VIA Rail

[crs1026]

Unfortunately, the word "market" (in the economic sense) is not a synonym for "population" and refers to the volume of transaction demanded by individuals or companies which have a need for a certain category of product or service (in this case: intercity travel) and cities in Western Canada appear to generate much less trips between them than their Corridor counterparts...

The only thing your lists show is that the CP route serves more population centers than the (more Northern) CN route, which is a revelation which will only surprise people who are completely ignorant of the Canadian geographic and demographics (or the routings of CN's and CP's transcontinental lines)...

This is a very insightful comment. Just because Winnipeg has a population of 750,000 and Saskatoon has a population of 250,000 does not mean that it will have ridership potential proportionate to say Ottawa (1.3M) and Kingston (140,000). The market potential along each route will be unique based on distance, alternatives, and quality of the rail line itself.

Conversely, reinstating passenger service on CN Edmonton to Calgary is a whole different proposition than on CP, even though most of the population variables are unchanged.

This isn't to say that a service isn't viable between some city pairs, but one can't just throw something on and hope for the best. Nor can one simply tell the freight railways to "just move over".

- Paul

 

[micheal_can]

I am going to try to help you understand me better.

#6 About VIA's mandate


Yet, you wrote "What surprised me was that the Canadian is not in the red." without anything which would have suggested that you were referring to anything I had posted (let alone: to the colouring of my table) rather than using an accounting reference ("to be in the red"). If you want your comments to be understood correctly, be clear on what you are actually replying to...


The cost-recovery rate of the Canadian has indeed dropped slightly between 2017 and 2018:
View attachment 220088
Compiled from: VIA Rail Annual Reports 2010-2018

However, the more important question is why the cost-recovery of the Canadian increased from 45% in 2012-2014 to 65% in 2017 and there are two main changes in that period: First, the previous federal government off-peak frequency (i.e. between early October and late April) was cut from 3 trains per week to only 2 in October 2012. Second, VIA Rail launched Prestige Class in 2014. The fact that cost-recovery stayed virtually unchanged after the frequency was cut (during low season) and then increased by 20 percentage-points in only 3 years following the introduction of Prestige Class (with passenger revenues increasing from $40.7 million in 2012 and $47.1 million in 2014 to $75.9 million in 2017), shows that ridership is rather insensitive to a decrease in frequency, while revenues have seen a strong boost from catering towards the higher-end segments of international tourism (by positioning the Canadian as a competitor to cruises). As neatly shown by the figure below, this strategic switch has caused revenues and yield (revenue per passenger-mile) to roughly double, while the costs to the taxpayer (even in absolute figures!) stayed stable and ridership only decreased moderately:

View attachment 220087
Compiled from: VIA Rail Annual Reports 2010-2018


Again, I have no idea what you meant with this statement and especially with "the 2 cities that seem to have the lower ridership", but it becomes quite apparent that you don't trust numbers much...

I will tackle this first....

So, to emphasize this, the colours I was referring to were the ones you posted of the graph. So, it surprised me that it did so well.

If the Canadian can draw luxury tourism, that is great, but shouldn't the mandatory service cater to citizens, not tourists?

Your chart shows a lower number of people traveling between Ottawa and Toronto. So, the normal person would wonder why they would increase frequency when there is a lower ridership. You said that the Canadian proved you could run on lower frequency and still do well. If you use that attitude, then, between Toronto and Ottawa should have less on it due to the lower ridership, or is this where your logic becomes flawed and you only want a self serving service?

#9 About expanding transcontinental VIA services

VIA Rail is already undergoing a fleet renewal on the Corridor (yes, it's a 1:1 replacement of existing seating capacity, at least for as long as HFR is not approved) and there realistically won't be a fleet renewal (let alone: expansion) project for outside the Corridor before the new Corridor trains are delivered, which means that new fleet for non-Corridor services is at least a decade away, possibly much more if the lead time until funding for the Corridor fleet is any indication...

There is nowhere in VIA's mandate which says that cities larger than a certain size require passenger service. A prescribed minimum service level only exists for services which link "communities without year-round ground transportation access" with the next major city (e.g. Churchill with Winnipeg). However, this doesn't mean that the province of Alberta can't fund intercity rail services between Calgary and Edmonton...

The only things silly here are your bizzare equations.

