Federal officials are considering privatizing some of VIA Rail’s longest and most scenic routes – including the quintessentially Canadian journey between B.C. and Ontario, and the Rocky Mountain run between Jasper and Vancouver.
The debate about the future of the Crown corporation is being triggered on two fronts: Ottawa’s efforts to cut costs and controversy over VIA Rail’s plans to expand into the luxury travel sector with high-end rail cars built with stimulus cash.
Internal Transport Canada documents show a private-sector competitor to VIA Rail, Rocky Mountaineer Rail tours, is strongly opposed to Ottawa’s decision to spend about $25-million on luxury cars aimed at enticing affluent tourists. The firm, also known as RMR, targets the luxury rail market exclusively, with slick promotional videos featuring U.S. country singer Reba McEntire raving about her time riding the Canadian rails.
Starting next year, VIA’s fleet will include 12 “deluxe” sleeper cars, featuring private rooms, a “very comfortable” double bed, flat screen TVs, leather sofas, heated floors and glass-door showers.
At $1,289 for the upscale one-way ride on the Jasper-to-Vancouver line, VIA’s planned pricing for 2013 would be nearly half what RMR charges per person for its “Gold Leaf” package, which only runs during daylight hours and includes a stay in an upgraded hotel room.
The documents reveal Transport Canada is circulating four options, including privatizing VIA’s Toronto-Vancouver Canadian line, privatizing its Jasper-Vancouver service, reducing VIA’s service to “low-mid level” by selling off its deluxe cars and luxury offerings or having VIA recoup a greater share of its costs for the Jasper-Vancouver line.
The documents, obtained under Access to Information legislation by researcher Ken Rubin, shed light on what Transport Canada officials are considering as they seek to trim the growing costs of Canada’s national rail line – and they suggest getting out of the tourism industry is an option.
Earlier this year, reports showed Transport Minister Denis Lebel was briefed on the issue of VIA Rail in April, 2011. That briefing note said the department was considering several options, including “significant reductions in service and schedule frequencies,” as well as “privatization and public sector partnerships in the Quebec City-Windsor Corridor.”
Brayden Akers, a spokesman for Transport Minister of State Steven Fletcher, said no decisions have been made.
“At this time, there are no plans to privatize any portion of VIA Rail Canada or divest any of their assets,” he said. “These notes were prepared by public servants and are not reflective of government policy.”
However, as recently as Dec. 1, 2011, Mr. Fletcher met with Rocky Mountaineer president Randy Powell in the minister’s Ottawa office. Talking points prepared for the minister in advance of the meeting suggest the government sees a potential role for the railway in its cost-savings plans.
“I am interested in hearing your views about how, and on what services, private sector companies such as yours could play a role,” states one section of the document. Another section, titled “objectives and outcomes” for the meeting, states: “To listen to Rocky Mountaineer’s views on which parts of VIA’s national network it views as potentially of interest (i.e. potentially profitable.).”
A spokesman for RMR, Ian Robertson, said the company has long objected to facing direct competition from a taxpayer-subsidized VIA Rail, but has not received privatization proposals from Ottawa. He declined to speculate on whether RMR would want to take over some of VIA’s current services.
The documents point out that the Rocky Mountaineer service was actually created and run at a profit by VIA for two years starting in 1988 before it was privatized in 1990 under a deal that allowed VIA to continue operating on the same line.
Lobbying records show Rocky Mountaineer Vacations has held numerous meetings with Conservative ministers, MPs and political staff in recent years.
The board of directors for Rocky Mountaineer has Tory connections. Its members include former Alberta treasurer Jim Dinning and previously included former Conservative MP Jim Gouk, who served as the opposition critic for VIA Rail from 2001 to 2006.