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Gaps in Provincial Transportation Data and the Implications for Assessment of Economic Growth

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Gaps in Provincial Transportation Data and the Implications for Assessment of Economic Growth MEASURING WHAT YOU MANAGE: CHALLENGES FOR PROVINCIAL TRANSPORTATION POLICY Megan Warachka, MBA, Research Associate, Barry E. Prentice, Ph.D., Director, Transport Institute, University of Manitoba 1. INTRODUCTION Macro data are available to determine the general state and direction of the national economy, but this level of aggregation can be insufficient for the micro policy analysis that is necessary in provincial jurisdictions. The problem varies, of course, with individual sectors of the economy. The transportation sector is one of the most difficult to monitor because of its magnitude and complexity. Accurate, timely and publicly available transportation data are relatively scarce. Data gaps limit the scope for regional, or provincial policy analysis, and the resultant quality of the economic development plans. This paper examines the transportation data available for the Province of Manitoba, and its adequacy to address the challenges that face provincial transportation policy. The first section presents the implicit hypothesis that transportation data gaps unduly affect policy assessment. The subsequent sections set out the magnitude and causes of data gaps for highway, rail, air and urban modes and transportation equipment manufacturing and trade. The paper concludes with some thoughts on the implications for provincial jurisdictions of being unable to measure the transport issues that they are expected to manage. 2. THE NECESSITY OF TRANSPORTATION DATA Transportation activity is a leading indicator of changes in the global economy. Consequently, better measurement of transportation activities can enable managers to prepare for economic growth and downturns. Economic growth is measured by the increases in productivity and the output of goods and services traded. Efficient and reliable transportation is critical to economic growth. Transportation is the largest single logistics cost affecting domestic and international trade. Accordingly, economic growth can be helped, or hindered, by the competitiveness and sustainability of the transportation system. 1 Warachka / Prentice Decision makers need comprehensive and timely transportation data to manage the economic health of this critical system. Accurate information is necessary for planning infrastructure investments to alleviate bottlenecks. Similarly accurate data are essential to the development of public policy strategies. The evaluation of new services, exploration of new market opportunities and examination of industry competition are all data rich activities. Major shifts in the Canadian and global economies are changing supply chain relationships and trade flows. Companies consider transportation factors to be important when selecting a new location for manufacturing and distribution. Absence of data precludes measurement of location advantage. Finally, data are needed to evaluate the impacts of endogenous and exogenous shocks. Internal forces of change that require assessment include environment protection policies, changes to industry structure and the application of advanced information technology. Some external forces are the impacts on provincial transportation related to NAFTA, the “Open Skies” agreement, new security procedures (following September 11, 2001) and the 20 percent rise in the value of the Canadian dollar in 2003. 3. IDENTIFICATION AND ANALYSIS OF DATA GAPS The purpose of this paper is to highlight specific transportation sector data gaps identified for the Province of Manitoba. The implicit hypothesis of this paper is that the current state of transportation statistics hinders accurate policy making and assessment at the provincial level. Examples of data deficiencies are presented by transport modes and sectors. Transport Canada’s annual report Transportation in Canada provides a comprehensive overview of the industry. Some provincial data are reported; however, the scope of the annual report is insufficient for provincial analyses. In 1996, the Transport Institute recognized the absence of a complete Manitoba transportation data set and began developing a comprehensive provincial database. The purpose was to have one reference that contained all relevant statistics specific to Manitoba’s transportation sector. Implementation of the National Transportation Act (1987) in 1988 was taken as the database origin. The magnitude of undertaking this database quickly became apparent. Provincial transportation data are scattered amongst dozens of reports, and no central reference exists to document their location. The most recent report on this project is entitled Transportation and Trade Statistics for Manitoba Edition 