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Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
INTERCITY PASSENGER RAIL IN CANADA
1
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Table of Contents
History of Passenger Rail in Canada
VIA’s Structure
History of Operating and Capital Funding
Current Network
Key Facts About VIA Rail Canada
The Results
Investing for the Future
Intermodality and Interconnectivity
Key Benefits of Passenger Rail
Global Trends in Passenger Rail
VIA Rail Canada …. A National Icon!
Challenges Facing VIA Rail Canada
Canada – U.S. Rail Links
2
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Coast to coast rail service was a condition of Canadian Confederation in 1867
Passenger Rail in Canada
Canada today is:
– 33.7 million people
– 10 million km² of land
– Extreme landscapes, climates and seasons
Rail played a major role in building Canada
The first railway operated in 1836 (the Champlain
and Saint Lawrence Railroad) in the Montreal
region, followed by an extensive expansion
facilitating the creation of Canada as a unified
country
Passenger rail was originally operated by various
companies, consolidating into what later became
CN (Canadian National) and CP (Canadian
Pacific)
History of Passenger Rail in Canada
3
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
VIA Rail was founded in 1977 as a Crown Corporation by merging the passenger services of CN and CP
VIA Rail History
Created by a Cabinet Order-in-Council in 1977
Passenger services of CN/CP merged into VIA:
– VIA inherited available passenger equipment
from CN and CP
– CN and CP continue to own most of the
infrastructure (VIA pays fees for access)
VIA’s operations were reduced by half in 1990, as
Government funding was reduced
Since 1990, VIA has almost doubled its revenues
while absorbing inflation and maintaining current
expenses at 1990 levels, while continuing to provide
Canadians with world-class, safe, efficient and
environmentally responsible intercity transportation
Since 1990 VIA has continued to innovate and
invest to improve service levels and customer
satisfaction
Since the network was reduced in 1990, VIA has almost doubled revenues and
absorbed all cost increases
0
20
40
60
80
100
120
140
160
180
200
220
1990 1995 2000 2005 2010
Revenues
Historical VIA Operating Results Values indexed to 1990
Expenses
Employees
Sept.11
SARS
Recession
Fuel prices
History of Passenger Rail in Canada
4
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
VIA’s Structure
Reports to the Minister of Transport
The Vision: We will offer the best travel
experience in Canada
The Mission: We work together to exceed
customer expectations every time
Guiding principles:
• I focus on the customer
• I take action and am accountable
• I am flexible and contribute to change
• I make the difference
VIA operates over infrastructure (98% of the
network) owned by freight railways
VIA’s Structure
The Government’s Program Activity Description for VIA:
“A national passenger rail transportation service that is safe, secure, efficient, reliable,
and environmentally sustainable and that meets the needs of travellers in Canada.”
VIA is a Crown Corporation
Parliament of Canada/
Minister of Transport
5
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Through aggressive cost-cutting and revenue growth, virtually doubling revenue, VIA was able to significantly reduce its operating subsidy and absorb inflation since 1990, while maintaining the train services network
History of Operating and Capital Funding
0
50
100
150
200
250
300
350
400
450
1990 1995 2000 2005 2010
Government Operating Subsidy In millions of current $
Increase due to 2008/ 2009 recession and pension costs
Government Capital Funding In millions of current $
0
50
100
150
200
250
300
350
1990 1995 2000 2005 2010
$402M Program
$923M Program
Summary of VIA’s productivity improvements over the years, implemented to ensure efficient and cost effective delivery of train services, together with the history of capital funding
6
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
VIA currently serves over 4M passengers per year through three types of services
Jonquière
Montréal
Halifax
Senneterre
Prince Rupert
Churchill
White River
Courtenay
Victoria
Transcontinental
Mandatory Routes
Corridor
Edmonton
Calgary
Regina
Saskatoon
Toronto
Windsor
Vancouver
Winnipeg
Corridor services
Intercity rail services
Business and leisure travellers
$766M capital invest. 2007-2012
On a shared allocation* basis:
− 3.7M passengers served
− $200M in revenues
