Ruling from 1993 regarding continuing passenger rail service in Northeastern Ontario
Decision No. 588-R-1993
http://www.otc-cta.gc.ca/eng/ruling/588-r-1993
FINDINGS
With respect to the annual losses incurred by CN in operating the service, the Agency heard many suggestions that efforts to increase ridership, improved scheduling, marketing and negotiation of trackage fees would reduce annual losses. While it is impossible to say that the current schedule is the most effective for attracting clients, it is doubtful that changes to the schedule would significantly improve ridership. The Agency does, however, encourage continued review of the scheduling of the service in an effort to improve ridership totals. The Agency finds that ridership volumes necessary to bring the service to a break-even financial situation are unlikely in the near future. Unless costs can be significantly reduced, the passenger-train service will continue to incur substantial annual losses. The losses for 1993 are now estimated to be over $4,000,000.
With respect to alternative transportation services, the Agency finds that competition between the ONTC bus service and the ONR rail service cannot be discounted. The rail routing from Toronto to Timmins/ Kapuskasing, Ontario is paralleled by an ONTC bus service, for example, and the fares for each mode are now quite similar. If people cannot afford to fly, or choose not to drive, the bus service is indeed a reasonable alternative. In fact, from Porquis/Cochrane, Ontario, buses are utilized as part of the ONR rail service to major points such as Timmins, Hearst and Kapuskasing. The Agency finds that in the area immediately served by the passenger-train service, alternative transportation services are available, such that current rail users could continue to access their destinations, and that these alternatives are, at the least, adequate.
The Agency finds that the effect of the discontinuance of the passenger-train service on other services and carriers would be significant, especially for the highway system. However, given the decreases in both the number of accidents, and the accident rate, the Agency is not persuaded that the highway system would become so crowded that safety would be compromised. As to the effect on other carriers, the Agency is persuaded that the discontinuance of the passenger-train service could mean the eventual termination of the northern segment of the freight and passenger-service now operated by the ONR.
The Agency finds that the discontinuance of the Toronto-North Bay segment of the service would likely result in the demise of the segment north of North Bay. It must be noted, however, that this statement is based on the assumption that no other entity, such as the Province of Ontario, ONTC, or the type of private short-line operator suggested by Mr. Howard Restoule, Chairman of the Aboriginal Peoples Alliance of Northern Ontario, might purchase and operate the service.
With respect to the probable future transportation needs of the area, the Agency finds that the evidence before it does not support expectations of future population growth or industrial development and, as a result, transportation needs for these purposes are not expected to increase in the foreseeable future. With respect to comments regarding recent ridership levels, the Agency is of the opinion that consistent ridership levels represent support for the service, but notes that this is not a situation unique to ONR. VIA Rail Canada Inc. ridership levels in recent years show the same relative consistency.
In terms of other public interest issues, the Agency finds that the discontinuance of the passenger-train service would have significant effects on the population served by this service. The Agency recognizes that the passenger-train service represents an important component of the economy of northeastern Ontario, and that the area is undergoing a difficult economic transition from a resource base to other industries such as tourism. Discontinuance would have serious adverse implications for this economy at this time.
The Agency also finds that while bus service is an adequate alternative for many travellers, the requirements for the accommodation and comfort of individuals with medical needs, seniors and persons with disabilities are often better served by the train.
Because persons travelling to the larger centres of Timmins, Hearst or Kapuskasing must transfer between rail and bus, the Agency is not convinced that the rail service represents a "seamless link" as suggested by ONR. The Agency is however of the opinion that the service is an important link between northern and southern Ontario.
In so far as environmental issues are concerned, the Agency is subject to the Environmental Assessment and Review Process Guidelines Order, SOR/84-467 (hereinafter the EARP Guidelines Order). The Agency developed in cooperation with the Federal Environmental Assessment Review Office an Agency Exclusion List, pursuant to subsection 11(a) of the EARP Guidelines Order, identifying the types of proposals that would not produce any adverse environmental effects and that would, as a result, be automatically excluded from the Environmental Assessment Review Process. In subjecting this application under section 266 of the Act to an environmental screening pursuant to subsection 10(1) of the EARP Guidelines Order, the Agency determined that this proposal is of a type identified on the Agency Exclusion List and, as such, may automatically proceed. Further, the Agency in its review of the submissions before it has not been persuaded that potentially adverse effects or public concern warrant a full screening or a referral to the Minister of Environment for public review.
The Agency finds that, at this time, the economic and social impact of this service on the region it serves outweighs such factors as the losses incurred by the service, and that retention of the service is in the public interest.
CONCLUSION
The Agency determines that the passenger-train service comprised of Train Nos. 121 and 122, jointly operated by the Ontario Northland Railway and the Canadian National Railway Company, between Toronto and North Bay, in the province of Ontario, is uneconomic, but that this passenger-train service is in the public interest and should not be discontinued.
