VIA Rail

[kEiThZ]

Case study - the Toronto Airport link was always premised on a high fare, because the project couldn't be sold initially unless it was subsidy-free. When the fare flopped, nobody cared that the new lower fare would force a subsidy... once built, the link came to be seen as an asset for the city, and fares are set to maximise its use - subsidy or not.

That shows you exactly what's wrong with our system. The money could have been better spent building a new people mover to Malton and speeding up GO RER on the corridor. But they built a business plan predicated on a high fare to deliver an Heathrow Express style service in a market that would not support such a service. That might not be intentionally devious so much as it is incompetence.

 

[crs1026]

Translation: lying to the public about public expenditures is good. ?

Good? No. I was trying to be ironic.

And obviously there's a line of diluted transparency and candour that one should not cross. But if you think there is a politician out there that doesn't mix facts with a little blarney, and spin it around......well, those guys finish second. #davidsokncackiforexample

- Paul

 

[TOareaFan]

Good? No. I was trying to be ironic.

And obviously there's a line of transparency and candour that one should not cross. But if you think there is a politician out there that doesn't mix facts with a little blarney, and spin it around......well, those guys finish second. #davidsokncackiforexample

- Paul

translation....winning is more important than governing? Something we are seeing a bit in our new government in Ottawa too I might add.

 

[crs1026]

translation....winning is more important than governing? Something we are seeing a bit in our new government in Ottawa too I might add.

It's not my preference - but if it gets us the damn HFR (which we should have had two decades ago) I will hold my nose and say "there's always an exception" ;-)

Seriously, this proposal needs to be sold to the public, it's not a slam-dunk. I'm not suggesting dishonesty but I do think pursuing the head-on technocratic discussion about equity in subsidies (which I agree with, intellectually) is not going to make that easier. We need to consider what will be palatable politically and optically as well as what may be technically arguable.

- Paul

 

[TOareaFan]

It's not my preference - but if it gets us the damn HFR (which we should have had two decades ago) I will hold my nose and say "there's always an exception" ;-)

Seriously, this proposal needs to be sold to the public, it's not a slam-dunk. I'm not suggesting dishonesty but I do think pursuing the head-on technocratic discussion about equity in subsidies (which I agree with, intellectually) is not going to make that easier. We need to consider what will be palatable politically as well as what may be technically arguable.

- Paul

But, seriously, if you support/allow lying to get your favourite government initiative done/built/complete....you surrender the right to complain when some other area lies to get something done that you don't support.

 

[crs1026]

But, seriously, if you support/allow lying to get your favourite government initiative done/built/complete....you surrender the right to complain when some other area lies to get something done that you don't support.

Fair point.

Now, I have no illusions that the pro-bus and pro-air and pro-car lobbies will take the high road when they advocate against this proposal. We've seen decades of how they spin facts and arguments (remember the bus lobby's inside track during the Martin years?)(Ever seen the Peter Armstrong crowd in action opposing VIA in the Rocky Mountains?). I'm not suggesting anyone at VIA stoop to the same level. The winner needs to be more credible, not the better street fighter.

On the occasions that I have had the opportunity to watch political decisionmakers at close range, I'm struck by how the facts do matter, but at one plane of discussion. There is another plane of storytelling that rides over top. Whether that's deception, or just good people skills, is always a tough call.

- Paul

 

[steveintoronto]

Answering to Dowling's [qt]
hate seeing that "$0 subsidy" line. I guess they are trying to both pander to conservative thinkers and to head off criticism from Megabus etc.[/qt]
Yeah, it's a rather compromising objective. It's rather hypocritical that rail would be held to a zero-subsidy standard when there is such massive subsidy for highways. It's not like Megabus pays for highway construction and maintenance.Yeah, it's a rather compromising objective. It's rather hypocritical that rail would be held to a zero-subsidy standard when there is such massive subsidy for highways. It's not like Megabus pays for highway construction and maintenance.

I think Urban Sky might have taken that comment the wrong way. Via Queen's Park, the taxpayers' atrocious return on highway investment is being realized (meaning Queen's Park is investing heavily in transit) and of course, a different tact is being taken on the Hill too. If the 'report' comes back very favourable for the new VIA plan, it will allow the Feds to invest *along with private capital* to at least supplement the operating costs. The infrastructure is where the private investment aspect is to manifest, and if that's mostly rail on that corridor, it's going to be very unlikely they could lose, whether VIA leases running rights or not. Huge amounts of money is *looking* for opportunities like this. The $3M report merely presents the prospectus.

