VIA Rail

[crs1026]

The one thing people forget is that ticket prices increase with speed. The mantra "faster than flying, cheaper than driving" sounds great, but it is a myth. I would rather see VIA take thousands of cars off of the road than a dozen flights out of the air.

If frequency rises, there will be many more seats to sell. Prices will find their optimum point. VIA will no doubt continue to use demand management so there will be bargains at times and higher prices when demand is higher.

In the short term, HFR appears to be headed for reliability and frequency rather than greatly enhanced speed (no matter how much I opine here on UT!) so one would expect prices to reflect that reality.

- Paul

 

[Urban Sky]

Passenger Rail service is not uniformly dying in Canada. Yes, long-distance VIA services have been on life-support since the late 70's, and many intercity routes are tenuous due to the awkward financial/commercial relationship between CN and VIA, but passenger rail has been experiencing incredible growth in Southern Ontario, primarily in the form of commuter rail, but also to a lesser extent in the Toronto-Ottawa VIA service.

The GO Expansion program is an absolutely enormous project that will bring frequent electrified service to the central portions of the GO network, and all-day express service to more distant destinations such as Kitchener, Niagara Falls and Barrie. This is not just talk, this has already been underway for a decade and the results are starting to show. I have been summarizing commuter rail schedules for the past 5 years, and between January 2015 and January 2020 the number of weekly GO train trips more than doubled from 1486 to 3472. In January 2015, only the Lakeshore lines had all-day service, with service every 30 minutes. By January 2020 there was all-day service on the Lakeshore Lines (every 15 minutes midday and every 30 minutes other times), UP Express (every 15 minutes), Kitchener line (every 60 minutes), Barrie Line (every 60 minutes) and Stouffville line (every 60 minutes). Every one of these service expansions was made possible thanks to railway expansions. Some have been huge projects, such as the Georgetown South project which completely grade-separated the Kitchener corridor east of Pearson airport and doubled the width of the infrastructure to support 4 tracks (widening to 8 tracks as the Milton and Barrie lines join in). While others have been comparatively modest, such as the projects to add double-track segments on the Barrie and Stouffville lines.

Just to quantify where the Corridor stands in a historical comparison with the last 70 years, the scheduled timetable volume has caught up to the April 1989 timetable (i.e. the last timetable before the January 1990 cuts) in November 2017 (166,871 vs. 166,661 km per week) and remained (until CoVid-19 hit) higher than most of the 1960s and 1970s:

Compiled from: official CN, CP and VIA timetables

If we look only at the "Corridor East" (i.e. east of Toronto), then the 136,627 km scheduled per week between November 2017 (when the 10th frequency was introduced between Toronto and Ottawa) and December 2019 (when train 69 was terminated already in Toronto instead of Aldershot) was only ever exceeded in April 1955 (137,660 km), April 1956 (137,120 km) and April 1958 (138,824 km):

Compiled from: official CN, CP and VIA timetables

Probably not. But is it good for the economy to cede so much control to CP and CN rather than have a regulator manage freight and passenger traffic demand correctly as in Network Rail and similar types of models abroad?

Regulating the infrastructure owners has undoubtedly its advantages, but it comes at a cost. At the beginning of this year, I posted a table (see below) with how much the governments (i.e. the taxpayers) invest into their rail infrastructure per capita in Europe. In the case of the United Kingdom (a country of 65.4 million), that was 151 Euros per capita in 2016, thus 9.87 billion Euros or $13.9 billion per year. Provided sufficient political will, it is relatively easy to interfere into CN's and CP's dispatching control. However, one should be aware that that sovereignty over their own infrastructure is what so far motivated CN and CP to mostly refrain from asking the government to chip into its capital expenditure projects. I repeat myself, but regulation is entirely possible - provided the taxpayer is willing to pay the price...

Source: Umsteiger (Newspaper of Germany's equivalent of Transport Action Canada), Issue #117 (September-December 2017, p.6)

Expanding freight capacity had a Harper era program in the west - the Pacific Gateway. Funding the non-rail elements of rail de-bottlenecking projects to increase throughput. I suspect in the next 20 years the government will run into a wall with CN and CP - they will both need major network upgrades, but the only way to add capacity will be extensive double and triple tracking that the railroads themselves can't afford since it will add a lot more capacity than the freight railroads can use. So there will be additional capacity for passenger rail! Whether capacity is needed over northern Ontario though, I am not so sure.

