The article below was originally prepared for the March/April version of “Ontario Report”.  To make it more readily available to website readers, it is reproduced here.

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        Going before the judge must be a troubling experience for federal government departments and Crown Corporations.  And so it likely was for VIA Rail Canada when the Auditor General (AG) published its Special Examination Report (SER) covering the period November 2013 to September 2015.  An understanding of VIA’s troubled legislative and political history is needed to put the SER in full perspective.  Successive federal governments who have repeatedly knelt before the personal automobile, the short-haul flight and have persistently ignored the very negative and social and economic impacts of a fragmented public transportation system and sub-par tourist industry are really a watermark on each page of this document.

         But VIA management, it points out, also have culpability and both VIA users and their advocates are well aware of their corporate missteps and spin machine that continue to both annoy and insult.  Although on-board services are quite acceptable by international standards and train staff are generally accommodating, one gets the feeling of a growing creakiness in the organization and the SER shines a light on the many reasons why.

         The full Auditor General’s report can be read on-line on the website of the Office of the Auditor General.  Some of the key points are as follows:

   Corporate governance.  It’s quite clear that the political nature of the VIA board precludes the necessary talent to plan, manage and operate a customer-focused passenger rail network.  Since 2008 VIA has been unable to obtain federal approval of its five-year corporate plan and has resorted to short-term measures to mitigate operational crises.  Whether this is a direct result of VIA management capability or stone-walling by entrenched federal government ideology is not clear from the report.  Either way, there is no future for VIA without a fully-funded, long-term corporate plan and a forward-thinking federal mandate.

   Frequency and track access.  The report discusses how this inhibits VIA operations and, superficially, one might be inclined to sympathize with VIA.  Both CN and CP are primarily focused on shareholder value, but CN recently rejected VIA’s accusations that it consistently gives priority to its freight over passenger traffic.  So where is the truth?  Why is Transport Canada not working with CN and CP on a better plan of mutual accommodation based the on facts?  Meanwhile VIA continues to display conflicting behaviour by announcing a dedicated Montreal – Toronto track plan, separate from the CN-owned infrastructure, while, at the same time telling Kingston passengers that their station will be modernized and trains “repurposed.”  In fact, VIA spent close to $500 million to add passing track on the current route through Kingston to reduce conflict with freights which should mean that a passenger-only dedicated tract Torontoo-Peterborough-Smith Falls is not required.

   Contract management.  The SER highlights the fact that many VIA capital projects have gone wildly over-budget (Exhibit 5 below).  It shows eye-watering variances that would result in a major management cull in a private company.  But an audit on infrastructure improvement, performed by KPMG, has deflected several access to information requests by concerned citizens.  The conclusion one must draw from this secrecy is that it comprises a litany of very poor planning and ineffective project management by VIA and other contractual players.

You are encouraged to read the entire Special Examination Report as it tells an interesting, if troubling story.  But the bottom line is that the fundamental problems rest squarely on the shoulders of Marc Garneau, Federal Minister of Transport, to sort the mess out.  Instead, he has chosen to kick the can down the road for another three years of study while funding VIA to “imagineer” its future rolling stock requirements.  Both actions are unacceptable.

         “Rise, ye, from the alter of the personal automobile, the short-haul flight, the rolling railway museum and misguided political dogma and soon give Canada a passenger railway that works – please.”

– Ken Westcar, Transport Action Ontario

 

VIA RAIL CANADA

2014

2013

2012

2011

2010

Key financial indicators (in millions of dollars)
Revenues

280

270

277

283

275

Total operating costs

597

578

556

544

536

Government funding – operations

317

308

279

261

261

Government funding – capital

82

96

170

237

269

Key operating statistics
Passengers (in thousands)

3,800

3,891

3,923

4,130

4,153

Average passenger load factor (%)

60

56

54

55

57

Overall on-time performance (%)

76

82

83

84

82

Number of employees

2,608

2,662

2,800

2,899

2,937

OAG Special Examination – VIA Rail Canada – Exhibit 1: Summary of VIA’s performance over the past five fiscal years.  Source: adapted from 2014 Annual Report, VIA Rail Canada.

 

 

Exhibit 5: Improvements to CN Kingston Subdivision rail structure

Initial project 2007 Revised project in light of 2009 Canada Economic Action Plan Project completion and results as of 31 Dec. 2014

$21 million

$251 million

$318.5 million

Improve track and some stations

160km of triple track

at $1.6M/km

70km triple track

at $4.5M/km

Expected benefits

Revised expected benefits

Actual results obtained

12 additional trains

14 additional trains

8 additional trains

Reduced travel times

Reduced travel times

Increased travel times

Improved on-time per-formance (stood at 82%)

Improved on-time performance

Worse on-time perfor- mance (average 65%)

$32 million in additional revenue

$32 million in additional revenue

No additional revenue

23% increase in ridership

23% increase in ridership

17% decrease

 in ridership since 2009

OAG Special Examination – VIA Rail Canada – Exhibit 5 (not all information included here)

 

 

The Auditor General’s report on VIA may be found on-line by searching for “VIA Rail Canada Inc.Special Examination Report2016.”

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