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3/27/2012



Rail News: Passenger Rail

Province to divest Ontario Northland Transportation Commission, cease passenger-rail service


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Last week, Province of Ontario officials announced plans to begin divesting the Ontario Northland Transportation Commission (ONTC), which governs the Ontario Northland Railway, Ontario Northland Motor Coach Services and Ontera telecommunication services.

The decision will enable the government to “protect investments” in health and education systems while balancing the provincial budget by 2017-18, provincial officials said in a prepared statement.



“Since 2003, the government has worked hard to make the ONTC viable by increasing funding by 274 percent. However, demand for its services has stagnated,” they said. “Also, the current subsidy on the Northlander train is $400 per passenger, and no longer is affordable.”
   
Annual passenger-rail ridership has remained flat at about 320,000 rides and annual sales revenue has declined from $140 million in 2005 to a little more than $100 million. In addition, private buses serve most of the same communities as the passenger-rail lines, government officials said.

Provincial officials have appointed a transition board to work with ONTC Chairman Ted Hargreaves to begin divesting the commission. The board’s mandate: to develop a new model to ensure the ongoing operation of the Polar Bear Express service; divest commercially valuable assets, such as freight rail, rail refurbishment and Ontera telecommunications; begin canceling Northlander passenger-rail service that runs between Toronto and Cochrane, and replacing it with enhanced bus service; and consolidate ferry service between Moosonee and Moose Factory with other provincial ferry services.

“The government will do what it takes over the long term to ensure that vital passenger and freight transportation services are maintained, especially for isolated communities where no alternatives exist,” said Minister of Northern Development and Mines Rick Bartolucci.

There will be no immediate changes to ONTC services or its workforce, but it's too early in the process to determine how many jobs will be lost or gained, he said.

“There are 966 jobs that will be impacted, and this will be mitigated to a certain extent by the number of workers eligible for early retirement,” said Bartolucci. “It's also reasonable to expect that many jobs can be maintained under new operators, and the possibility of new jobs being created is not out of the question.”



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