Because VIA's Corridor services are in fact not significantly slower slower than the car and plane, and faster than the bus, due to railway lines which are built for speeds in the 100-160 km/h spectrum (i.e. above official highway speed limits). In Western Canada, however, trains are unlikely to exceed 100 km/h and frequent meets with freight trains inflate the travel times to that above intercity buses (before they were driven out of the market, due to lack of sufficient demand to operate them without losses).

By your logic, a small car like the Smart or a children's book written in German should have much higher sales in the United States than in Germany, because the population of the United States is five times as large as that of Germany. Unfortunately, the word "market" (in the economic sense) is not a synonym for "population" and refers to the volume of transaction demanded by individuals or companies which have a need for a certain category of product or service (in this case: intercity travel) and cities in Western Canada appear to generate much less trips between them than their Corridor counterparts...

The only thing your lists show is that the CP route serves more population centers than the (more Northern) CN route, which is a revelation which will only surprise people who are completely ignorant of the Canadian geographic and demographics (or the routings of CN's and CP's transcontinental lines)...

No, the only thing you have clearly demonstrated is how little you grasp the challenges which passenger rail expansion efforts face in your country.

I know there are no plans for any replacement outside of the Corridor. I know that with the government, if they wanted to replace something, a decade is a quick turnover. I know that we are running 50+ year old equipment on most other routes outside of the Corridor.

I know how vague Via's mandate is. Maybe it should be rewritten to reflect today's reality. Maybe it should have something added along the lines of "All major cities that are connected to the North American rail network shall have regular scheduled passenger service." That would mean that places like Victoria and St John's would not necessarily fall under this section of the mandate. I know, that would take an act of Parliament to change it.

You like to argue that everything should be buses. Maybe you should take a history lesson why Toronto is the only one in Canada that still has streetcars. You might even enjoy the movie Who Framed Roger Rabbit. It is proven that GM and Firestone paid millions to have cities pull up lines or to make passenger rail unappealing to the public so they can sell buses. Buses will not help us reach our climate promises, trains will. If you are a climate denier, say now so I can simply scroll on instead of wasting my time with someone who does not understand basic physics.

In general, most government departments are not there to make money. They are there to serve the citizens with a needed service. Just imagine if the military had to make a profit, or EI had to be profitable... So, Via does not need to make a profit. They need to serve Canadians.

I know the routings of CP and CN. I also know why they go where they go.

#11 About requiring a minimum siding length (equal to maximum train lengths)

Imagine you were a corporation with profit-oriented shareholders and the government places a cost (e.g. fines for non-compliance) if you own sidings are shorter than the longest train you operate. Would you a) extend all your sidings to match your longest train length, b) reduce your train lengths to not exceed the length of your shortest siding or c) analyse all sidings which are currently "too short" to determine for which sidings it would be profitable to extend it to be allowed to keep it and to eliminate all other sidings?

Given that the Canadian currently fits in all sidings (even in those where almost no freight train fits), it would suffer most from such a short-sighted and counter-productive law, whereas the elimination of sidings has little negative effects on freight trains which have outgrown them....

Imagine if your corporation profited due to a government program that saw the construction of the First Canadian Transcontinental Railway.
Imagine if you pulled up double track sections to make more profits for your shareholders.
Imagine if you now get told how to run your business or the government nationalizes it Oh, wait, that last one hasn't happened - yet.

The government paid for the CP mainline. I would argue that CP should be working more with the government due to that.

There are bottlenecks at the ports and some main yards throughout Canada on both CN and CP lines. This is partly due to the lack of double track to allow more trains to be scheduled. Of course, there are many other reasons for it too. Both mainlines from Coast to Coast (Montreal for CP) could and should be double track. With that, they could both move more freight and make more money, which means more profits. Instead they want to cut costs to make more money.

The government could make a law that all schedule passenger trains have priority over freight. That would of course be challenged in court, but if it succeeded, they would have to do something or loose lots of money due to having to run much shorter trains.

 

[micheal_can]

This is a very insightful comment. Just because Winnipeg has a population of 750,000 and Saskatoon has a population of 250,000 does not mean that it will have ridership potential proportionate to say Ottawa (1.3M) and Kingston (140,000). The market potential along each route will be unique based on distance, alternatives, and quality of the rail line itself.

Conversely, reinstating passenger service on CN Edmonton to Calgary is a whole different proposition than on CP, even though most of the population variables are unchanged.

This isn't to say that a service isn't viable between some city pairs, but one can't just throw something on and hope for the best. Nor can one simply tell the freight railways to "just move over".

- Paul

Actually, the government can. They don't, but they can.

