to explore the potential for their amalgamating into one integrated port authority. In their report presented to the Minister of Transport, Infrastructure and Communities in November of 2006, the three CPAs recommended amalgamating. Transport Canada and the three CPAs are currently working collaboratively on amalgamation.

Great Lakes St. Lawrence Seaway Study

Over the past year, the majority of study projects and technical analyses were completed. This includes the evaluation of infrastructure needs of the Great Lakes St. Lawrence Seaway system, including the engineering, economic, and environment implications of those needs as they pertain to navigation. The consolidation process, which summarizes all technical works in order to create one final consolidated report, started in Fall 2006. The final study report is expected for public release by Fall 2007. The report will include a detailed engineering analysis of the Seaway system's existing infrastructure. It will also include an economic analysis on the costs and benefits associated with maintaining the infrastructure. In addition, the report will present navigation-related environmental factors.

Ridley Terminals Inc.

In February 2006, the Minister of Transport, Infrastructure and Communities announced that the Government of Canada made a public policy decision to set aside the Request for Proposal process for the divestiture of Ridley Terminals Inc. (RTI) to ensure that the long-term future operation of RTI supports industry and trade objectives. RTI will continue to be maintained as a Crown corporation. At the same time, the government rescinded the Directive prohibiting RTI from entering into any long-term agreements, in excess of 18 months, without the prior written approval of the Minister of Transport, Infrastructure and Communities. With the approval of its 2006-2010 Corporate Plan in June 2006, the corporation entered into long-term contracts. Theupswing in coal markets has had a positive effect on RTI's operations, with the Corporation forecasting financial viability in 2007. As a result, RTI will not be seeking a contribution agreement with Transport Canada to subsidize operations in 2007. RTI is currently in the process of bringing forward its 2007-2011 Corporate Plan to the Minister for approval by the Governor in Council.

2.1.3 Innovation

An innovative and integrated transportation system is necessary to support Canada's success in the global marketplace. Through its innovation, research and development and skills development initiatives, Transport Canada works with other public and private sector organizations to increase the responsiveness, flexibility, and performance of the Canadian transportation sector.

Strategic Research and Development

Ongoing organizational changes in the department continue to bring Transport Canada's innovation, research and development (R&D), and policy research activities into alignment with the Government of Canada's vision of an efficient and competitive economy. The Innovation, R&D and Policy Research group examines the department's overall approach to innovation and R&D from a policy and strategic perspective, and fosters relationships with other public and private sector organizations. Specifically, Transport Canada has laid the groundwork for a strategic approach to optimize mobility of people and goods by identifying four strategic R&D themes to complement its safety in security mandate: gateways and corridors, northern transportation, accessibility and energy efficiency.

Transportation Development Centre

The Transportation Development Centre (TDC) is a centre of expertise for technology R&D supporting the department's strategic goal of maintaining a competitive and productive transportation system that is safe, secure, and environmentally responsible. The Centre forges partnerships between industry, governments, and research centres for the development, demonstration, and commercialization of innovative technological solutions to Canada's transportation challenges. Results of TDC's research are made publicly available on the Internet. More than 40 technical reports and summaries were released in 2006-07.

Major work in 2006-07 included finalization of a prototype regional Advanced Traveller Information System for the Greater Vancouver area in partnership with TransLink, the Greater Vancouver Transit Authority. The result is a one-stop public web portal that provides multi-modal, multi-jurisdiction, static and real-time traveller information, enabling users to make better, more informed travel decisions. The public launch of the system, branded iMove, is planned for 2007-08.

In addition, a Canada-U.S. project to develop a fatigue management program for commercial motor carriers began with volunteer companies in Alberta, Quebecand California. The program includes guidelines, manualsand other training materials, which will be finalized following the trial and made available to the trucking industry.

An ongoing Canada-U.S. freight security initiative is testing off-the-shelf technologies to determine their potential for improving security through real-time monitoring and tracking. The technologies are being installed on several cargo containers and moved through Canadian, U.S. and international intermodal freight systems by truck, rail and ship.

Shakedown testing was completed on a prototype electric parcel delivery truck developed by an industry-led partnership. The goal is a lightweight vehicle with a range of 120 km that is 90 per cent more energy efficient than a conventional delivery truck. In-service testing at a national courier service is planned for Toronto in Summer 2007.

The Centre also played a key role in the organization of two major international rail industry conferences. Hosted by Transport Canada and a group of industry partners, the World Congress on Railway Research drew more than 750 representatives from industry, governmentand research centres from around the world. The Ninth International Level Crossing Safety and Trespass Prevention Symposium attracted more than 300 delegates.

For more information visit http://www.tc.gc.ca/tdc/menu.htm.

Intelligent Transportation Systems

Intelligent Transportation System (ITS) refers to the integrated application of information processing, communications and sensor technologies to transportation infrastructure and operations that support the efficiency, safety, security and sustainability of the transportation system. Under the Strategic Highway Infrastructure Program, $30 million is dedicated to ITS and, to date, some $24 million has been spent or committed.

Transport Canada has continued implementing the ITS Strategic Plan for Canada by concluding contribution agreements with provinces and territories, municipalities and transportation agencies and authorities. 31 projects were completed during the year, including the installation of over 40 new environmental sensor stations and the upgrade of 36 existing stations, the development of a hand-held computer-based dispatch system for commercial vehicles at Vancouver International Airport, models for managing the interactions of land-based container fleets and shipping lines; the implementation of remote vehicle inspection stations for commercial vehicles, the development of a draft deployment plan for Intelligent Border Crossings; and the completion of a feasibility and design study for a multi-agency centralized transportation management centre.

These projects support national objectives such as the Asia-Pacific Gateway Initiative (integrated transportation management centre) and the Let's Get Windsor-Essex Moving Strategy (Intelligent Border Crossings) and several Government of Canada outcome areas (an innovative and knowledge-based economy, strong economic growth and a prosperous Canada through global commerce).

Transport Canada has begun the process to review and update the ITS Plan for Canada by seeking the views of stakeholders, and contracting for expert advice as needed. The policy framework setting out the direction for Transport Canada in this area will be completed late in 2007.

For more information about ITS visit: http://www.its-sti.gc.ca/en/menu.htm.

Transportation-related Innovation and Skills Development

Transport Canada has continued to act as a catalyst between different levels of government, industry, academia and other stakeholders to support transportation skills development. In 2006-07 Transport Canada co-chaired the federal/provincial/territorial Skills Task Force as the group delivered on its work plan commitments, including the development of a Compendium of Successful Skills Initiatives (http://www.comt.ca/default.htm). The Skills Task Force ultimately reports to the Council of Deputy Ministers responsible for transportation through the Policy and Planning Support Committee. Transport Canada also funded the inclusion of a transportation component in the Canada-wide Virtual Science Fair to encourage Canadian students (aged approximately five to 17 years) to consider the scientific exploration of transportation-related themes.

