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For VIA Rail, an Existential Crisis

Written by David Thomas, Canadian Contributing Editor
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Photo by Craig Turner

Battered by COVID-19 lockdowns, fatigued rolling stock, fierce competition for station slots and the ubiquitous adoption of alternatives to physical travel, Canada’s publicly owned intercity passenger system is mired in an existential crisis over which it has little or no control. That is the depressing message in VIA Rail’s 2021-2025 Corporate Plan, dated Nov. 5 2021 but never officially announced by way of news release. It resides in an obscure page of the company’s website.

VIA Rail’s future depends upon a rapid rebound in domestic travel and global tourism to restore operating revenues, the beneficence of rival railways in renting track and station access, and above all, a greatly expanded largesse on the part of present and future national governments.

Download VIA’s 2021-2025 Corporate Plan:

In the absence of a patron saint like U.S. President Joe Biden, whose infrastructure program will at least save Amtrak’s existing rail network from the boot hill of fallen flags, VIA Rail’s route map is already withered, with no guarantee that its mortified extremities will ever revive. With 32 new Siemens trainsets ordered in the “Before Times” being delivered, VIA Rail’s existing corridor service between Quebec City and Windsor, Ontario will likely survive, though with the legacy handicaps of operating inferiority to freight trains and big-city terminals controlled by expanding regional commuter operators rapacious for platform slots.

The Canadian at Jasper. VIA Rail photo

At particular risk is The Canadian streamliner, which combines luxury land cruising for foreign tourists with flag-stop service for native fishing camps. The Canadian’s Budd-made stainless steel cars were built 67 years ago for Canadian Pacific. (Former CP CEO Buck Crump called it “the biggest mistake of my life.”) The museum-piece cars need immediate overhauls to last another 15 years before they are auctioned off to tourist train operators. With a 10-15 year lead time for procurement of new equipment, the government must decide soon whether to repeat Crump’s leap of faith in transcontinental passenger service. Worrisome is VIA Rail’s projection that GDP growth and inflation will help restore The Canadian’s revenues to pre-pandemic levels:

Canadian Pacific CEO Buck Crump greeting sleeping car porters at the time The Canadian was inaugurated in 1955. Toronto Railway Historical Society photo

The Canadian is forecast to have variable revenue growth that will enable levels to exceed those prior to the pandemic (from $3.4 million to $61.2 million) over the Plan period. This equates to a compounded average annual growth of 158.7% for the first three years (2021-2023), and a compounded average annual growth of 2.2% for the final two years of the plan (2024-2025) … “Over the Plan period, increase in revenue is mainly achieved through the expected resumption of service, GDP growth and inflation.”

Already paralyzed, if not altogether dead, are VIA Rail’s only service on Vancouver Island, suspended in 2011 due to unsafe track between Victoria and Courtenay, and its Matapédia to Gaspé service, stopped in 2013 for the same reason. The Montreal-Halifax Ocean recently resumed after being suspended in March 2020 because of COVID lockdowns. The thrice-weekly Winnipeg to Churchill service, seasonally popular among polar bear watchers, has also resumed after an 18-month hiatus due to washouts that caused VIA Rail to recover a stranded train by ship via Hudson’s Bay.

But the biggest loss by far would be VIA Rail’s project to snap together its own electrified trackage from Quebec City to Toronto, from bits of abandoned rights-of-way built in the 19th century.

The spreadsheet case for the High Frequency Rail (HFR) scheme collapsed when COVID constraints caused traffic on the existing Corridor route to plummet from 4.9 million passengers in 2019 to 1.11 million in 2020, and a corresponding 77% drop in revenue from C$313 million to C$70 million in 2020. The justification for HFR now depends upon projections for a spectacular recovery in Corridor ridership:

“The Corridor is forecast to have variable revenue growth that will enable levels to exceed those prior to the pandemic (from C$69.9 million to C$431.6 million) over the Plan period. This equates to a compounded average annual growth of 72.3% for the first three years (2021-2023), and a compounded average annual growth of 9.9% for the final two years of the plan (2024-2025).”

Among other long-term threats to viability of HFR, VIA Rail identifies the adoption of autonomous private cars and a mooted hyperloop that would flush passenger pods through vacuum tubes joining Montreal, Ottawa and Toronto. Though the hyperloop concept remains engineering and financial fiction, its mere prospect could cause governments pause in funding VIA Rail’s conventional HFR technology.

It’s hard to find nuggets of optimism in VIA Rail’s Corporate Plan. In fact, the railway is downright gloomy about its prospects as long as it remains dependent on freight railways and terminal operators with their own competing interests:

“Because it cannot readily add frequencies, control departure, arrival and trip times or on-time performance, the company will eventually reach a saturation point where no tactical or strategic improvements can compensate these material operating constraints. The eventual outcome to not addressing these elements will be both financial and reputational. Fewer passengers will imply lower revenues, poor operating conditions will increase costs, and the combination of those conditions will result in increased Government subsidies and harm to the Corporation’s brand.”

Thus, Canada’s government must either follow the United Kingdom and the United States in committing massive public funding to post-pandemic passenger rail (including dedicated rights-of-way and independent big-city terminals), or simply allow it to fade ignominiously to black. 

Contributing Editor David Thomas is a reporter who has covered government and society since graduating from Ottawa’s Carleton University with degrees in political science and journalism. He has written for National Geographic, Maclean’s, The Globe and Mail, The Gazette, and The Canadian Press news agency from postings in Ottawa, Montreal, Quebec City, Toronto and London, England. “Railroading has been a personal fascination since a childhood timed fortunately enough to witness the golden years of steam on the late-to-dieselize Canadian National and Canadian Pacific,” he says.

VIA Rail photo
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