Like most things it is unlikely it is any once specific thing but a lots of things ranging from minor to significant.
Randomly, some thoughts.
air travel deregulation, which resulted in lower fares for flying. (for Toronto/Ottawa/Montreal you currently have at least 3 choices which helps to keep fares low).
society's changing attitudes to drunk driving, making bar cars not just socially unacceptable but a legal liability - it is much easier for train staff to control consumption when served directly to the person at the seat. This in turn removed part of the "fun" of taking the train for certain types of people.
per above, the decline in the "business lunch" and other former business perks like hotel stays, meaning it became preferable to fly so you could do everything in one day.
cars became more comfortable and reliable, with AC, quality audio systems, comfortable seats, etc. all resulting in driving being less of an inconvenience.
with the government taking over passenger rail, limits to how much the government was willing to spend both on service subsidies and capital expenditures. Hard to run 15 car trains if you can't get the subsidy or the money to replace the equipment.
deregulation (of sorts) of the railways, the result being it became acceptable to impose often significant delays on passenger trains to keep the freight moving.
related to previous, the property tax system that encourages the freight railways to cut their infrastructure to the bare minimum, and often below, to cut costs.
the unwillingness of the government to bring VIA rail into not just the modern world, but the late 1900s. It was unacceptable 20 years ago never mind today to force passenger to get on or off a train at whatever door(s) happen to be convenient for staff to open. Passengers shouldn't have to line up to get on or off a train, and shouldn't have to carry their belongings through a train to get to a open door. This is an indirect encouragement to run shorter trains, because longer trains would require more staff who would only be needed to open additional doors.