− $265M in costs
− $17 deficit/passenger
Mandatory services
Connecting small communities
Public service obligations
$50M capital invest. 2007-2012
On a shared allocation* basis:
- 111K passengers served
- $6M in revenues
- $38M in costs
- $231 deficit/passenger
Long-haul services
Coast-to-coast service
Mainly leisure travellers
$107M capital invest. 2007-2012
On a shared allocation* basis:
- 258K passengers served
- $56M in revenues
- $118M in costs
- $545 deficit/passenger
Quebec Ottawa
Gaspé The Pas
London Niagara Falls
Pukatawagan
Moncton
Prince
George
Jasper
Sudbury
Current Network
Sarnia
* Shared allocation equals direct plus a proportion of common costs and revenues
7
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Key Facts About VIA Rail Canada
• 12,500 km network with 500 trains per week serving over 450 Canadian communities
• Maximum speeds of 160 km/h on shared tracks with freight railways
• 417 rail passenger cars and 74 locomotives in service
• Four modern maintenance facilities and 159 stations
• Less than 3,000 employees (headcount reduced from 4,500 to <3,000 (- 33%) between 1990 and
2010)
• More than 4M passengers, or 1.4B passenger-km per year
• Cost recovery increased by 74% from 29¢ in 1990 to 54¢ in 2010
• 36% reduction in operating subsidy between 1990 and 2010
• On Time Performance between 80 - 85% is a challenge
• Customer Satisfaction is consistently about 97% (“meet expectation” @ 56%, and “exceed” @
41%)
8
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
The Results
9
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
The Results
A disciplined focus on the bottom line has enabled VIA Rail to reduce headcount and operating costs while increasing revenue
REVENUE & OPERATING EXPENSES
143 150 156 164 176 175 185 191 200221
241 254 271250 259
290 297 285 299265 276
350 328 331 321262
222 205 196 183168
164158
149 178181
175 176 200
214261
262
538
478493
487 485
438
397390 387 383
389405 412
420 428440
465 473485
513 526
0
100
200
300
400
500
600
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Operating Expenses*
Revenues
*excludes restructuring and non-cash expenses such as depreciation Operating Deficit
10
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Current improvements enabled by latest additional Government funding to deliver VIA’s promise to Canadians Recent Federal Government support… …allowed VIA to improve its services using
the same core assets by
$516M in Capital Funding
$407M under Canada’s
Economic Action Plan
2007
2009
$923M in Capital Funding
This provides a solid foundation for future longer-term improvements that will enhance the
performance and viability of passenger rail in Canada and reduce the need for Government
Operating Subsidy
Refurbishing its aging train fleet
– Lowering emissions
– Increasing reliability
– Providing better accessibility
Eliminating key infrastructure bottlenecks
Offering additional frequencies
Repairing and upgrading stations and service
facilities
Improving customer experience (e.g. on-board WiFi)
Improving information systems and back
office operations
Investing for the future
11
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Details of projects enabled by the $923M Government capital funding
Cu
rre
nt
VIA
In
ve
stm
en
t P
rog
ram
s
Equipment
Infrastructure
Stations
IT
Facilities
2010 2009 2008 2013 2012 2011
F-40 locomotive rebuild
Light, Rapid, Comfortable (LRC) car rebuild
Renaissance car accessibility modifications
Other equipment projects
Improvements between Montreal-Ottawa-Toronto
New stations and facilities renovations
Improved on-board WiFi
Reservation system, revenue management, automation, security
Regulatory compliance for fuelling and other facilities
Last locomotive delivery First locomotive delivery
First car delivery Last car delivery
First car delivery Last car delivery
London-Chatham-Windsor
Toronto-Kitchener-London
Investing for the Future
These projects will modernize key elements of rail infrastructure, equipment, stations, and information technology required for reliable performance and growth
12
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Successful passenger rail systems are fully integrated into the rest of the transportation system and develop seamless links to other modes
VIA operates 20 stations from Vancouver to Halifax
that have intermodal links to other modes
The four top intermodal stations in terms of
passenger volume and/or intermodal connections
(besides cars and taxis) are at Toronto, Montreal,
Ottawa, and Dorval.
