(Reuters distributed the following article by Randall Palmer on its website on October 24.)
OTTAWA — Plans to spend nearly C$700 million to upgrade Canada’s struggling passenger rail system have created a deep power divide within the ruling Liberal Party, which is set to see a new prime minister and cabinet team take over within the next few months.
The tug of war marks the oddity of Canada effectively having two parallel governments, that of Prime Minister Jean Chretien who has pledged to retire by February, and that of former Finance Minister Paul Martin, who is set to replace him.
Transport Minister David Collenette said the C$692.5 million ($533 million) in new spending, devoted to the state-run Via Rail passenger service, was slated to begin flowing next April.
“It is totally legitimate for a government, which has the right to govern, to make a decision which is in the spirit of a five-year-old policy,” Collenette, whose future in a Martin cabinet is uncertain at best, told a news conference.
He did not consult Martin, although it was for spending that would be solely on his watch.
“There can only be one government at a time. The government’s under no obligation to consult Mr. Martin,” said Scott Reid, a spokesman for the incoming prime minister.
“The government of the day has every right to take decisions affecting spending priorities, but so too the new government will have a responsibility to review those decisions with an eye to ensuring that the public purse is well-managed.”
Reid said Martin would certainly review this decision, adding: “In the meantime, Via Rail would be well-advised to not plan on spending a dollar of this new money.”
“The fiscal outlook promises to be somewhat constrained and, as such, we’re going to have to all make important choices about competing priorities.”
The subsidies were not flagged in February’s federal budget, which is where most new spending initiatives are outlined.
They money would come on top of an annual grant of C$171 million to Via Rail and a further C$402 million announced in April 2000 for capital improvements.
Almost half the new money is slated to make improvements on the most heavily traveled corridor, from Quebec City to Windsor, Ontario, but it fell well short of Via Rail’s C$3 billion dream to bring in what it dubbed “higher-speed rail.”
“This is something the current administration can saddle the next one with without any of the responsibility of having to actually come up with that money,” Jim Gouk of the official opposition Canadian Alliance party told reporters.
“That’s why I believe this is the most irresponsible thing I’ve seen this government do in some time.”
Martin ally Stan Keyes, chairman of the Liberal caucus in Parliament, questioned why so much money was going to be spent on a rail system that accounted for just 0.1 percent of all domestic transportation.
“How can you commit money you don’t know you’re going to have to a project you know nothing about?” he asked, adding that it was a very real possibility that the House of Commons transport committee would reject the idea.