Go to the Globe and Mail homepage

Jump to main navigationJump to main content

railways

Via targets private financing with eye toward speed upgrades Add to ...

Via Rail Canada Inc. wants to team up with private-sector investors to pay for expensive upgrades to passenger rail service in the key Montreal-Ottawa-Toronto corridor – with ambitions to build a long dreamt of high-speed connection.

Via chief executive officer Marc Laliberté said in an interview Thursday that if the Crown corporation can make progress in improving service on its key routes, it could attract private financing for new investments requiring deeper pockets.

More Related to this Story

Most of the high-speed rail expansion in Europe is now done through private-public partnerships, he said, and the same thing could happen in Canada. “This is something we need to look at.”

But first, Via has to make enough improvements to show it can make money on its existing track, Mr. Laliberté said. After that foundation is in place, further upgrades to increase speeds – and perhaps dedicated high-speed tracks – could be considered. “If you can bring in a service that attracts a lot of customers and you can make it profitable, then private money could be [attracted to it],” Mr. Laliberté said.

Ideally, he said, the private sector funds would be used to “finance, design, build and maintain” new infrastructure, while “we can operate it.”

He noted that big Canadian institutional investors, such as pension funds, seem very interested in ploughing more money into infrastructure projects, so a potentially profitable domestic rail service could glean their interest as well.

Indeed, some large Canadian funds have already bought into high-speed rail projects in other countries. In 2010, Ontario Teachers’ Pension Plan and Borealis Infrastructure – an arm of the Ontario Municipal Employees Retirement System – paid $3.4-billion for the right to run High Speed One, the rail link from London, England, to the mouth of the channel tunnel.

Currently, Via loses money on most of its services, although the busiest routes in the Windsor-to-Quebec corridor come closest to breaking even.

With $1-billion in infrastructure funding from the federal government that began flowing in 2007, Via is upgrading its locomotives and cars, fixing up stations, adding new tracks and improving its internal information systems. It has also upgraded its wireless Internet service on trains and has built a new first-class lounge in Toronto’s Union Station.

That “foundation” is helping the company to improve service and performance, and to run more efficiently, Mr. Laliberté said. It will be followed up by efforts to reduce travel times between major centres – and some of that work could involve private sector funding, he said. But existing track, even in the best conditions, could only accommodate trains running up to 160 kilometres an hour, he said, adding that anything faster would require dedicated rails.

In the meantime,Via is under pressure to reduce its operating expenses because Ottawa has put it on notice that it will be reducing its public support. In the last federal budget, Ottawa said the subsidies to the Crown corporation will be cut by $41-million over the next three years.

Via has already trimmed service on some of its less popular lines, laid off 200 employees, and cut some of the trips on its long-distance Ocean train from Montreal to the Maritimes and the Canadian Transcontinental service from Toronto to the West Coast. Those moves were made in the name of efficiency, rather than in response to the government’s cuts, Mr. Laliberté said.

One way to make Via Rail work better and to improve ridership, he said, is to make sure the train schedule is co-ordinated with other forms of travel. The company has already moved to link its schedules with some bus lines in Eastern Canada, commuter rail service in Toronto and Montreal, and Air Transat’s service out of Montreal’s Trudeau Airport. That allows passengers from Ottawa, for example, to disembark from a Via train at Dorval station – near the airport – and catch a flight to Europe.

Follow on Twitter: @blackwellglobe

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories