Good day, Mr. Chair and hon. members of the committee.

Thank you for inviting us to discuss the high-frequency rail project.

Canadian National, or CN, is Canada's largest railway, transporting over 300 million tonnes of freight per year over a 30,000-kilometre network spanning Canada and the central United States. CN's mandate is to support Canada's economy by moving freight securely and efficiently to our client markets. The goods we carry are going to and coming from a great many of your ridings; they're essential to everyday life, from cars to clothes, food to raw materials.

A large part of these goods are commodities for export, in support of the Canadian economy. We acknowledge the importance of rail freight in supporting Canada's trade balance and we thank our clients for their trust.

The Canadian railways that transport freight own their own corridors, infrastructure and rolling stock. They're also responsible for their maintenance.

Canadian railways need to make massive investments to increase their capacity and meet the rising demand of their clients while supporting economic growth and jobs. To illustrate this growth, we'd simply like to mention that, in 1994, the last year before CN's privatization, we ran 2.3 million cars originating from Canada. These last few years, we reached 3.5 million cars, representing an increase of almost 55%. CN's current rail system is completely different compared to what it was before privatization. CN has had to invest massively to meet that growth and continue to support the Canadian economy.

We want to emphasize that, last year alone, CN invested $3.2 billion, or 19% of its gross revenues, to maintain the system and increase capacity. Still, the sustained increase in demand for freight service is such that certain segments of the supply chain are at full capacity, or near full capacity.

Canadian railways are subject to a level of service obligations. Simply put, Canadian railways cannot say no, and must, without delay and with due care and diligence, receive, carry and deliver the traffic. Here, the act refers to the freight traffic tendered to railways.

Some of our customers have certainly engaged with you to express the need for more rapid growth or for more service. Recent years have been challenging for the Canadian supply chain. Major and unpredicted variations in demand are part of the new reality that we must collectively deal with. Importantly, this requires network capacity to adjust when needed.

Since the privatization of CN in 1995, Via has operated on CN's network under a train service agreement. Nearly 85% of Via's current service operates on CN's network. This represents a significant commitment for CN.

The coordination of both freight and passenger service presents a sustained challenge. Our freight service has a maximum speed of 55 miles per hour, while Via operates in some segments of our network at 100 miles per hour.

We have two additional comments.

First, increased demand for our freight service is causing more operational conflicts with Via. Nevertheless, we do our best to accommodate Via's operations, understanding that it's not always possible to do exactly as Via wants.

Second, asking one freight railway company to host 85% of the passenger service while its direct competitor provides only a marginal contribution to that passenger service creates an imbalance that must end.

Last September, representatives of HFR appeared before you and explained that their project involves a corridor dedicated to passenger service. The stated purpose is to ensure the long-term viability of both passenger and freight service by removing the inefficiencies and complexities of having both types of train operating on the same tracks.

CN totally agrees with this critical aspect of the project and supports the establishment of a corridor dedicated to passenger service. We welcome HFR's approach in recognizing the importance of protecting railway freight capacity for the growth of the Canadian economy.

At CN, we believe the Canadian vision for rail transportation should be one in which both freight and passenger services can deliver on their respective mandates, including enabling their respective growth. This is why we believe the HFR proposal has many of the right features to provide the long-term rail capacity Canada needs.

Thank you for your attention.