This, the third and final article looking at passenger rail service in Canada, was originally published by the Halifax Examiner. It delves into the decision by the federal government to privatize the most lucrative VIA Rail route in Ontario and Quebec, and what this could mean for passenger rail service in the rest of the country. The first two articles are available here and here .

On March 9, 2022, Omar Alghabra, then Canada’s transport minister, announced that the federal government was about to privatize the country’s busiest passenger rail corridor between Windsor, Ontario, and Quebec City.

Of course that is not quite the way Transport Canada worded the surprise announcement in its press release full of doublespeak, under this deceptively benign headline: “Government of Canada launches the next phase in the procurement process of High Frequency Rail.”

The word “privatize” is nowhere to be found in the press release, even though it clearly states that the government of Canada was launching a “Request for Expressions of Interest” from “industry” on the High Frequency Rail (HFR) project, to allow the government to “seek feedback from experienced private sector companies to help shape” the HFR project.

Almost as an afterthought, towards the end of the press release, Transport Canada gets around to mentioning the Crown corporation, VIA Rail, and its employees, which it says “are central to the success of High Frequency Rail and will continue to play a key role across Canada as our national passenger rail provider.”

That March 2022 announcement made one thing very clear: the plans for the future of VIA Rail’s passenger rail service had changed.

Not just changed, but really changed.

Instead of simply moving ahead with the “High Frequency Rail project” in VIA Rail’s Windsor-Quebec City corridor, which would “offer a faster, more frequent, accessible and sustainable rail service,” the federal government was now planning to privatize that chunk of the VIA Rail passenger service.

The high frequency rail project – not to be confused with high speed rail (HSR) for which there are no plans in Canada – had been in the works since VIA Rail first proposed it in 2016. It would involve some new tracks exclusively for VIA Rail’s use and improved tracks elsewhere to allow passenger trains to move at good speeds without ceding way to CN freight trains. It would also include new trains for that corridor.

In addition, VIA Rail had been hoping for federal funding so it could replace its antiquated equipment on its long-distance routes – the Ocean train between Montreal and Halifax, and the Canadian between Toronto and Vancouver.

All of this – the HFR project and the new equipment for long-distance trains – would be managed by VIA Rail, greatly improving its passenger rail service and securing its future as a crucial public service.

At least that had been the plan before March 2022.

‘A bombshell’

Terry Johnson, president of Transport Action Canada that describes itself as the country’s “leading citizen transportation advocacy group, called the announcement “a bombshell,” when he addressed the Parliamentary Transport Committee on September 20, 2023.”

In an interview, Johnson says there are a lot of people who are “really quite shocked” by the federal government plans to hive off the high frequency rail project from VIA Rail and hand it to a private consortium to operate, given that the corridor constitutes 90% of the company:

So “wow” is what we said when the government proposed this. What of the rest of the country? That has not been explained …The corridor makes a significant surplus on its very variable costs versus revenue, and the Canadian in some years has made a surplus on variable costs versus revenues, which contributes to overheads of the company … There’s a lot to running a railway that VIA currently does for the whole of Canada. But if you start splitting that up, you’re going to become less efficient and it’s going to cost a lot more to do it.

In February 2023, Transport Action Canada outlined its concerns about transforming the high frequency rail project into a public – private partnership:

The central idea of HFR, when first proposed in 2015, was that it could be done quickly. Indeed, it was supposed to be up and running by now. Instead, we have a mega-project procurement that’s being dragged out over nearly a decade … A contract to begin construction might not even be concluded before the next election.

Neither has any justification been given for including a 30+ year private sector operating concession for the entire corridor, including existing routes and the new trains recently purchased for VIA Rail. There’s no big commercial secret to operating an effective passenger railway, and all the challenges VIA Rail faces when running on shared tracks today will not magically disappear.

‘A horrible and very difficult day’

Transport Action Canada was not alone in its dismay at the federal government’s decision to privatize VIA’s high frequency rail project, for which it created a new VIA Rail subsidiary called VIA-HFR.

Jennifer Murray, Atlantic regional director for Unifor, describes the day of Minister Alghabra’s announcement as “horrible and very difficult.”

Murray recalls that she was at the bargaining table with VIA Rail that day, working on a collective agreement for Unifor members, when they got word that the federal transport minister was about to make an announcement.

“There had been no heads-up or warning that any announcement about VIA Rail was coming,” Murray says, especially not one informing them that Transport Canada was going to outsource the high frequency rail project to a consortium of its choice, which would also run operations in the corridor.