I'm confident that the current infrastructure upgrades along CN's transcontinental main corridors in Western Canada will benefit passenger trains (i.e. the Canadian and the Skeena) and it's a lucky coincidence that the extreme delays suffered by all trains out west have forced CN to pay for massive capacity expansions, which will increase the fluidity of freight and passenger traffic alike, without taxpayer involvement. However, in order for Canada to through in its weight in the global effort to fight climate change, the government will have to release funding and incentives to make rail cheaper compared to its competing modes...

Also, our freight operators are incredible. They carry more freight by rail than all the European freight rail operators combined. Canada has the fifth largest freight rail network (by tonne-km carried) in the world. The only countries ahead of us are China, Russia, India and the US. That's something we should be proud of, as Canadians.

This is a point which can't be reiterated enough: the rail network in North America is by no means pathetic - it's in its way just as highly efficient and performant as in Europe and just as lopsided towards one side of rail transportation (passengers in the case of Europe, freight in the case of North America)!

 

[kEiThZ]

The province has already done it, and so did VIA in the 80s.

When I say study it, I mean something akin to the Joint Project Office, VIA and the CIB struck up for HFR. They need to study it, pick a course of action and deliver. If it costs $5B so be it. It's the second most important economic corridor in the country.

 

[kEiThZ]

In the short term, HFR appears to be headed for reliability and frequency rather than greatly enhanced speed (no matter how much I opine here on UT!) so one would expect prices to reflect that reality.

I'm a little more pessimistic on Toronto-Montreal ridership than most, but all the other segments doing well will hopefully make the case for investment.

And to be honest, I'd be just fine with a cheaper to use system that did Toronto-Montreal in 4 hrs (in due course after some upgrades), than an expensive full blown HSR system that cut it down to 2.5 hrs. If subsequent upgrades get Toronto-Ottawa to 2.5 hrs and Toronto-Montreal to 4 hrs and there's Western extensions that get Toronto-Kitchener to 1 hr and Toronto-London to 2 hrs, with hourly hourly (or semi-hourly hopefully) departures and reasonably priced tickets, ridership will skyrocket.

This is a point which can't be reiterated enough: the rail network in North America is by no means pathetic - it's in its way just as highly efficient and performant as in Europe and just as lopsided towards one side of rail transportation (passengers in the case of Europe, freight in the case of North America)!

I'd go further. I would argue that since our population is highly concentrated in a handful of corridors, it's much easier for us to invest in a handful of rail projects and get substantial ridership, while also having substantial freight rail networks. Europeans and Asians can't really do that.

 

[micheal_can]

You haven't a clue. Aviation isn't subsidized in Canada. In fact, it's a huge moneymaker for the federal government. Hundreds of millions annually in ground rent from the largest airports. Fuel taxes for more general revenue. And navigation fees, security charges and airport improvement fees so that the whole system pays for itself. This is why the Feds don't care about intercity rail. Why move passengers from a sector that gets them revenue to one that requires subsidies?

Aviation is subsidized, but in indirect ways. For example, the governments have bailed out Air Canada in the 2008 recession. The government is bailing out airports all over Canada. That is the act I have a problem with when we see much of the Via network shuttered.

And "we Canadians" were fully compensated with the sale of those assets. You can't sell something and retroactively impose obligations. Imagine selling your car to a friend and then insisting that he let you use it every Friday at exactly 7pm, after you have cashed his cheque.

Also, our freight operators are incredible. They carry more freight by rail than all the European freight rail operators combined. Canada has the fifth largest freight rail network (by tonne-km carried) in the world. The only countries ahead of us are China, Russia, India and the US. That's something we should be proud of, as Canadians.

We did not sell the CP transcontinental. We gave the money to the corporation. They have not given it back to us. With inflation and interest accumulating for about 140 years it would be in the Trillions.

I am proud of how much we do with our rail, however we do so little with it with regards to passenger rail.

 

[Urban Sky]

Aviation is subsidized, but in indirect ways. For example, the governments have bailed out Air Canada in the 2008 recession. The government is bailing out airports all over Canada. That is the act I have a problem with when we see much of the Via network shuttered.