Transport Canada also funded the National Training Program that is responsible for the development and administration of technical training courses for the marine inspection community. This ensures inspectors are in compliance with changing rules and regulations and are knowledgeable of the acts and regulations impacting marine safety. Ongoing developments include a national policy for mandatory training of inspectors prior to appointment, continued emphasis on small vessel inspections, and backup for regional inspectors when they are assisting with the delivery of training courses. In addition, the development of the necessary training modules were completed to ensure that marine inspectors will be conversant with the changes that will come as a result of the Canada Shipping Act 2001 coming into force in the Spring 2007.

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

Resource allocation to this strategic outcome for 2006-07 ($ thousands):

Planned Spending	Total Authorities	Actual Spending
$1,090,298	$1,016,671	$940,383

Note: The spending by Strategic Outcome includes a reallocation of departmental administration.

As displayed in the Main Estimates, the two program activities under this strategic outcome are "Policies, rule-making, monitoring and outreach in support of a safe and secure transportation system" and the Crown corporation "Canadian Air Transport Security Authority". Transport Canada 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. This Minister tabled an advisory panel report on the CATSA Act in December 2006. The report made over 40 recommendations related to CATSA's operations, roles/responsibilities, legislation and finance/administration. The Minister accepts the report and is studying the recommendations to provide a response in the Fall and Winter 2007.

As per section 122 of the FAA, this Crown corporation must submit its annual corporate plan to the Minister of Transport, Infrastructure and Communities and is not subject to reporting through this document.

The safety and security program activity covers policies, rule-making, monitoring and enforcement, and outreach in support of a safe and secure transportation system. It also encompasses the development of national legislation, regulations and standards, and carries out monitoring, testing, inspection, enforcement, education, training and developmental activities to promote safety and security in all transportation modes. It also covers emergency preparedness plans and delivers aircraft services to government and other transportation bodies.

Transport Canada's 2006-2007 Report on Plans and Priorities outlined a number of important areas for the department to focus its efforts in ensuring a safe and secure transportation system. The following section provides highlights of Transport Canada's progress in these areas by program priority.

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 related to the accident/incident rates Progress in implementing safety management systems and security management systems

 2.2.1 New Security Policies and Programs

In terms of enhancing transportation security, in 2006-07, Transport Canada continued a number of activities, including legislative and regulatory enhancements, awareness campaigns, industry training initiatives, research and development activities, and international initiatives. Transport Canada also actively contributed to such federal government initiatives as the National Security Policy and the Security and Prosperity Partnership.

Aviation Security

Aviation security remained a key priority for the department in 2006-07 as it continued to implement a number of aviation security initiatives in collaboration with other federal government departments, other countries and international organizations, industry stakeholders and labour organizations. In particular, Transport Canada introduced or made significant progress towards developing new or enhanced security programs, such as:

• Establishing a project office for air cargo security initiative and commencing program design following the Budget 2006 announcement of $26 million over two years for the design and pilot testing of an air cargo security initiative;

• Developing a methodology and strategy to assess the need, type and extent of the Transportation Security Clearance Program across all transportation sectors; and

• Completing some preliminary planning needed to undertake a multi-year broad-based review of the security regulatory framework.

In addition, Transport Canada made significant progress toward the introduction of the Passenger Protect program by continuing to work with other government departments and key interested parties, and introducing new identity screening regulations. Passenger Protect prevents persons who pose an immediate threat to aviation security from boarding a commercial aircraft. The identity screening regulations complement the program by requiring passengers to present government-issued identification before boarding an aircraft, and were first published in the Canada Gazette, Part I on October 28, 2006, with the program coming into effect in June 2007. For more information visit http://www.tc.gc.ca/vigilance/sep/menu.htm.

Marine Security

Marine security was identified in the National Security Policy as a critical element of national security. Transport Canada aims at a nationally and internationally recognized marine transportation system that is secure, efficient and respects Canadian values. This will be achieved with partners in order to increase the level of protection of Canada's Marine Transportation Security System against: unlawful interference, terrorism attack and terrorist exploitation as a conduit to attack our allies. This will be done in a manner that preserves the efficiency of the Canadian marine transportation system and respects Canadian values.

During 2006-07, Transport Canada carried out key initiatives in enhancing marine security as well as made significant progress under the six-point action plan set out in the National Security Policy.

Transport Canada continued to work on developing the Marine Security Operations Centre (MSOC) capability in collaboration with National Defence, Canadian Coast Guard, Canada Border Services Agency and the Royal Canadian Mounted Police. Transport Canada personnel within the MSOC continue to conduct processing of all 96 - hour Pre-Arrival Information Reports (PAIRs) to ensure vessels entering Canadian waters are compliant with international and national security regulations. The department's analytical capability within the MSOC continues to evolve with its analysts working with military and government counterparts to develop and disseminate improved Maritime Domain Awareness in their respective areas of responsibility.

Transport Canada continued to work with its international partners in harmonizing marine security, in particular with the U.S. and with member States of the International Maritime Organization (IMO). Transport Canada also participated at key IMO Committees for the development of regulatory requirements, including those for the Long Range Identification and Tracking (LRIT), and Vessel Security Officers (VSO) training. These requirements are now being included in the Marine Transportation Security Regulations (MTSR).

Transport Canada continued its work in carrying out the Marine Security Contribution Program and granting over $12 million in funding for security enhancements throughout the country during 2006-07. Funding was used for security enhancements such as surveillance equipment, dockside and perimeter security, command, control and communications equipment, and training. In 2006, the program was extended for two years for all eligible applicants, except Canada Port Authorities, and expanded to include domestic ferry operators, a new category of applicants not previously eligible. In November 2006, results of the Round Three applications were announced, which is providing up to $42 million to 101 ports and marine facilities across the country.

Significant progress was made in the implementation of the Marine Transportation Security Clearance Program during 2006-07 including an analysis of the approach and scope of the program. As a result of numerous consultations, the decision was made to move to a risk-based approach for the program. The scope was modified to focus on higher risk areas, create two different regimes for terminals (one for containers and one for cruise ships) and expand to more ports.

A collaborative pilot project with industry and labour stakeholders was completed in Vancouver in Spring 2006. Draft regulations were published in Canada Gazette, Part I on July 1, 2006. Further detailed discussions on operational issues were held through Summer and Fall 2006 followed by the publication of the regulations in the Canada Gazette, Part II on November 15, 2006.

Further work was accomplished in implementing the program including the development of an industry working group, chaired by Transport Canada to address all requirements for implementation of the program.

