Remote Community Access - Federal responsibility met by ONTC

In my last post, I touched on the need for the provincial and federal government to work together in advancing passenger rail transportation.  The dysfunction of a provincial government operating a railroad under federal jurisdiction goes back to the days when the Nipissing Central Railway operated as a subsidiary of the T&NO (forerunner of ONTC) to get around the problem of a local railway extending over provincial boundaries.  Up until that point in time, the T&NO operated exclusively in Ontario, meaning that it did not constitutionally fall under the federal government.  The disinterest of the federal government continued as the use of the Nipissing Central Railway faded over time. There was little distinction between that line and the rest of the company except when legalities were involved.  

The confusion about jurisdiction simmered for years until the unions pushed for clarification on which Health and Safety legislation was applicable, the federal Canada Labour Code or the provincial Employment Standards Act.  As is the case in most complex legal issues, there was no definitive answer, so the provincial government agreed to abide by the Canada Labour Code to ensure there was some sort of oversight for their employees.

The fact that Ontario Northland operates in a jurisdictional grey area, contributes to very little co-ordination between the two levels of government.  To illustrate the point, one only needs to look at the Regional and Remote Passenger Rail Services Class Contribution Program which is included in the Rail Passenger Stewardship and Support program.

These programs, together with stewardship of VIA Rail, make up the bulk of Canada's commitment to rail passenger service.  That commitment is declining in financial and real terms, in sole opposition to the rest of the G8 countries who are busy expanding their rail services.  If you read between the lines in the Evaluation of Rail Passenger Stewardship and Support it becomes clear the Federal government is looking to decrease their support even further.

Even before the provincial government axed the Northlander, it was being questioned as to the need for any federal support at all.  The federal government ignores the passenger service between North Bay and Moosonee due to the fact it is operated by a provincial government.  While I understand the need to clearly define jurisdictions, it seems to me that the Ontario government has been fulfilling a federal mandate since 1932.  

When one examines the criteria for defining remote community, it is clear that Moosonee and the James Bay coast communities fully meet that requirement. As such, it is also clear the federal government has the responsibility to ensure those communities are connected to the national transportation system.  

In the past, the federal government through VIA, shared the expenses of providing passenger service from Toronto to Cochrane, but never contributed to the operation of the line between Cochrane and Moosonee, even though that would more likely be their responsibility.  When VIA pulled out from the Toronto Cochrane service, the feds left a $2.5M subsidy with the provincial government but stipulated it only applied to the Toronto to North Bay portion of the run.  

The only program they could do this under was the Remote access one, so for decades the frozen funding was applied to a portion of the line that was in no way remote, nor disconnected from the national transportation system.  It had gone on for so long that bureaucrats were starting to question its existence and were trying to find ways to abolish it.

No one ever took into account that the federal government had never lived up to their obligation to the remote communities on the James Bay.  In spite of increasing costs, the amount of money available to the funded services is declining as this government bails on support for rail passenger service.

The importance of remote communities to the overall economy of Canada has been recognized by GE Canada and the Chamber of Commerce and the Conference Board of Canada, yet they continue to struggle as Ottawa looks the other way.

The Ring of Fire has caught the attention of the federal government and they have authorized Tony Clement to head up a "whole government" approach to the situation.  If the province is telling the truth about wanting to consider all options to the divestiture of ONTC, they need to put a high profile individual in the same sort of all-inclusive position, not some mid-level MNDM bureaucrat with a fancy title like Ring of Fire Secretariat.   MNDM has proven they do not care about ONTC services and would not be able to protect Ontario's interests.

First Nations, the Federal Government and the business community are all looking for a solution to development in the remote northern area.  The provincial government needs to press that interest in developing an overall solution to protecting remote communities and advancing passenger rail service.

  

Passenger Rail - Federal Responsibility but Provincial Consequences

Railroads may have been the link that brought this country together but the federal government turned their back on them years ago.  In 1995 Canadian National railway was privatized and the government abdicated their original responsibility for rail transportation to the private sector.  That move has been judged a success by some because of the record profits and growth the company was subsequently able to achieve.  

