Tuesday, June 02, 2009

Finance review tags VIA Rail as “not self-sustaining”

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Perhaps stating what many in the passenger railroad business would consider obvious, Canada’s Department of Finance has labeled VIA Rail as "not self-sustaining," grouping VIA Rail with eight other entities that could be sold as part of the government's asset review.

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Ottawa last November said it would conduct a review of Crown assets, and government documents publicized since then suggest the government would consider privatizing VIA Rail and at least eight corporations requiring federal financial assistance. The move is part of a government effort to rein in Canada’s deficit, expected to surpass C$50 billion (US$46 billion) this year. Asset sales are projected to raise as much as C$4 billion (US$3.7 billion).

Under the Financial Administration Act, Parliament would have to approve the privatization of any Crown corporation, and such passage is not assured, observers said.

A Finance Department spokeswoman said the asset review won't necessarily lead to sales in all cases.