Railway Passenger Services Contract Regulations (SOR/78-286)

Short Title

1 These Regulations may be cited as the Railway Passenger Services Contract Regulations.

Interpretation

2 In these Regulations,

CN

CN means Canadian National Railway Company; (CN)

CP

CP means Canadian Pacific Limited; (CP)

Minister

Minister means the Minister of Transport; (ministre)

railway passenger service

railway passenger service means passenger services operated over railway lines, and other passenger services in substitution for or ancillary to those services, that do not accommodate principally the carriage of goods or persons who regularly commute between points on a railway line; (service ferroviaire voyageurs)

railway passenger service contract

railway passenger service contract means a contract between the Minister and VIA entered into pursuant to Transport Vote 52d of Appropriation Act No. 1, 1977; (contrat de service ferroviaire voyageurs)

subsidiary service request

subsidiary service request means a request in writing by the Minister to VIA with respect to the manner in which and the extent to which the provision, management and operation of railway passenger services shall be carried out by VIA; (demande de services complémentaires)

VIA

VIA means VIA Rail Canada Inc. (VIA)

Conditions Precedent

3 The Minister shall not enter into a railway passenger service contract unless

• (a) Treasury Board has approved the contract;

• (b) VIA has provided the Minister with an implementation plan approved by CN and CP relating to the involvement of VIA in the provision, management and operation of railway passenger services; and

• (c) VIA has reached an agreement with CN and CP whereby, in determining payments by VIA to CN and CP that may include provision for financial incentive measures, the proposed contract may be subject to a review approved by the Minister to ascertain that the costs do not exceed, without the approval of the Minister, costs determined by the application of CTC Order R-6313, subject to indexing supplied by the Canadian Transport Commission.

Conditions Relating to a Subsidiary Service Request

4 Every railway passenger service contract shall provide, with respect to a subsidiary service request, undertakings whereby

• (a) prior to the issuance of a subsidiary service request by the Minister, the Minister shall require VIA to provide plans and financial projections with respect to the services to be provided by VIA, including proposed fare structures if requested by the Minister;

• (b) the Minister may, before making a subsidiary service request, consult with provincial governments, members of the motor carrier industry and other organizations with respect to any proposed fare structure;

• (c) no subsidiary service request

  • (i) requiring the payment of an amount in excess of ten million dollars or such other amount as Treasury Board may direct in any one year, or

  • (ii) relating to passenger services in substitution for or ancillary to passenger services operated over railway lines

  shall be made by the Minister without the approval of the Treasury Board;

• (d) a subsidiary service request shall not contain undertakings that are inconsistent with the contract; and

• (e) the Minister may impose limitations with respect to

  • (i) the maximum total payment that may be made to VIA,

  • (ii) pricing conditions within which fares may be set by VIA, and

  • (iii) the minimum level and quality of service to be provided by VIA.

Undertakings of Railway Passenger Service Contract

5 Every railway passenger service contract shall contain, in addition to such other undertakings as the Minister may deem advisable, the following undertakings by VIA:

• (a) VIA shall, after consultation with the Minister, comply with any subsidiary service request made by the Minister;

• (b) VIA shall make its accounts and records open to audit and inspection by an authorized representative of the Minister;

• (c) VIA shall provide reports to the Minister at such times and containing such information as the Minister may from time to time require; and

• (d) VIA shall adopt a contract policy for public invitation to tender acceptable to the Minister.

6 No railway passenger service contract shall contain any express or implied undertakings that have the effect of

• (a) requiring the Minister to make payments to VIA in respect of costs incurred by VIA, other than costs by application of the compensation method provisions set forth in section 7; or

• (b) precluding the Minister from participating in the establishment of or requiring the implementation of objectives, service concepts, pricing policies and other related matters.

Payments to Via

7 Every railway passenger service contract shall provide, with respect to payments to VIA pursuant to the contract or a subsidiary service request, undertakings whereby

• (a) any payment by the Minister may include provision for financial incentive measures;

• (b) the application of financial incentive measures will be undertaken so as to

  • (i) encourage cost-effective decision-making by VIA in making the trade-off between attracting passengers and reducing costs, and

  • (ii) vary the terms of payment from route to route as may be required in accordance with the competitive conditions and government objectives on each route;

• (c) payments will not be based on the actual costs incurred by VIA of providing, managing or operating the service but will be determined at the time of the contract or request, as the case may be, on the basis of estimated costs less estimated revenues, having regard to the minimum level and quality of service and the pricing conditions prescribed by the Minister; and

• (d) in determining payments the estimate of costs related to the operation of passenger services will not exceed, without approval of the Minister, costs determined by the application of CTC Order R-6313, subject to indexing supplied by the Canadian Transport Commission.