Ottawa denies Via Rail up for sale

A spokesman for federal Transport Minister Denis Lebel denies Ottawa is thinking about selling Via Rail, despite a report Friday saying otherwise.
Via Rail, created in 1977, carries 80 per cent of its traffic in the busy corridor between Windsor and Quebec City. (Peter McCabe/Canadian Press)

A spokesman for federal Transport Minister Denis Lebel on Friday denied Ottawa is thinking about selling Via Rail, despite a report saying otherwise.

Pierre Florea told CBC News "at this time, there are no plans to privatize Via Rail."

Earlier Friday, Bloomberg reported that the federal government might sell part of the money-losing passenger rail service as it tries to cut spending and eliminate the deficit.

Another option is to cut part of the service, according to a briefing note prepared for Lebel and obtained under the Access to Information Act.

The government has pledged to do away with the deficit by the spring of 2015, in part with annual spending cuts of $4 billion.

The document suggested staff are recommending "privatization and public sector partnerships in the Quebec City-Windsor corridor," according to Bloomberg.

But Florea said the paper "does not necessarily reflect the government’s position ... or a decision made by the government. While the department can make suggestions, the minister is in charge of government policy."

"Briefing notes are provided to an incoming minister in his new portfolio to provide information regarding files related to Transport Canada."

Via lost $261.5 million in 2010 with annual revenues of $274.4 million — a 5.3 per cent drop from 2005. Operating costs over the same period rose 15 per cent to $535.9 million.

Via, in a news release issued in response to the Bloomberg report, said its performance has improved in the last two years. It has reduced its operating deficit, when pension costs are excluded.

Revenue, it said, increased in both 2010 and 2011, and operating expenses before pension costs decreased.

In 2010, its operating deficit was $9 million less than in 2009 and in 2011, it said, "although financial results are still preliminary, the improvement is expected to be significantly better than the one achieved in 2010."

Created in 1977, Via operates passenger service from British Columbia to Nova Scotia, but about 80 per cent of its traffic is on the busy corridor between Windsor, Ont., and Quebec City.