The operating losses that plagued VIA Rail last year will continue to increase throughout 2024 due to “difficult operating and financial environments,” the taxpayer-owned railway service says.
The crown corporation, which posted an operating deficit of $403.9 million in 2023, up 14 percent from 2022’s $354.3 million, is projecting a $430 million deficit this year, according to its corporate plan. The $430 million even eclipses VIA’s 2020 shortfall of $415.8 million when lockdowns cut ridership to less than a third of pre-pandemic levels.
“The economic environment is applying upward pressures on VIA Rail’s operating expenses,” VIA management wrote in a summary of the 2023–2027 corporate plan, which was first obtained by Blacklock’s Reporter. “The increase is mostly due to the resumption of normal services as operations increase.”
Combined deficits laid out in the corporate plan from 2023 to 2027 would total $2.1 billion, the report to Parliament stated.
“Since the COVID-19 pandemic VIA Rail’s financial performance was significantly affected,” the report said.
Losses have continued to grow despite the cabinet approving a $187.5 million special bailout in 2021 to cover “extraordinary losses.” VIA Rail also cut its payroll by 14.5 percent from 3,234 to 2,763 employees.
Another issue VIA faces, according to the report, is its continued reliance on hundreds of cars and locomotives from 1955 and even earlier.
“A new fleet is urgently required,” the corporate plan said. It noted that it has more than 250 cars and locomotives as part of its heritage fleet, some of which are being refurbished through the Heritage Fleet Modernization Program.
“The HEP cars are 68 years of age or older, some are affected by unexpected conditions and all are aged well beyond the industry norm of 30 to 40 years,” the report said, referring to a fleet of diesel-electric locomotives that have been refurbished to provide head-end power (HEP).
VIA, which was created as a Crown passenger rail service by the government in 1978, is also focusing on corridor fleet renewal. So far, three new trains have been introduced into the fleet since 2021.
“Qualification testing, winter testing, and regulatory inspections are all complete or nearing completion,” the report said. “Once in service, millions of VIA Rail passengers who travel VIA Rail’s busiest route will experience a new age of passenger rail transportation.”
VIA has sought billions in upgrades for several years and has pushed for dedicated lines to replace current leases on Canadian National and Canadian Pacific Railway tracks that have been offered to more profitable freight traffic.
In 2016, then-CEO Yves Desjardins-Siciliano testified at hearings of the Commons transport committee that VIA was expecting large recurring deficits.
“We would expect in the next seven years the deficit would amount to between $450 million and $500 million,” he said. “If we do not have a dedicated track the deficit will simply increase. A future government will have to make the decision to eliminate VIA Rail or do something else.”
