Evidence of meeting #21 for Public Accounts in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was funding.
A video is available from Parliament.
10 a.m.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
I see that. I was looking on your website at the 2015 year-end report.
I also see that you're per-mile employee ratio has gone down substantially too—
10 a.m.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
—compared to 2011. It kind of peaked in 2013, which was a really good year for the ratio per employee. You had an extremely low per-employee ratio, and I see that it is maintaining itself at a lower rate.
10 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
Right.
10 a.m.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
My next question is on Mr. Poilievre's comment on a per passenger or per mile subsidy, if you were to do it that way. Just a little bit off to the side of that, I see that for some of these routes, especially the rural routes, some of the subsidies are up—
10 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
It's 90%.
10 a.m.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
Yes, it's $700 or $800 per passenger on a route. Where's the cap on that? At what point do you say that we can't subsidize this run to this level and operate efficiently? The reason I say that, ultimately, is that I recognize that it's a crown corporation.
10 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
Right.
10 a.m.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
I was looking at Amtrak's website, too. I looked at their year-end report from last year, and I see a lot of similarities between the two companies.
10 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
Of course, right.
10 a.m.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
It's not a problem that just VIA Rail has. I think it's a crown corporation problem within this industry, the passenger rail industry. What I'm saying is that ultimately we need to move toward a direction that is going to see at least a substantial reduction in operating costs that are going to be relying on the government. While I do agree that we need to try to maintain service to as many geographic areas within this country as possible, I'm asking that question because I want to know what your opinion is.
10 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
We're the operators, and the public policy decision is at another pay grade as to where we run and what we should run. It is not up to me to say what would be acceptable or not acceptable. My responsibility is to optimize what is available. That's why we developed this higher frequency train concept to exploit the commercial viability of the Quebec-Windsor corridor, because we believe that can be run profitably, and so profitably that we believe over the longer term it can generate sufficient profits to eliminate the operating deficits of the public purpose services like the remote areas, as long as we have those.
The decision to cap those, or to stop that type of service, is a policy decision to be made by the shareholders and not by the operator.
10 a.m.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
Right. No, I recognize that.
All I was asking is, do you have a number in mind of where you as the operator think the plateau for that is? When you look at your strategic plan over the next five years, and you look at all facets of your business and all geographic areas, do you have an idea in your head, per passenger, where you think the cap is on that?
10 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
Our tack is that we can eliminate the subsidy on the Quebec-Windsor corridor, and we can generate sufficient profit to reduce, if not eliminate, the subsidy on those services.
On those remote and long-haul services, the only place where we see profitability as well, because we believe it exists, is on the tourism services of the Ocean and the Canadian in the peak summer tourism months. That is why we run the Canadian through the Rockies on a profit basis, because it is a tourism offer. If you sit in economy, then you're on a subsidized basis because that's an intercity service, but if you're in a sleeper car, and you enjoy that tourism experience, then it's a tourism offering like any other tourism offering, and it's meant to be profitable.
10 a.m.
Liberal
TJ Harvey Liberal Tobique—Mactaquac, NB
I have one more quick point. On this new GPS tracking system, what's your estimated return on investment? What do you think your return on investments over the long term is going to be? What will that generate in savings for you as a company, and what is your timeline on realizing those savings?
10:05 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
On the GPS train system, the motivation is first and foremost safety, and therefore, it's not an economic justification, per se.
The financial justification, if one needs one for a safety-related improvement, is twofold. It's a much more affordable substitution to positive train control. Positive train control is a signalling system that would cost billions of dollars to install across Canada, and this is a millions of dollars alternative. There's a huge return in terms of savings over the positive train control investment. The second element is that the system allows for better train handling, which means fuel economies, because the train handling is more efficient, and there are fewer accidents or rule violations. Where the train is immobilized because you've violated a rule, crews have to be changed, and the passengers wait and are indemnified. It costs millions of dollars a year. There's sufficient justification there again.
The investment on GPS is fairly small. I think to date it's less than $2 million over two years, but compared to a billion-dollar positive train control investment, or the millions of dollars that we lose by indemnifying passengers who are delayed hours when the train has to stop because the locomotive engineer violated a rule, or the millions of dollars that we save on fuel, because now we monitor the fuel usage as a train is idled or moved down the track, it makes local engineers better users of fuel, and the cost of fuel has gone down. We've reduced our fuel consumption by 24%—
10:05 a.m.
Liberal
The Vice-Chair (Mrs. Alexandra Mendès) Liberal Alexandra Mendes
I'm sorry, Mr. Desjardins-Siciliano, but this is really getting very far....
I'm really sorry to cut you off.
Mr. Christopherson, the floor is yours.
10:05 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
We can tell you're getting a little experience now, T.J. You go right to the last second.
Thank you very much, Chair.
If I may, the first thing I want to do is respond to my friend Mr. Poilievre in terms of that clunky apparatus he references. For the record, I just want to underscore that it's also known as Canadian democracy. My friend and some of his cronies would privatize the office of the Auditor General, if they had an opportunity.
This question is for Mr. Laplante, to start.
I want to come to the issue that's on page 3 under “Background” of the AG report. Paragraph 10 makes note:
In 1978, VIA became a Crown corporation separate from CN. To date, the Corporation is not governed by any enabling legislation. VIA obtains the funding it needs through its corporate plan, which is approved once a year.
It's my opinion, but I suspect that the biggest behavioural change we need is from the federal government in this instance, that this will be reflected in our report and that there is going to be a priority on it. I don't understand the difference and how it might affect the fact that government has been part of the problem here in not providing enough money and not doing it in a timely fashion.
The notes say that the corporation is not governed by enabling legislation. If we went down that route, with enabling legislation, would it put more pressure on the government to at least have to provide more timely funding announcements, or is it unrelated to anything we're focusing on here?
10:05 a.m.
Assistant Auditor General, Office of the Auditor General of Canada
Thank you for the question.
The president of VIA Rail can likely give a more detailed answer.
That said, as a result of the lack of enabling legislation, the corporation's mandate is unclear. Enabling legislation helps clarify a corporation's mandate. When the legislation doesn't exist, the corporation's mandate must be approved through the corporate plan.
Mr. Desjardins-Siciliano could probably add something, if he thinks it would be necessary and useful.
10:05 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
Thank you for the question, Madam Chair.
VIA is a non-agent crown corporation. There are 47 crown corporations in the Government of Canada, and there are three non-agent crown corporations that do not have enabling legislation. They are Marine Atlantic, Ridley Terminals in B.C., and VIA Rail Canada. It is the most important crown corporation without enabling legislation. As I said, it is a non-agent crown corporation: it does not bind the crown.
It was created in 1977 as a CBCA company, so it is a commercial entity with all the powers of a normal company, except that it is subject to the Financial Administration Act of Canada, and that's where the appropriations come from. Therefore, its normal powers of a company to borrow money, to pledge assets, to create equity vehicles for a special purpose don't exist.
10:10 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
I'm sorry, but I'm trying to focus on whether it would help us with the issue of timely government funding announcements.
10:10 a.m.
President and Chief Executive Officer, VIA Rail Canada Inc.
It would help in as much as if the government's wish were to establish such rules, for example, as multi-year funding and to establish the ability of VIA to pledge assets or borrow money, it would clarify VIA's opportunity to run itself as a business.