Transport Canada's Marine Security Directorate (TC/MARSEC) worked with the Organization of the American States (OAS) Secretariat for Multidimensional Security to develop a Canada-Americas Port Security Assistance Program that resembles Asia Pacific Economic Cooperation's (APEC) International Ship and Port Facility Security (ISPS) Code Implementation Assistance Program. This program assists developing Member States in the Americas to effectively implement the international maritime security standards specified in the ISPS Code and other security amendments to the Safety of Life at Sea (SOLAS) Convention. The program responds to an identified need to better coordinate and target port security capacity building assistance in this region. Transport Canada played a lead role in strengthening APEC's ISPS Code Implementation Assistance Program and in coordinating multilateral and bilateral technical assistance projects throughout the Asia-Pacific region. This project enabled Transport Canada to play a similar role within the Americas by developing and managing a needs-based program of marine security related technical assistance to developing States and coordinating all technical assistance projects in the region.

For more information visit http://www.tc.gc.ca/marine/menu.htm#security.

An evaluation of the Marine Security Program was conducted in 2006. The results are presented in Table 9 - Details on Transfer Payment Programs http://www.tbs-sct.gc.ca/est-pre/estime.asp.

International Influence on Security and Emergency Preparedness

Emergency preparedness and counter-terrorism capabilities continued to be a focal point for the department in 2006-07. The department continued to lead, or collaborate on, a number of high profile training exercises, both domestically and internationally - including the Public Safety Canada-led urban transit exercise program, to assess Canada's ability to act quickly, decisively and effectively in concert with other partners in the event of a terrorist attack, a security-related threat such as radiological contamination or other emergencies.

Transport Canada continued to work with other federal government departments, the provinces, industry partners and other governments in order to share information and best practices, and increase capabilities to respond to potential incidents in accordance with the Chemical, Biological, Radiological or Nuclear (CBRN) Response Program for the transportation of dangerous goods. For example, Transport Canada participated and presented at the CBRN Roundtable organized by Public Safety Canada in March 2007, its contribution under the National CBRN Strategy of Canada. This national strategy is the overarching framework for managing CBRN incidents in Canada and includes accidental CBRN incidents in its scope. The purpose of the roundtable was to discuss progress made and key initiatives, gaps and challenges. Transport Canada requires an approved Emergency Response Assistance Plan prior to offering to transport or import certain dangerous goods. The plans are also connected to the CBRN Response Program as it pertains to the evaluation of response capabilities to specific dangerous goods that could potentially be used as CBRN agents in a terrorism situation in Canada. A case in point, the current Health Canada / Public Health Agency response teams for CBRN incidents are the same responders who would respond to a transportation accident involving highly infectious substances.

Transport Canada also continued to enhance Canada's influence and reputation on the international stage by working with organizations such as the International Civil Aviation Organization (ICAO), the European Civil Aviation Conference, the International Maritime Organization, the North Atlantic Treaty Organization (NATO), and other governments (e.g. U.S. Department of Homeland Security). An example of Transport Canada's significant international security achievements is the collaborative effort being made under the Security and Prosperity Partnership (SPP) of North America. The SPP created an unprecedented commitment between Canada, the U.S. and Mexico to enhance the security, economic well-being and quality of life for citizens of North America. Under the SPP, Transport Canada is leading or co-leading in 52 transportation security initiatives including: transportation security clearances, hand baggage screening, air cargo security, passenger assessment, critical infrastructure and emergency response, among others. The department is making significant progress in collaborating with its Mexican and U.S. counterparts on many security policies and regulations, and all security initiatives are currently on track as a result of this continued co-operation.

Other key international security and emergency preparedness achievements include:

• Continuing to implement the transportation-related aspects of the Smart Border Declaration and its companion 30-point action plan to improve the security of shared border services, assure the flow of people and goods, and protect the critical transportation infrastructure. Many of the items in the action plan were further developed and became elements of SPP;

• Collaborating with the U.S. and other international partners such as the U.K. in major emergency preparedness and counter-terrorism exercises, to assess Canada's ability to act quickly, decisively and effectively in concert with international partners in the event of a terrorist attack, security-related threat such as radiological contamination, or other emergencies; and

• Continuing to help developing states in the Caribbean and South America meet international aviation security standards through the provision of a $405,000 contribution to the ICAO Aviation Security Awareness Training Program.

For more information visit http://www.tc.gc.ca/majorissues/transportationsecurity/menu.htm.

Passenger Rail and Public Transit Systems Security

Transport Canada has developed a two-year contribution program targeted towards the high volume passenger areas of commuter rail and urban transit, with a focus on major urban transit systems. This program provides financial assistance to commuter rail and public transit operators in designated major metropolitan areas to accelerate the implementation of immediate and initial security measures. On the basis of two national announcements in November 2006 and April 2007, the federal government committed $38 million to improve rail and urban transit security for 26 large and small transit operators for: risk assessments; security plans; employee training programs; public awareness; and the upgrade of security equipment. These security measures will assist operators in implementing projects that will protect Canadian families and communities.

During 2006-07, Transport Canada engaged operators in information sessions, consolidated information on best practices, and developed guidelines on developing a risk assessment, and a Security Plan Assessment Tool. While it is too early to measure specific security improvements in their respective transportation systems, Transport Canada officials have noted that operators are increasingly engaged in improving the level of security readiness in the context of Transit-Secure. Transport Canada officials have also observed national participation in its workshops and consultations that include relevant players in the sector and that contributes to national consistency including:

• a Threat and Risk Assessment Guide and Security Plan Guide Workshop delivered by Transport Canada;
• a one-day workshop added to the Canadian Urban Transit Association's conference to provide operators with guidance for applying for round two funding and guidance on developing risk assessments and security plans;
• a workshop on Standards and Best Practices delivered by Transport Canada; and
• a closed circuit television camera workshop.

At the same time, a major review of rail and transit security policy is being advanced. Drawing on international best practices, Transport Canada is working with federal partners, other levels of government, transportation experts and the transportation industry to develop a nationally consistent comprehensive, sustainable long-term policy. The policy will include a range of approaches to achieving a sustainable and comprehensive security regime for rail and urban transit in Canada, including both legislative/regulatory and voluntary measures. During the reporting period, Transport Canada has engaged provinces and territories in a review of the roles and responsibilities of different levels of government and the possible way ahead in this area of shared jurisdiction. Working with operators and industry associations, Transport Canada is facilitating the enhancement of industry capacity to address a range of security issues, and the development of industry standards/best practices.

For more information visit http://www.tc.gc.ca/vigilance/sep/rail/menu.htm.

2.2.2 Smart Regulation

In 2006-07, Transport Canada, as a major regulatory department, played a key role in the Government of Canada's Smart Regulation Initiative. In practical terms, this meant regulations that were more focused on safety and security results with targeted interventions, and that were designed, where appropriate, to give industry the flexibility to be innovative in meeting those outcomes..