Small reality check: VIA has already scaled up its operations back to more than 40% of its regular pre-Covid schedule since September 2020. The only services which haven't resumed service so far are the two transcontinental routes, the restoration of which would undermine the travel restrictions in place for travelers arriving from cities like Montreal or Toronto into Manitoba or New Brunswick. Nevertheless, the Canadian is going to restart tomorrow with a weekly service between Vancouver and Winnipeg.

We did not sell the CP transcontinental. We gave the money to the corporation. They have not given it back to us. With inflation and interest accumulating for about 140 years it would be in the Trillions.

Small reality check: Canada's GDP is approximately US$1.7 trillion (C$2.1 trillion) and the upkeep for maintaining a railway line over more than a century dwarfs the right-of-way's initial construction costs.

 

[kEiThZ]

Aviation is subsidized, but in indirect ways. For example, the governments have bailed out Air Canada in the 2008 recession. The government is bailing out airports all over Canada. That is the act I have a problem with when we see much of the Via network shuttered.

There are plenty of sectors getting a bailout during the pandemic. Including VIA itself is recently. And plenty of companies got bailouts in 2008 during the aftermath of the Global Financial Crisis. Governments aren't willing to see services vital to the economy collapse and tens of thousands of jobs cut. Shocker.

We did not sell the CP transcontinental. We gave the money to the corporation. They have not given it back to us.

We didn't "give" them anything. We subsidized (partially) construction because it was in the national interest to do so and since then have enjoyed over a century of economic benefits enabled by the completion of that line. We got what we paid for.

Let's be clear here. The problem isn't the freight cos. The problem is that we (as a society) aren't willing to pay to build passenger rail. As Urban Sky has pointed out, Europeans subsidize passenger rail by tens of billions of Euros annually. As he pointed out, this would be like Canada spending $3-4B annually on just the construction of passenger rail. If VIA, GO and AMT had those kinds of budgets, their relationships with CN and CP would be very different. Heck, if we had $3-4B to spend on passenger rail annually, we'd be building high speed rail in places like Saskatchewan and the Maritimes just because we could afford it.

Have a look at what Urban Sky wrote about how much the Europeans spend annually:

In short, Germany (a country with very decent passenger and freight rail services, but decade-long and ongoing under-investment in its rail infrastructure) has invested 64 Euros ($93) per capita in public funds in 2016 into its passenger rail network and Switzerland (a country considered the gold standard for passenger and freight rail service and infrastructure) has even invested 378 Euros ($551), which would be equivalent to $3.27 billion (Germany) or $19.37 billion (Switzerland) of taxpayer money invested into the Canadian rail network. Unfortunately, there is no short-cut to building an efficient and performant rail network which circumvents using tons of your own (i.e. taxpayers') money...

The good news is that with HFR and GO RER we may finally be doing a serious fraction of what the Europeans and Asians have been doing for decades. This is why we should all be cheering VIA and HFR instead of moaning, bitching and criticizing from the cheap seats. More investment will only come if HFR and GO RER are successful. If they aren't, it'll be the end of intercity passenger rail in Canada.

 

[nfitz]

I'll be happy if by 2035, they can have cumulatively spent $7-8 billion on the Toronto-Ottawa-Montreal portion. That would get Toronto-Montreal to 4 hrs.

$7-$8 billion to get Montreal to 4 hours - slow that VIA can already do it if it wasn't for the freight issues?

How much would it cost to simply buy CN, take over the Toronto to Montreal trackage, restrict freight operations to overnight, and sell the rest of the CN network?

 

[Urban Sky]

$7-$8 billion to get Montreal to 4 hours - slow that VIA can already do it if it wasn't for the freight issues?

How much would it cost to simply buy CN, take over the Toronto to Montreal trackage, restrict freight operations to overnight, and sell the rest of the CN network?

CN’s market capitalization seems to be just under $100 billion (which would be equivalent to approximately 5% of national GDP)...:

 

[Northern Light]

CN’s market capitalization seems to be just under $100 billion...:
View attachment 288162

Not to be confused with endorsing the purchase of CN...............

But I observe that the federal government has allocated 100B for 'stimulus' beginning in 2022.

I would then add, however, I consider a PE of 29.3 to be excessive and would not purchase CN Stock at that valuation.

Of course, the Federal government has the means to depress that valuation; say, announce a surtax on freight railways earnings of 20%.

Then watch the PE fall, nationalize the asset; then announce that you wont' implement that tax after all.

