(The following article by Steven Chase and Drew Fagan was posted on the Globe and Mail website on October 24.)
OTTAWA — Prime Minister Jean Chrétien’s government will pledge nearly $700-million in new cash to Via Rail today to help the passenger service upgrade equipment and operate at higher speeds, but the funds won’t start flowing until after Paul Martin takes the helm.
The $692.5-million capital injection for Via — whose chairman, Jean Pelletier, is a former chief of staff to Mr. Chrétien — will be spread over five years. It comes less than a month before Mr. Martin is named Liberal leader.
It’s a controversial parting gift from Mr. Chrétien to a Crown corporation that already gets more than $170-million a year from Ottawa to cover losses and that does much of its business between Quebec City and Windsor.
“This government felt we should send a signal that we are continuing with the investments in passenger rail and that we are dedicated to a faster product,” a senior government source said, explaining why Ottawa is making such a large pledge in the final weeks of the Chrétien government.
“This is the next step in the revitalization of passenger rail.”
Mr. Martin’s team refused to comment on the Via spending. But Liberal MP Joe Comuzzi, a supporter of Mr. Martin and chairman of the Commons transport committee, assailed the new Via assistance, saying Mr. Chrétien has no business making major spending commitments toward the end of his tenure.
“It’s not fair to the new leader. What are we, three weeks away from the official [leadership] change?” Mr. Comuzzi said. “We’re talking about almost three-quarters of a billion dollars and it’s too late in the game to be making decisions like this.”
Now that the cabinet has approved the Via spending, it’s set to start flowing in April, 2004, rising each year through 2009.
Mr. Martin, the unofficial prime-minister-designate, is free to reverse Ottawa’s commitment to Via once he takes office, likely in February. But today’s high-profile announcement will make it politically difficult for him to take back assistance to the Montreal-based Crown corporation.
Ottawa’s package will help Via to speed up its service and keep alive Via’s bid eventually to provide high-speed rail service in Central Canada.
The assistance package was developed after federal budget worries this past summer sank any chance that Ottawa would dole out $3-billion in one shot for a proposed high-speed-rail project called Via Fast between Quebec City and Windsor.
“It helps the product speed up and does not preclude you going to Via Fast,” a source said.
Today’s announcement is not Via Fast. Genuine high-speed train service in the Quebec-to-Windsor corridor would require billions of dollars for hundreds of kilometres of dedicated track, among other things.
The new cash for Via includes $324.5-million over five years to upgrade track and rail infrastructure. “It’s work that will need to be done if we go for Via Fast,” the source said.
The infrastructure portion of the package will pay for improvements in level crossings, track and the fleet of cars so that Via’s system can let trains move faster and decrease journey times.
Today, Via will also get $368-million over five years to refurbish and upgrade equipment including locomotives, cars and stations.
The new Via capital subsidy starts flowing in April 1, 2004, at a relatively modest level of roughly $45-million and rises, over five years, to the $200-million range.
Transport Minister David Collenette, speaking generally yesterday about his hopes for a Via package, told the House of Commons transport committee that cabinet colleagues told him to come back with something smaller after rejecting a $3-billion Via Fast proposal early this summer.
He said the cabinet agrees that any short-term capital assistance for Via should help pave the way for Via Fast.
“What I would like, and I think my colleagues agree, [is] that anything we do for Via in the short run should preserve the option of Via Fast,” Mr. Collenette told the committee.
“In other words, if you’re going to fix up the track, don’t fix it up unless it’s part of the Via Fast concept,” he said.
Stan Keyes, another Liberal MP on the transport committee and a Martin supporter, said he thinks the funding package is part of a “stealth” ploy to move Via toward high-speed rail without public debate.
“If Via needs money for infrastructure, if Via needs money to do its job, then it should be in the estimates scrutinized by Parliament, not in through the back door because it’s part of a Via Fast proposal that has yet to be adopted,” Mr. Keyes said.