Marine Safety - Legislative and Regulatory Enhancements

The Canada Shipping Act, 2001(CSA 2001) entered into force on July 1, 2007. Phase 1 of the Regulatory Review involved the reform of more than 50 existing regulations into an estimated 24 regulations, and included those regulations that were inconsistent with the provisions of the CSA 2001, as well as those that were deemed to have a substantial impact on safety and the environment. Phase 2 will begin once the CSA 2001 enters into force, and will involve modernizing the remaining regulations so as to ensure they are consistent with the requirements of the new Act. The CSA is the principal piece of legislation governing personal safety and environmental protection in Canada's marine sector. It applies to Canadian vessels operating anywhere and to foreign vessels operating in Canadian waters.

Transport Canada conducted extensive public consultations on Regulatory Review at the Spring and Fall 2006 regional and national meetings of the Canadian Marine Advisory Council (CMAC). In addition, several of the individual projects conducted outreach sessions with stakeholders at strategic locations across Canada in 2006. Other activities in 2006 included the development and delivery of cross-Canada orientation sessions for Marine Safety Inspectors on the new CSA 2001 Regime.

For more information visit http://www.tc.gc.ca/marinesafety/rsqa/CSA2001RegRefSite/menu.htm

The Maritime Labour Convention (MLC)2006 is an important new international labour Convention that sets out seafarers' rights to decent work conditions and helps to create conditions of fair competition for shipowners. It is intended to be globally applicable, easily understandable, readily updateable and uniformly enforced.

The decision by the International Labour Organisation (ILO) to move forward to create this major new maritime labour Convention was the result of a joint resolution in 2001 by the international seafarers' and shipowners' organizations, later supported by governments.

Representatives of Transport Canada and Human Resources and Social Development Canada - Labour Program were proactive on this project since its inception in 2001. While Canada participated in the development of the MLC 2006, Transport Canada developed, in consultation with the Canadian marine industry, a regulatory framework for the CSA 2001 in compliance with the MLC 2006.

Amendments to the Pilotage Act - Marine pilotage is an important element of safe marine navigation in Canada. Pilotage Authorities created under the Pilotage Act (Act) are Crown Corporations and are required by law to be financially self-sustaining; which in recent years has been difficult to achieve. The Act governs how Pilotage Authorities hire pilots, either as employees or pilot corporations, how they negotiate service contracts with pilot corporations, and imposes a regulatory review process additional to the Government's standard process - all of which can impinge upon an Authority's financial sustainability.

In January 2007, the Prime Minister authorized the department to undertake focused consultations on amendments to the Pilotage Act. The department held consultations across the country in February and March 2007.

For more information visit http://www.tc.gc.ca/marinesafety/Pilotage/menu.htm

Marine Safety - Smart Regulations - Inspection and Enforcement

Transport Canada has been busy developing a new compliance and enforcement regime for marine safety as a result of changes to the CSA 2001. Activities have included the development of a comprehensive enforcement policy and a detailed enforcement manual aimed at Marine Safety Inspectors.

A key component of the new CSA 2001 regime is the establishment of a new enforcement mechanism and new tools that will be supported by the new Administrative Monetary Penalties Regulations (AMPs). These regulations represent a completely new set of regulations for the marine sector. AMPs regulations involve an administrative process of enforcement, and therefore, marine violators who would be charged with an offence will no longer be required to attend criminal court proceedings under the administrative monetary penalties system. Violators who receive a penalty under the AMPs regulations will have the right to appeal the Transport Canada Marine Safety (TCMS) decision to the Transportation Appeal Tribunal of Canada.

During 2006, Marine Safety Inspectors carried out vessel inspections to ensure that regulatory requirements are respected and, consequently, public safety is protected. This inspection program is driven by legislative and regulatory requirements under the Canada Shipping Act. The CSA 2001 allows for greater flexibility in the program and inspections will be based on risk analysis and attention to particular problems identified as affecting public safety. The particulars of the reform of the inspection program will be detailed after the CSA 2001 comes into force.

Marine Safety Innovation - National Training Program

Transport Canada also funded theNational Training Program thatis responsible for the development and administration of technical training courses for the marine inspection community. This ensures inspectors are in compliance with changing rules and regulations and are knowledgeable of the acts and regulations impacting Marine Safety. In 2006-07, the program delivered 27 courses to 543 Marine Safety inspectors across Canada. Ongoing developments include on-the-job training, continued emphasis on small vessel inspections and backup for regional inspectors when they are assisting with the delivery of training courses. In addition, the development and delivery of cross-Canada orientation sessions for marine safety inspectors on the new CSA 2001 Regime.

Aviation Safety - Legislative and Regulatory Enhancements

The Aeronautics Act (Bill C-6) establishes the responsibility of the Minister of Transport, Infrastructure and Communities for civil aeronautical activities and the responsibility of the Minister of National Defence for military aeronautical activities. The legislation, which completed second reading in the House in April 2006, contributes to Transport Canada's ongoing commitment to enhancing the safety of the national transportation system. The changes proposed to the Act are reflective of the new strategies being implemented to regulate aviation safety by providing explicit enabling authority for newly evolved safety and regulatory initiatives such as those required for the implementation of safety management systems. The authority for Safety Management Systems Regulations is valid under the existing Act. However, the amendments are intended to maximize the effectiveness of the SMS safety framework and to facilitate implementation.

Transport Canada has completed most of the regulatory activity associated with safety management systems (SMS). The second phase of implementing SMS for specific certificate holders is now well underway. The implementation of the SMS program has been divided into four phases in order to work closely with operations in promoting & ensuring compliance with the new requirements. Phase three will commence shortly with a complete safety management implementation completed by 2009. Implementation activities for airports and air navigation service providers will commence in 2008. The implementation of the SMS program will result in improving safety through pro-active management rather than reactive compliance with regulatory requirements. Companies that have begun the implementation process have experienced demonstrable improvements in many areas of their organization.

Transport Dangerous Goods

Transport Canada's goal is to enhance international safety standards and regulations for transporting dangerous goods, without hindering trade. In 2006-07, Transport Canada's Transport of Dangerous Goods Directorate led the United Nations sub-committee of experts on the transport dangerous goods in reviewing testing requirements for intermediate bulk containers (IBCs), which resulted in the adoption in December 2006 of revisions to the United Nations Model Regulations that will enhance safety by tightening or, where necessary, clarifying the requirements for testing IBCs. These revisions will be adopted by the International Maritime Organization and other international regulatory bodies, and by national and regional regulatory authorities, thus enhancing international and domestic harmonization.

Road Safety

One of the key initiatives of Transport Canada is to reach an agreement with the automotive manufacturing industry concerning the manufacturing and use of in-vehicle telematic devices, including navigation, entertainment and internet access. The intention of this agreement is to develop a set of mutually agreed upon guidelines regarding the general principles and process elements that will guide product design and evaluation. Producing safer telematic devices will reduce the incidence of distraction and thus reduce collisions. The intention of the agreement is to give the industry more flexibility and opportunity for innovation in product design while not requiring the department to develop or maintain a regulatory requirement. The consultations to develop this agreement have been difficult with the industry not accepting the concept of process regulations. The negotiations are expected to continue this year with the expectation that the agreement will be reached later in the fiscal year.