 

[kEiThZ]

Seriously, this proposal needs to be sold to the public, it's not a slam-dunk. I'm not suggesting dishonesty but I do think pursuing the head-on technocratic discussion about equity in subsidies (which I agree with, intellectually) is not going to make that easier. We need to consider what will be palatable politically and optically as well as what may be technically arguable.

I think you are under-appreciating public support for investment in VIA Rail. Even a lot of conservatives support this. As the Harperites found out in office.

I don't see the need to sell investment on VIA's busiest line, in an area of the country where over half of the population lives. That "no-subsidy" pitch was clearly meant for the Conservatives when in power. This government has no issues throwing massive subsidies to all sorts of different causes. Money to VIA offers far better return than most of the rest of the deficit spending being incurred.

 

[dowlingm]

There are political realities in the Brantford area which are likely to make a mile of track there as pricey as a mile of pushing through lake country. Ask Hydro One.

 

[steveintoronto]

There are political realities in the Brantford area which are likely to make a mile of track there as pricey as a mile of pushing through lake country. Ask Hydro One.

I don't get the connection to VIA and Brantford. This is considerably south of Brantford, and reservation land, disputed or otherwise, is all south of the Grand River as it skirts the south side of Brantford.

The only possible area of dispute would be with land-owners (private, not reserve) to the north of Brantford, and segments of this RoW are used for the Paris-to-Ancaster bike race coming up in a few weeks: (6/ Harrisburg Rail Line *** 3 stars - Comes just after the half way feed station at Harrisburg Park. After a hundred meters or so of whoops and turns, you get a 2km straight shot down a rail line in its best naturalized condition. Local trivia - Harrisburg used to be a bigger town than Brantford, but lost out in a competition between railroads. Maybe they really won. Our feed zone is the site of the former train station. You pass the original hotel for the station as you leave the park. http://www.parisancaster.com/dirtydozensectors.html)

[...][A smaller project that would have an impact on VIA’s competitiveness in Southwestern Ontario would be the reconstruction of CN’s 18-km Brantford Bypass between Lynden and Paris Junction. The bypass would be used by new, peak-hour express trains on the Toronto-London route. It would also allow for the re-routing of through CN freight trains that aren’t required to set off or lift cars at the Brantford Yard, taking them off the existing 27-km line that loops through the city and serves VIA’s station. This would free up capacity on the existing line segment for local and semi-express passenger service, which would be expanded to provide Brantford with several more roundtrip frequencies than VIA currently provides. Because rail service was abandoned on this right-of-way decades ago, reconstructing it would be subject to an EA. It is estimated that the Brantford Bypass project would cost $150 million, which would include the construction of a new, double-track bridge over the Grand River.][...]
http://transport-action-ontario.com...16/03/TAO-HPR-Discussion-Paper-2016-03-04.pdf

 

[Urban Sky]

Yeah, it's a rather compromising objective. It's rather hypocritical that rail would be held to a zero-subsidy standard when there is such massive subsidy for highways. It's not like Megabus pays for highway construction and maintenance.

[...]

The more free-market option: Create a non-subsidized division of the MTO to operate the highways in the Corridor: all highway construction and maintenance costs would need to be collected through tolls rather than taxes. Higher bus and car costs would give VIA a much better shot turning enough profit to pay for their own infrastructure maintenance.

This issue has been raised by the recent CTA review, which explictly "recommends that the Government of Canada act [sic!] to improve the fluidity of passenger railway services by [...] using infrastructure financing models that integrate the principle of direct user-pay pricing for rail and road modes of personal transportation in the interests of long term harmonization of pricing incentives" (p.181). Even though the review has been commissioned under Harper, it is surprisingly favorable of passenger rail transport in Canada, but very regrettably, most passenger rail supporters have dismissed it based on their very selective interpretation of the recommendation "that the Government of Canada increase [sic!] the use of private sector approaches for federally-operated passenger rail services including by [...] considering the elimination of subsidies for the Toronto–Vancouver service" (p.182), by shortening it to "... recommends to eliminate the Toronto-Vancouver service"...