2: A Periodically Updated Database and Trend Analysisi. The University of Manitoba Transport Institute’s publication contains all relevant and available transportation and trade information at the provincial level for fifteen years from 1988 to 2003. The provincial transportation data are derived from Statistics Canada, CANSIM II (the Canadian Socio-Economic Management Database), the Manitoba Bureau of Statistics, 2 Warachka / Prentice industry organizations (such as the Railway Association of Canada), and operators (such as the Winnipeg Airports Authority and Winnipeg Transit). During the annual updates of this database, significant gaps and data reporting inconsistencies have been observed. These gaps and inconsistencies are detailed further in this article by mode of transport and related industry. 3.1 HIGHWAY TRANSPORT: IMPORTANCE AND DATA GAPS The Manitoba truck transport industry contributed $561 million (at basic prices and in 1997 constant dollars)ii, or 1.8 percent of the total Manitoba economy in 2002. The trucking industry is of greater importance to Manitoba (in terms of revenue or employment) than the national averageiii. The trucking industry accounts for about 1.2 percent of Canada’s economyiv. In 2002, truck transport in Manitoba employed 7,837 peoplev, or 1.4 percent of all Manitoba employees. Over 500 truck transport firms are domiciled in Manitobavi. Five of these firms are amongst the top 25 largest carriers in Canada. The majority of information on highway transport for the Province of Manitoba is obtained from CANSIM, and the Statistics Canada publications Trucking in Canada (53- 222) and Surface and Marine Transport (50-002). Trucking data vary with the different classifications of operations. Small for-hire, medium to large for-hire, owner operators, and private carriers do not have the same data reported in each case. Specific examples include Manitoba carrier operating revenues, expenses, number of employees, and salaries (from the Motor Carriers of Freight Survey). This information is reported for small for-hire carriers and owner operators, but not for medium to large for-hire, or private carriers of Manitoba. Without comparable data, studies of economies of size, industry concentration and structure become very suspect. The annual distance traveled by vehicle type, fuel consumption and costs are available for Manitoba owner operators and small for-hire carriers. These data are not reported for medium to large for-hire carriers. Similarly, average wages data are unavailable for Manitoba trucking. Since 1997, no data are reported for solely Manitoba trucking operations. Manitoba, Saskatchewan and Alberta data are amalgamated in the reporting of estimated transport revenues, tonnages hauled, tonne-kilometers and number of shipments to and from other provinces by for-hire trucking. These data are essential to the estimation of demand elasticities, structural change and economic growth. The economies of the three provinces are very different, leading to individual transportation demand patternsvii. The significant growth of trade since the signing of CUSTA (1988) and NAFTA (1994) has stimulated for-hire south and northbound movement of goods to and from United States regions. By value, more than seventy percent of this trade moves by truckviii. The 3 Warachka / Prentice impact of north-south trade on emerging trade corridors deserves attention. The ability to promote economic development and industrial location, and the implications for policy development, depends on an understanding of changes to identify strategic opportunities. Some data have never been collected, but could be very useful in assessing economic growth. For example, freight rates and vehicle utilization data could be used to estimate backhaul demand and competitive advantage for investment and plant location. Wage data could be helpful in the analysis of driver shortages. This data wish list could become more important given the recent appreciation of the Canadian dollar. If the U.S. trucking industry gains a cost advantage, as they did in 1989, such data could be invaluable in managing the market share adjustment of the cross-border transportation industry. 3.2 RAILWAY TRANSPORT: IMPORTANCE AND DATA GAPS Canadian National Rail, Canadian Pacific Rail, Via Rail, the Hudson Bay Railway and other short-line railways serve Manitoba. The trucking industry may employ more workers in Manitoba than the railways, but the national share of railway employment to Manitoba is much largerix. The rail transport industries employed 1.1 percent of all Manitoba workers in 2001 (6,091 people), versus 0.3 percent (50,376 people) in all of Canadax. To express this point another way, Manitoba accounts for 12.1 percent of national employment in the Canadian railways, while the population of Manitoba is only 3.3 percent of Canada. Consequently, the railways are
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