Road Safety Vision 2010 - a mid-term review of this initiative has been completed in collaboration with the Canadian Council of Motor Transport Administrators and can be found on the following web site: http://www.ccmta.ca/english/committees/rsrp/rsrp.cfm. The results of the review and action plans for all jurisdictions will be presented to the Council of Deputy Ministers Responsible for Transportation and Highway Safety. The results show that some progress has been made on the overall 30 per cent national target and on some of the sub-targets (e.g. seat belt use is about 91 per cent, incidence of unbelted fatalities/serious injuries has declined, incidence of fatalities involving young drivers has decreased, intersection related fatalities and serious injuries have dropped) but much more needs to be done in the areas of weakness (speed-related collisions, impaired driving, car-truck collisions, vulnerable road users).

Railway Safety ActReview

The Minister has appointed an independent panel to review the Railway Safety Act in order to further improve railway safety in canada and to ensure that all transportation sectors have comparable safety regimes. transport canada welcomes the participation of all concerned parties, including the general public, in this review. public and stakeholder participation was solicited across the country and a draft report of recommendations to the minister is due by the end of 2007. contact information for the transport canada secretariat responsible for this review may be found at: http://www.tc.gc.ca/tcss/rsa_review-examen_lsf/org_e.htm

2.2.3 Safety and Security Management Systems

In Spring 2006, a working group was established, with representatives and subject matter experts from all directorates in the Safety and Security Group, to develop a consistent SMS/SeMS approach. The result was Moving Forward - Changing the safety and security culture - A strategic direction for safety and security management, a collaborative effort that outlines Transport Canada's overarching multimodal policy while respecting a range of initiatives in Safety and Security. For more information visit http://www.tc.gc.ca/tcss/StrategicPlan/menu.html .

Moving Forward willguide the Safety and Security Group in applying safety and security management in day-to-day transportation activities. This document outlines why this approach is needed, what is to be achieved and how progress will be made. It also articulates the challenges facing the industry and Transport Canada as well as the strategies to make progress in developing and sustaining a safety and security culture.

Safety Management Systems

Aviation Safety

The implementation of Safety Management Systems (SMS) involves a progressive development, and Transport Canada's Civil Aviation Directorate has adopted a phased-in approach to this implementation. The initial phase of SMS became effective throughregulations in May 2005 and provided aviation organizations with the flexibility to decide how to meet the safety requirements. Following this initial phase, Transport Canada agreed to establish the Small Operator Pilot (SOP) Implementation Project to address industry concerns regarding the application of SMS to smaller air operators and aviation maintenance organizations. The SMS SOP project demonstrated that a safety management system could be successfully implemented and become a positive addition to a small operation. For more information on SMS in civil aviation, please visit: http://www.tc.gc.ca/CivilAviation/SMS/menu.htm.

Rail Safety

The Railway Safety Management Systems (RSMS) regulations, which came into effect on March 31, 2001, require railway companies subject to the Railway Safety Act (RSA) to implement and maintain safety management systems. Oversight of the implementation of SMS in the rail industry is carried out through the conduct of rail safety audits. A stakeholder forum on the experiences to date in implementing SMS in rail was planned for 2006-07, however, this was superseded by RSA Review Panel consultation sessions as there may have been potential conflicts in running concurrent sessions. Consequently, Transport Canada Rail Safety plans to hold this stakeholder forum in the latter part of 2007-08 to be followed by a formal review of the RSMS regulations and accompanying guidance material. For more information visit http://www.tc.gc.ca/railway/smsindex.htm.

Marine Safety

Marine safety management systems were implemented in 1998 on a worldwide basis for tankers, bulk carriers and passenger ships in international trade and were extended in 2002 to almost all vessels trading internationally. They are implemented through the Safety Management Regulations. To date, close to 82 Canadian vessels have obtained the required statutory certification issued by classification societies on behalf of Transport Canada. Through a well established monitoring program, Transport Canada directly monitored eight of the audits carried out by these authorized organizations and also reviewed 12 related audit reports in 2006. Transport Canada continues to support the voluntary adoption of SMS by vessels operating in Canadian waters and is reviewing the feasibility of implementing a SMS for operators of Canadian domestic vessels (including small passenger vessels).

Security Management Systems

Transport Canada has completed developing a conceptual framework outlining an approach to Security Management Systems (SeMS). This framework was developed in close consultation with a wide range of interested stakeholders. It is expected that SeMS will bring significant gains in security performance in a dynamic threat environment. For more information visit http://www.tc.gc.ca/tcss/StrategicPlan/Appendix-A/3/menu.html#s.

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

Resource allocation to this strategic outcome for 2006-07 ($ thousands):

Planned Spending	Total Authorities	Actual Spending
$87,097	$74,831	$56,615

Note: The spending by Strategic Outcome includes a reallocation of departmental administration.

As displayed in the Main Estimates, the program activity under this strategic outcome is "Policies and programs in support of sustainable development".

This program activity encompasses the development and implementation of programs and policies to protect the natural environment and to achieve a more sustainable transportation system in Canada.

Transport Canada's 2006-2007 Report on Plans and Priorities outlined a number of important areas for the department to focus its efforts in protecting the physical environment. The following section provides highlights of Transport Canada's progress in these areas by program priority.

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

• Overall, GHG emissions from on-road gasoline vehicles increased by roughly 19.0 megatonnes (Mt) or 24 per cent between 1990 and 2004, while emissions from on-road diesel vehicles increased by 20.8 Mt or 81 per cent during the same period. The emissions intensity (emissions per level of activity) did, however, decline over the 1990 to 2003 period (the last for which this data is available), indicating some improvement. In comparison, between 1990 and 2004, domestic aviation and marine emissions increased modestly by 1.4 Mt and 1.6 Mt respectively (22 per cent and 32 per cent respectively) while rail emissions declined by 1 Mt or 14 per cent.

• Between 1990 and 2004 (the last year for which data is available), the average fuel efficiency in litres/100km improved by 10 per cent for cars, roughly 8 per cent for light trucks, and by 11 per cent for heavy-duty diesel trucks. Freight locomotives also experienced dramatic improvements in fuel use (34 per cent) while passenger aircraft fuel efficiency improved by 24 per cent.

• Between 1990 and 2004 (the last year for which data is available), GHG intensity levels (gms/tonne-km) for heavy-duty diesel trucks declined by 18 per cent, both domestic marine and rail had impressive improvements in GHG intensity (22 per cent and 34 per cent respectively), while aircraft GHG emissions per tonne-km increased by close to 29 per cent.

