Friday, July 13, 2012

The VIA Rail Cuts

The federal government recently announced severe cuts to VIA Rail service in a press release with the Orwellian title of “Via Rail continues its modernization and takes action to better meet customer demand." The reductions will hit hardest on the transcontinental routes and in Southwestern Ontario. The Canadian from Toronto to Vancouver will be reduced to only two trips per week in the Winter, while the Ocean from Montreal to Halifax will be cut back to three trips per week from six. These cuts seem like a worrisome prelude to hiving off these vital national services into a privatized summer-only cruise train like the Rocky Mountaineer. Southwestern Ontario was equally hard-hit with the cancellation of trains to Windsor, Sarnia, Kitchener, and Niagara Falls. VIA claims that riders can switch to parallel GO Transit services and coordination with GO makes sense where they have become direct competitors. However, many affected communities aren’t served by GO trains, either at all or at the affected times.

These cuts mark the end of a relatively friendly disposition towards VIA on the part of the present government. They had continued the “Renaissance of Passenger Rail” investment programme, which included station renovations, locomotive rebuilding, and track improvements in the Corridor. With their new majority government, the Conservatives may be returning to their more traditional views on passenger rail. While in opposition, they introduced multiple Private Member’s Bills to privatize VIA in its entirety. These cuts certainly don’t go that far, but they’re a worrisome step. In 1990, Prime Minister Mulroney’s government cut more than half of VIA service, including the abandonment of passenger service on the historic Canadian Pacific railway that united the country. VIA has never recovered from that blow.

As is so often the case, these cuts take the easy way out of cutting service rather than taking steps to make operations more efficient. VIA’s frequently uncompetitive fares are a major deterrent to riders. A regular adult round-trip from Kitchener to Toronto costs an astounding $62. Even given the cost of parking in Toronto, that is far higher than the cost of driving for a single person, let alone for a whole family. VIA’s schedules are also far too infrequent on many routes, forcing travellers to drive when they would prefer to ride the train. A significant expansion of service would attract many passengers to existing trains, strengthening VIA’s operations in the long term.

According to its 2011 Annual Report, VIA’s “Direct costs per available seat-mile” in the Southwestern Ontario region amount to 19 cents. That means that moving a seat, whether empty or full, from Toronto to Kitchener or Toronto to Brantford would cost $11.40 excluding all overhead and, presumably, most station costs. Current plans to cut trips will not reduce these costs at all. VIA’s revenues average 14 cents per available seat-mile in the region, requiring a government subsidy of 21 cents per passenger-mile. Government subsidy is the rule in passenger service around the world. The exception comes only after massive capital investment to provide service of sufficient reliability and speed to compete with automobile and air travel. If VIA is not going to receive the investment required to make its operating budget self-sustaining, and the government is going to continue cuts to its subsidy, it may have to take a hard look at some of its operating practices in order to reduce costs without reducing frequencies and further depressing ridership. These could include reducing the number of staff on trains, relying on e-ticketing and automated machines at all but the busiest stations, and reducing the staff at major stations to direct people to tracks. This would hurt VIA’s admirable customer service standard, but it may be the only option in the face of continued reductions in the operating subsidy. Further fare increases would be devastating to ridership while more cuts to the already-skeletal network would leave little remaining. Lower operating costs just might permit lower fares, which could attract people back to VIA and finally create a virtuous cycle of ridership and service increases.

Many VIA trains consistently operate well below capacity, yet their fares are as high as peak-period services that are routinely sold out. While VIA has taken admirable steps toward yield management in recent years, there is still much room for improvement. Several years ago, after a strike scare, VIA offered a temporary across-the-board reduction of 50%. The late night train from Toronto to Kitchener, on which less than one of its five or more cars is usually occupied, ran almost full. While it might not work in all circumstances, a dramatic reduction in fares on less busy trips could result in higher, rather than lower revenues. VIA also has a price floor, which makes short trips like Kitchener to Guelph or London to Brantford unreasonably expensive. Such short trips could be a good source of passengers for otherwise-empty trains.

VIA Rail could also adapt its reservation system so that its trips are displayed on an even playing field with airline trips on consumer and business travel search engines. Many companies require business trips to be purchased through services where train trips are not currently an option. In the more distant future, better connection with Pearson and Trudeau airports would permit through-ticketing with airlines and even code sharing with the use of flight numbers on VIA trains. This practice occurs in many countries, including the United States, France, the Netherlands, and Germany.

Some of the hostility to federal funding for VIA Rail in parts of the country is understandable. VIA’s network is clearly centred on Central Canada, and all of Western Canada sees a handful of train trips per week. There are a number of corridors, such as Edmonton to Calgary and Victoria to Courtenay, that are very suitable for intercity rail service. Investing in these lines would give VIA a real presence in Western Canada and would help build a broad national base of support for greater investment in passenger rail.

These cuts are a bad precedent for the future of VIA Rail over the next several years. While it is fortunate that the core Toronto-Ottawa-Montreal corridor is seeing some investment, the cuts to transcontinental trains suggest that they may go the way of train service to Calgary and Regina and VIA looks to be all but abandoning the potentially lucrative Southwestern Ontario market.


  1. Our federal government truly is running us into the ground. Even though Europe is going down too, at least they built all the trains while they still had smart-thinkers in office.

    You cover a lot of ground here and have some very good ideas. I especially agree that the VIA reservation system would benefit from through-ticketing with airlines, etc. Great idea.

  2. Laliberte, who was appointed by Harper as the ax-man at VIA, carefully arranged to cut the busy trains to Sarnia, Windsor, and Niagara Falls, as well as to slash the Ocean to Halifax below the minimum level of one-a-day.

    This is guaranteed to crush ridership.

    VIA's rolling stock is all antiques. There are no plans to get new ones.

    Abandoning the Southwestern Ontario market is particularly stupid in business terms; it seems that the federal government expects GO to pick up the difference, and GO appears to be trying, but GO has a lot of projects on its plate and not enough money.

    Abandoning the Halifax service is simply designed to further eliminate political support.

    Nothing will improve until Harper is out of office, hopefully in 2015. An NDP government would probably improve things. Unfortunately, that will only happen if the Liberals manage to finally implode -- the defects of first-past-the-post means there's no room for that 19% Liberal vote (along with the 6% Bloc vote and 6% Green vote).

    And you're not going to change away from first-past-the-post to proportional representation unless you elect a radically different party (NDP, perhaps).