[Urban_Sky]

Re: Canadian

Originally Posted by roger1818

Yes, but do we really need a single train that runs all the way from Lake Ontario to the Pacific ocean?

I don't know, CN used to cover most of the route with local trains (mostly mixed passenger&freight trains, but whereas CN (and later VIA) have always offered long-distance night trains over the entire route, all local trains have already disappeared 30 years ago (most of them even 50 years ago), as this overview (the numbers indicate the number of trains per week) shows:

Compiled from: historic CN and VIA timetables (effective dates are shown)

Originally Posted by roger1818

As it is, to make the journey from coast to coast, you would need to make two other transfers. What is the harm in increasing the number of transfers if it provides better service to the communities along the way?

Indeed a coast-to-coast journey by rail requires changes in Toronto and Montreal. However, only hardcore rail fans would do that trip without spending at least one night in either city and the average international tourist would probably spend at least two nights in either city. By forcing passengers to spend nights in places like Sudbury (Capreol), Hornepayne, Winnipeg, Saskatoon, Edmonton and Kamloops, you are adding multiple days to their itinary while removing the "land cruise" atmosphere which motivates passengers to spend multiple days and nights on board the train. In other words: converting the Canadian from its current format to a series of day-train routes would escalate the time commitment (think: vacation days) required for exploring and traversing Canada by rail, while diminishing the leisure/recreational value to a not less dramatic degree.

But it’s certainly not just the tourists which would loose out, it’s also those intercity markets you claim to serve better: a passenger travelling from Winnipeg to Edmonton is not served better by spending two full days in transit and having to pay a Hotel night in Saskatoon compared to a 23 hour train ride currently. Even worse, the 12 hours and forced hotel night would also be added to relatively short trips like Melville to Biggar (currently 7 hours).
I’d like to share this highly interesting article “Amtrak shouldn’t axe the national network”, which argued the following:

We need a national network
It’s important to keep Amtrak’s long-distance trains, even though they’re not profitable. A recent white paper from the National Association of Railroad Passengers elaborates on many points.
One major reason is that the long-distance trains and shorter ones fit together into a system. They’re not completely isolated.
The Southwest Chief might run over 2200 miles across the nation. But many riders are not going all the way from Los Angeles to Chicago. Some are only going between Los Angeles and Flagstaff. Others ride between Albuquerque and Trinidad. And Kansas City to Chicago is a very popular pair of stations on the route.
[The Brookings report] seems to think that 400 miles is where passenger rail stops being competitive. And that may be the case. But just because the train goes more than 400 miles doesn’t mean that the passenger has to.

The article points out that braking up a long-distance route at any point affects the vast majority of travellers (and introducing forced Hotel stays is not much less extreme than removing a supposedly “weak” link), as it demonstrates with the following figure:

Originally Posted by roger1818

The Canadian is a lovely train (I took it once and it was wonderful), but I am not convinced it service the western communities it travels through very well. I don't understand why you argue in one post that "nobody wants to arrive after 2am or depart before 5am" yet that is what the Canadian does for many communities and in this case, there is no other option for a daytime train.

Of course it doesn't serve those communities well, but I don't see how any schedule adhering to the countless constraints imposed by the current level of funding, frequencies, fleet, travel speeds and travel time predictability available, could serve any intercity market adequately. As for departing or arriving at ungodly times, passengers are much more forgiving for such timings if no other timings are available with any public mode – and most importantly: in the case of night trains on the Corridor, the demand for overnight travel is vastly outstripped by the demand for short-distance travel, whereas it is the opposite on the Canadian…

Originally Posted by roger1818

But it didn't turn a profit. Now, I don't have a problem subsidizing transportation services if it is for the better good, but the vast majority of those riding on the Canadian are foreign tourists. If a study can show that those tourists then turn around and spend enough money in Canada to make it worth the Canadian government subsidizing their vacation, then fine, but I somehow doubt that is true.

You still don’t seem to understand the less-than-subtle difference between a “subsidised product/service” and a “subsidised operation”: A subsidised product/service means that the revenues are not sufficient to offset the direct costs associated with its provision, whereas a “subsidised operation” means that the revenues are sufficient to offset the direct costs, but not the operation’s fixed costs. Or in other words: a subsidised product/service charges below its marginal cost, whereas a subsidised operation only charges below its average costs (which decrease with every additional unit demanded). The implication is significant, as every additional unit demanded increases the total deficit of a subsidised product/service, while it decreases that of a subsidised operation.

