Thank you, Mr. Chair.
Mr. Chair, I will now highlight the findings of our special examination of VIA Rail Canada Inc. I am accompanied by René Béliveau, Principal.
We conducted our examination from June 2007 to February 2008. We found a significant deficiency in the systems and practices of VIA Rail. VIA does not have reasonable assurance that it will be able to meet the strategic challenges it currently faces. These challenges could have an impact on the fulfillment of its corporate plan for the 2007-2011 period.
The Corporation does not own most of the railway tracks that it uses. For any extra usage, it must negotiate with the owners. The corporate plan is premised on successful completion of the current negotiations with the principal provider of access to the railway track network, within VIA Rail's prescribed funding envelope. A new service agreement is thus critical to the Corporation's ability to meet the objectives set out in its corporate plan. As of the drafting of our special examination report, the outcome of negotiations was uncertain and the Corporation had not established contingency plans to be put in place should negotiations fail.
The 2007-2011 corporate plan further assumes growth in ridership and revenue. This will pose a significant challenge for VIA, which has had difficulty meeting similar objectives in the past. For example, the 2002-2006 corporate plan projected revenues that were $230 million higher than actual revenues. It also projected better on-time performance, but the actual performance remained below 80%.
In other areas, we found that the corporation had improved its practices, notably the human resources and marketing and customer focus. We also identified certain areas requiring improvement, particularly information technology, security, and environmental management.
VIA Rail has accepted all our recommendations and has indicated that it would move quickly to address our concerns. As we completed our examination in February 2008, I cannot comment on measures taken since then, so the committee may wish to inquire about the actions the corporation has taken to respond to our recommendations.
Mr. Chair, this concludes my statement, and we would be pleased to answer any questions the committee members may have.
Thank you.