INTERCITY PASSENGER RAIL IN CANADA -...

Presentation delivered at the May 25, 2011

CANADA – UNITED STATES

CROSS-BORDER RAIL PEER EXCHANGE

INTERCITY PASSENGER RAIL IN CANADA

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Table of Contents

History of Passenger Rail in Canada

VIA’s Structure

History of Operating and Capital Funding

Current Network

Key Facts About VIA Rail Canada

The Results

Investing for the Future

Intermodality and Interconnectivity

Key Benefits of Passenger Rail

Global Trends in Passenger Rail

VIA Rail Canada …. A National Icon!

Challenges Facing VIA Rail Canada

Canada – U.S. Rail Links

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Coast to coast rail service was a condition of Canadian Confederation in 1867

Passenger Rail in Canada

Canada today is:

– 33.7 million people

– 10 million km² of land

– Extreme landscapes, climates and seasons

Rail played a major role in building Canada

The first railway operated in 1836 (the Champlain

and Saint Lawrence Railroad) in the Montreal

region, followed by an extensive expansion

facilitating the creation of Canada as a unified

country

Passenger rail was originally operated by various

companies, consolidating into what later became

CN (Canadian National) and CP (Canadian

Pacific)


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VIA Rail was founded in 1977 as a Crown Corporation by merging the passenger services of CN and CP

VIA Rail History

Created by a Cabinet Order-in-Council in 1977

Passenger services of CN/CP merged into VIA:

– VIA inherited available passenger equipment

from CN and CP

– CN and CP continue to own most of the

infrastructure (VIA pays fees for access)

VIA’s operations were reduced by half in 1990, as

Government funding was reduced

Since 1990, VIA has almost doubled its revenues

while absorbing inflation and maintaining current

expenses at 1990 levels, while continuing to provide

Canadians with world-class, safe, efficient and

environmentally responsible intercity transportation

Since 1990 VIA has continued to innovate and

invest to improve service levels and customer

satisfaction

Since the network was reduced in 1990, VIA has almost doubled revenues and

absorbed all cost increases

0

20

40

60

80

100

120

140

160

180

200

220

1990 1995 2000 2005 2010

Revenues

Historical VIA Operating Results Values indexed to 1990

Expenses

Employees

Sept.11

SARS

Recession

Fuel prices


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VIA’s Structure

Reports to the Minister of Transport

The Vision: We will offer the best travel

experience in Canada

The Mission: We work together to exceed

customer expectations every time

Guiding principles:

• I focus on the customer

• I take action and am accountable

• I am flexible and contribute to change

• I make the difference

VIA operates over infrastructure (98% of the

network) owned by freight railways

VIA’s Structure

The Government’s Program Activity Description for VIA:

“A national passenger rail transportation service that is safe, secure, efficient, reliable,

and environmentally sustainable and that meets the needs of travellers in Canada.”

VIA is a Crown Corporation

Parliament of Canada/

Minister of Transport

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Through aggressive cost-cutting and revenue growth, virtually doubling revenue, VIA was able to significantly reduce its operating subsidy and absorb inflation since 1990, while maintaining the train services network

History of Operating and Capital Funding

0

50

100

150

200

250

300

350

400

450

1990 1995 2000 2005 2010

Government Operating Subsidy In millions of current $

Increase due to 2008/ 2009 recession and pension costs

Government Capital Funding In millions of current $

0

50

100

150

200

250

300

350

1990 1995 2000 2005 2010

$402M Program

$923M Program

Summary of VIA’s productivity improvements over the years, implemented to ensure efficient and cost effective delivery of train services, together with the history of capital funding

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VIA currently serves over 4M passengers per year through three types of services

Jonquière

Montréal

Halifax

Senneterre

Prince Rupert

Churchill

White River

Courtenay

Victoria

Transcontinental

Mandatory Routes

Corridor

Edmonton

Calgary

Regina

Saskatoon

Toronto

Windsor

Vancouver

Winnipeg

Corridor services

Intercity rail services

Business and leisure travellers

$766M capital invest. 2007-2012

On a shared allocation* basis:

