It's to give you more time for questions.
I'll give it a shot.
There is no doubt that the inability to obtain greater access to tracks in order to add frequencies had an impact on VIA meeting these financial targets.
Market conditions also played a role, such as in 2003 and 2004 when the Canadian travel and tourism market fell into an unprecedented downturn.
Compared to the industry as a whole, VIA actually performed fairly well. And of course, financial targets were adjusted with the 2003-2007 corporate plan, and with each plan since then as a normal part of the planning process.
However, the experience over the past five years including the current economic crisis highlights a real concern about VIA's ability to respond to drops in market demand within its current operating mandate.
When demand drops, any business needs to cut costs to balance revenue shortfalls. A manufacturer, for example, will pull a product line, or postpone the launch of a new product. But for VIA, a huge portion of our costs are pre-determined, without reference to market demand. We operate mandated services, with little room for flexibility when it comes to the core costs of keeping trains running, whether people are getting on board or not.
This is just a fact of life for VIA, the way our operating mandate is currently defined. And it raises issues that go beyond the scope of the Auditor General's special examination report.
The report, quite rightly, recommended that VIA should identify and clarify risks that affect its ability to achieve strategic objectives, preparing contingencies that spell out how to respond to such risks and the potential impact on government funding. Our current corporate plan identifies and quantifies major risks related to passenger revenue, fuel cost fluctuations, train service agreement changes, expense fluctuations, and the benefits of investments in equipment and infrastructure.
In addition, we regularly review our operations to identify ways in which we can reduce our dependency on government funding. In 2009, this has included realigning train capacity to demand, adjusting service delivery staffing levels, and reducing other discretionary expenses. We will also review and renegotiate purchasing contracts.
The summary of the main findings in the special examination report identifies three other areas for VIA to address concerning information technology, environmental management, and security.
A new position of chief information officer was created and filled in July of this year to oversee VIA's information technology strategic plan and to ensure that the strategic objectives are achieved efficiently. As recommended, we are incorporating an IT, information technology, risk management framework as part of our new information technology security program. All critical elements of this security initiative will be completed by the end of next year.
With respect to environmental management, we are continuing to implement our environmental management system as the report recommends. We are particularly focused on the identification, assessment and control of environmental risks through a risk evaluation methodology. Full implementation is targeted for the second quarter of 2010.
Finally, VIA has completed a full review of employee and contractor positions to identify appropriate security level clearance requirements. We agree that this is a critical step to protect passengers and employees, as well as capital assets. A new security ratings system will be in place next year.
In fact, we have acted quickly to implement all 14 recommendations contained in the special examination report. In each case, implementation is either already complete, or will be completed, in the near future.
I believe we are fully addressing all the concerns raised during the Auditor General's special examination and that VIA has benefited as a result.
The recommendations have helped us to develop better strategic planning and better operating frameworks throughout the organization. That is a significant achievement, and it underlines the real, constructive value of the work performed by the Office of the Auditor General.
My colleagues and I will be happy to discuss these results in more detail with you and answer any questions you may have.
Merci.