Getting Back on Track: Parliament’s role in restoring VIA Rail

VIA Rail train operating along the Ocean route from Montreal to Halifax. VIA has suspended the route indefinitely due to COVID-10 (Source: Radio-Canada)

COVID-19 has taken a significant toll on the world’s transportation economy. Globally, actors in air and ocean transport are scaling back their operations. In some cases, companies have gone so far as to send their ships to be scrapped for their steel and iron-ore. In Canada, Greyhound and WestJet have suspended their services at both national and regional levels. The decline in use of Canadian public transit has corresponded with a rise in first-time automobile purchases, thus reinforcing the car’s position as Canada’s most popular mode of intercity travel.

Similarly, VIA Rail has been hit hard by the pandemic. The declining travel demand and rising safety costs have caused the corporation to scale back operations and lay off personnel. On March 23, VIA reduced service along the Windsor-Quebec Corridor, the densest portion of Canada’s passenger rail network. VIA also suspended its Vancouver-Toronto (the Canadian) and Montreal-Halifax (the Ocean) services. In July, 1000 employees were temporarily laid off.

Although VIA is in the processes of reinstating Corridor service, recovery has been slow. Ridership in Ontario and Quebec is less than a third of its total from 2019 and few employees that were temporarily laid off have been rehired. Although VIA plans to reinstate the Canadian on December 11, the service is expected to be decreased from three weekly trips to only two. Additionally, the Ocean has been suspended indefinitely. This move has caused Atlantic Canadian communities, who were already negatively impacted by the Greyhound and WestJet suspensions, to have even fewer public transit options. Based on VIA’s most recent projections, services will not rebound quickly.

Given the current predicaments facing VIA Rail and its riders, two questions must be asked:

1) What policies have allowed for regional services to be cut so abruptly?

2) What can be done to reverse this trend?

A brief look into VIA’s history and recent legislative proposals may provide Parliament with the tools to address transit insecurity outside of the Corridor.

VIA Rail’s Crown corporation status: slow death by decree

VIA Rail was established as a Crown corporation through an Order-in-Council in 1977. The service was set up as a response to the declining passenger service offered by the Canadian National Railway (CN) and the Canadian Pacific Railway (CP) over the preceding decade. Following the acquisition of CP passenger service in October 1978, VIA became the sole national passenger service operator. Lacking its own track infrastructure, VIA pays right-of-way fees to freight network owners such as CN and CP in order to access its routes. To date, only 3% of VIA Rail’s network is owned by the corporation itself (situated primarily in two small sections of track in Chatham and Ottawa, respectively). The freight-oriented nature Canada’s rail network has made it difficult for policymakers to improve and expand passenger service. As a result, major municipalities (especially in the Prairies and Maritimes) remain either underserved or unserved by passenger rail.

The existing issues facing VIA Rail may be exacerbated by its non-legislated Crown corporation status. Canada is an outlier among comparator countries in that its passenger service does not have a mandate approved by legislators. Canadian passenger rail policy diverges from the rest of the G7,, where lawmakers have enacted forms of legislation that directly regulate their passenger services. The scopes of these parliamentary acts vary across jurisdictions, but their frameworks clarify organizational mandates, degrees of operational autonomy, and relationships with their respective supervisory departments or agencies. Above all, these frameworks can lay out both (a) minimum operational requirements and (b) the steps that must be taken for a route or station to be closed.

VIA Rail’s governance has none of these elements. In the absence of a directly legislated mandate for passenger service, VIA Rail is indirectly regulated through the Canada Transportation Act for safety issues and through the Financial Administration Act for Crown corporation matters. Major organizational decisions are issued through Orders-in-Council rather than through parliamentary bills or motions. Over the past four decades, VIA’s lack of public oversight and parliamentary scrutiny has allowed for passenger rail service to either expand or (more commonly) contract at the discretion of the governing party.

VIA’s reliance on ministerial decree means that Canadian passenger rail lives, breathes, and dies through Cabinet. If Parliament doesn’t intervene, ‘dying’ will become the norm. Despite this current framework, MPs can and should take action to transfer VIA’s authority from Cabinet to Parliament.

VIA Rail Canada Act — an opportunity for Parliament?

Policymakers have called for VIA rail to receive legislative entrenchment for decades. A 1998 report from the House of Commons Standing Committee on Transport argued that legislative entrenchment would allow VIA to have: (1) greater operational flexibility, (2) clearer parameters for passenger service obligation, and (3) enhanced resources to accommodate public/private partnerships. VIA Rail itself has opposed its current governance structure, stating that the arrangement “constitutes a risk in the efficient delivery of its services, as well as in the planning and execution of its medium-to-long-term strategy.”

In recent years, MPs have discussed the idea of bringing VIA more closely into Parliament’s fold. Irene Mathyssen (former NDP MP for London-Fanshawe) introduced a private member’s bill in 2017 to establish VIA Rail as a legislated entity and to further ensure that passenger service would take priority over CN and CP freight service. Mathyssen argued that her bill would make “VIA Rail’s decisions to cancel services or close stations subject to approval by Parliament.” Despite its ambitious scope, the bill was not debated beyond first reading in the House of Commons and it was dropped from the order paper at the end of the 42nd Parliament in 2019. The bill was reintroduced last month by former Green Party leader Elizabeth May last month but has yet to be debated by the House of Commons.

Given the benefits of legislative entrenchment for passenger rail in other countries, Canadian lawmakers should strongly consider the merits of giving VIA Rail a statutory mandate. Improving VIA’s accountability can disincentivize the closure of routes and stations (particularly in communities outside Ontario and Quebec) by providing the Crown corporation with clear policy directives. Such a framework may also give VIA more freedom to partner with private actors such as CN to invest in improved punctuality or expanded service. Additionally, VIA Rail’s improved standing can strengthen its bargaining power when negotiating track access with CN and other freight rail companies. This would advance VIA’s special projects (such as High Frequency Rail), where private and regional infrastructure owners pose the biggest obstacles to VIA’s future growth.

Parliament absolutely has the power to overturn these closures through a clear legislative mandate. By helping VIA get its “Act” together, lawmakers can address the recent COVID suspensions and further reverse the prolonged trends of poor service in the Prairies and Atlantic Canada. But until such steps are taken, the service will continue to be at a disadvantage when compared to other countries, other modes of transport, and even other Crown corporations.

NOTE: I have compiled a full list of Crown corporations, their responsible ministers, and their enacting legislation. You can access it here.

MSc graduate from the London School of Economics and Political Science (LSE) | Interests include Canadian and UK politics, transit, and health policy

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