• In the ten years after 1990, criteria air contaminant emissions from each light duty vehicle have, on average, been dramatically reduced. Emissions, per vehicle, of fine particulate matter have dropped by roughly 38 per cent, Nitrogen Oxides (NO_x) emissions by 49 per cent, Volatile Organic Compounds (VOCs) emissions by 50 per cent, and Sulphur Oxides (SO_x) emissions by 1 per cent.

• Under the Federal House In Order initiative, Transport Canada is one of 11 federal government departments required to report fuel consumption and greenhouse gas (GHG) emissions. As one of the principle operational departments, Transport Canada took on a share of the target that is equivalent to a 4 percent reduction from its 1998-1999 baseline year, to be achieved by 2010. In fact, Transport Canada's GHG emissions were reduced from all departmental transportation activities and buildings, for a total of 17% in 2005-2006 (most recent data) relative to the baseline year of 1998-1999.

• Transport Canada maintains an inventory of its contaminated sites in the departmental Contaminated Sites Management Database. Of Transport Canada's 554 sites listed in the database, 234 sites have undergone remediation or risk management. A further 68 sites are currently being remediated while no action is required on 66 sites.

Program Priorities:	2.3.1 Climate Change
	2.3.2 Environmental Assessment
	2.3.3 Environmental Protection and Remediation

 Transport Canada's Sustainable Development Strategy

Transport Canada's Sustainable Development Strategy (SDS) and the practice of sustainable development has become an integral part of the department's programs, policies and procedures. During the 2006-07 fiscal year, Transport Canada made notable progress towards achieving the remaining commitments within its 2004-2006 SDS, while concurrently developing the 2007-2009 strategy. For a summary of the progress made towards the 2004-2006 strategy, please visit http://www.tc.gc.ca/programs/environment/sd/sds0406.htm.

On December 13, 2006, Transport Canada tabled its fourth SDS in Parliament. This fourth strategy takes a long-term approach that includes focused, results-oriented commitments in areas that Transport Canada can make a difference. The department chose three themes at the heart of sustainable transportation in order to focus its efforts: urban transportation; commercial freight transportation; and marine transportation. In addition, the Government developed six federal sustainable development goals for the 2007-2009 SDS period. Many of the commitments within the department's SDS 2007-2009 serve to support the Government's goals. Please see table 14 for additional details on Transport Canada's SDS. For more information, please visit http://www.tc.gc.ca/programs/Environment/SD/menu.htm.

2.3.1 Climate Change and Clean Air

The Government of Canada is committed to the development and implementation of a plan, through its environmental agenda, for reducing greenhouse gases and ensuring clean air for Canadians. In February 2007, the Minister of Transport, Infrastructure and Communities announced the ecoTRANSPORT Strategy, which will provide over $100 million in funding towards new initiatives in clean transportation aimed at::

• improving the health of Canadians and the environment by reducing the environmental impacts of transportation;
• securing Canada's future prosperity and competitiveness by making critical transportation infrastructure sustainable - economically and environmentally; and, promoting an efficient transportation system that supports choice and the high quality of life that Canadians expect.

To date, achievements under the ecoTRANSPORT Strategy include:

• the ecoMOBILITY Program, which works with municipalities to help cut
  urban-passenger transportation emissions by making sustainable options more available and by reducing single occupant vehicle use;
• the ecoTECHNOLOGY for Vehicles Program, which will test and promote advanced environmentally friendly vehicle technologies, while building partnerships with the automotive industry to address potential barriers to the introduction of new technologies in Canada;
• the ecoENERGY for Personal Vehicles Program (delivered by Natural Resources Canada [NRCan]), which will provide fuel consumption information and
  decision-making tools to encourage consumers to purchase fuel-efficient vehicles that are currently available in the market;
• the ecoFREIGHT Program, aimed at reducing the environmental and health effects of freight transportation through accelerated adoption of emissions-reducing technology;
• the ecoENERGY for Fleets program (delivered by NRCan), which encourages commercial and institutional fleets to take advantage of existing and emerging technologies, with a focus on driver education and energy management, and best practices.

For more information on these new initiatives, please visit http://www.ecoaction.gc.ca/ecofreight.

The government has also committed to regulating fuel-efficiency for new passenger cars and light trucks that will be sold in Canada beginning with the 2011 model year. The government announced in October 2006, under a Notice of Intent to Regulate, that it would regulate fuel efficiency under the Motor Vehicle Fuel Consumption Standards Act. Preliminary work on the development of regulations commenced in 2006-07, including the establishment of a Transport Canada task force to lead the work. NRCan, Transport Canada, Environment Canada, Finance Canada and Industry Canada are actively involved in this initiative.

A joint government-industry monitoring committee has been established to track the Canadian automotive industry's performance under an existing Memorandum of Understanding (MOU), which calls for a reduction of 5.3 megatonnes of greenhouse gases by 2010. Transport Canada, Environment Canada and Natural Resources Canada are represented on this committee. The Committee released its first progress update report in Summer 2006.

To increase consumer purchases of more energy efficient vehicles before the regulatory fuel-efficiency standards take effect in model year 2011, Budget 2007 announced a new Vehicle Efficiency Incentive (VEI) structure that covers the full range of passenger vehicles available today. The VEI came into effect on March 20, 2007, and has three distinct components: a performance-based rebate program offering up to $2000 for the purchase of a new fuel-efficient vehicle; neutral treatment of a broad range of vehicles with average fuel-efficiency that are widely purchased by Canadians; and a new Green Levy on fuel-inefficient vehicles. Transport Canada is responsible for administering the rebate program, known as the ecoAUTO program. The Government is aiming to make rebate payments in Fall 2007.

In sum, 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, such as those announced under the ecoTRANSPORT strategy, for reducing emissions from the transportation sector.

Advanced Technology Vehicles Program

The Advanced Technology Vehicles Program (ATVP) seeks to encourage the supply and consumer demand of advanced technology vehicles in Canada and to determine the viability of emerging and future technologies in the Canadian context. In doing so, it provides support to the auto industry's efforts to meet a voluntary target of reducing greenhouse gas emissions from motor vehicles in Canada by 5.3 MT in 2010. In 2006-07, the program continued its strong outreach program to inform the public of the environmental and safety performance of a range of advanced technologies. Five new advanced vehicles were purchased in 2006-07. It successfully sponsored or attended approximately 20 individual events across Canada, ranging from major Canadian international auto shows (in Toronto, Montreal, Vancouver and Calgary) to consumer lifestyle or environmental shows. It also met collectively and individually with the auto industry to discuss collaboration on the program and to present program findings. The ATVP sunset on March 31, 2007, and was succeeded by the new and expanded ecoTECHNOLOGY for Vehicles program, which was announced in February 2007.

For further information on this initiative, please visit: http://www.tc.gc.ca/programs/environment/atvpgm/menu.htm.