My biggest complaint on the study has been the fact that they budgeted it for 3 years. A feasability study like this should not take more than 12-18 months. And usually, given the capex needed for something this big, you'd spend more than $3 million to do such a study. If I'm extremely generous we're talking maybe 10-12 000 hours of consulting work. That's not a lot for a project of this magnitude. And not enough to fill 3 years. […]

The budget says that the government does not expect to fund the project in this and the next 2 (if I remember correctly) budgets. This could be understood as a sign to the private sector and VIA that they are given the time and trust to negotiate a deal to finance HFR. As things stand at the moment, the government seems only prepared to step in if VIA's efforts of establishing such a partnership fails. If we discount electrification (which is optional) and fleet renewal (which is mostly independent from HFR), the investment volume is $2 billion and you don't know what pre-studies have already been done by VIA or other parties concerned.

[…] I have a distinct discomfort in having the private sector fund something like this. The private sector profit motive will simply drive up ticket costs beyond what they should be, while keeping VIA's revenues lower than then they should be. I wonder how VIA plans to achieve financial independence in that scenario. […]

[…] I don't see the need to sell investment on VIA's busiest line, in an area of the country where over half of the population lives. That "no-subsidy" pitch was clearly meant for the Conservatives when in power. This government has no issues throwing massive subsidies to all sorts of different causes. Money to VIA offers far better return than most of the rest of the deficit spending being incurred.

Private-sector financing does not necessarily have to come in the form of equity with any profit sharing. If VIA emits a bond and that bond was to be guaranteed by the federal government, then investors' stake in HFR and VIA is limited to interest and capital (re)payments.

[…] You're right that VIA Rail fits into exactly the type of sustainablity infrastructure investment that the government was talking about before the budget. That's why I expected a sort of preliminary commitment to the project with a short 12-18 month feasability confirmation study. But they've only committed to spend on the study. And no where in their 5-year infrastructure have they mentioned serious funding for VIA. That's what left me seriously disappointed in this government.

I think you are under-appreciating public support for investment in VIA Rail. Even a lot of conservatives support this. As the Harperites found out in office. […]

Given how much the Liberals are currently slammed for their deficit spending, it would be very unwise for them to directly commit $2 billions in capital expenditure for HFR as long as there is a realistic chance that this could be financed without increasing the debt burden of Canadian taxpayers...

[...] Now, I have no illusions that the pro-bus and pro-air and pro-car lobbies will take the high road when they advocate against this proposal. We've seen decades of how they spin facts and arguments (remember the bus lobby's inside track during the Martin years?)(Ever seen the Peter Armstrong crowd in action opposing VIA in the Rocky Mountains?). I'm not suggesting anyone at VIA stoop to the same level. The winner needs to be more credible, not the better street fighter. [...]

This is exactly why the project is considerably more politically feasible if it is financed by the private sector. Fleet is due for replacement anyways and could therefore be paid by the federal government, as this burden would have fallen on the federal taxpayer anyways (and independently from whether HFR becomes reality or not), but VIA Rail may have to be allowed to borrow money against its own assets in order to raise the funds required for infrastructure acquisition and construction with the government providing a guarantee on the private capital invested.

I don't get the connection to VIA and Brantford. This is considerably south of Brantford, and reservation land, disputed or otherwise, is all south of the Grand River as it skirts the south side of Brantford. […]

Also in the map crs1026 posted, the First Nation's areas are still south(east) and not north of Brantford. That Hydro One invests $100 million into infrastructure without prior consulting of such a publicly available resource is clearly the exclusive problem of Hydro One (and its customers), not of the First Nations living in settlements which predate the very existing of Hydro One (or Ontario as a province) by a few centuries...:

Actually, this reminds me of how WalMart had to be taken to court in Germany as they didn't believe that they had to obey to collective bargaining agreements and other applicable regulation. Ignorance can be very expensive and WalMart eventually pulled the plug out of this financial disaster and deeply embarrassing display of incompetence and ignorance...

 

[dowlingm]

I don't get the connection to VIA and Brantford. This is considerably south of Brantford, and reservation land, disputed or otherwise, is all south of the Grand River as it skirts the south side of Brantford.