I can only think of three items which would count as direct costs when taking the Canadian and that is the payment processing fee at booking, the bag of toiletries provided to Sleeper passengers when checking into their cabins/berths and the food and beverages which is served to Sleeper passengers as part of complimentary meals and drinks. Assuming a credit card processing fee of 1.5% and product costs of $20 per toiletries bag or meal, the cost of my (unfortunately to this date: only) trip on the Canadian (I travelled with my wife Toronto-Vancouver in a Cabin for 2 with a layover of 48 hours in Jasper) would have been $484.92 (i.e, $242.46 per person, see table further below for more detailed calculations), considering that we were served 10 meals and my credit card was charged $2,944.99, and would equal a cost-recovery rate of 617.6% (or more than 6 times marginal costs)!

However, since you are so obsessed with average figures, let’s do the calculations again with the average operating cost per passenger, which was $1,102.12 in 2015, still a cost-recovery rate of 135.9% with $1,497.50 paid per person (and this already pays for a share of corporate overheads, such as my own salary). Or what about the per-passenger-mile cost? That comes out to $0.94 ($98,888,000 in costs divided by 105,215,556 passenger-miles) and translates into an operating cost of $2,608.11 (2775 miles * $0.94), which represents an individual cost-recovery rate of 57.4%.

This means that my trip generated for each of us a marginal profit of either $1,255.03 or $395.37 or a marginal deficit of $1,110.62, depending on whether only marginal costs are included or average costs based on per-passenger or per-passenger-mile costs. But is there really a deficit on a per-passenger-mile cost basis? Well, for international travellers the sales tax would represent an incremental tax revenue which would bring the deficit down to $915.94 and individual cost-recovery up to 64.9%. So when would my trip (had I been a foreign tourist) broken-even from a taxpayer perspective? If we assume a sales tax rate of 12% (i.e. the sales tax of BC) for all expenses the tourist has besides taking the Canadian (i.e. other transportation costs like flights, rental cars or transit, accommodation costs, restaurant costs, groceries, leisure activities or shopping), then we can determine the required amount of taxable spending by dividing the remaining deficit by 12% (granted, things like groceries are charged much less – if any – sales tax, but on the other side, consumption taxes are added on top of sales tax for other items, like alcohol and fuel). In our case, that would have required a taxable spending of $7,632.87 per person, which falls well short of the $2,345.75 my household book recalls as being what each of us spent during the trip and results in a cost-recovery rate of 75.7%.

Nevertheless, using the cost and revenue figures of the quarter (rather than the year we traveled, i.e. Q2-2015 instead of 2015) brings our operating cost down to $859.01 (if calculated on a per-passenger basis) and $1.997.05 (if calculated on a per-2775-passenger-miles basis), which represents an individual cost-recovery of 174.3% and 75.0%, respectively, for our trip. Correspondingly, a taxable spending of now only $2,540.67 would have brought the latter figure to 100%, which is only $194.92 more than the $2.345.75 each of us actually spent, thus representing a cost-recovery rate of 98.8% or a net subsidy of only $23.39. Which is why I consider my trip (a shoulder-season trip on the Canadian to Vancouver with a 2 nights spent in the Rockies, 3 nights in Vancouver and 4 nights on Vancouver Island) as a trip which was virtually cost-neutral to the taxpayer and that despite having secured deep discounts at one of VIA’s sleeper sales.

However, things have changed a lot in the last 3 years and especially when it concerns the financial performance of VIA Rail. So how would these numbers look for international tourists taking the Canadian this summer?
Unfortunately, the most recent financial figures we have for the Canadian are 2017 (for full year) and Q3-2018 (for a quarter). I therefore researched fares for the first date in Q3-2019 (i.e. the most popular travel season) where discounted fares were available for all classes (note that there are no discounted fares in Prestige Class, not even any discount for single vs. double occupancy):

