VIA Rail’s latest corporate plan shows the company in dire straits after consecutive years of losses.
As first reported by Blacklock’s Reporter, VIA Rail’s latest Corporate Plan reveals the company is expected to run a $411 million deficit even though it announced mass layoffs during the pandemic.
“Demand for travel may only return to or exceed the level seen in 2019 sometime in 2024,” the document reads.
“Under such conditions VIA Rail, while continuing to prudently provide needed transportation services to Canadians as it has done throughout 2020 and 2021, will be forced to seek funding.”
The company continues to blame Covid-19 for the disruptions while also tapping into even more federal bailout funds.
“Financially the company has stretched itself in the past few years to grow revenues, contain the operating deficit and the reliance on government funding and improve on the cost-recovery ratio,” said the report.
“However due to the Covid-19 crisis VIA Rail’s financial performance was significantly affected.”
In 2021, the Liberal government provided VIA Rail with $187.5 million in pandemic relief funding. That same year, the company lost $370.5 million in revenue.
Liberal MP and chair of the House of Commons transport committee Peter Schiefke recently called on VIA Rail officials to testify before the government after travellers were met with “unacceptable delays and cancellations” this holiday season. Some passengers complained of being stuck on trains for hours without food or other amenities.
Last February, executives with the company approached the federal government for even more funding citing impending “drastic cuts” to service.
“Without sufficient and timely funding VIA Rail would be obliged to make drastic cuts which is a significant business and reputational risk exacerbated by layoffs, significant restructuring costs including employment security and severance payments and start-up costs when the service resumes,” claimed the company.
“It may take until 2024 to return to the level of demand seen in 2019. Under such conditions VIA Rail, while continuing to prudently provide needed transportation services to Canadians as it has done in 2020, would be forced to seek additional funding through 2022, 2023 and 2024.”