 

[lenaitch]

Imagine if your corporation profited due to a government program that saw the construction of the First Canadian Transcontinental Railway.
Imagine if you pulled up double track sections to make more profits for your shareholders.
Imagine if you now get told how to run your business or the government nationalizes it Oh, wait, that last one hasn't happened - yet.

The government paid for the CP mainline. I would argue that CP should be working more with the government due to that.

There are bottlenecks at the ports and some main yards throughout Canada on both CN and CP lines. This is partly due to the lack of double track to allow more trains to be scheduled. Of course, there are many other reasons for it too. Both mainlines from Coast to Coast (Montreal for CP) could and should be double track. With that, they could both move more freight and make more money, which means more profits. Instead they want to cut costs to make more money.

The government could make a law that all schedule passenger trains have priority over freight. That would of course be challenged in court, but if it succeeded, they would have to do something or loose lots of money due to having to run much shorter trains.

It could be argued that 'the government' got what it funded - a single track transcontinental line (well, from Sudbury west anyway). I realize there a certain legislative levers that government may or may not be using, but 'the government' - tax dollars - funds my OAS, but it doesn't mean they get to tell me how to spend it. Public money backstops all sorts of things that the government deals 'in the national interest', but it doesn't necessarily mean that they get to dictate corporate direction.

 

[micheal_can]

It could be argued that 'the government' got what it funded - a single track transcontinental line (well, from Sudbury west anyway). I realize there a certain legislative levers that government may or may not be using, but 'the government' - tax dollars - funds my OAS, but it doesn't mean they get to tell me how to spend it. Public money backstops all sorts of things that the government deals 'in the national interest', but it doesn't necessarily mean that they get to dictate corporate direction.

Private citizens are not the same level of government control as corporations are. I get what you mean though. However, if the corporation is not working for the people, then it could be an argument for nationalization. It can be done, if it were needed.

 

[lenaitch]

Private citizens are not the same level of government control as corporations are. I get what you mean though. However, if the corporation is not working for the people, then it could be an argument for nationalization. It can be done, if it were needed.

Under free market capitalism, corporations represent the interests of their shareholders, not the people. Boards can be found in breach of their fiduciary responsibilites if they act otherwise. The success of CPP, RRSPs, pension plans and unregistered investmentfunds depend on it. For sure, they must act ethically and within the law. We, the people, used to own Air Canada, CN, PetroCanada and likely others. No doubt it made sense at the time but I don't support going back to that level of socialism, if for no other reason than, historically, governments are lousy business managers. I would also think some or many of our trade agreements might have a problem with it.
Besides, I can think of better things to do with the ~$35Bn that we don't have that would take to buy CP alone.

 

[micheal_can]

Under free market capitalism, corporations represent the interests of their shareholders, not the people. Boards can be found in breach of their fiduciary responsibilites if they act otherwise. The success of CPP, RRSPs, pension plans and unregistered investmentfunds depend on it. For sure, they must act ethically and within the law. We, the people, used to own Air Canada, CN, PetroCanada and likely others. No doubt it made sense at the time but I don't support going back to that level of socialism, if for no other reason than, historically, governments are lousy business managers. I would also think some or many of our trade agreements might have a problem with it.
Besides, I can think of better things to do with the ~$35Bn that we don't have that would take to buy CP alone.

I don't suggest we do that, but I merely point out we can. It is kind of like "the nuclear option". In short, they can play nicely, or they can be without something. So, the real question is: How do we have them play nicely?

 

[lenaitch]

I don't suggest we do that, but I merely point out we can. It is kind of like "the nuclear option". In short, they can play nicely, or they can be without something. So, the real question is: How do we have them play nicely?

By using whatever legislative or regulatory tools that are available or that can legally be enacted; not by dangling a threat that is clearly unrealistic. A government can't run private industry by fiat. I don't recall the government telling GM to only built purple sedans in return for our money.

Chekhov's dramatic principle (paraphrased): A gun produced in Act I must be used by Act II; otherwise, don't produce it.

 

[micheal_can]

By using whatever legislative or regulatory tools that are available or that can legally be enacted; not by dangling a threat that is clearly unrealistic. A government can't run private industry by fiat. I don't recall the government telling GM to only built purple sedans in return for our money.

Chekhov's dramatic principle (paraphrased): A gun produced in Act I must be used by Act II; otherwise, don't produce it.

The government used to run a railway in Canada - CN. Don''t say cant. Instead, say that it is not the best option, but it can be an option if needed.