I am no expert on these matters but there is Haudenosaunee interest in the Paris area (http://www.brantfordexpositor.ca/2016/01/21/natives-raise-concerns-about-land-deal) and the Confederacy appears to require consultation in respect of development in the Tract land either side of the Grand River. It would be unwise to assume their consent especially if the primary beneficiary is through passenger and/or freight services. Without consent, it's difficult to see either federal or provincial government pushing forward.

 

[Urban Sky]

I am no expert on these matters but there is Haudenosaunee interest in the Paris area (http://www.brantfordexpositor.ca/2016/01/21/natives-raise-concerns-about-land-deal) and the Confederacy appears to require consultation in respect of development in the Tract land either side of the Grand River. It would be unwise to assume their consent especially if the primary beneficiary is through passenger and/or freight services. Without consent, it's difficult to see either federal or provincial government pushing forward.

Either way, my original point was that Greg Gormick pulls his figures out of only he knows where and that they seem completely arbitrary. Also, First Nation's land claims form a systemic and not a specifically financial risk, as unlike most construction risks they have a realistic potential to legally stop the construction as Hydro One has learned the hard way...

 

[crs1026]

What makes you so certain that HFR would not be able to recover their operating costs?..

I'm not sure of it, and I'd love to eat my words some day. I'm less certain, however, that we have defensible projections yet for either revenue or cost. What we have so far needs to be reviewed carefully and challenged.

Also, The modal experience elsewhere is that systems don't break even on a full-cost basis. There may be exceptions, but that's the better bet.

I'm fairly confident that above-the-rail costs can be covered, but servicing the full capital cost may be the challenge. As others have noted, there are institutional investors out there who would accept a modest but certain return... pension plans are an example. The government may not want to finance this directly out of taxes, but Ottawa needs to lead with a position on how much risk they will backstop. Even with good numbers on paper, this project is high-risk simply because there are few precedents to point investors to. Ottawa will have to offer some level of assurance. This needs to be done expeditiously rather than waiting for someone else to make the first move.

- Paul

 

[steveintoronto]

The land being contested in the present Hydro-One dispute south of Brantford has no bearing on the *already privately-held land" on the old Harrisburg alignment. (Some may be local municipal, I'll dig later) To try and equate the two is to bring up the same in Toronto. Six-Nations, specifically (IIRC) some of the bands, have had an *historical* claim to what's now being contested, further complicated in this case because the Railway Act (and Expropriation Act) are federal. The Ontario Electricity Act is...obviously...provincial, albeit there is a provincial expropriation power too. Under the Indian Act (federal) it may not apply. If *anyone* is aware of a pending claim on the Harrisburg alignment (the RoW grandfathered from the days of the Great Western) then by all means, post reference. I was digging on it extensively last night. There's a number of disused alignments through and around Paris, Harrisburg and Brantford, some of which are still visible on Google satellite .

Urban Sky posts:

What makes you so certain that HFR would not be able to recover their operating costs?

Here's what I posted, and you quoted:
[[...] If the 'report' comes back very favourable for the new VIA plan, it will allow the Feds to invest *along with private capital* to at least supplement the operating costs. [...]]

You fail to consider what the term "at least" means. It's a cautionary proviso that you might be wise to adopt, and it revolves around the same point of "0% subsidy" that seems to be a sore point for you.

To go to the public and make that claim is to set yourself up for a very embarrassing climbdown. We've seen a litany of these claims over the years, and just as you counsel caution as to the 'three years for the $3M"...you'd be wise to adopt latitude on the operating subsidy point.

W/o getting too political, Trudeau clinched this last election when he defied the claims of the other two major parties to state: (gist) "We are going to run deficits". The public can *accept that* (within reason) as being realistic and necessary, and polls clearly show the public still agreees on the point.

Be *very careful* you don't blow your whole campaign on something as unrealistic as "0% operating subsidy". Private investors will also find it realistic, some will expect and require it in their calculations. The question is "how much" and "is it sustainable over the length of our investment?"

Edit to Add: Paul, your post went up as I was typing mine. Big thumbs up from me! We make a point that, at least with the demographic of this forum, is almost a given.

VIA must be judged on *transit* terms, and even GO, the highest fare-box return of any system in North Am (including Amtrak) still needs roughly a 25% operating subsidy. And it is an *excellent return* for the taxpayer at that in terms of saving money elsewhere.