Unifor represents 2,400 VIA Rail employees, all of whom could be affected by the decision to privatize the operations of the high frequency rail corridor.

“There were tears in that room,” Murray tells me in a telephone interview. “There was incredible fear in that room about what this was about.”

Murray explains that VIA Rail offers the passenger rail service the federal government promised when it decided to privatize CN in 1995 and “sell the entire infrastructure except for the passenger rail side.”

But, Murray says, “There hasn’t been proper funding for VIA Rail. Nor has there been enough support. So without proper funding, we’ve seen the services reduced.”

“What we’ve been advised over the years is that the profitable piece [of the VIA Rail network] has been the corridor region,” Murray says, referring to the Windsor-Quebec City route.

She continues:

If the profitable corridor is now going to be privatized, where is that profit going to go? It’s not going back into taxpayers’ hands, or back into funding for the other regions, the Ocean and the Canadian. Those profits are going to remain in the corridor, in the hands of the investors.

“So what’s going to happen to the Ocean and the Canadian and all the other routes that branch off those?” she asks.

Murray says she comes from Atlantic Canada, and sees all the time how little investment there has been for passenger rail in the region.

Everybody has a ‘train story’

Before she took her position with Unifor, Murray says she was a “proud railway worker, from a family of railway workers.” The latest government decision to privatize part of VIA Rail operations is particularly painful for her, evoking memories of how it hurt her father when the federal government decided to privatize CN in 1995.

“When I speak to my dad about it, and he is still incredibly passionate about what happened in those months leading up to the sale of CN, he talks about the devastation of that decision,” Murray tells me.

Unifor has made VIA Rail’s passenger service a national priority, she says. Any loss of that service affects many communities, she adds, and it’s something that matters to people across Canada:

Anyone you speak to would have some sort of train story. Whether it was the train running through their community when they were children, or the sound of the train whistles, or that they travelled by train when they were kids and it’s very nostalgic for them, or they want to bring their kids on the train because of the history, or they have a family member or somebody they know that worked or works in the rail system.

“Investing in public rail is really investing in the tie that binds us together as a country,” Murray says.

‘Aggressively’ fighting privatization

Even before the March 2022 announcement, Murray says Unifor had a campaign “to encourage the government to invest properly in VIA Rail.”

“We had to change course very quickly after this announcement,” she adds.

In a press release issued the same day, the union said it planned “to aggressively fight back against the federal government’s latest announcement to privatize the VIA Rail corridor.”

In February 2023, Unifor again expressed concerns about what it called the “VIA Rail sell-off,” and launched a “Get Canada Back on Track” campaign to “revitalize passenger rail in Canada.”

According to Unifor:

In the last several years alone, Canadians have contributed over $1.5 billion towards the corridor’s enhancements—either on the purchase of new corridor trainsets, in preparation for the HFR project and other upgrades. After all these public investments, the government is now looking to hand it over to the private sector.

‘Ideologically driven privatization’

Jennifer Murray had a chance to address the Parliamentary Transport Committee in November 2023, where she criticized the plan to make the HFR project a public-private partnership (P3):

No matter how many attempts there are to call these structures “modern,” they are simply subsidies to commercial interests that end up costing taxpayers more money to get a service rather than doing it in-house … P3s for operations are a leftover from the previous era of ideologically driven privatization. Decades of failures of this model show there is no magic to be found and no actual competition resulting in higher-quality services, because transport like this is a natural monopoly.

Murray suggested that the privatization of one part of the VIA Rail system could “cannibalize needed investments in the rest of the system,” and pointed out the lack of logic in the plan:

Are we really to believe that we do not have the expertise needed to run the corridor but we do have it for the rest of the system? Either the government is saying they don’t have any intention to develop the rest of the system, or the excuse for HFR is not valid. The fact that the RFP [request for proposals] involves two state-owned European rail companies just shows how ridiculous the notion that we need private sector expertise is.

The two European state-owned rail companies Murray was referring to, which are part of the three consortia that Transport Canada selected to participate in the Request For Proposals for the high frequency rail project, are Germany’s Deutsche Bahn and Spain’s Renfe Operadora.[1]

Transport Canada responds … with no answers

We requested an interview with Canada’s transport minister, Pablo Rodriguez, and sent a list of questions with a request they be answered individually. The interview was not granted. Instead, the office of the minister sent this statement that answered none of the questions:[2]

Canadians expect to leave and arrive on time, and they expect good service standards when they travel. The men and women at VIA Rail work hard every day to deliver that service. We have made significant investments to support the delivery of services by VIA Rail, including in regional routes. Our Government is also supporting the High Frequency Rail project which will transform passenger rail service in Canada. This greener travel option will run on dedicated tracks, with faster train journeys, more frequent departures, and greater reliability. In a country as big as Canada, travelling by train is an important option for Canadians. We need to strike a balance to ensure that we have a sustainable passenger rail service and that Canadian businesses can get their products to market through an efficient and reliable freight rail network.

