1.

0 INTRODUCTION

Everywhere around the world the railway system of a nation is the form of public
transport that is widely used and the most used due to it being convenient and cost
efficient. The public will use the railway as a means of transportation for their everyday
commute going back and forth from work, going out to buy groceries or to shopping
malls and also for sightseeing due to the fact that railways are usually made very
accessible in major cities. Even tourists from other countries will use railway as their
main mode of transport because it is more convenient than renting a car in terms of time
and cost efficiency. This being said, most railways in the world built are from government
funding at the start and then privatized later on when the project is finished meaning that
operations and maintenance will usually be taken on by private corporations either fully
or partially.

Privatisation bears an abundance of benefits for the railway industry in the country.
Privatisation will force the private companies to make profit from railways by cutting
costs thus making the railway system more efficient and more profitable, this is a great
improvement from nationalisation as improved profitability will enable room for
improvement from profits gained. Also, privatisation will eliminate if not minimize
political interference from nationalisation. Political interference will make decisions for
the railway system biased towards political pressures regardless of the outcome making
the railway system towards tailored towards political views rather than the overall
performance and efficiency of said railway system.

In this case, railway systems in Canada are looked upon on the restructuring and
privatization of railway systems in the country. Canada is one of the countries that boasts
a large and well-rounded railway systems in the world with a counting of a whopping 84
million passengers a year and a total of 49 422 km’s of railway. [1] Even this large of an
operation, Canada primarily transports freight, which is handled by two companies which
are Canadian National Railway Company (CN) and Canadian Pacific Railway Company
(CP). Both of these companies are among the world’s most efficient and organised freight
railway, moving 70 percent of Canada’s intercity freight and 50 percent of our goods
destined for export. [2] CN and CP are considered as Class 1 railways, meaning that their
operating revenues in a year have already exceeded 250 million for two years in a row.

In this paper, several topics will be enlightened revolving around the privatisation and
restructuring of railway systems in Canada. The history and background of the railway
industry in Canada will be written and educate readers on how the railway industry was
brought up in Canada and an overall picture of how the railway industry is in Canada in
the 21st century. Other than that, the restructuring that has been done in Canada will also
be brought into the light alongside the privatisation of railway that has happened in
Canada. However, the overall process of these two were not all smooth sailing so the
issues and challenges faced in these two processes will also be written. Lastly, the effect
of these two processes that has been brought upon Canada, whether positive or negative
the effects will be shown in the paper.
2.0 OBJECTIVES

1. Enlighten readers on the importance of restructuring and privatisation of railways

3.0 BACKGROUND OF RAILWAY IN CANADA

Canada has a history of being in the railway industry that dates back to the year 1836
when the opening of Champlain and Saint Lawrence Railroad happened. This railroad
was a 26 km rail line that connects Montreal to Lake Champlain by means of a railhead
on the south shore of the Saint Lawrence River. [2] The opening of this railroad led to the
quick growth of railways in Canada. Jump forward 3 years, the second railway which is
the Albion Mines Railway that was built and purposed for freight, carrying coal from the
Albion Mines to Dunbar Point for a distance of 9.5 km. There was also the Montreal and
Lachine Railroad which was another short line that goes on for 12 km transporting water
built in 1847. [3] In the 1960s, the passenger rail industry declined forcing CN and CP to
focus on freight transportation. This was also due to the exponential growth of air travel
and it being more affordable. In the year 1977, VIA Rail was created by the government.
VIA Rail was a Crown corporation meaning that they are state-owned. VIA Rail was
created to focus on providing and organizing an all intercity passenger train. In 1990, the
Rocky Mountaineer was created, its train routes were through Canada’s Rocky
Mountains. The Rocky Mountaineer was also the world’s largest privately owned tourist
train company.

Canada’s railways have gone a long way since the opening of the Champlain and
Saint Lawrence Railroad. In present time, Canada is the fifth country with the largest rail
transport network size with a total of 49 452 km of travel distance. Also, there are 13
commuter rails operating everyday to provide Canada’s residents a commute for
travelling to and from work. These commuter rails are operating in Toronto, Ottawa,
Montreal and Vancouver. With this in mind, there are still plans on expanding their
commuter rail networks in the near future. “In Ontario, for example, the government has
earmarked more than $11.5 billion to fund The Big Move — a plan to improve commuter
transportation in the Greater Toronto and Hamilton Area.” ("A Brief History of Canada’s
Railways", 2016).

To get a better idea of how railways operate in Canada, the nation prioritizes safety
and commits to it in their railways with a Railway Safety Act that conveys many
regulations including the need of a Safety Management System (SMS). The SMS is a
system for companies to have a plan of planning, inspections, performance measurements
and goal setting to adopt a safety culture in the organization. From the introduction of the
SMS in 1999, the accident rates of Canada’s passenger and freight rail have significantly
declined. [2] In the last 10 years, a 40 percent decrease can be seen in Figure 1 below.
 Figure 1: Freight Accident Rate in Canadian Railways

The railway systems in Canada are one of the main sources of the nations income due to
fact that most of their railways are freight rails. Their freight rails make them able to compete
against other big countries by transporting Canadian goods to the United States and also
internationally with the continents large port system. A rough estimate of 280 billion of
Canadian goods get transported by this system of rail and ports. In 2014 taxes for Canadian
railways was more than $1 billion including sales, property and fuel taxes. In most industries,
railway workers are among the most well-payed with the average annual wage of $92 000 in
the year 2014. [2]
 REFERENCES
[1] "Canada's Passenger Railways: Moving People". www.railcan.ca. Retrieved 2 December
2019.
[2] A Brief History of Canada’s Railways. (2016), 1. Retrieved 17 May 2020, from.
[3] E. Boardman, A. (2007). A Cost-Benefit Analysis of the Privatization of Canadian
National Railway [Ebook]. University of British Columbia. Retrieved 17 May 2020, from
https://www.sauder.ubc.ca/sites/default/files/2019-04/2007_03_boardman.pdf.