Sell space in the CN Mainline corridor to VIA while you're the owner, allowing a continuous single track own by VIA from Durham Junction to Montreal; with space for passing tracks as meet VIA's needs.

Retain the balance, and sell the asset at a tidy profit...............

 

[Allandale25]

$7-$8 billion to get Montreal to 4 hours - slow that VIA can already do it if it wasn't for the freight issues?

How much would it cost to simply buy CN, take over the Toronto to Montreal trackage, restrict freight operations to overnight, and sell the rest of the CN network?

It's not just the cost. It's the amount of time battling it out to make it happen.

Sure, it's still 4 hours. But if there are more trains to choose from and the travel time is consistent, it's a bigger picture than just the end-to-end time.

 

[crs1026]

^@nfitz That’s a good start to how to look at things. I have the back of an envelope handy.

Let’s assume that 40% of that CN capitalization is in the track - the rest pertains to locomotives, railcars, yards, and other things that VIA doesn’t encroach on. CN has 19,500 route miles. The Kingston Sub is double track and high quality, so give its capitalization a factor of 2x the average per-route mile value. On that back of envelope basis, the market value of the Kingston Sub is about 3% (600/19,500) of CN’s market value for track of $39.8B (40%x $99.5B). or roughly $1.22 B.

If one assumes that expropriating CN (and presumably) forcing it onto CP will not hurt CN’s ability to attract customers and earn an equal return, then there is no need to compensate CN for loss of future opportunity. And so long as we assume that the Kingston line will always be a railway, and has no potential growth in property value,, the loss of the land itself has no opportunity cost. So it would be reasonable to guesstimate that expropriating the 300 miles of the Kingston Sub, in its current condition, would cost Ottawa $1.22B.

That leaves two issues. One is how much CP would expect to share its line with CN. We could do a similar per-mile market assessment of CP’s assets and determine what it would cost CN to become a 50% partner with CP between Oshawa and Dorval. CN would likely come out ahead. We would have to pay to enlarge sidings on the Belleville Sub to assure CP of no adverse operational impact and assure CN of roughly equal freight throughput and velocity. Let’s assume that is 50 miles of new sidings at $10M per mile - $0.5B Having made that gift to CP and CN, we have effectively made them whole and provided wVIA with a high quality, freight-free right of way that is vastly superior to the Havelock Sub.

The second issue is, what should we do about the potential for the shared freight line to fill up and require a second freight line.... say, in 40-50 years. In theory one would force that issue into local land planning today, before land is developed in other ways, dealing with any property owners’ claims for harm now while their land remains relatively cheap.( Let’s call that initiative “Pickering Airport 2.0”). To be conservative, let’s budget $1B for that new ROW. There are two options - the new route becomes HSR some day, and CN gets the Kingston Sub back, or the new ROW becomes a super-quality freight line perhaps with totally different technology in 40 years.

This scenario does not offend any principle that I hold dear, and it is not an intrusion into free enterprise or capitalism as generally practised in Canada. I don’t believe CN’s shareholders would claim hardship (although they might perceive the imposition of greater risk, due to CP’s involvement....railways are not that good at cooperating) The only obstacle I can see is that the legal work to declare the expropriation, haggle with CN over final price, and then to haggle with CP over its compensation, would take a JPO full of lawyers and force a decade of delays.

So yes, I think the cost is roughly comparable to HFR, and would deliver a higher-performing infrastructure to VIA without harming freight railways.....it is a more rational and economical solution. Unfortunately there is no public appetite for this, and no political will. So VIA’s HFR strategy is the only option we have that has a realistic chance of success. So I’m learning to love it.

-Paul

 

[micheal_can]

There are plenty of sectors getting a bailout during the pandemic. Including VIA itself is recently. And plenty of companies got bailouts in 2008 during the aftermath of the Global Financial Crisis. Governments aren't willing to see services vital to the economy collapse and tens of thousands of jobs cut. Shocker.

It is not a shocker. However, the government is willing to give money to the private corporations and let all government owned enterprises struggle. That is where I have a problem. Maybe it is time for some of those companies to fail. Maybe it is time that shareholders learn what it is like to loose big. Maybe it is time that people learn that if the company is doing shady things, or cannot balance their books, they shut down.I know that will never be allowed to happen, but it would help everyone realize the mess we are in.