VIA shares stations with commuter trains, subway,
buses, and airport links.
VIA sells tickets for commuter trains, such as GO
Transit.
VIA is working with numerous airlines, commuter
trains, bus companies, car sharing organizations
and Amtrak to introduce seamless information,
reservations and ticketing
Connectivity is being implemented with some
airlines and bus companies, including Red Arrow
from Banff, Calgary, Edmonton, Jasper and Fort
McMurray.
Joint Ticketing
VIA/GO Transit
Toronto Union Station
Intermodal Station
Intermodality and Interconnectivity
13
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
• Reduces emissions
• Reduces fossil fuel dependency
• Alleviates air and road congestion
• Increases accessibility for disabled
• Enhances mobility
• Enables tourism
• Enhances economic productivity and development
• Increases traveler productivity
• Provides disaster preparedness
• Unites the country and is part of Canada’s cultural identity
• Can improve linkages with the U.S. rail network
Key Benefits of Passenger Rail
14
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Expansion of high speed rail: High and higher speed rail continuing to grow rapidly worldwide
1 Networks capable of operating at speeds in excess of 200km/h
Sources: UIC High Speed Department (update 2010), Oliver Wyman analysis
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
20
10
Asia
Europe
Rest of world, incl. U.S.
Higher speed lines1 In km in operation
An additional 30,000 km of high speed rail
infrastructure is being planned or is under
construction
– Over 200% increase in global high speed
rail infrastructure, mainly due to the
contribution from Asia
Approximately 50 countries have invested
in high speed rail
– Includes almost all other G20 countries,
except Canada, Australia, and Mexico
The US plans to connect its high speed
network to major Canadian cities
" Within 25 years, our goal is to give 80
percent of Americans access to high-speed
rail. This could allow you to go places in half
the time it takes to travel by car. For some
trips, it will be faster than flying –- without the
pat-down." – U.S. President Barack Obama
Global Trends in Passenger Rail
15
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Rail services help unite the country; VIA is a recognized part of Canada’s history, cultural identity and image abroad
Canada’s 10 most iconic brands
Serves 9 out of the top
10 urban centres in Canada
Links 400+ communities
across the country
VIA Rail passenger network
VIA Rail Canada … a National Icon!
Source: Brand Finance Survey, 2009
Halifax
Vancouver
Winnipeg
Toronto
Ottawa
Montreal
Churchill
Prince Rupert
Edmonton
Windsor
White
River
The Pas
Courtenay
Jonquiere Gaspe
London
Sarnia
Senneterre
16
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Challenges Facing VIA Rail
• Build on the recent Capital Investment Program to reduce the Government
operating subsidy
• Match Capital and Operating Funding to the Train Services Network designated by
the Government of Canada
• Maintain reliable service on tracks shared with host freight railways
• Maintain consistently high Customer Satisfaction at about 97% (meet or exceed
expectations)
• Meet fierce competition from other modes
• Capitalize on the relative fuel cost advantage of rail compared to other modes
• Build on the concept of productive time while on the train (work and
leisure/entertainment, e.g. Wi-Fi)
• Capitalize on Intermodality and Interconnectivity
17
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Canada – U.S. Rail Links
• Amtrak provides rail service between Seattle and Vancouver, New York City and
Toronto, and New York City and Montreal
• VIA provides services to Amtrak, including maintenance of equipment, station
services and ticket selling
• Amtrak and VIA share the responsibility for the Maple Leaf a joint train that
operates between New York City and Toronto, through Niagara Falls
• VIA and Amtrak passenger connections and reservation links are being enhanced
• VIA and Amtrak have a Master Cooperation Agreement and work together and
share information in various areas
• There Is potential to do much more together for the benefit of passengers and
taxpayers
18
Presentation delivered at the May 25, 2011
CANADA – UNITED STATES
CROSS-BORDER RAIL PEER EXCHANGE
Thank you!