− 3.7M passengers served

− $200M in revenues

− $265M in costs

− $17 deficit/passenger

Mandatory services

Connecting small communities

Public service obligations



- 111K passengers served

- $6M in revenues

- $38M in costs

- $231 deficit/passenger

Long-haul services

Coast-to-coast service

Mainly leisure travellers



- 258K passengers served

- $56M in revenues

- $118M in costs

- $545 deficit/passenger

Quebec Ottawa

Gaspé The Pas

London Niagara Falls

Pukatawagan

Moncton

Prince

George

Jasper

Sudbury

Current Network

Sarnia

* Shared allocation equals direct plus a proportion of common costs and revenues

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Key Facts About VIA Rail Canada

• 12,500 km network with 500 trains per week serving over 450 Canadian communities

• Maximum speeds of 160 km/h on shared tracks with freight railways

• 417 rail passenger cars and 74 locomotives in service

• Four modern maintenance facilities and 159 stations

• Less than 3,000 employees (headcount reduced from 4,500 to <3,000 (- 33%) between 1990 and

2010)

• More than 4M passengers, or 1.4B passenger-km per year

• Cost recovery increased by 74% from 29¢ in 1990 to 54¢ in 2010

• 36% reduction in operating subsidy between 1990 and 2010

• On Time Performance between 80 - 85% is a challenge

• Customer Satisfaction is consistently about 97% (“meet expectation” @ 56%, and “exceed” @

41%)

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The Results

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The Results

A disciplined focus on the bottom line has enabled VIA Rail to reduce headcount and operating costs while increasing revenue

REVENUE & OPERATING EXPENSES

143 150 156 164 176 175 185 191 200221

241 254 271250 259

290 297 285 299265 276

350 328 331 321262

222 205 196 183168

164158

149 178181

175 176 200

214261

262

538

478493

487 485

438

397390 387 383

389405 412

420 428440

465 473485

513 526

0

100

200

300

400

500

600

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Operating Expenses*

Revenues

*excludes restructuring and non-cash expenses such as depreciation Operating Deficit

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Current improvements enabled by latest additional Government funding to deliver VIA’s promise to Canadians Recent Federal Government support… …allowed VIA to improve its services using

the same core assets by

$516M in Capital Funding

$407M under Canada’s

Economic Action Plan

2007

2009

$923M in Capital Funding

This provides a solid foundation for future longer-term improvements that will enhance the

performance and viability of passenger rail in Canada and reduce the need for Government

Operating Subsidy

Refurbishing its aging train fleet

– Lowering emissions

– Increasing reliability

– Providing better accessibility

Eliminating key infrastructure bottlenecks

Offering additional frequencies

Repairing and upgrading stations and service

facilities

Improving customer experience (e.g. on-board WiFi)

Improving information systems and back

office operations

Investing for the future

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Details of projects enabled by the $923M Government capital funding

Cu

rre

nt

VIA

In

ve

stm

en

t P

rog

ram

s

Equipment

Infrastructure

Stations

IT

Facilities

2010 2009 2008 2013 2012 2011

F-40 locomotive rebuild

Light, Rapid, Comfortable (LRC) car rebuild

Renaissance car accessibility modifications

Other equipment projects

Improvements between Montreal-Ottawa-Toronto

New stations and facilities renovations

Improved on-board WiFi

Reservation system, revenue management, automation, security

Regulatory compliance for fuelling and other facilities

Last locomotive delivery First locomotive delivery

First car delivery Last car delivery

First car delivery Last car delivery

London-Chatham-Windsor

Toronto-Kitchener-London

Investing for the Future

These projects will modernize key elements of rail infrastructure, equipment, stations, and information technology required for reliable performance and growth

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Successful passenger rail systems are fully integrated into the rest of the transportation system and develop seamless links to other modes

VIA operates 20 stations from Vancouver to Halifax

that have intermodal links to other modes

The four top intermodal stations in terms of

passenger volume and/or intermodal connections

(besides cars and taxis) are at Toronto, Montreal,

Ottawa, and Dorval.