Fuel Consumption Program

The Motor Vehicle Fuel Consumption Program (MVFCP) administers the voluntary Government/Industry Fuel Consumption Program, in collaboration with Natural Resources Canada (NRCan). The specific responsibilities of Transport Canada relate to the administration of the voluntary fuel consumption targets for industry, including: publishing annual company average fuel consumption (CAFC) targets and reporting guidelines for companies selling new vehicles in Canada, collecting performance data and maintaining a comprehensive vehicle database, providing data to NRCan for the Fuel Consumption Guide for Vehicles and to provinces for related vehicle programs, and administering a confirmatory audit test program to confirm the accuracy of reported information. The MVFCP completed these activities on schedule, and initiated work with individual companies to review and improve the data in the database system. All information (with the exception of three companies who require additional time to address their data issues) is now complete and updated up to the 2005 model year (inclusive). In 2006-07, the MVFCP completed compliance testing on 13 vehicles as part of its confirmatory audit test program.

Freight Programs

In 2006-07, the Freight Efficiency and Technology Initiative (FETI) and the Freight Efficiency Program (FEP) continued to support energy-efficiency improvements in the goods movement sector through the funding of demonstration projects and projects to purchase and install efficiency-enhancing technologies. A total of eight technology demonstration projects in all freight modes (air, rail, truck and marine) were initiated to test and measure the impact of a range of technologies in real world operating conditions. Transport Canada committed approximately $1.06 million towards these eight projects in 2006-07. The Freight Incentives Program (FIP) initiated two projects to support the purchase and installation of emissions-reducing technologies in 2006-07, with $231,000 in committed funding. Work was completed on a total of 25 projects. Summaries of the results of the demonstration projects will be published on the Transport Canada website over 2007-08. These two contribution programs sunset on March 31, 2007, having successfully funded 38 different projects over four years.

Transport Canada continued its work under the Shipper Awareness Program with the Canadian Industrial Transportation Association (CITA), Supply Chain and Logistics (SCL) Canada and industry to enhance freight shippers' understanding of the environmental impacts of their business decisions, and improve the uptake of transportation alternatives available to them, with the aim of reducing greenhouse gas (GHG) emissions. In 2006-07 the department participated in the fall SCL symposia to raise the shippers' awareness of environmentally friendly approaches available to them. This work also included participation in CITA's second Confidential Benchmarking Survey, which surveyed the transportation and environmental policies and practices of the manufacturing sector and other industries in Canada. Transport Canada also worked in close collaboration with SCL to sponsor the first Green Shipper Award in Canada, to be presented to an organization in the supply chain that exceeds a high standard of environmental friendliness. The department completed environmental footprint background studies for the rail and marine sectors, and initiated a study of the trucking sector. These studies will be input, to analysis in 2007-08, to develop decision-making tools for freight shippers in Canada that incorporate environmental impact considerations.

Significant progress has been made with respect to the department's work to establish voluntary agreements with industry to reduce GHG emissions. The department, in collaboration with Environment Canada, concluded negotiation of an agreement to reduce greenhouse gas and air pollutant emissions with the Railway Association of Canada.

Urban Transportation Showcase Program

The Urban Transportation Showcase Program (UTSP) is a $40 million initiative to demonstrate and evaluate the impacts of integrated strategies to reduce GHG emissions from urban transportation and to disseminate information that encourages replication of successful practices. Municipalities in Halifax, Region of Waterloo, Greater Toronto Area/Hamilton, Whitehorse and Greater Vancouver continued to implement showcase demonstrations aimed at increasing the modal share of transit, cycling, walking and car-pooling. Three projects in Winnipeg, Quebec City, and Gatineau/Montreal were successfully launched, bringing the total number of showcases to eight. The program was extended to March 2009 as part of the interim strategy on existing climate change programs.

Preliminary results from showcases are promising. For example, the Halifax MetroLink Bus Rapid Transit project reported an 18 per cent increase in transit ridership and significant travel time savings on their new transit services under their showcase project.

The Program's Information Network continued to disseminate practical information on how cities are reducing the GHG emission impact of urban passenger transportation activity. The Information Network accomplishments included:

• an upgraded website that received 158,000 visitors, representing a 50 per cent increase over the previous year;
• the development of the web-based Transportation Demand Management Resource Centre;
• the sponsorship of 14 sustainable transportation learning events that attracted over 1100 transportation practitioners and other participants;
• the development of 12 case studies and issue papers highlighting effective sustainable transportation practices and policies, which received 5,632 visits on the UTSP website;
• the publication of an annual review that documented the progress and results of showcase demonstrations; and
• recognition of innovation and leadership by supporting two national sustainable urban transportation award programs.

For further information on the program, including the most recent Annual Review, please visit http://www.tc.gc.ca/programs/environment/utsp/menu.htm.

Moving On Sustainable Transportation

The Moving On Sustainable Transportation (MOST) program is a key departmental initiative for supporting innovative, community-based, sustainable transportation projects to facilitate a transition to a more sustainable transportation system. In 2006-07, the MOST Program completed funding for 32 projects that included: identifying the environmental benefits of tele-work; facilitating increased active transportation at elementary schools; piloting of transportation management associations; and examining the feasibility of transit services in rural communities.

In 2006-07, work was completed to renew and enhance the MOST program, in anticipation of the sunset of its program authority on March 31, 2007.

For further information on the renewed program, including the 2005 MOST Annual Review, please visit, please visit: http://www.tc.gc.ca/programs/environment/most/menu.htm.

Climate Change and Clean Air - Arctic Marine Shipping Assessment

Global climate change predictions include a significant reduction in Arctic sea ice, with potential for shipping to increase substantially in the future. Participation by all circumpolar countries in this major initiative is paramount to a successful outcome.

This assessment will look at shipping activity levels today and estimates in the future (2020 and 2050). It will serve to identify potential marine environmental and socio-economic impacts and will indicate where further efforts may be required to continue to protect the Arctic on a sustainable basis.

The Arctic Council's Protection of the Arctic Marine Environment (PAME) working group is studying the potential impacts of expanded marine activities on Arctic populations and their environment. Transport Canada, on behalf of the Arctic Council, is currently carrying out consultations in Canada for input into the Arctic Marine Shipping Assessment, an initiative co-led by Canada, Finland and the U.S. The full assessment will be completed over the 2006-2008 biennium with a final report expected in 2009.

2.3.2 Environmental Assessment

A total of 1,058 project environmental assessments (EA) were underway or completed by Transport Canada in 2006-07 in accordance with the Canadian Environmental Assessment Act (CEAA).

In order to support The Cabinet Directive on Strategic Environmental Assessment (SEA) of policy, plans and programs proposals, the EA group has continued their work raising awareness on SEA requirements and provided guidance and support to groups on completing the SEA process. In this reporting period, over a 100 proposals were received and analyzed, three training sessions were provided and response to SEA Audit was coordinated and provided to the Office of the Auditor General - Commissioner of the Environment and Sustainable Development.

For more information, please visit http://www.tc.gc.ca/programs/environment/environmentalassessment/menu.htm.