Whether or not that profitability was due solely to the ownership of the company or partly influenced by the changing regulatory environment occurring at the same time is subject to some debate.  The fact that only a fraction of the millions of dollars of assets and the millions of dollars invested in the Crown corporation in the decades prior were returned to the Canadian taxpayer does not appear to be disputed.

Aside from a poor ROI for the Canadian taxpayer, the other issue that gets little mention is the lack of control the government now has over rail transportation, even though that service is recognized as being critical to the Canadian economy.  VIA was created in 1978 as the crown agency responsible for rail passenger operations and when CN was privatized in 1995, VIA became dependent on a private sector owner to deliver their operational obligations.

The federal government had legislative jurisdiction over railroads from the beginning and maintained that role with regard to safety, freight rates and environmental issues after privatization.

VIA has been the victim of numerous major funding cuts over their lifetime and the system has been shrunk to the bare minimum needed to provide cross country service.  Many regional routes have been cast off along the way as a number of different governments sought to make VIA pay for non performance stemming from their lack of control and systemic funding inequalities with other transportation modes.

Against this backdrop the Ontario government launched its Crown agency in 1902 which operated a number of marginal business endeavors, but primarily a railroad, in the sparsely populated Northeast.  The T&NO, later ONTC, operated at a profit for most of its 110 year history and provided rail passenger service with minimal support from the federal government in spite of their jurisdictional responsibility.

When the province's railway started to encounter financial difficulties due to the same systemic imbalances in financial support, the federal government was not inclined to increase their share.  In fact federal support had been frozen for over a decade and inflation had chewed the real funding down by $1M.  The dysfunction between different levels of government was only exacerbated by the fact a province was operating a railroad that had never been endorsed or supported by the national government.

The fact that Ontario was the only province left with its own railway, (BC sold off its provincial railway, BC Rail in 2003 in a scandal plagued firesale) added to the disinterest of the federal government.  Ontario and Quebec have the most to lose, as VIA sheds any service outside of the Montreal-Windsor corridor.  They either need to push Ottawa into living up to their National Transportation Policy or take on more responsibility in the rail sector.  While the latter may have increased cost tied to it, it also brings greater control and that may bring an answer to the transportation issues that are beginning to plague this province.

NATIONAL TRANSPORTATION POLICY

Marginal note:Declaration

5. It is declared that a competitive, economic and efficient national transportation system that meets the highest practicable safety and security standards and contributes to a sustainable environment and makes the best use of all modes of transportation at the lowest total cost is essential to serve the needs of its users, advance the well-being of Canadians and enable competitiveness and economic growth in both urban and rural areas throughout Canada. Those objectives are most likely to be achieved when

• (a) competition and market forces, both within and among the various modes of transportation, are the prime agents in providing viable and effective transportation services;
• (b) regulation and strategic public intervention are used to achieve economic, safety, security, environmental or social outcomes that cannot be achieved satisfactorily by competition and market forces and do not unduly favour, or reduce the inherent advantages of, any particular mode of transportation;
• (c) rates and conditions do not constitute an undue obstacle to the movement of traffic within Canada or to the export of goods from Canada;
• (d) the transportation system is accessible without undue obstacle to the mobility of persons, including persons with disabilities; and
• (e) governments and the private sector work together for an integrated transportation system.

One of the key elements in the above extract from the Canada Transportation Act is the plurality of the word government in Item (e).  The fact that other governments, aside from the federal one, are directed to work together with the private sector, is the answer to improving rail transportation's role in public policy.   

Passenger rail service can survive in lower population density areas also, but they need freight service operating on the same line, to cross subsidize the massive capital expenditures necessary to maintain the roadbed.  Highways have the luxury of  general tax revenue to subsidize their capital expense, but railways are expected to make it on their own, even though the CTA prohibits reducing the inherent advantages of any particular mode of transportation.  Passenger rail services need the expertise of competent individuals who understand both the rail freight system and passenger operations and can pressure governments to live up to their obligations.  

