Operating losses at VIA Rail are projected to increase by 14% this year and expected to continue rising through 2024.According to Blacklock’s Reporter, the taxpayer-owned railway complained of “difficult operating and financial environments.”“VIA Rail has made significant efforts to contain the growth of its operating deficit and thus its reliance on government funding,” management wrote in a Summary of the 2023-2027 Corporate Plan. “However, the economic environment is applying upward pressures on VIA Rail’s operating expenses. The corporation continues to pursue commercial strategies to increase in the long run its ridership.”According to the Corporate Plan, there was an operating deficit of $354.3 million last year. This deficit is expected to increase by 14% to $403.9 million this year.The projected deficit for the upcoming year is expected to reach $430 million, surpassing the pandemic-related shortfall of $415.8 million in 2020. During 2020, lockdowns decreased ridership to less than one-third of the pre-COVID levels.“The increase is mostly due to the resumption of normal services as operations increase,” wrote management. It said that combined deficits in the period covered by the Corporate Plan from 2023 to 2027 would total $2.1 billion.“Since the COVID-19 pandemic, VIA Rail’s financial performance was significantly affected,” said the report to Parliament. VIA Rail also acknowledged difficulties unrelated to the pandemic, including its continued reliance on hundreds of aging cars and locomotives dating from 1955 or older. “A new fleet is urgently required,” said Corporate Plan.In 2021, VIA Rail received a $187.5 million bailout to deal with substantial losses. To cut costs, VIA Rail reduced its workforce from 3,234 to 2,763 employees, a decrease of 14.5%. Their Corporate Plan did not specify a profitability target.Parliament established VIA Rail as a government-owned passenger rail service in 1978.“We have reached a plateau within the constraints of our current operating environment,” VIA wrote in its 2017 Annual Report to Parliament.In 2016, Yves Desjardins-Siciliano, CEO of VIA at the time, testified before the Commons Transport committee. During his testimony, he stated VIA Rail was anticipating large and recurring deficits in its budget.“We would expect in the next seven years the deficit would amount to between $450 million and $500 million,” said Desjardins-Siciliano.The railway has been trying to secure billions of dollars in upgrades for years. These upgrades include dedicated railway lines to replace the current arrangements, where they lease tracks from the Canadian National and Canadian Pacific Railway. This leasing arrangement often prioritizes more profitable freight traffic over passenger trains.“If we do not have a dedicated track, the deficit will simply increase,” said Desjardins-Siciliano. “A future government will have to make the decision to eliminate VIA Rail or do something else.”
