Mr. Speaker, I am pleased to have the opportunity to stand in this House today to speak to VIA Rail's funding requirements for the next fiscal year. As colleagues know, the Standing Committee on Transport took the decision to reduce VIA Rail's funding request by $9 million based on concerns that VIA Rail could not, in the committee's view, explain why it needed more money than last year.
As well, as many of our colleagues are aware, the Minister of Transport came before the Standing Committee on Transport this past Monday afternoon to discuss the impact of the proposed reductions and to address the concerns of the committee members. There was much in that speech that I would like to reiterate tonight, as I think it is important that all our colleagues have the benefit of that information.
In addition, the Minister of Transport recently tabled in the House of Commons two reports that speak to VIA's operating performance and financial requirements for the next five years. I refer specifically to VIA Rail's annual report for 2002 and the summary of VIA Rail's corporate plan for 2003-07.
VIA's corporate plan summary and its annual report contains information that addresses the standing committee's concerns and demonstrates that VIA is accountable to Canadian taxpayers.
Moving people and goods efficiently, safely, securely and in an environmentally respectful way is vital to our economy. As Canada's national passenger rail service, VIA Rail has an important role to play providing safe, high quality, efficient passenger service to Canadians. Moving people out of their cars and onto trains is one solution to the problem of congestion which we see each and every day in and around our cities and on our major highways. Not only is congestion a personal frustration but it also slows down our business.
Passenger rail also gives Canadians a convenient and economical choice—whether travelling for business or pleasure.
And, for many Canadians in northern and remote parts of the country, rail provides an invaluable lifeline, especially where no other transportation options are available.
The Government of Canada is dedicated to passenger rail and its revitalization—not only as a viable transportation option that is central to our identity as Canadians, but also as one that makes good economic and environmental sense.
A strong passenger rail system also contributes to building stronger communities. Passenger rail provides a vital link for the movement of people, encouraging business development and growth. VIA Rail connects some 450 communities with services that run across the country.
The Standing Committee on Transport was concerned that VIA could not explain why it needed more funding for the current year than for last year. The Main Estimates identify $266.2 million for 2003-04, compared to $255.7 million for 2002-03. The government provides funding for VIA Rail in the form of an operating subsidy and a capital budget.
VIA's operating subsidy has been fixed since 2000 at $171 million per year and, as such, VIA cannot request more than $171 million for its operational requirements. Further, VIA cannot transfer funding from its capital budget to cover operating requirements without government approval.
I will speak more about VIA's capital budget in a few moments. Before doing so, I think it is important for us to review VIA's operating performance over the last year and compare this performance to a decade ago before VIA underwent major rationalization.
More Canadians are using the train today than ever before. In 2002, VIA Rail carried 116,000 more passengers than in 2001 and over half a million more passengers than in 1990. As a result of this growth and improved yields per customer, VIA's passenger revenues grew by $17 million to reach $270 million in 2002. In fact, revenues have grown steadily over the past decade enabling VIA to steadily improve the cost-effectiveness of its services.
VIA's total operating funding requirement is now 63% lower than in 1990. It was as a result of this demonstrated growth and improved cost effectiveness that government decided in 2000 to fix VIA Rail's operating subsidy at $171 million per year for 10 years compared to $410 million in 1990.
VIA's cost recovery ratio now stands at 64.5% for the entire network, including the regional and remote services. This is an increase of 123% since 1990. Similarly, government funding per passenger mile has been reduced from 45.6¢ in 1990 to 15.8¢ in 2002.
In January 1998 the Standing Committee on Transport reviewed passenger rail service in Canada. At that time, the committee carried out public consultations and made 11 recommendations in its report, “The Renaissance of Passenger Rail in Canada”, in June 1998. The committee's report stated unanimously that the status quo was not acceptable.
The report concluded that government support, particularly in explicit long term policy commitment, was required to provide for a sustainable system of passenger rail in Canada.
The committee's first recommendation stated, and I quote:
That the government define and commit to long-term support, not less than 10 years, for passenger rail objectives in Canada, including the route network, level of service and long-term stable funding to allow stakeholders to recapitalize rolling stock and infrastructure and enhance passenger rail services.
Further, the committee's fourth recommendation stated:
That the government commit to stable funding for passenger rail in the amount of $170 million annually.
The government tabled its response in October 1998, broadly agreeing with the report's findings. The government committed to revitalize passenger rail operations in Canada by providing long term financial support for passenger rail, protecting truly remote passenger rail services and better defining access arrangements for passenger rail in the absence of an agreement with rail infrastructure owners.
To this end, in addition to stabilizing VIA's annual operating subsidy at $171 million, as recommended by the committee, the government announced in April 2000 that it would provide VIA with an additional $401.9 million in capital funding over the next five years to allow the company to address urgent capital requirements related to rolling stock, infrastructure, health and safety, and to provide for modest growth in services.
These funds are being invested in new locomotives, in new Renaissance cars for additional capacity, in the installation of waste retention tanks on existing fleet, in track upgrades and in the refurbishment of passenger stations. The government and VIA are continuing to implement this initiative.
VIA has already made improvements as a result of this funding. The company began operating 21 new high-speed locomotives in December 2001. It purchased 139 new passenger cars some of which are already in operation on the corridor. It has completed the refurbishment of several stations across the country, including Prince George, Thompson, Kitchener, Brantford, Toronto, Oshawa, and so on and new stations in London and west Ottawa.
The corridor fleet has been fitted with waste retention systems. And VIA has completely refurbished the existing Rail Diesel Cars that are used on the regional and remote services on Vancouver Island and in northern Ontario.
I understand that I am quickly running out of time. However, I would like to say that for 2003, VIA has also planned track infrastructure improvements of $7.6 million.
This provides a brief outline of the impact of a reduction in the amount VIA is asking for.
As members of the House will see from the Corporate Plan, VIA has to plan its expenditures over rolling periods of five years. Like other companies, VIA needs certainty that the requested funds will be available when needed to cover its contractual commitments.
In conclusion, the restoration of the funding requirements requested in the main estimates will help ensure that the investments announced in 2000 will continue to bear fruit for the benefit of Canadians across the country.