Passenger rail has proven in Europe that it can provide quick, efficient, and well used transportation for the general population so it is obviously the policy differences in Canada that prevent it from doing the same here.  We are in desperate need of policies that can be supported by all levels of government, and permit railways to operate with clear mandates. They will require stable long-term funding arrangements with the goal of working toward self sufficiency but a recognition that passenger transportation is about moving the maximum number of people with the minimum cost, not making profits.

ONTC Divestiture - Not the Only Option.

On Friday May 10th, Min. Gravelle indicated a change in the government's direction when he told the FONOM group that divestiture is not the only option.  This was welcome news for the group, and others, who have been advocating to stop the selloff and take a good look at the options.  It seems that anyone who knows anything about Ontario Northland recognizes that the status quo will not suffice, but we have been at this point before.

One of the options that is the most developed as an alternative to the current structure of Ontario Northland is the "New Deal" as proposed by the GCA, the umbrella group of the ONTC unions.  While that proposal is far superior to the divestment option, which was the only previous choice, it is not clear if it is the best one, given that all options may now be on the table.

The perceived unsustainability of ONTC is what set the divestiture wheels in motion, albeit probably with an initial push by MNDM, who have never been able to figure out how to utilize the corporation.  After more than a decade of that lack of leadership, the company was only able to achieve a fraction of its true potential.  Further evidence of how MNDM is not geared toward transportation can be seen by the struggles of the Owen Sound Transportation Company as they were almost forced to delay the operation of the Chi-Cheemaun due to MNDM failure to deal with low water levels.

If the reporting structure of Ontario Northland was changed to the MTO, alongside Metrolinx, it may have two beneficial effects.  For one thing, it would remove the barriers to innovation and expansion that have been firmly planted by MNDM.  The other benefit could be the introduction of an inter-city rail mindset into the MTO mandate.  It would have to be supported at the highest levels of government to prevent being overtaken by the former Department of Highways.  

Currently there are a number of groups fighting to preserve or enhance their access to rail passenger service and/or rail service providers experiencing financial difficulty. In addition to leading the ROF development, ONTC could be involved in the following

CAPT - Sault Ste Marie
CAPT has long been advocating for improvements to passenger rail service on the Algoma Central Railway, where communities and businesses are totally dependent on CN for access because there are no roads .  They have since expanded their vision to include all of Northern Ontario in the provision of rail services.

Huron Central - Sault Ste Marie

In 2009, the Huron Central Railway was to the point where they were prepared to wind down their entire operation between Sault Ste Marie and Sudbury, which would have sever negative effects on two major employers in the region, Essar Steel and Domtar.

Transport Pontiac Renfrew
Transport Pontiac-Renfrew is engaged in a spirited process to acquire from CN the rail line known as “The Beachburg Subdivision” thus ensuring its survival for generations to come! Extending from Pembroke to Ottawa running through both Ontario and Quebec, the Beachburg Sub is one of the oldest rail corridors in Eastern Ontario and Western Quebec. Its very existence allows local resource-based industry to ship to world markets efficiently and cost-effectively.

Removal  of Rail between Smiths Falls & Mattawa
When the CPR diverted its trains from this line to its main traffic lines through Toronto, Rail America the contracted operator,  ceased operations beyond Mattawa to Smith Falls.  

Shining Waters Railway
When this organization gets up and running they will be looking for an experienced rail services operator to manage freight and passenger services between Toronto and Peterborough. 

VIA cuts London to Sarnia 
VIA responded to declining ridership by cutting the route, but the Mayor of London says VIA contributed to the decline by poor marketing, lack of cars and  turning away some passengers.

Committee Promoting Muskoka Rail Travel
This group was looking to increase rail passenger service between Muskoka and Toronto and use the Northlander as a commuter service.