VIA shares stations with commuter trains, subway,

buses, and airport links.

VIA sells tickets for commuter trains, such as GO

Transit.

VIA is working with numerous airlines, commuter

trains, bus companies, car sharing organizations

and Amtrak to introduce seamless information,

reservations and ticketing

Connectivity is being implemented with some

airlines and bus companies, including Red Arrow

from Banff, Calgary, Edmonton, Jasper and Fort

McMurray.

Joint Ticketing

VIA/GO Transit

Toronto Union Station

Intermodal Station

Intermodality and Interconnectivity

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• Reduces emissions

• Reduces fossil fuel dependency

• Alleviates air and road congestion

• Increases accessibility for disabled

• Enhances mobility

• Enables tourism

• Enhances economic productivity and development

• Increases traveler productivity

• Provides disaster preparedness

• Unites the country and is part of Canada’s cultural identity

• Can improve linkages with the U.S. rail network

Key Benefits of Passenger Rail

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Expansion of high speed rail: High and higher speed rail continuing to grow rapidly worldwide

1 Networks capable of operating at speeds in excess of 200km/h

Sources: UIC High Speed Department (update 2010), Oliver Wyman analysis

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

19

80

19

83

19

86

19

89

19

92

19

95

19

98

20

01

20

04

20

07

20

10

Asia

Europe

Rest of world, incl. U.S.

Higher speed lines1 In km in operation

An additional 30,000 km of high speed rail

infrastructure is being planned or is under

construction

– Over 200% increase in global high speed

rail infrastructure, mainly due to the

contribution from Asia

Approximately 50 countries have invested

in high speed rail

– Includes almost all other G20 countries,

except Canada, Australia, and Mexico

The US plans to connect its high speed

network to major Canadian cities

" Within 25 years, our goal is to give 80

percent of Americans access to high-speed

rail. This could allow you to go places in half

the time it takes to travel by car. For some

trips, it will be faster than flying –- without the

pat-down." – U.S. President Barack Obama

Global Trends in Passenger Rail

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Rail services help unite the country; VIA is a recognized part of Canada’s history, cultural identity and image abroad

Canada’s 10 most iconic brands

Serves 9 out of the top

10 urban centres in Canada

Links 400+ communities

across the country

VIA Rail passenger network

VIA Rail Canada … a National Icon!

Source: Brand Finance Survey, 2009

Halifax

Vancouver

Winnipeg

Toronto

Ottawa

Montreal

Churchill

Prince Rupert

Edmonton

Windsor

White

River

The Pas

Courtenay

Jonquiere Gaspe

London

Sarnia

Senneterre

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Challenges Facing VIA Rail

• Build on the recent Capital Investment Program to reduce the Government

operating subsidy

• Match Capital and Operating Funding to the Train Services Network designated by

the Government of Canada

• Maintain reliable service on tracks shared with host freight railways

• Maintain consistently high Customer Satisfaction at about 97% (meet or exceed

expectations)

• Meet fierce competition from other modes

• Capitalize on the relative fuel cost advantage of rail compared to other modes

• Build on the concept of productive time while on the train (work and

leisure/entertainment, e.g. Wi-Fi)

• Capitalize on Intermodality and Interconnectivity

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Canada – U.S. Rail Links

• Amtrak provides rail service between Seattle and Vancouver, New York City and

Toronto, and New York City and Montreal

• VIA provides services to Amtrak, including maintenance of equipment, station

services and ticket selling

• Amtrak and VIA share the responsibility for the Maple Leaf a joint train that

operates between New York City and Toronto, through Niagara Falls

• VIA and Amtrak passenger connections and reservation links are being enhanced

• VIA and Amtrak have a Master Cooperation Agreement and work together and

share information in various areas

• There Is potential to do much more together for the benefit of passengers and

taxpayers

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Thank you!

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