27. VIA RAIL CANADA INC.

VIA RAIL CANADA INC

VIA Rail Canada Inc. (VIA) is seeking access to $546,909,001 in planned spending authorities.

Key Messages:

• These estimates capture VIA Rail’s normal reference levels, and funds for renewing its fleet in the Windsor-Quebec Corridor.
  • $146,755,000 in operating funding is from VIA’s annual reference levels, and $2,600,000 is from Budget 2019.
  • $397,554,001 in capital funding is from Budgets 2017 and 2018.
• This fiscal year, VIA Rail has been supplied $828,889,571, which includes over $230M towards Corridor fleet renewal.

• These funds are for VIA’s continued operation of Canada’s national passenger rail service and for key capital projects to modernize its service offering and make safety improvements.

• The operating funding is for VIA’s general provision of national rail travel. $2.6M is earmarked for remediation work with respect to the Government’s Federal Contaminated Sites Action Plan.

• This capital funding is for major equipment projects such as Corridor fleet renewal ($231.8M) and heritage fleet modernization, for large-scale track infrastructure projects such as grade crossing modifications, and for renovations to a heritage station.

• This funding will support VIA in maintaining a safe, efficient, and reliable passenger rail service for travellers across Canada.

• An improved passenger experience and the continued health and safety of VIA’s customers and employees will result from new and refurbished fleets, and from track infrastructure projects.

If Pressed

• VIA faced significant disruptions to its services in February 2020 as a result of protestors blockading host rail infrastructure, compounded several times over by the reduced service and ridership as a result of the COVID-19 pandemic. We are aware of the consequent challenges and are working with management to ensure VIA can continue to provide the passenger rail service Canadians need.

Background

VIA’s Operational Funding

Reference Levels

VIA Rail’s annual reference level has been set at $146.8M since 2015. By design, appropriated Crown corporations are allocated annual reference-level funding that is insufficient to maintain their full year of operations. This ensures regular Cabinet or Budget consultation on top-up operating funding as well as capital funding.

Federal Contaminated Sites Action Plan (FCSAP)

VIA Rail received $4.1M through Budget 2019 as part of the Government’s FCSAP program.  The intent of this program is to address the Government’s priority to protect the health and environment of Canadians by minimizing threats from pollution through assessment and remediation activities on contaminated sites.

VIA’s Key Capital Projects

Corridor Fleet Renewal

VIA awarded a $989M contract to Siemens Canada Inc. in December 2018 to provide 32 trainsets to replace the existing Corridor fleet.  These new trainsets will enter into service between 2022 and 2024. This project is currently progressing in line with the established schedule with no forecast delays to delivery.

Heritage Fleet Modernization Program

The Heritage Fleet Modernization Program, which began in 2018, is an important capital equipment program for VIA Rail as it involves renovating 54 cars in its Head End Power (HEP) fleet. The HEP I long-haul cars are at or over 65 years of age and have not had any refurbishment performed in 27 years. The HEP II cars, which are approximately 70 years old, were acquired and refurbished by VIA Rail in the early 1990s with no refurbishment since that time.  Structural repairs are required to this aging fleet to address identified cracks and corrosion issues to ensure continued health and safety for travellers and employees.

Grade Crossings Enhancements

On November 2014, the Railway Safety Act was amended with new Grade Crossing Regulations (P.C. 2014-1296) towards a higher level of rail safety by reducing the frequency and severity of accidents at Canada’s federally-regulated grade crossings.  VIA Rail received $100M through Budget 2017 to work with CN to meet the key requirements of these regulations, which is to maintain sightlines at grade crossing and prohibit their obstruction.