All of the above groups or situations could benefit from a strong provincial rail service provider.  Ontario Northland already has all the administrative support, car repair facilities, car refurbishment facilities, track maintenance gangs, and marketing people necessary in these situations.  They have experienced railroaders who could work with provincial negotiators on behalf of Ontario residents when it comes to pressing the federal government to live up to VIA's mandate.

Ontario Northland should be involved in all these areas to see what economic impact could be generated if the provincial government were to participate in the solutions.  Rail transportation needs a much higher priority in this province and Ontario Northland is ideally suited to work with Metrolinx and expand the benefits of rail travel to all parts of the province.

Government Accountability - We Need a Champion

Government accountability is such a big issue and affects us so fundamentally it is difficult to figure out where to begin.  From both a federal and provincial standpoint, trust in politicians and bureaucrats is one of the cornerstones of our society, yet 95% of us don't trust our elected leaders.

And buried within that statistic is the fact that bureaucrats are supposed to be accountable to their elected leaders.  As Kevin Page tells us, the lack of transparency has now moved to the bureaucracy.  This attitude is not restricted to the federal level, but is evident in provincial politics also.

In the case of ONTC, the response to MPP Fedeli's request for information, indicates two very alarming trends.  

One, is the bureaucratic response to an elected representative's request for information.  Regardless of the perceived motives for that request, Mr. Fedeli is the elected representative of the people of Nipissing and, like all of us, is entitled to public information.  To determine that of 700 pages, 689 of them are too sensitive to be released and then to black out the 11 that are released, goes against reason.

Two, is the time period of the communications between ONTC and the Min of Finance.  The fact that 700 pages exist regarding Min. of Finance, ONTC and divestment during the runup to the last election, yet there was not a hint of it in the campaign is disturbing to say the least.  Either the Liberals were running on a platform of deception or they lacked the ability to control what the bureaucracy was up to.  

The trend toward secrecy has been documented by Star reporter Kevin Donovan and Edward Greenspon is not restricted to any one level or ministry.  Groups like Democracy Watch and Canadian Journalists for Free Expression are just the tip of the iceberg.  Remember that 95% number.  There is a need to restore the faith of the public in the political process and Justin Trudeau may well be the first champion of that cause.

On the provincial level, Mr. Hudak has taken a step towards accountability, with Path 10 in his New Deal for the Public Sector.  However, given his overall objective of gutting the public service first, it rings a little hollow.  I wonder if Ms. Wynne or Ms. Horvath would like to take up the banner?  There is a chance to connect with a large percentage of the voters for either one.

Ontario Budget 2013 - Ontario Northland Transportation Commission

Opposition MPP's have already written off the 2013 Liberal budget because they say it has little for the north.  While I admit the budget is pretty vague with regard to the details regarding the way forward for ONTC, I think it is important to note the changes from the last budget, and in what is NOT being said now.  

There is no longer any reference to the act of divesting ONTC, nor is there any financial provision for cost avoidance.  There is a reference to the Advisory committee, who along with the Mayors of the five largest cities in Northern Ontario, have expressed support for ONTC and called for a halt to the divestiture process.

As painfully slow as the process is, it is important to note other areas where the provincial government has some issues.  In order to develop the Ring of Fire, it will be necessary for industry, the Federal Government and First Nations to all work together and support a common direction so the benefits can be fairly distributed.

The province is also seeking resolution to a number of First Nation land claims and developing a relationship that works for both parties.  Industrial investment, as a percent of real GDP, in this province has been at levels below that of the US,  in spite of a significant reduction in corporate income tax levels

There are a number of issues in the Federal Provincial relationship that need to be addressed and Stephen Harper is not exactly the model of a fair, open-minded, negotiator.

If one includes all these factors in the preparation of a budget, not to mention the further demands likely by the NDP, this version is probably as good as ONTC proponents could of hoped for, at this point in time.

One thing the government has learned from the gas plant cancellations, is that laying out your political agenda, before an organization such as the OPA negotiates what you are promising, sure puts a crimp in your bargaining power.