 

[crs1026]

I don't suggest we do that, but I merely point out we can. It is kind of like "the nuclear option". In short, they can play nicely, or they can be without something. So, the real question is: How do we have them play nicely?

By recognizing their interests, and taking pains to not threaten or challenge their most fundamental needs. They are running a complex operation, and there is a lot riding on their doing it well. Fundamentally, we want freight to move efficiently in this country. A lot of jobs, and a lot of wealth creation, rides on the freight operation. We may want them to add a few trains, but not at the expense of running freight badly or at greater cost.

As an example, it would be ridiculous to penalize the railways for poor performance on hauling grain while demanding that they sidetrack grain trains to accommodate VIA. That’s almost certainly why Ottawa has been mute about the last few years’ timekeeping of the Canadian in the west. CN has owned up to needing to add capacity, and they are investing heavily to do so. When things stabilise, maybe VIA can seek a better deal.

Similarly, if there were an appetite to reinstate trains on other lines, there would have to be assurance that adequate freight capacity is maintained.

Maslow’s theory of the hierarchy of needs applies: we can haggle about higher level things, but don’t ask the freight railways to absorb fundamental hits to their operation.

The old negotiator’s maxim: don’t fight over who gets the best piece of the pie..... discuss how to make a bigger pie. Win-lose isn’t on.

- Paul

 

[lenaitch]

Sure. Assuming control of series of bankrupt or near bankrupt railways at a time when rail was the only extensive land-based transportation system connecting the people and economy of the country is exactly the same as as spending billions to acquire a profitable company so it will play nice. CN is currently valued at around $90Bn (or do we intend to seize it?).

This is becoming circular.

 

[micheal_can]

By recognizing their interests, and taking pains to not threaten or challenge their most fundamental needs. They are running a complex operation, and there is a lot riding on their doing it well. Fundamentally, we want freight to move efficiently in this country. A lot of jobs, and a lot of wealth creation, rides on the freight operation. We may want them to add a few trains, but not at the expense of running freight badly or at greater cost.

As an example, it would be ridiculous to penalize the railways for poor performance on hauling grain while demanding that they sidetrack grain trains to accommodate VIA. That’s almost certainly why Ottawa has been mute about the last few years’ timekeeping of the Canadian in the west. CN has owned up to needing to add capacity, and they are investing heavily to do so. When things stabilise, maybe VIA can seek a better deal.

Similarly, if there were an appetite to reinstate trains on other lines, there would have to be assurance that adequate freight capacity is maintained.

Maslow’s theory of the hierarchy of needs applies: we can haggle about higher level things, but don’t ask the freight railways to absorb fundamental hits to their operation.

The old negotiator’s maxim: don’t fight over who gets the best piece of the pie..... discuss how to make a bigger pie. Win-lose isn’t on.

- Paul

How long should the government wait for the stabilization? The biggest issue I think on the line are the trains that are running over siding. Having a regulation that a train cannot pass a siding it cannot fit in might be the single biggest fix. The reality is, the rail companies cannot afford this as it means they need more people running more trains, which makes their shareholders sad they are not making more money.

No company can work outside of government regulations. The railway has many, some self imposed; written in blood. Some are government imposed, written before blood is spilled.

Again, CN and CP cannot continue with the the way they are doing things. It isn't sustainable. The CN strike spoke to that.

 

[micheal_can]

Sure. Assuming control of series of bankrupt or near bankrupt railways at a time when rail was the only extensive land-based transportation system connecting the people and economy of the country is exactly the same as as spending billions to acquire a profitable company so it will play nice. CN is currently valued at around $90Bn (or do we intend to seize it?).

This is becoming circular.

It is circular because we have differing views on what we should have. I like being educated on why it wouldn't work. The problem I am finding is many do not understand history.

 

[crs1026]

How long should the government wait for the stabilization? The biggest issue I think on the line are the trains that are running over siding. Having a regulation that a train cannot pass a siding it cannot fit in might be the single biggest fix. The reality is, the rail companies cannot afford this as it means they need more people running more trains, which makes their shareholders sad they are not making more money.

No company can work outside of government regulations. The railway has many, some self imposed; written in blood. Some are government imposed, written before blood is spilled.

Again, CN and CP cannot continue with the the way they are doing things. It isn't sustainable. The CN strike spoke to that.

I agree that some of the things the railways do are questionable. But that does not mean that government should rush in to impose a fix.