• Assuming a Cabin for 1 or a Cabin for 2 (the per-passenger price is exactly the same for both accommodation types, which represent the choice of the majority of Sleeper passengers) and deflating the fares by 10% (to simulate the simulate a more realistic price level for 2017), the deflated fare of $2,161.13 would have covered 856.2% of its direct costs, 193.6% of its per-passenger operating costs and 85.6% of its per-2775-passenger-miles costs. The latter increases to 96.8% if the sales tax is added, which means that a taxable spending of $676.94 is needed to become cost-neutral to the taxpayer.
• Projecting this trip onto Q3-2018 rather than 2017 and correspondingly deflating the fare by 5%, the deflated fare of $2,281.19 would have covered 897.3% of its direct costs, 270.4% of its per-passenger operating costs and 113.5% of its per-2775-passenger-miles costs. This means that taking the train in this scenario actually represents the same benefit (!) to the taxpayer as spending $4,739.53 on fully taxed goods and services in BC.
• Assuming a trip in Prestige class instead (projected onto 2017), the deflated fare of $5,410.44 would have covered 931.0% of direct costs (note that I have increased the assumed product price of the toiletry bag to $100 and doubled the meal costs to reflect that Prestige passengers receive presumably better handouts and also have alcoholic beverages included in their fare), 484.7% of its per-passenger operating costs and 214.4% of its per-2775-passenger-miles costs. This means that taking the train in this scenario actually represents the same benefit (!) to the taxpayer as spending $29,920.77 (!) on fully taxed goods and services in BC.
• Projecting this same trip in Prestige Class onto Q3-2018 rather than 2017, the deflated fare of $5,711.02 would have covered 975.1% of its direct costs, 677.0% of its per-passenger operating costs and 284.3% of its per-2775-passenger-miles costs. This means that taking the train in this scenario actually represents the same benefit (!) to the taxpayer as spending $37,037.12 on fully taxed goods and services in BC.

I hope that above figures become easier to follow with below tables:


Compiled from: VIA Rail’s Annual Reports 2015 and 2017 and Quarterly Reports Q2-2015 and Q3-2018.
I know that this is a far cry of “a study [which] can show that those tourists then turn around and spend enough money in Canada to make it worth the Canadian government subsidizing their vacation”, but it gives me enough confidence to tell you that you are probably wrong with doubting this…

Originally Posted by roger1818

It also has the second highest subsidy per passenger (behind only the Winnipeg-Churchill train) and the largest total subsidy ($41 million) of any route, for a train that I believe only ran three times a week at the time (it has since been cut to twice a week).

At the same time, the Canadian has the highest average fare of every route ($723.45 or five times the Ocean as the route with the second-highest fare and 11 times the Corridor) and second-largest revenue figure ($76 million), which might show you why it is meaningless to compare routes by their per-passenger or absolute figures…

Originally Posted by roger1818

Using back of the napkin math and the Sudbury-White River train as an example. Correct me if I am wrong, but it is about 1/10 the length of the Canadian. If VIA offered similar daytime services, the same 3 days a week, strung from Toronto to Vancouver, I would guess it would cost $36,160,000 to operate, generate $2,340,000 in revenue and thus require $33,820,000 in subsidies (less than the Canadian) and transport 63,520 people.

Hang on a second, the Sudbury-White River is the only VIA route operated with RDCs, which have much lower operating costs (fuel efficiency!) than locomotive-hauled trains. As VIA has only 3 more RDCs spare (ear-marked for Vancouver Island, but nobody there seems to be willing to fund the necessary infrastructure improvements for restoring service so far). This means that only one of your series of daytime-only trains can be operated with RDCs, while the others have to be locomotive-hauled.

Originally Posted by roger1818

That is fewer passengers than the Canadian, but most of those loses would be in foreign tourists (though many might still use it) and instead it would provide much better service to Canadians who live along the route. I would much rather see that type of service.

If you wanted to provide “better service to Canadians” (presumably those living in the prairies), you would fill the void left by the departure of Greyhound with intelligent public service agreements (PSAs), which create an extensive, coordinated, efficient and affordable (for riders and taxpayers alike) intercity bus network…

Originally Posted by roger1818

Now I admit my math is oversimplified, as some stretches would not do as well, but others would do much better.

Have a look at the current timetable of the Canadian and divide the travel time into segments which have less than 14 hours of travel time (10 hours if you want to avoid requiring 2 crews of locomotive engineers) and I will try to work some back-of-the-envelop calculations which give you a better idea of what kind of service you would receive and what kind of subsidy it might require (and how both compares to the Status Quo)...

Originally Posted by roger1818

Now Combine that with service to other major cities that no longer do (like Calgary and Regina) and we could have something really interesting.

You can blame many things for these cities not having any passenger rail service, but certainly not the $41 million operational subsidy (representing $1 per Canadian) which was allocated to the Canadian in 2017…