1. Ottawa Update Transportation Border Working Group Vancouver, British Columbia October 22, 2014 1

2. Overview Economic Update Transport Canada’s 2014 Priorities Bilateral Cooperation on Transportation Transportation Issues Beyond the Border 2

3. Cross-border truck traffic is down 21% from the 2000 peak but over 10.7 million trucks still cross annually Truck activity at nearly all crossings has levelled off or declined since the early 2000s No big rebound seen after the 2008 financial crisis In 2013, the six busiest road border crossings represented 70% of all truck border movements 3 Truck volumes  Cross-border rail traffic declined by 25% in 2009 but rebounded strongly  Cross-border traffic exceeded 2.3 million carloads for the first time in 2013  The top 4 rail crossings accounted for 77% of the total Economic Update Rail volumes

4. Economic Update Oil and other resource industries are booming but automotive and other manufacturing are continuing to recover from a deep recession in 2009 Crude petroleum exports to the U.S. have trebled since 2000, while manufactured exports have declined Vehicle and auto parts imports to Canada are down since a peak in 2002, but have grown since 2009 Structural changes in North American automotive industry have played a major role in the decline in cross-border movement of vehicles and parts 4

5. Transport Canada’s 2014 Priorities The departmental priorities for 2014 include: refining and strengthening TC’s safety and security oversight; contributing to the Government’s Responsible Resource Development agenda; improving Canada’s competitiveness and critical transportation infrastructure; and, ensuring that TC’s policies, programs and activities will meet the needs of the transportation system in the long-term. 5

6. Bilateral Cooperation on Transportation Minster Raitt met with U.S Secretary of Homeland Security Jeh Johnson in September 2014 Detroit River International Crossing (DRIC)/ New International Trade Crossing; Beyond the Border, etc. Associate Deputy Minister Helena Borges visited Washington in September 2014 met with Susan Kurland: DRIC; rail & marine issues; met with Customs and Border Protection and General Services Administration. Minister Raitt met with Ambassador Heyman in May 2014 Ambassador had separate meeting with Transport Canada: Beyond the Border; Regulatory Cooperation Council; railway safety; marine policy. 6

7. DRIC/NITC 7 The Windsor-Detroit Bridge Authority (WDBA) will oversee design, construction, operation and maintenance through a public-private partnership (P3). The WDBA is a Canadian Crown (government- owned) corporation. Canadian Budget 2014 provides an additional $470 million over two years. COMPLETED Environmental Assessment Preliminary Engineering Crossing Agreement with Michigan Presidential permit Crown corporation established Buy America Waiver ONGOING Property acquisition and utility relocation in Canada Technical Studies (geotechnical, design, etc.) Transition from TC to WDBA UPCOMING Property acquisition and utility relocation in the U.S. Preparation of bid documents Procurement

8. Transporting Grain by Rail Western Canadian grain production for the upcoming crop year could be as high as 56 million metric tons. Forecast 8% higher than 5 year average, but 11% lower than last crop year. Government took action to clear grain backlog and reinforce strong, rail-based supply chain by enacting the Fair Rail for Grain Farmers Act: Requiring Canadian National Railway (CN) and Canadian Pacific Railway (CP) to move a minimum amount of grain each per week between August and November 2014, subject to corridor capacity and demand; Until August 2016, extended interswitching distances from 30km to 160km for shippers of all commodities in Alberta, Saskatchewan and Manitoba; provided greater clarity on service level agreements; and required more timely and enhanced railway data related to grain; In level of service adjudications, the Canadian Transportation Agency may now order a railway company to pay a shipper compensation for failure to fulfill service obligations; Established regulatory authorities to mandate performance requirements and compensation provisions in grain companies’ contracts with producers. 8

9. Railway Safety Update In April 2014, TC responded to the Transportation Safety Board’s (TSB) interim recommendations on the Lac-Mégantic accident by: Removing the least crash-resistant DOT-111 tank cars from dangerous goods service; Requiring DOT-111 tank cars used to transport crude oil and ethanol that do not meet existing the January 2014 standard, or any other future standard, to be phased out or refitted within three years; Requiring Emergency Response Assistance Plans for crude oil, gasoline, diesel, aviation fuel, and ethanol; Creating a task force with stakeholders to strengthen emergency response capacity; and Requiring reduced speed for trains carrying dangerous goods. In August 2014, the Minister of Transport launched a second round of consultations with stakeholders on a strengthened liability and compensation regime for federally regulated railways. TC is preparing response to final TSB recommendations on Lac-Mégantic and continuing to collaborate with U.S. counterparts on rail policy and regulatory activities. 9

10. Beyond the Border Progress continues on Beyond the Border initiatives: Transport Canada continues implementation on nine initiatives and is involved in the development of two new initiatives. Third annual Implementation Report expected to be released in December 2014. Transport Canada and its U.S. partners have made good progress on the Regulatory Cooperation Council (RCC) Action Plan Phase I initiatives that deal with transportation (11 of the 29 initiatives). The RCC’s Joint Forward Plan for the Action Plan Phase II was made public in August 2014 and can be found on the Privy Council Office website. The focus is now on governance arrangements to establish regulatory partnerships and develop technical work plans to support joint regulatory sector commitments. Work to develop these two items commenced with a joint government- stakeholder event in Washington, D.C. on October 7-8, 2014. 10

11. Questions? Daniel McGregor Manager, Senior Policy Advisor Highway, Border and Motor Carrier Policy Transport Canada 613-998-1929 daniel.mcgregor@tc.gc.ca 11