VIA Rail plea for all its routes

We also requested an interview with VIA Rail CEO Mario Péloquin about outsourcing the high frequency rail project and VIA’s future. Péloquin was out of town and unavailable at the time.

However, a VIA Rail spokesperson did send some responses, drawing on Péloquin’s words to the November 6, 2023 meeting of the Parliamentary Transport Committee.

Crucially, for those concerned that the privatization of the Windsor – Quebec City corridor could negatively affect long-distance passenger service on the Ocean and the Canadian, Péloquin told the committee:

For VIA Rail, this must start with the renewal of Canada’s long-distance and regional trains, since the eventual arrival of a new service in the corridor does not affect the fact that we must continue to serve off-corridor routes, including northern regions, and our current rolling stock is very old by any standards.

Péloquin also pointed out that the high frequency rail project was “conceived and planned” by VIA Rail itself, noting:

VIA Rail is not only an expert in passenger rail transport in Canada, but also an innovative, environmentally responsible company committed to connecting communities. Our services are also often crucial for Indigenous communities, where travel without trains is sometimes very difficult, if not impossible.

A petition to protect VIA Rail, stop privatization

Frustrated by the ongoing plight of passenger rail in Canada, Transport Action Canada decided to act.

On January 8, 2024, its president Terry Johnson tabled an e-petition with parliament, calling on the Canadian government to:

1. Incorporate the contents of Bills C-371, the Rail Passenger Priority Act, and C-236/C-640 … the VIA Rail Canada Act, in a Government Bill and prioritize its passage through the legislative process;
2. Commit, in the 2024 federal budget, the funds necessary to renew VIA Rail’s long-distance fleet;
3. Provide passenger and worker representation on VIA Rail’s board of directors; and
4. Revise the High Frequency Rail project to protect VIA Rail’s role in delivering public passenger rail service along the Windsor to Quebec City corridor.

The e-petition invited signatures until April 7, 2024.

It was sponsored by Taylor Bachrach, NDP transport critic and MP for Skeena—Bulkley Valley in British Columbia. As reported in the second article [LINK] in this series, in December 2023, Bachrach tabled Bill-371, hoping to secure parliamentary approval for legislation that would give VIA Rail priority on train tracks in Canada.

Johnson says that main goal of his petition is, “to ensure that there is a future for Canada’s long-distance and remote rail services. At the moment, that’s not by any means assured.”

Much of that will come down to money.

“You fund good infrastructure, and you get good infrastructure. Or you don’t, and you don’t,” Johnson says.

Railways can’t compete against free highways

Johnson, who moved to Canada in 2003 from the United Kingdom, says if we want to see what happens to passenger rail when a government transfers revenue risk to the private sector, we need only look at the “30-year fiasco” that resulted from privatization of British Rail.

“The British government’s solution has been to end the revenue risk because they recognize that it just goes horribly wrong,” Johnson says. “If you want trains to operate on a private-sector-market-economy level playing field, then you have to be internally consistent and do that to the highways as well.”

Asked to elaborate, Johnson explains that the demise of passenger rail was a direct result of policies and subsidies favouring automobiles and the oil and gas industry:

The railways made an absolute fortune until we spent billions and billions and billions of dollars building a free highway network, and subsidizing the oil industry … The argument that you could totally privatize rail, and expect that to make money, while not actually privatizing its direct peers is nonsense.

Urgent need for new VIA Rail equipment

In Johnson’s view, the best assurance the government could give that the VIA Rail network is going to survive would be to renew the fleet for the long-distance trains, and do it now.

Johnson explains:

All of the equipment that operates those services is life-expired … Lots and lots of credit due to the people who built this kit in 1955, because it was built solid. But the original design life was 30 years, and we’re at 70. And we’ll be at 80 by 2035. And it takes ten years to order, design, build, manufacture, test, deliver, and introduce a new fleet. And we’ll get to the point within the next few years, where somebody walks into the minister of transport’s office and says, “I’m sorry. We can no longer run the trains.”

Johnson says if the federal budget this spring doesn’t have provisions to renew VIA’s long-distance trains, “that will be a policy decision.”

