Thank you for the question.
The arrival of the new government and it's March budget really give us reason to be hopeful. In a very short amount of time, the new government, as well as the new minister, did their homework and learned all about VIA Rail's situation.
First, the government released funding for fleet renewal. We are in the process of completing the legwork so the government can make a decision on new equipment funding for the corridor as early as this fall or, later, as part of its 2017 budget. That's extremely positive news for VIA Rail.
Second, the government, in the same budget, talks about modernizing VIA Rail and calls the proposal for a high-frequency rail service perhaps the only way for the corporation to improve its relevance, on-time performance, and ridership, while reducing its deficit.
We welcome this public policy, one that recognizes our corporation's need to upgrade and renew our fleet. The fact remains, however, that bureaucratic processes are cumbersome. The Auditor General's finding reflects that reality. Even though the government decided to allocate infrastructure funding in its budget to VIA Rail, the approval mechanism involving Parliament and Treasury Board enters into the equation. As a result, VIA Rail is often unable to access the funding until months later and, in some cases, not until the end of the year in which it was allocated. What's more, the funding usually has to be used by a certain deadline. In our industry, though, the construction season is limited to summer, as far as infrastructure is concerned. I'll give you a good example to illustrate that.
Two years ago, the Government of Canada announced $102 million in funding for VIA Rail infrastructure between Montreal and Ottawa, in other words, the Coteau segment, in Quebec, on the Ottawa-bound portion. The announcement came in November, but the funds weren't released until mid-July of the following year. It was then too late to start the work because of the tendering process: the requests for proposals had to be posted for 43 days and the suppliers had to be chosen. That took us to October or November, just before winter. Construction work got under way the following year, but the funding decision announced in November was valid for only two years. When we were finally able to access the money and start construction, we had just 12 months until the funding expired.
That's the kind of red tape that prevents things from running smoothly. If the mechanism allowed for long-term planning and five-year funding, it wouldn't matter if we lost six months or a year going through the administrative steps because we would still have enough time to plan and carry out the work.
North America is experiencing a railway revival, but procurement remains a barrier. Whether we're dealing with steel for the track, signalling systems, or rolling stock, the procurement process can take as long as six, 12, or 18 months, given all the railway construction going on right now in North America, particularly in terms of passenger trains.
In order to cope with the red tape—which won't go away overnight—we need long-term planning. It's also important to ensure that projects are fully deployed.
Over the past 10 years, many of VIA Rail's infrastructure projects have suffered because of a lack of foresight. Projects that had gotten under way would be disrupted because the funding had expired. We would end up with these small segments—