We didn't "give" them anything. We subsidized (partially) construction because it was in the national interest to do so and since then have enjoyed over a century of economic benefits enabled by the completion of that line. We got what we paid for.

Let's be clear here. The problem isn't the freight cos. The problem is that we (as a society) aren't willing to pay to build passenger rail. As Urban Sky has pointed out, Europeans subsidize passenger rail by tens of billions of Euros annually. As he pointed out, this would be like Canada spending $3-4B annually on just the construction of passenger rail. If VIA, GO and AMT had those kinds of budgets, their relationships with CN and CP would be very different. Heck, if we had $3-4B to spend on passenger rail annually, we'd be building high speed rail in places like Saskatchewan and the Maritimes just because we could afford it.

Have a look at what Urban Sky wrote about how much the Europeans spend annually:

Comparing us to Europe is a straw man argument. We have much less population, and move more freight over rail, and really only have 2 freight operators.

Most of Canada's rail lines are not at capacity. The issue is that freight operators prioritize their cargo over passengers. A simple solution could be that the owner of the lines get fined for a passenger train being late. Fine them something like $1000/minute per station that any scheduled passenger train is late. You would quickly see some changes. Mind you, they would try to push to make the schedule longer so that they don''t have to yield to passenger trains.

The good news is that with HFR and GO RER we may finally be doing a serious fraction of what the Europeans and Asians have been doing for decades. This is why we should all be cheering VIA and HFR instead of moaning, bitching and criticizing from the cheap seats. More investment will only come if HFR and GO RER are successful. If they aren't, it'll be the end of intercity passenger rail in Canada.

I agree. I am looking outside of the sections that can be HFR and looking there.

It's not just the cost. It's the amount of time battling it out to make it happen.

Sure, it's still 4 hours. But if there are more trains to choose from and the travel time is consistent, it's a bigger picture than just the end-to-end time.

It is why people like having a subway/LRT route over a bus. It comes down to reliable service.

 

[Urban Sky]

Comparing us to Europe is a straw man argument. We have much less population, and move more freight over rail, and really only have 2 freight operators.

Just a quick reminder that I wasn't comparing Canada to Europe. All I did was to point out how deeply the taxpayer is involved in funding rail infrastructure upgrades in countries which (unlike Canada) prioritize passenger over freight operations.

Most of Canada's rail lines are not at capacity. The issue is that freight operators prioritize their cargo over passengers. A simple solution could be that the owner of the lines get fined for a passenger train being late. Fine them something like $1000/minute per station that any scheduled passenger train is late. You would quickly see some changes. Mind you, they would try to push to make the schedule longer so that they don't have to yield to passenger trains.

I guess you could fine CN for every minute they delay a passenger train, but the most significant change would be that CN sues the government for compensation, as you can't just sell (privatize) something and then redefine the fundamental principles upon which that property may be used. Also, they will fight you in court over every minute of delay they feel like being the fault of the passenger operations and not of themselves - or simply lengthen the passenger schedules until they match the average speed of their freight trains...

 

[roger1818]

$7-$8 billion to get Montreal to 4 hours - slow that VIA can already do it if it wasn't for the freight issues?

How much would it cost to simply buy CN, take over the Toronto to Montreal trackage, restrict freight operations to overnight, and sell the rest of the CN network?

You are forgetting the cost of having to add 4 lanes to the 401/A20 (among others to allow them to get to their origin/destination) to accommodate all the extra trucks to compensate for the reduced rail freight capacity (plus the hit to the economy stemming from the extra cost required to transport goods by trucks).

You are also forgetting the HF in HFR. The big advantage of the proposed HFR route is that it that the same route is used for Montreal-Ottawa, Montreal-Toronto and Ottawa-Toronto trains. This allows for double the frequency on all three routes. With a dedicated lakeshore, you need separate trains on all three routes (unless you use the Toronto-Ottawa-Kingston-Montreal route, but that is significantly longer). As a result it is compromising speed for improved frequency.

An improved lakeshore does nothing to fix the winding route between Ottawa and Toronto. People often complain about travel times on HFR between Montreal and Toronto since the route will be about 9.6% longer (in distance) than the existing route (or maybe a bit less if they can shorten the current Montreal-Ottawa route), but forget that HFR will be about 9.5% shorter between Ottawa and Toronto. Even at that, the lakeshore isn't the shortest route between Montreal and Toronto either.