Canada Approves Via Rail Rescue Package - Brief Article

International Railway Journal, May, 2000

THE Canadian government has approved a financial rescue package for the ailing state-owned passenger rail operator, Via Rail, which has been guaranteed its existing annual subsidy of $C 170 million ($US 115.3 million) for a further decade, and is to receive an additional $C 401.9 million during the next five years to acquire new locomotives and coaches, upgrade signalling and track, and refurbish stations. The transport minister, Mr David Collenette, told Via Rail to provide within the next month details of how it plans to spend the extra capital investment.

Currently, Via Rail covers only about half its $C 400 million operating costs through fares, and faces a crisis as a result of having antiquated equipment and a shortage of track capacity (IRJ March p2). Its annual subsidy has fallen to the present level from $C 389 million eight years ago.

Collenette said: "By providing Via with important new capital funds, we are putting an end to the deterioration of Canada's passenger rail system, ensuring that it can operate safely and efficiently in years to come. This marks the beginning of a renaissance for passenger rail services in Canada."

The state cash injection was agreed by the Canadian government after it rejected Collenette's original proposal to sell Via's operating rights for inter-city services, the transcontinental service, and regional services to a number of private franchisees.

Via operates 430 services each week over 14,000 route-kin, most of which is owned by Canadian National Railway. Services in the 1171km Quebec City-Montreal-Toronto--Windsor corridor account for 85% of Via's ridership and 70% of its income.

Via's president, Mr Rod Morrison, said the operator plans to introduce faster services between Montreal and Toronto, and will acquire new coaches and sleeping cars to expand its existing operations and launch new services. At the moment, it possesses a fleet of 81 diesel locomotives, mainly GM-built FP40H diesel-electric units, and a mix of LRC tilting trains and refurbished Budd Car passenger coaches. The latter date from the 1950s.

Collenette added that he was encouraged by Via's reported increase in revenue to $C 220 million last year, compared with $C 200 million in 1998. He stated: "Via carried almost 3.8 million passengers and logged 1.5 billion passenger-km--its best performance for a decade. These numbers indicate an enormous growth potential."