2.3.3 Environmental Protection and Remediation

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 90 departments enrolled in the program, the NCR program has been a notable achievement. Employee participation has reached 13,000 and the program has stimulated a 5-7 per cent increase in transit ridership among federal employees. In 2006-07, an evaluation of the NCR Transit Pass Program was completed and it revealed a high degree of satisfaction among federal employees enrolled in the program. The evaluation also recommended expanding the program beyond the NCR considering the cost-benefit of such an expansion..

The Great Lakes St. Lawrence Seaway (GLSLS) study is a joint Canada/U.S. effort to evaluate the future infrastructure needs of the St. Lawrence Seaway. Transport Canada, the U.S. Department of Transportation, the U.S. Army Corps of Engineers, the Canadian and U.S. Seaway entities, Environment Canada and the U.S. Fish and Wildlife Service have worked cooperatively to determine the future needs of the GLSLS, including the environmental, economic and engineering implications of those needs.

In January 2007, the environmental delivery team submitted its report to the project's management team. This document includes the following nine chapters of some 500 pages of text and illustrations:

• Study Overview
• General Description and Context of The Great Lakes St. Lawrence Seaway System
• Water Level Regimes
• Ecological Characteristics of The Great Lakes St. Lawrence River Basin
• Navigation Related Impacts
• Fish and Wildlife Resources and Navigation-Related Activities
• Environmental Impact Assessment (EIA)
• Trends and Qualitative Assessment of Expected Future Conditions
• Sustainable Navigation Perspective

In 2006-07, Transport Canada continued to undertake work detailed in its departmental Contaminated Sites Management Plan in support of the department's commitment to manage its sites in a responsible manner. The plan outlines the department's five-year strategy for managing its contaminated sites and identifying suspected contaminated sites. During 2006-07, Transport Canada spent $ 18.6 million on the assessment and remediation/risk management of contaminated sites. This includes $ 7.8 million from the Federal Contaminated Sites Action Plan (FCSAP). FCSAP funding was provided for 11 remediation and 13 assessment projects.

For more information, please visit http://www.tc.gc.ca/programs/environment/contaminatedsites/menu.htm.

Environmental Protection and Remediation - National Aerial Surveillance Program

Transport Canada keeps a watchful eye over ships transiting Canadian waters through its National Aerial Surveillance Program (NASP). The NASP is the primary tool for detecting ship-source pollution in waters under Canadian jurisdiction. Aerial surveillance is widely adopted internationally, and is considered to be the most effective method for the detection of oil spills.

In addition, newly acquired pollution surveillance aircraft flew its inaugural mission in fiscal 2006-07 aiding in the protection of Canada's ocean waters. Transport Canada will strive to continuously improve the effectiveness of the NASP to achieve its goal for Canada to be recognized as one of the most capable nations in aircraft marine reconnaissance.

2006-07 was a remarkable year for Transport Canada's NASP as 1,649 productive pollution patrol hours were flown, this is a new record for the NASP. This is a 67 per cent increase when compared to an average of 1,100 hours per year prior to 2004. Of the 1,649 hours, 84.3 hours were conducted in the Arctic; this was the second consecutive year that dedicated pollution surveillance was conducted over Arctic Waters. The total number of vessels over flown was 10,063, a 54 per cent increase when compared to 2004-05 when 6,539 vessels were over flown. This is an average of 6.1 vessels over flown per hour nationally. There were 98 pollution incidents detected, 87were reported as mystery spills, where no positive source could be identified and 11 were reported as ship source spills. It was estimated that the NASP crews observed 2,107 litres of oil on the ocean surface during the reporting period. For more information visit http://www.tc.gc.ca/marinesafety/oep/ers/nasp.htm.

Environmental Protection and Remediation - The Canadian Ballast Water Program

The international community recognizes that uncontrolled discharge of ballast water and sediment has led to the transfer of harmful aquatic organisms and pathogens. The International Maritime Organization (IMO) has been addressing the issue since 1988 when Canada reported on invasive marine species in the Great Lakes. In response, the IMO adopted voluntary guidelines in 1991 to help prevent further introductions. In an attempt to control further transfers, members of the IMO signed the International Convention for the Control and Management of Ships' Ballast Water and Sediments (the Convention) on February 13, 2004.

In June 2006, Canada's voluntary ballast water management program was replaced with a mandatory regulatory program. The Ballast Water Control and Management Regulations require all vessels, with the exception of vessels specifically exempted from the regulations, to exchange or treat their ballast prior to ballast discharge in waters under Canadian jurisdiction.

There are thousands of aquatic species that may be carried in ships' ballast water, including bacteria and other microbes, micro-algae, and various life stages of aquatic plant and animal species. Ships travelling in Canadian waters carry thousands of tonnes of ballast water annually, making Canada vulnerable to the introduction of alien species from the ballast water discharged.

The Government of Canada is committed to protecting Canada's marine and freshwater environment. Transport Canada recognizes that uncontrolled discharge of ballast water and sediment can lead to the transfer of harmful aquatic organisms and pathogens with resulting negative impacts on industries such as fishing and aquaculture, and is committed to the introduction and enforcement of appropriate regulatory controls. The regulations introduced in June 2006 are not the final solution to the issue of reducing the risk of introductions from ships, but they are a significant step forward.

Transport Canada supports Canada's accession to the International Ballast Water Convention, and will be seeking the confirmation of other required departments and agencies in order that Canada may ratify this instrument. This is dependant on the development of suitable treatments systems and confirmation that the provisions of the Convention provide sufficient protection for Canada's waters.

For more information about The Canadian Ballast Water Program visit http://www.tc.gc.ca/marinesafety/oep/environment/ballastwater/menu.htm.

Environmental Protection and Remediation - Newfoundland Environmental Risk Assessment Study

With more than 280 million barrels of oil passing through the area every year, Placentia Bay on Newfoundland and Labrador's south coast is one of the busiest ports in Canada. Due to the growing offshore oil production, refining, and transhipment activity in Newfoundland, the Regional Advisory Council (RAC) requested that Transport Canada conduct a risk assessment study to assess the risks of pollution along the south coast of Newfoundland and to ensure that the response regime continues to be adequate should an oil spill occur.

The environmental risk assessment began in September 2005 and continued into this fiscal year. The study will provide Transport Canada with extremely valuable information in its governance role of Canada's Marine Oil Spill Preparedness and Response Regime. Once the results are in, Transport Canada can assess the level of preparedness provided by the Regime, given the level of environmental risk identified, and make necessary adjustments to the Regime as required.

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Transport Canada also continued to work towards reducing greenhouse gas emissions in the rail sector. Specifically, it worked with Environment Canada and the Railway Association of Canada on expanding the existing Environmental Performance Agreement to include more effective plans and targets to reduce greenhouse gas emissions, and control over toxic emissions.

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