Good afternoon, Mr. Chairman and members of the standing committee. Thank you for the opportunity to appear before you today.
I would like to express my appreciation for the remarks of the Auditor General and for the valuable work performed by her office. The relationship between the corporation and any external auditor often takes an adversarial tone, but this is certainly not the case for VIA Rail. The Office of the Auditor General brings a wealth of unique knowledge and expertise to the special examination process, and VIA welcomes the opportunity to benefit from that expertise. We found the approach taken throughout the 2008 special examination to be both insightful and constructive. The observations made in the report have been valuable. VIA fully supports and has already acted on each recommendation in that report.
We also appreciate the recognition given to VIA's progress since the previous special examination, particularly with respect to continued improvements in governance practices, and in the successful transformation of our Human Resources function into a more strategic resource for the corporation.
The Special Examination identified one significant deficiency which I will address momentarily. First, however, I would like to say I am gratified by the balance of the report's conclusion that the management of the corporation's financial, human and material resources is economic and efficient, and that VIA's activities are carried out effectively.
The significant deficiency is related to VIA's planning process, which failed to provide reassurance that the corporation can achieve its planned objectives within the framework of available government funding. Two main reasons are cited for this finding.
First, the report notes that VIA's planned performance targets depend on access to the rail infrastructure. When the report was written, as Ms. Fraser just said, the existing train service agreement with CN, which owns most of the infrastructure, was about to expire, and the report indicates some skepticism about negotiating a new agreement that would ensure the access we need. However, since then, we have, in fact, negotiated a new 10-year train service agreement with CN, which came into effect this past January. Overall, the agreement has been simplified and modernized to reflect changes in VIA's operations over the years, and it provides the kind of stability in track access that was missing when the Auditor General's report was written.
In addition, with the current capital investment program, VIA is working closely with CN to improve the capacity of the infrastructure for increased passenger rail traffic. Last July we jointly announced the VIA–CN Kingston subdivision project, an infrastructure investment valued at more than $300 million. It will improve capacity and accessibility for our trains on the Kingston subdivision and will provide guarantees on track access for future additional frequency. Negotiations are continuing with CN, and we expect that they will be completed shortly.
A second major reason cited in the report highlights concerns about VIA's ability to achieve its objectives such as the financial targets set out in the 2002-2006 Corporate plan.