Whether or not that profitability was due solely to the ownership of the company or partly influenced by the changing regulatory environment occurring at the same time is subject to some debate. The fact that only a fraction of the millions of dollars of assets and the millions of dollars invested in the Crown corporation in the decades prior were returned to the Canadian taxpayer does not appear to be disputed.
Aside from a poor ROI for the Canadian taxpayer, the other issue that gets little mention is the lack of control the government now has over rail transportation, even though that service is recognized as being critical to the Canadian economy. VIA was created in 1978 as the crown agency responsible for rail passenger operations and when CN was privatized in 1995, VIA became dependent on a private sector owner to deliver their operational obligations.
The federal government had legislative jurisdiction over railroads from the beginning and maintained that role with regard to safety, freight rates and environmental issues after privatization.
VIA has been the victim of numerous major funding cuts over their lifetime and the system has been shrunk to the bare minimum needed to provide cross country service. Many regional routes have been cast off along the way as a number of different governments sought to make VIA pay for non performance stemming from their lack of control and systemic funding inequalities with other transportation modes.
Against this backdrop the Ontario government launched its Crown agency in 1902 which operated a number of marginal business endeavors, but primarily a railroad, in the sparsely populated Northeast. The T&NO, later ONTC, operated at a profit for most of its 110 year history and provided rail passenger service with minimal support from the federal government in spite of their jurisdictional responsibility.
When the province's railway started to encounter financial difficulties due to the same systemic imbalances in financial support, the federal government was not inclined to increase their share. In fact federal support had been frozen for over a decade and inflation had chewed the real funding down by $1M. The dysfunction between different levels of government was only exacerbated by the fact a province was operating a railroad that had never been endorsed or supported by the national government.
The fact that Ontario was the only province left with its own railway, (BC sold off its provincial railway, BC Rail in 2003 in a scandal plagued firesale) added to the disinterest of the federal government. Ontario and Quebec have the most to lose, as VIA sheds any service outside of the Montreal-Windsor corridor. They either need to push Ottawa into living up to their National Transportation Policy or take on more responsibility in the rail sector. While the latter may have increased cost tied to it, it also brings greater control and that may bring an answer to the transportation issues that are beginning to plague this province.
NATIONAL TRANSPORTATION POLICY
Declaration
5. It is declared that a competitive, economic and efficient national transportation system that meets the highest practicable safety and security standards and contributes to a sustainable environment and makes the best use of all modes of transportation at the lowest total cost is essential to serve the needs of its users, advance the well-being of Canadians and enable competitiveness and economic growth in both urban and rural areas throughout Canada. Those objectives are most likely to be achieved when
- (a) competition and market forces, both within and among the various modes of transportation, are the prime agents in providing viable and effective transportation services;
- (b) regulation and strategic public intervention are used to achieve economic, safety, security, environmental or social outcomes that cannot be achieved satisfactorily by competition and market forces and do not unduly favour, or reduce the inherent advantages of, any particular mode of transportation;
- (c) rates and conditions do not constitute an undue obstacle to the movement of traffic within Canada or to the export of goods from Canada;
- (d) the transportation system is accessible without undue obstacle to the mobility of persons, including persons with disabilities; and
- (e) governments and the private sector work together for an integrated transportation system.
One of the key elements in the above extract from the Canada Transportation Act is the plurality of the word government in Item (e). The fact that other governments, aside from the federal one, are directed to work together with the private sector, is the answer to improving rail transportation's role in public policy.
Passenger rail service can survive in lower population density areas also, but they need freight service operating on the same line, to cross subsidize the massive capital expenditures necessary to maintain the roadbed. Highways have the luxury of general tax revenue to subsidize their capital expense, but railways are expected to make it on their own, even though the CTA prohibits reducing the inherent advantages of any particular mode of transportation. Passenger rail services need the expertise of competent individuals who understand both the rail freight system and passenger operations and can pressure governments to live up to their obligations.
Passenger rail has proven in Europe that it can provide quick, efficient, and well used transportation for the general population so it is obviously the policy differences in Canada that prevent it from doing the same here. We are in desperate need of policies that can be supported by all levels of government, and permit railways to operate with clear mandates. They will require stable long-term funding arrangements with the goal of working toward self sufficiency but a recognition that passenger transportation is about moving the maximum number of people with the minimum cost, not making profits.
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