To not address VIA fleet replacement in the budget, Johnson adds, will be a “conscious choice by Justin Trudeau and his cabinet to cut [passenger rail] services to the rest of Canada.”

“I’m hoping that’s not the legacy they want,” Johnson says. “The legacy they told us they want is rebuilding a strong infrastructure backbone and sustainable transportation for Canada.”

We asked VIA Rail if it had a wish list for new equipment to replace its antiquated trains, to improve and expand passenger rail service in Canada, particularly the cars and locomotives on the Ocean route.

VIA Rail’s reply:

The Long Distance and Regional Routes (LDRR) fleet dates from the 1950s with some of our cars approaching 70 years old. While still safe to operate, the fleet limits our ability to deliver a passenger rail service that is efficient, accessible, comfortable, and the most environmentally responsible possible.

To deliver a passenger rail service that all Canadians deserve and to ensure service continuity, VIA Rail needs to begin the process of procuring a new LDRR fleet now.

VIA Rail submitted a business case to the government in July 2022. We have since been working to be ready to launch this process as soon as funds are allocated as we have undertaken a number of pre-procurement activities and planned every step of the procurement process.

A new fleet would also go a long way to bring Canadian passenger train travel in line with global rail service that is by far the most climate-friendly way to travel.

According to VIA Rail, a “new modern, more environmentally friendly fleet will make a huge difference.”

Train travel best for the climate, except in Canada

Terry Johnson points out that because of the age of VIA Rail’s long-distance trains, their greenhouse gas emissions are “not very good,” and that new equipment will be far more efficient, hopefully also with provisions for electrification.

His view is shared by Ryan Katz-Rosene, assistant professor of political studies at the University of Ottawa, who has been looking at the greenhouse gas emissions of Canada’s passenger trains, and finding them – well, let’s just say – worrisome.

According to the International Energy Agency, long distance – non-urban – rail travel emits fewer greenhouse gas emissions than any other form of passenger transport.

Unfortunately, that is not the case in Canada. In 2020, Ryan Katz-Rosene wrote an article for Canadian Geographic, entitled “A not-so-green choice? The high carbon footprint of long-distance passenger rail travel in Canada.”

In that article, Katz-Rosene broke the bad news for those of us taking VIA Rail thinking it a greener choice that it probably isn’t very climate-friendly at all.

The problem, according to Katz-Rosene, is that VIA Rail’s long-distance rail services are “powered by aging and inefficient diesel engines.”

“While travelling by train within the modernized Quebec City-Windsor Corridor generates a smaller climatic footprint than flying,” Katz-Rosene writes, “VIA Rail’s greenhouse gas emissions factor within the Corridor is still far higher than international rail comparisons.”

In a telephone conversation, Katz-Rosene says that he has been opting to take the train rather than fly because he originally thought it the most climate-friendly way to travel across Canada.

He travelled coach or economy class, meaning he spent several days in a seat that reclined only a little, as that would result in even fewer emissions than a berth in a sleeper car.

However, even then, once he started digging into VIA Rail emissions data, he found that a seat on the Canadian between Vancouver and Toronto would generate 724 kilograms of carbon dioxide equivalents (CO2e), while an economy-fare flight with Air Canada would generate only 464 kilograms per passenger.

Katz-Rosene says he had trouble getting clear emissions data from VIA Rail, and relied on data sent to him by two passengers, so he does use the data “with a bit of a grain of salt.”

Katz-Rosene calculates that while a passenger on the Canadian averages 162 grams of CO2e per kilometre, on the Ocean the figure is a whopping 960 grams of CO2e per passenger per kilometre.

He notes that this is in stark contrast to the average emission factor of just 12 grams of carbon dioxide equivalents per passenger kilometre for rail systems globally, which is 15 times lower than the average of 183 grams of CO2e for international aviation.

How VIA Rail can reduce emissions

Regardless, Katz-Rosene says, there is a great deal VIA Rail can do to clean up its climate act.

In a 2020 essay, he offers some ideas:

I would suggest that a few simple changes and smart public investments could go a long way to improving the train’s environmental performance. First, we need to fill up those trains. Let’s separate the “elite land cruise” leisure trains from passenger-focused trains and improve the load factors by adding more seating/sleeping space in each car along with subsidized fares …

Let us also change up the locomotive technology, and invest in new research and development. Some rail companies in North America are currently testing battery-powered locomotives alongside diesel ones. The Canadian could easily slice its carbon footprint by adding an electric locomotive … (provided the electricity it is drawing upon is generated by low carbon sources).

