Why Via Rail wants an overhaul of the conditions for using CN’s rail tracks

MONTREAL — Documents supporting Via Rail’s ongoing attempt to secure better access to tracks owned by Canadian National Railway Co. shed new light on an increasingly strained relationship between the carriers.

The Crown corporation has been trying to overhaul its contract with CN for years, finally asking the country’s transportation regulator in 2023 to impose a new track-access agreement that sets their relationship on a fair footing.

In a submission to the Canadian Transportation Agency, Via proposed changes that would help boost the number of trains on its key Quebec City-to-Windsor corridor, improve its poor on-time performance and pay more “reasonable” rates to CN.

The request has borne no fruit since it was filed 18 months ago, in part because of a procedural delay related to CN’s response. A request for confidentiality on some documents is still being considered, so CN’s submission is not publicly available.

The vast majority of Via trains run on CN-owned tracks, which the Crown corporation pays to access. Via warns that its “captive client” status and CN’s “quasi-monopolistic position” mean the country’s largest railway can prioritize its own locomotives over passenger trains.

“This is by far the most significant cause of train delays experienced by Via over CN’s infrastructure,” the filing states.

Meanwhile, busier freight routes, longer trains — which also move more slowly — and limited space on the tracks mean Via faces strict limits on its ability to ramp up trip volumes and get travellers to the terminal on time.

Via says that several decades ago the Montreal-Toronto train could make the trip in four hours flat. In 2022, the voyage took five hours and 33 minutes on average — nearly a half-hour longer than in 2014.

Similar delays played out on other routes between Quebec City and Windsor, Ont. Via’s overall on-time percentage in the corridor dropped from 84 per cent in 2011 to an all-time low of 56 per cent in 2022, according to the filing.

In a statement, CN said it is in full compliance with its latest agreement with Via, which includes no provisions on speedy travel.

“The pending dispute is the result of Via looking for improved performance at a lower cost to them, with increased costs to CN to maintain those dedicated track routes to meet their passenger rail needs,” said spokeswoman Ashley Michnowski in an email.

“CN recognizes the importance of passenger services and continues to support the development of dedicated rail infrastructure that would address those needs while preserving freight railways’ ability to support the growing needs of the Canadian economy.”

Greg Gormick, who heads On Track Consulting, says the tensions between the two outfits are natural given their competing priorities and finite amount of track.

“There are always problems when you mix freight and passenger,” he said.

However, improved service often comes at a cost, he added.

“When Amtrak and its state partners want improvements, they have to pay for them,” Gormick said, referring to Via’s passenger rail counterpart in the U.S.

“Somebody needs to broker this. There needs to be a peace agreement, but it needs that higher authority to do it.”

The standoff speaks to long-simmering frictions between the two parties, potentially aggravated by fresh ones.

Earlier this month, Via filed a lawsuit in Federal Court against CN over speed restrictions that affect Via’s new passenger trains. It said the caps are causing further delays on the Quebec City-Windsor corridor, affecting thousands of passengers daily and damaging its reputation.

CN said it imposed the restrictions at rail crossings “given the industry’s experience and the well-known risks” associated with trains similar to the 32 brand new Siemen’s Venture trainsets that Via will have put into service on the corridor by this summer.

Via’s earlier request to the regulator amounts to a test of the Canada Transportation Act. In contract disputes between a public passenger service and a railway, the legislation allows the agency “to decide the matter” after reasonable efforts to resolve it.

“Continued attempts at negotiating with CN appear doomed to fail,” Via argued in its submission, which has sat before the transport agency since June 2, 2023.

Until now, the process has played out behind closed doors. It followed drawn-out negotiations and eight temporary extensions to the contract, which expired in 2018.

Terry Johnson, president of the Transport Action Canada advocacy group, framed Via’s application as a last-resort countermeasure to CN’s trying to negotiate a “significant downgrade” in Via’s level of service — the term refers generally to train speed and trip volume.

“Via is massively dependent on CN,” he said. “That makes for a complicated relationship, and not one that’s really amenable to a commercial contract.”

Via claims the money CN charges it for track access has diminishing returns for the passenger service, with the freight railway having less incentive than its partner to keep the tracks in top shape. To hit their higher speeds, which can top 150 km/h, passenger trains must run on routes maintained to higher standards than those required for slower freight trains.

“Via and CN have now reached a crossroads in their relationship,” Via stated.

This report by The Canadian Press was first published Nov. 26, 2024.

Companies in this story: (TSX:CNR)

Christopher Reynolds, The Canadian Press