This past reading week, I took the Via Rail train for the first time. While on route from Montreal to Toronto, rolling past vast farmlands covered in snow, my friend and I out of boredom had gotten up to inspect the serial code—4001—on the front of the fleet.
With some additional research, it turns out the HEP2 train we were riding was built in 1947. This fascination led me to fall down a rabbit hole of the business of trains and how trains are the lifeline of Canada, the blood and vessels that keep the country alive.
Via Rail was born out of business necessity. In the 1960s, Canada largely operated on Canadian National Railway (CN) and Canadian Pacific Railway (CP), but both found it economically impossible to sustain their passenger train networks due to plummeting demand from over 60 million rides during World War II to less than five million. By 1977, with government pressure, Via spun off CN as a separate Crown corporation, keeping all of CN’s old fleet of locomotives. Today, Via acts almost as a monopoly on passenger rail travel for over 3.3 million passengers per year over 14,000 kilometers of track connecting 450 communities from sea to sea.
Nonetheless, Via is hardly profitable. In 2022, its $335 million in revenue was reduced to a total loss of $673 million after accounting for all expenses; the government funded the entirety of this loss. A fundamental challenge of the passenger train business in Canada is how CN, since being privatized in 1995, owns virtually all tracks. In fact, 97% of the tracks Via runs on are owned by CN, which Via has to pay to use. Consequently, Canada is one of the only nations in the world where passenger trains yield to freight trains rather than the other way around, leading to frequent and significant delays— Via’s on-time performance was just 57% in 2022. Both to and from Montreal during my reading week trip, the trains were delayed.
Despite Via’s financial challenges, its passenger train business today makes up only 5% of the rail transport industry’s $10bn revenue per year. The remainder is made up by freight operations, an extremely complex, interconnected network of lines across North America that keep the economy moving. If the train tracks are Canada’s vessels, the freight trains are the blood, pumping out over 330 million tonnes of freight a year to reach every part of the nation’s beating heart.
The railway industry’s past and present yield to the tracks of the future. Unfortunately, the business of future rail travel in Canada is likely to be bleak. Canada is the only nation in the G7, a group of some of the world’s most advanced economies, without any high-speed rail, so considering this area is a logical next step. But all the numerous studies Canada has commissioned on high-speed rail’s feasibility have concluded economic infeasibility with costs of, at a minimum, tens of billions without budget overruns. Moreover, given that Via owns only 3% of the tracks it runs on, the high-speed trains would have to co-exist with freight trains, making them logistically impossible to run. Canada has thus pivoted away from high-speed rails to high-frequency rails—increasing the number of trains run—but even then the earliest high-frequency rails could come by would be the mid-2030s, far too late in the future and likely after much political back-and-forth.
Even if nationwide Canada’s railway industry is stagnant, we do have excellent regional railway systems. Take the SkyTrain in my hometown of Vancouver, for example. The SkyTrain is efficient, reliable, and the world’s oldest fully automated rapid transit system, proving the feasibility of regional transit that works. The GO Transit system in the Greater Toronto Area also commutes over 25 million through its rail services every year—with 69% of tracks owned by GO Transit’s parent, Metrolinx, trains are able to effectively run with an on-time performance of 95%. Both cases show the railway industry can be strong and functional regionally; it is now just up to Via to bring such success nationally.
Although Canada’s national passenger railways may hardly be profitable, and its trains hardly modernized, and its future hardly the tracks of dreams, the business of trains is nonetheless far- reaching. After diving into this unexpectedly fascinating area, I was able to better appreciate the operational labyrinth that is running Canada’s rail transportation industry. On my entire journey back, from the downtown core of Montreal to a stop at Ottawa to Union Station in Toronto, I saw the tracks in a new light—and hopefully, Canada will too to push our trains to the light at the end of the tunnel.