Katz-Rosene would also like to see government support for VIA Rail:

Let us remember that VIA is a Crown Corporation. While independent, it is owned by the government, and it has a unique mandate to serve us, the public. While this has sometimes worked to VIA’s disadvantage (when austere governments have defunded the company) it also serves as a lifeline offering tremendous potential for transformative projects.

In response to the Katz-Rosene’s findings on the emissions of its current long-distance passenger trains, VIA Rail points to its 2021-2025 sustainability plan and sent us this statement:

We are currently engaged in our own research on emissions of VIA Rail’s Long Distance and Regional Fleet. It is important to note that our non-Corridor services play a vital role in meeting essential transportation needs, as required by the federal government in VIA Rail’s mandate, especially in serving diverse communities, including remote Indigenous areas where alternative transportation options are limited or non-existent. While we recognize that our long-distance and regional routes are not as energy-efficient as the Quebec-Windsor corridor, they provide an important service to these communities.

… Overall, VIA Rail believes strongly that passenger rail remains one of the most environmentally sustainable modes of transportation.

Looking to the future

Terry Johnson has a vision for passenger rail in Canada:

It’s a combination of making sure that short-distance intercity corridors like Montreal, Vancouver, Calgary and Edmonton have faster, high-frequent service, and the long-distance corridors have reliable enough and regular enough service to serve as a backbone network. So my dream is that if the kid of somebody who lives in Cornerbrook, Newfoundland, comes to them and says, “I’ve got an offer from the University of Alberta,” they’re going to be able to take that kid to the bus. And the bus will take them to the ferry. The ferry will take them to the other bus. The bus will take them to the train connections. And they will get to university. And at no time will there be any risk that that kid is going to get stuck somewhere, and have to call home and say, “help.”

Asked if he isn’t describing a system that Canada had 60 years ago, if we haven’t gone backwards in the country, Johnson replies without hesitation.

“Absolutely,” Johnson says. “If we had as much energy put into actually operating transportation in this country as we put it into having microbrews with train logos on the beer cans, we would have the best transportation system in the world.”

Sounds as if the gauntlet has been dropped.

Now, it remains to be seen what the federal government decides to do to protect and support public passenger rail service in Canada, whether it agrees to protect VIA Rail from privatization and come up with the financing for the renewal of its fleet in the spring budget.

Or not.

The future of passenger rail in Canada hangs in the balance.

Update April 24, 2024 … There is good news

It looks as if the future of passenger rail in Canada has been given the lifeline it needs for now. The federal government’s 2024 budget did promise full funding to replace VIA Rail Canada’s heritage stainless steel fleet and life-expired Renaissance cars for long-distance and remotes services across Canada. Transport Action Canada says it is “delighted” by the decision and “encouraged by the preamble to the announcement, which acknowledged the importance of services across Canada and the growing preference for sustainable modes of travel.” It also noted that its e-petition to parliament garnered 9,000 signatures. The full Transport Action Canada analysis of what was – and wasn’t – in the budget for passenger rail service in Canada is available here. It’s an important read.

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ENDNOTES

[1] The three consortia selected by Transport Canada to submit proposals for the Windsor – Quebec City high frequency rail corridor are:

• Cadence (CDPQ Infra, AtkinsRéalis (formerly known as SNC-Lavalin), Systra Canada, Keolis Canada)
• Intercity Rail Developers (Intercity Development Partners, Kilmer Transportation, First Rail Holdings, Jacobs, Hatch, CIMA+, First Group, RATP Dev Canada, Renfe Operadora)
• QConnexiON Rail Partners (Fengate, John Laing, Bechtel, WSP Canada, Deutsche Bahn)

[2] On January 11, 2024, the Halifax Examiner contacted Transport Canada, requesting an interview with Transport Minister Pablo Rodriguez, and a list of questions. No interview was provided, and the Office of the Minister of Transport sent a statement rather than individual answers requested for the questions sent for the minister:

1. Does your government plan to commit the funding required to replace VIA Rail’s long-distance passenger fleet in the 2024 Budget? If so, when would you envision that new fleet up and running on Canada’s rail tracks? If not, would your government consider doing so at a future date?
2. Does your government  plan to move forward with and support Bill C-371, the Rail Passenger Priority Act?
3. What is your government’s long-term vision for passenger rail service in Canada?
4. Will your government consider revising the High-frequency Rail project to protect VIA Rail’s role in delivering public passenger rail service, rather than outsourcing it to private operators who will then take away 80% of VIA Rail’s revenue source?