E&N future unclear

By Ross Crockford, October 2013

Backroom debates intensify.

Despite an August 31 deadline announced by Island Corridor Foundation (ICF) executive director Graham Bruce, negotiations are continuing between Southern Rail of Vancouver Island (SVI) and VIA Rail to craft a new passenger-rail agreement for the Island. 

“We are coming closer and closer together,” says SVI president Frank Butzelaar. “We are confident we will reach a deal.” 

In April, SVI submitted a proposal to have VIA’s trains based in Nanaimo instead of in Victoria, as they were before VIA stopped service in 2011 due to poor track conditions. VIA has said it prefers the original arrangement, under which it paid an average annual subsidy of $1.4 million. The SVI proposal would require an annual subsidy of $1.8 million, plus $6 million over five years for track maintenance.

“We believe the people of Vancouver Island want a different service,” says Butzelaar. “That’s why this is taking so long.” Butzelaar says SVI has spoken with federal transportation minister Lisa Raitt to broker a deal, and that Raitt intended to speak with VIA as well.

The ICF and SVI need an agreement with VIA to release $18 million already pledged by federal, provincial and regional governments to upgrade the 127-year-old Esquimalt & Nanaimo line. SVI, which operates rail services along the E&N under contract to the non-profit ICF, is owned by industrialist Dennis Washington, #71 on the Forbes 400 list of the richest people in the United States. Washington also owns Seaspan, which has an $8-billion contract with the Canadian government to build seven non-combat navy vessels. In August, Seaspan CEO Jonathan Whitworth wrote to Raitt, urging her to get VIA to sign a new E&N agreement so that Seaspan’s 1,000-plus employees on southern Vancouver Island could commute by train to the company’s shipyard in Esquimalt.

Meanwhile, some of the five regional districts (along with 14 First Nations) that own the ICF are scrutinizing the foundation itself. 

At the end of August, Regional District of Nanaimo director Julian Fell sent a memo to all directors of the five districts, criticizing changes to the ICF’s governing bylaw approved at the ICF’s annual general meeting in April. According to Fell’s memo, the new bylaw “imposes high levels of secrecy, enables out of town [Nanaimo] and out of country meetings, enables out of country banking, enables concentration of control in a single person, and enables pecuniary benefit to conflicted directors and staff.” 

Fell said he could not discuss the memo further, because “[i]t has been referred to legal council and by statute has gone in camera at the various Regional Districts.” For his part, the ICF’s Bruce said: “We have a response [to the memo], but I’m not about to comment.”

Ross Crockford is working on a book about a city networked by trains.