delete Regulations Respecting a Contract Between the Minister and Via Rail Canada Inc. with Respect to Railway Passenger Services
This regulation governs railway passenger service contracts between the Minister of Transport, VIA Rail Canada Inc., and railway companies (CN/CP). It establishes approval processes, implementation requirements, subsidiary service requests, payment mechanisms based on estimated costs vs revenues, financial incentive measures, and audit/reporting obligations. The regulation aims to ensure cost-effective passenger rail services while maintaining minimum service levels and quality standards.
This regulation creates a complex bureaucratic framework that distorts market incentives in passenger rail services. By mandating estimated-cost-based payments regardless of actual performance, it removes competitive pressure to reduce costs and improve service quality. The extensive government oversight and approval requirements prevent VIA from responding flexibly to market demands, while the financial incentive structure encourages cost-plus behavior rather than efficiency. This regulatory burden directly contributes to Canada's uncompetitive passenger rail system compared to private alternatives.