Budget Cuts Hit Canadian Passenger Trains
CANADIANS love to talk about passenger trains, but when it comes to traveling, they usually fly or drive. And keeping passenger trains has become too expensive for the federal government. The trains may have to go. The federal government has cut the operating budget of Via Rail - the Canadian version of Amtrak - fired the president, and hinted it might sell off part of the passenger-railway business.
It is all related to the federal government's cost-cutting measures announced in its recent budget. Via Rail received a subsidy of $591 million (Canadian; US$496 million) from Ottawa last year. This year it will be $541 million (this and subsequent sums are in Canadian dollars, worth 84 cents per US dollar), and by 1993 it will have to run the railroad on a subsidy of $250 million.
Via Rail was never really a railroad. It was formed in 1977 to operate the moribund passenger services of Canadian National and Canadian Pacific Railways. Via has never owned the tracks the trains run on, it just pays rent to the two railways. Since it was started, the federal government has spent $5 billion subsidizing the system.
Denis de Belleval, the former president of Via, had been mounting a campaign this year to get $2 billion to spend on a high-speed rail system between Montreal and Toronto, similar to the TGV system in France. Benoit Bouchard, the minister of transport, fired Mr. de Belleval. ``We cannot invest $650 million in a service used by only 3 to 5 percent of Canadians,'' Mr. Bouchard said. He says bluntly that transportation should be road and air, not rail.
The new president of Via is Ronald Lawless, who is also president and chief executive officer of Canadian National Railway, a government-owned freight-train line. He has reduced debt at government-owned CN to the point where it is a candidate for privatization. His job at the passenger railway will be to cut debt, sell off losing lines, and probably raise fares.
``The subsidy per passenger on Via's trains is about $100,'' says David Todd, a vice-president at CN who has been brought in to help run Via. Both the government and the new management say there is little choice but to raise fares, especially on the popular Montreal-to-Toronto run. And routes that don't pay their way will be closed or sold, either to local governments or private companies.
But there are some lines to remote spots that Via Rail has been ordered to keep open. One of them is the 1,000-mile stretch in the province of Manitoba from Winnipeg in the south to Churchill on the shores of Hudson Bay. The subsidy to keep that line open last year was $11.5 million, or $2,047 for each of the 5,616 passengers who took the trip.
There has been an outpouring of sentiment in favor of trains and charges that the government wants to get rid of trains altogether, though not all at once.
``The government's only vision is to destroy Via,'' says George Rideout, a Liberal member of Parliament.
Critics of the cutbacks to Via Rail say ridership was up and the government isn't giving trains a chance. But Mr. Todd, one of the tough triumvirate that will run the railway, counters with figures of his own. ``Sure, ridership was up 4 percent and revenues were up by 2 to 3 percent. But costs were up by 14 percent.''