In this case there are many bargaining tables in many different arenas where the province wants to see some commitments from the others before making any of their own.

It is good to see the lessons from the gas plant cancellations have at least been learned, given the expense of them.

BUDGET 2013

 

Ontario Northland Transportation Commission

The Province currently owns and operates the Ontario Northland Transportation Commission (ONTC), which provides transportation services to northern Ontario. The ONTC has been operating at a deficit, spending more money on operations and capital repairs than it makes in revenue, and Provincial funding has been increasing over time.

The Province remains committed to ensuring that northern communities and industries benefit from viable, efficient and sustainable transportation and communications systems. As part of the process of addressing ONTC's ongoing shortfalls, while recognizing the transportation and communications needs of the north, the government has already:

·  ensured that every community served by the former Northlander train service continues to be served by ONTC motor-coach service;

·  moved forward on transferring the Niska I ferry, which runs between Moosonee and Moose Factory Island, to the Owen Sound Transportation Company, with no changes in service;

·  maintained the Polar Bear Express service; and

·  received submissions responding to a Request for Proposals for the Ontera telecommunication assets.

The government continues to transform the ONTC. The government will ensure that the voices of northern municipalities, Aboriginal communities, and key industry stakeholders are heard. In March 2013, the Minister of Northern Development and Mines established the ONTC Advisory Committee, which provides a collaborative opportunity for the exchange of ideas so that any decisions made will recognize the economic development value of transportation services in the north.

The government also recognizes the need to have a pan-northern transportation strategy and the path forward for ONTC will be considered as part of a broader review being conducted by the Ministry of Transportation on a Northern Ontario Multimodal Transportation Strategy.

BUDGET 2012

Ontario Northland Transportation Commission Divestment

The Province created and currently runs the Ontario Northland Transportation Commission (ONTC), which provides transportation services to northern Ontario. The ONTC’s business lines include the Polar Bear Express passenger rail service between Cochrane and Moosonee, the Northlander passenger rail service and bus service from Toronto to Cochrane, telecommunication services delivered by Ontera, and rail freight and refurbishment operations.

The ONTC has historically operated at a deficit, spending more money on operations and capital repairs than it makes in revenue. For example, ridership on the Northlander passenger rail is not commercially viable. The cost to the ONTC per passenger has been approximately $400 beyond the ticket price paid by passengers. Taxpayers can no longer maintain this subsidy, and the total funding provided to the ONTC has increased from $28 million in 2003–04 to $103 million in 2011–12 due to mounting operating and capital pressures.

As a result, the government will:

·  maintain the Polar Bear Express service;

·  divest commercially valuable assets such as rail freight, rail refurbishment operations and Ontera telecommunications;

·  tender bus services for other operators to service existing bus routes;

·  terminate the unsustainable Northlander passenger rail service; and

·  consolidate the ferry service between Moosonee and Moose Factory with other provincial ferry services.

Once implemented, this will result in annual savings and avoid costs of approximately $250 million over three years.

The government is committed to maintaining vital public services the ONTC delivers, particularly for isolated communities where no alternatives exist.

MNDM - Mines maybe, Development? Not.

The Ministry of Northern Development and Mines, in its original form, was created to give northerners better access to government services and to bring the northern priorities into focus for the provincial government.  If you read the short history on Northern Ontario on the MNDM website, you will see how Ontario Northland has not been favoured in bureaucratic eyes, since the beginning.  In spite of the fact that Ontario Northland and its forerunner the T&NO, played a huge role in the development of the northeastern part of our province, it does not even rate a mention in a historical account of the region.

This failure to recognize the value and potential of ONTC has carried through to the present day.  When reviewing the statement about the division of MNDM that works with ONTC, one would not think the company has multi-million dollar revenues and a huge economic impact in the region.  In fact the passenger services provided by Ontario Northland do not appear to be very substantial at all, as opposed to the characterization of the huge financial strain attributed to them, in the budget.

