An Economic Analysis of Canada's Ground Transportation Sector

This study examines the trends and outlooks for four different ground transportation industries in Canada: bus passenger service, railway service, trucking, and taxis. Ground transportation is less spectacular in its growth and outlook for the future than air transportation. Nevertheless, rail and truck freight revenues have consistently been more than 3 percent of Canada's GNP during the past decade, with value added in just these two industries somewhere between 1.5 percent and 3 percent of GNP. These nominally small percentages are actually quite large for two industries as narrowly defined as these two have been for this study.

In all four of these industries, there has been a tendency toward increased specialization with fIrms serving increasingly narrowly defined market niches. This finding holds for all four of the industries studied, despite their considerable differences in both past growth and projected future growth. The primary reason for the observed increases in specialization is that the costs of specialization have declined, especially for communication and organization tasks.