VIA Rail & HFR Inc. RFP Brief

• VIA HFR's final contract goals:
  • Have the private sector operate the HFR Project with a 30-to-50-year contract.
  • All work from VIA Rail in the corridor will be transferred to the private sector operator.

The VIA Rail subsidiary will have its own authorities, employees and resources to deliver the HFR Project with the Private Developer Partner and Private Partner, as well as have a distinct and independent board of directors, CEO and a reporting and accountability structure directly through the Minister of Transport to Parliament.

NOTE: There is no automatic transfer of union contract protections when work is transferred from a unionized parent company through a subsidiary to an outsourced private operator.

• Request for Proposals will be issued in the next month or so. This provides a very short window to affect the RFP process.
• After an RFP is issued, there is perhaps a one year window to affect the signing of the deal that will hand over the rights of the corridor to the private sector.

The alternative would be to provide VIA Rail money directly to upgrade services over the next 2-3 years.

Two alternative paths:

1. Incremental upgrades: It will be cheaper to change the mandate to upgrade VIA Rail service incrementally with no down-side political and economic risks. No one will blame the government if VIA gets slightly better or not.
2. Invest in large expansion using the Canada Infrastructure Bank investing directly in VIA HFR: Build publicly owned and managed infrastructure with a plan for expansion instead of reduction in overall national passenger rail services.

1. Request for Expression of Interest: completed.
   • 54 Interested Parties through the Request for Expression of Interest (RFEOI) expressed interest in managing a piece of the privatization.
   • About 1/5 of them are Canadian companies.
2. Request for Qualification: completed.
   • Fact sheet on the three new selected consortia.
3. Request for Proposals: on going.
   • Start: September 2023
   • End: Summer of 2024

Note: Project finalization will happen in the "co-development" phase, which is estimated at ~3.5 years. Project contract finalization will happen during this co-development, not at the end of the 3.5 years.

The timeline suggests that, because the project is so far "in the future", the actual goal of the program is privatization and not really building passenger rail.

Revenue:

• 2022
  • $317.9M passengers
  • #335M total
• 2019
  • $388M passengers
  • $411M total

Expenses:

• 2022: $689.4M
• 2019: $665.2M

Operating loss:

• 2022: $354.3M
• 2019: $272.6

• From the 2022 annual report.

• Passenger Trips: 3.3 M
• 1,200 million kilometres across Canada
• 85%: intercity travel
• 13%: long-distance
• 2%: regional
• 96% intercity travel (the Corridor)
• 3% Long-Distance
• 1% Regional

• 328 departures per week on average
• 82.6% depart on time
• 57% on time performance
• 61% passenger load (2022)

• 81% Intercity Travel ($268,692,000)
• 18% Long-Distance
• 1% Regional

Train Services Revenues; Costs Shortfall; Subsidy per passenger; Subsidy per passenger-mile; Passengers per week; Passengers per year

Mandatory Route Revenue Total: $4,368M

• 74 locomotives
• 355 train cars (in and out of service)

• 104 train stations total
• 24 Heritage stations
• VIA Rail owns 61

• 400+ communities served across Canada

Two routes are extending back into Canada:

1. Vermonter: October 3, 2022 | The Vermont Agency of Transportation sent a letter to the Federal Railroad Administration which said that it, “intends to submit proposals to extend the Vermonter Service into Canada, from the current terminus in St. Albans to Montreal’s Central Station.”
2. Maple Leaf: 12 hour train from New York City to Toronto. Traveling through the Hudson River Valley, New York's wine country, the Finger Lakes region near Niagara Falls crossing into Canada through Niagara Falls, St. Catherines, Altershot, and Toronto.

There are additional routes being requested through a Corridor Identification and Development Program (CIDP) launched with November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law (BIL). Public Law 117-58.

Investment Reduction Act money will support these corridors outlined February 16, 2023.

• Purpose of CIDP: Intercity Passenger Rail Corridor” and “Corridor” new and upgrades for intercity passenger rail route of less than 750 miles.

VIA Rail Canada’s mandate:
VIA Rail Canada Inc.'s mandate is to operate the national passenger rail services on behalf of the Government of Canada, offering intercity rail services and ensuring rail transportation services to regional and remote communities

Remote Passenger Rail Program (RPRP): the two remote railways receiving funding are the Tshiuetin Rail Transportation (TRT) in Quebec and Labrador, and the Keewatin Railway Company (KRC) in Northern Manitoba.

Tshiuetin Rail Transportation (TRT) receives both capital and operating funding through the RPRP while KRC receives capital funding through the RPRP and operating funding through VIA Rail.

The government continues to finance the Remote Passenger Rail Program funded through an Appropriated annually investment through Estimates.

• A review was conducted March 2018. The conclusion was that the RPRP was a continued need because of the cost of creation of new roads is too high.

  The RPRP continues to be relevant by addressing the ongoing need of enabling Canadians who live in remote communities to access the national transportation system.

NOTE

The goal is to transfer (or transfer administration of) these routes to Crown-Indigenous Relations and Northern Affairs Canada and Indigenous Services Canada.

• The previous funding allocation ceased 2019, but was renewed.
• New funding continues in 2022 under the federal government Estimates: $23,469,137
• The routes are not outlined in the Estimates.

• The Remote Passenger Rail Program:
  • Previously known as the Regional and Remote Passenger Rail Services Class Contribution Program
  • Program 1.3: Transportation Infrastructure
  • Sub-program 1.3.3: Surface and Multimodal Infrastructure
  • Sub-sub-program 1.3.3.1: Rail Passenger Stewardship and Support program