Transport 2000 Canada Hot Line

20 July 2001

This is the Transport 2000 Canada Hotline, issue number 611, recorded on 20 July 2001, our 25th anniversary year, Bert Titcomb reporting for Harry Gow.

In this issue...

In this issue, CTA report, BC Rail, Cape Breton and other news.

Headlines

1 - Canadian panel recommends dropping some VIA subsidies

In a scenario that should sound familiar to Amtrak supporters, a Canadian review panel has recommended that the government stop subsidizing VIA Rail Canada's service in the busy Quebec City - Windsor corridor, which includes Toronto and Montreal. The report by the panel that reviewed the Canadian Transportation Act, which was released on 18th July, suggested that VIA be allowed to drop service on money-losing segments of the corridor, the Globe and Mail reported. The panel suggested that it might be more cost effective for Ottawa to subsidize other modes, instead.

The recommendation appears to be headed nowhere, however Transportation Minister David Collenette says he's committed to supporting VIA operations. "I don't know of any other passenger rail system in the world that can exist without public subsidy", he told the newspaper. "I'm not even sure there's full cost recovery on the Montreal-Toronto run. I think that's the most profitable run."

Harry Gow of Transport 2000 Canada said commercializing VIA services between Quebec City and Windsor won't work. "It's much less successful than the French model or the German model of a complete national railway", Gow told the paper. "This business of fragmenting or commercializing bit by bit is really heavily rejected in professional railway circles."

2 - Pacific Wilderness Railway shuts down in British Columbia

Ross Rowland announced this week that the Pacific Wilderness Railway, which operated tourist trains between VIA Rail Canada's station in downtown Victoria and milepost 20 of Rail America's Esquimalt & Nanaimo Victoria sub, would shut down with the arrival of the afternoon run.

The reasons given for the shutdown were low ridership, increasing expenses, and parent Ohio Central Railway's desire to no longer invest in what it termed a losing operation. The railway began operations in June of 2000.

3 - BC Rail boss says RDC fleet needs overhaul or replacement

BC Rail's Budd car fleet needs rebuilding or replacement if Cariboo Prospector passenger service to Prince George is to continue beyond the end of next year. The railway owns six RDC-1s and three RDC-3s, originally built between 1953 and 1962. "We haven't upgraded these cars and they are coming to the end of their useful life", BC Rail CEO Bob Phillips told the Vancouver Sun. "We will have to come up with $30 million in capital expenditures to make that service operate beyond 2002." No money is currently earmarked to overhaul or replace the Budd cars.

4 - Canadian panel recommends using running rights to boost competition

In its review of the Canadian Transportation Act, a panel recommended that running rights could be used to enhance rail vs rail competition under certain, limited circumstances. The move was cause for concern for Canadian National, which successfully fought off an unwanted running rights request earlier this year, but encouraged shortline operator OmniTrax, which had sought to gain access to 2100 miles of CN lines on the Prairies. The report contained 90 recommendations covering all aspects and modes of transport in Canada. The rail recommendations however, are six month interim suggestions that will get further review.

CN said it was pleased that the panel recognized the benefits of deregulation. The panel clearly shares CN view view we stated repeatedly throughout the CTA review process that Canada's regulatory regime for railroads works effectively for most shippers, that rail competition is substantial and that the system needs only minor revision, not wholesale change, said CN President and CEO Paul Tellier. But Tellier warned that if all of the panel's recommendations are adopted, it will harm Canada's resurgent railroad industry. Given the panel's conclusions about the presence of substantial rail competition, the absence of market abuse, and that commercial transactions are preferable to regulatory intervention.

Tellier said CN is troubled by the extensive list of recommendations in the panel's report. This menu of recommendations if adopted in its entirety and stripped of the context provided by the panel could, at the end of the day, constitute a fundamental reversal of policy, a step back to unnecessary re-regulation of the industry, Tellier said. This is an outcome the panel, in its own wisdom, is not recommending. OmniTrax Canada said it was pleased that the panel's recommendations recognized the need for increased competition in the rail network for Western Canada.

5 - Cape Breton Railway is in danger

All rail service to industrial Cape Breton could soon be eliminated. It has been operated at a loss since 1998. The threat is very real, and with shippers already turning to alternatives, traffic is down.

Transport 2000 Atlantic and business such as Copol International Ltd. are working hard to find new traffic and save the line. Meanwhile, the Bras d'Or, VIA's tourist train is bring a growing number of people to the island.

Thank you for calling the Transport 2000 Canada Hotline. Thanks to trains.com Newswire by Bill Stephens for all these items. For additional information, please contact our web site at:

www.transport2000.ca.