Running oversize trains across Northern Ontario is a bit like watching someone wrestle a crocodile....one doesn’t know whether to admire their spunk or point out the stupidity of even trying. The solution is not to cut train length, which would just double labour costs. I would like to see more sidings lengthened, but they seem to move the freight acceptably with what they have. (Yes, with plenty of meltdowns, too....at some point perhaps they will address this out of pure self interest. But already, they have found other fallbacks that work reasonably well and may be cheaper eg they regularly reroute traffic via Chicago when the NOZ is plugged).

Meanwhile, we recently had a government wanting to buy a fleet of tank cars to run oil trains, to meet a demand that may only last for ten years ......when the payback period on that investment might be twenty years or more. The railways respected the political optics, but privately many railroaders were horrified....no way were they going to get dragged into making an investment where the revenue stream dries up before the infrastructure is only half paid for. Happily, government has retreated to a more commercialised solution which resp cts the underlying economics of shipping bulk commodities.

Much as I believe in passenger trains, If you weigh the actual value of transportation provided across Northern Ontario by the Canadian, a crash program to re-establish a daily passenger train with a best-ever schedule would not be cost justifiable. There is no justification, legal or moral, to demand that the railways eat that cost. Nor is there enough cost-benefit to pass this cost to the taxpayer. That might change, but we are talking one Airbus load per train. VIA is predominantly a cruise ship service anymore on that route.

Put it this way: suppose a cruise line decided to add a stop in Prince Rupert, or Churchill. Cruise ships are profitable, and they deliver undisputed economic benefit ie tourism dollars to a port. But these towns have no cruise terminal, or even a berth to offer outside of their bulk terminals. Would you order the grain terminals in town to clear space for the cruise ship visits, shutting down grain loading while the ship is in town? I hope not. One might ask the grain terminals whether they have idle periods....but even then, if a bulk cargo ship turns up to be loaded when the cruise ship arrives, the per-hour cost of having an empty ship sit at anchor is huge. Who eats that cost? The solution is to build a separate terminal for cruise traffic, and that will have a ROI case that may or may not discourage the cruise line.

I believe we should be looking to restore train service in many places, but that requires adding infrastructure, not imposing burdens on the freight businesses.

- Paul

 

[Northern Light]

I agree that some of the things the railways do are questionable. But that does not mean that government should rush in to impose a fix.

In fairness, solutions have been required for at least 2 decades now; I think the 'rush' has come and gone. Its procrastination that's the issue now.

Should solutions be thoughtful, reasonable, not cause undue damage to the freight side; and have a compelling business/environmental/social case; of course.

But the solutions are known. Here, I'm not speaking of The Canadian (cruise ship business) in a narrow sense, but the deficiencies in the rail network more broadly and in particular those that conflict with running a useful, justifiable and
desirable passenger service in some locations.

Much as I believe in passenger trains, If you weigh the actual value of transportation provided across Northern Ontario by the Canadian, a crash program to re-establish a daily passenger train with a best-ever schedule would not be cost justifiable. There is no justification, legal or moral, to demand that the railways eat that cost. Nor is there enough cost-benefit to pass this cost to the taxpayer. That might change, but we are talking one Airbus load per train. VIA is predominantly a cruise ship service anymore on that route.

I think this is true if one is talking about running 'The Canadian' or something similar, daily, on the current route.

But there are other more desirable services {potentially), servicing the same markets.

I would argue for a City-pair model (typically), with select intermediate stops.

Kenora-Thunder Bay; Thunder Bay-Sudbury (or Sault); Sault to North Bay, North Bay to Ottawa; Sudbury/NB to Toronto.

I'm not suggesting all of these are of equal or imminent priority, but that any business case for servicing this area would be based on this type of service, not a 'cruise ship' model.

Likewise, out west, Edmonton-Calgary; Regina-Saskatoon, Calgary-Banff, Calgary-Regina, Calgary-Lethbridge, Regina-Winnipeg etc. are where more reasonable potential exists.

I believe we should be looking to restore train service in many places, but that requires adding infrastructure, not imposing burdens on the freight businesses.

Yes.....but............I would argue there was always an inherent onus on the freights not improve their model at the expense of passenger railway, which they did.

I would also argue they have not been pro-active in coming up with cost-effective solutions.

I would not advocate for government becoming their enemy; but neither do I feel it needs to be their partner.

It ought to be their regulator; and to fulfil its mandate of ensuring the public interest. A good deal of that may require public investment, which does need to be carefully considered and thoughtfully executed.

But some of the solutions are achievable within existing operating protocols and existing freight capital works; with a little bit of 'encouragement'