NORTHERN DEVELOPMENT AND MINES
NORTHERN DEVELOPMENT DIVISION
TRANSPORTATION, TRADE AND INVESTMENT BRANCH
TRANSPORTATION AND INFRASTRUCTURE UNIT

The Transportation and Infrastructure Unit recommends policies and programs designed to address Northern needs and circumstances; evaluates existing and proposed initiatives, e.g., transportation; communicates special northern circumstances to other ministries; and identifies and addresses emerging northern issues. The Transportation Program is undertaken in cooperation with the Ontario Ministries of Transportation and Natural Resources, the Ontario Northland Transportation Commission (ONTC) and the Owen Sound Transportation Company (OSTC). The Transportation Program includes a variety of programs directed towards the provision of capital infrastructure and passenger services. 

With this mindset about the value of Ontario Northland, one wonders how motivated MNDM has been, toward promoting the northern company and ensuring it gets proper funding from, and utilization by, the provincial government.  In fact, outside of mining, there is very little hard evidence for the ROI on any developmental activities by the Ministry.

The Ministry of Tourism, through the Ontario Tourism Marketing Partnership, hosts an interactive map of Ontario, identifying many of the province's cities and towns.  If one zooms in, it can be seen that virtually all of the buttons for  Southern Ontario centers have further links available, while almost none of the Northern Ontario centers have additional detail.  If the MNDM is meant to bring focus to Northern Ontario, it is not evident in this website.

Back in 2009, well before Minister Bartolucci decided he could not sustain Ontario Northland, and the company still had economic development as part of its mandate, the Ministry of Tourism was trying to overcome declining tourism numbers in the province.

At that time, at least of couple of reports were commissioned, Ontario Tourism Infrastructure Research Study and Discovering Ontario, A Report on the Future of Tourism.  

The following statements are pulled from those reports, which both list Ministry of Northern Development and Mines personnel as participants.


"INVEST IN TRANSPORTATION INFRASTRUCTURE: Ontario should improve access to existing attractions focusing on the links that make it easier to get from one region to another. Tourism transportation funding should focus on movement in and out of key gateways or high-draw areas."


"Ontario should identify provincially owned assets within destinations that could be catalysts for future development"


"Rejuvenation of the rail network, like upgrading Northern Ontario’s highway 
system, is an expensive and long-term solution to tourist travel. However, 
improving rail service could provide economic returns and tourism sector 
growth and investment. In the 2000 Travel Activities and Motivations Survey22 Americans travellers stated they were more likely to be motivated to take a trip to Ontario for nature-oriented attractions such as an overnight train tour through natural terrain."



"Intra- and inter-regional movement of tourists could also be accomplished by 
developing people mover systems such as short line rail like the Orangeville 
Brampton Railway (OBRY) and the Waterloo St. Jacobs Railway (WSJR) and 
regularly scheduled air flights to popular tourist destinations like Muskoka and 
Collingwood."


"The generalized cost of travel in and between Ontario’s tourism regions is an 
important policy lever that can be used to aid tourism development in Ontario. 
The Government of Ontario can aid tourism development by reducing the cost 
of travel through enabling more, faster or easier access. A more thorough 
assessment of Ontario’s access (transportation) infrastructure is contained in 
the Appendix E."

Why would these statements not provoke a response from MNDM something like this?  

You know, we already operate a passenger rail service out of Union Station in downtown Toronto, through Muskoka and North Bay, enroute to Cochrane where our tour train, the Polar Bear Express operates out of.  Why don't we advertise in any of the free daily newspapers read by thousands of commuters who already have chosen our provincial rail system?  Maybe we could partner with other tourism providers and put together packages along the way that are affordable and exciting.

So what was the input from the MNDM?


"The passenger rail service provided by Ontario Northland Rail does not provide full coverage inter-city transportation service between major tourist areas in the Northern Ontario."

Wonderful....thanks so much for promoting the North and bringing focus to our assets.  Maybe we should get the Auditor General to report on the whole ministry, not just the savings claimed from the ONTC Divestiture.