Canada May Sell Part of VIA Rail, Cut Routes as Costs Rise, Documents Show
Canada may sell part of VIA Rail or cut service provided by the money-losing passenger-rail company as the government looks to pare spending, documents show.
The transport ministry is “assessing several options for future support for passenger-rail services,” including “significant reductions” in service and privatizing part of the network, according to a briefing note prepared for Transport Minister Denis Lebel, which was obtained by Bloomberg News under Canada’s freedom-of-information law.
Prime Minister Stephen Harper’s government has promised to eliminate its budget deficit by the fiscal year starting April 2015, in part by cutting operating spending by at least C$4 billion ($3.9 billion) annually.
Federal money for government-owned VIA has increased in recent years as it “regularly requires additional funding to cover operating shortfalls,” according to the documents. “Privatization and public sector partnerships in the Quebec City-Windsor corridor are being assessed,” staff say in the documents, referring to the most densely-populated sections of Quebec and Ontario, including Toronto and Montreal.
VIA had an operating loss of C$261.5 million in 2010 according to its latest annual report. Annual revenue fell 5.3 percent from 2005 to 2010 to C$274.4 million, while operating expenses rose 15 percent to C$535.9 million.
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