(The following story by Ian Jack appeared on the Nation Post website on October 25.)
OTTAWA — A spokesman for Paul Martin warned Via Rail yesterday not to “plan on spending one dollar” of the nearly $700-million the current government has promised it, the strongest public disagreement yet between the outgoing administration of Jean Chrétien and his successor.
David Collenette, the Minister of Transport, announced $692.5-million yesterday for improvements in Via service to be spent over five years. But the money is to come out of future budgets, leading to harsh criticism from the Martin camp that the commitment is inappropriate and may be overturned.
“We’re obviously entering extremely tight fiscal conditions. There are going to be a number of important competing priorities [for the new government],” said Scott Reid, Mr. Martin’s spokesman. “Mr. Martin is unaware of the details supporting this decision and therefore will naturally want to review it once in office.
“Via Rail would be well-advised to not plan on spending one dollar until such time as that review has been conducted.”
Mr. Collenette, a long-time train buff who has pressed for additional Via funding for years, defended the decision to make the announcement despite not knowing whether the new government will allow the plan to proceed. Ottawa has supported Via for years, he said.
“It’s very legitimate for a government that has the right to govern to make a decision in the spirit of the policy we’ve had for the last five years,” he said. “I don’t think people should get hung up over the timing.”
He also admitted the money must be provided for in the next budget, which will be put together by Mr. Martin and his new Cabinet.
The money would go for track and railcar improvements that will allow trains to move a bit faster, and prepare them in case the future government decides to proceed with a $3-billion high-speed rail proposal.
Critics say personal loyalties played a part in the decision, which was made despite significant opposition from other Cabinet ministers to committing the next government to significant spending within weeks of the transition of power. Mr. Collenette is the key Toronto minister for Mr. Chrétien and a long-time loyalist. Via’s chairman is Jean Pelletier, former chief of staff to Mr. Chrétien. And one of the key bidders on any higher-speed proposal is likely to be Bombardier Inc., the politically well-connected Montreal transportation conglomerate.
Mr. Pelletier, who sat quietly at the back of the room as Mr. Collenette made his announcement, said he has no idea if Mr. Martin’s government will honour the Transport Minister’s pledge.
“The government is the sole shareholder; the government has the right to do whatever it decides. It has nothing to do with me and I have no business commenting on that,” he said.
The funding was considered dead as recently as Tuesday, when Cabinet said it would not approve the money but left the final decision with the Prime Minister’s Office.
The announcement irritated more than just the Martin camp.
The financially troubled airline industry was angry, after years of mostly failed attempts to get support from Ottawa.
“It just gets so frustrating. It’s utter frustration,” said Clive Beddoe, the chief executive of WestJet Airlines Ltd., the country’s only highly profitable airline. “The Canadian system seems to be that it will aid and abet those who fail and penalize those who succeed.”
Money-losing Via already receives a $171-million annual subsidy and got $400-million for capital improvements in 2000.
“We think it’s outrageous and extremely unfair. The government has turned itself into a weapon of mass destruction against the airline industry,” said Warren Everson, vice-president of policy at the Air Transport Association of Canada, a lobby group for the country’s air carriers.
He described yesterday as “black Friday” for the industry, given the Via Rail announcement and a proposed increase in user fees at Toronto’s Lester B. Pearson International Airport.
(With files from Paul Vieira and Sean Gordon.)