micheal_can
Senior Member
The metric to assess how dependent a transportation service is on subsidies is commonly referred to as „farebox recovery rate“, which describes what proportion of a service‘s operating costs is actually covered with passenger revenues. Here a few examples from pre-Covid times:
VIA‘s Remote services: ~10-20%
VIA‘s Ocean: ~40%
Transit networks: ~50% (typical value)
Ontario Northland‘s bus services: ~75%
VIA‘s Canadian: ~95%
VIA‘s Corridor services: ~130%
Why invest in the „Northlander“ which is projected to loose more than $3 for every $1 earned in ticket revenues, when Ontario Northland‘s buses only loose one-tenth of that ($0.33 for every $1 earned)?
Why invest in the Northlander when it costs more than half-a-billion in start-up costs, when buses have considerably lower start-up costs as they use the public road network?
Why invest in passenger rail on low-ridership corridors if its per-train-km operating costs are approximately ten (!) times that of an intercity bus?
The way to address this is to expand the farebox-recovery rate to a Benefit-Cost ratio, by adding all external costs and benefits to the calculation: A road may very well yield benefits which exceed costs (despite not charging any user directly), if it relieves residential areas along the existing roads from pollution, reduces accidents and saves its users time (which often also reduces fuel consumption with the associated environmental benefits).
The baseline is always the „Business-As-Usual“ (or: „Do-Nothing“), whereas all impacts of any project are to be captured as projected benefits or costs. I generally feel uncomfortable about road-upgrades, but whether approximately 170 people every day use a new passenger train or any existing mode of transportation won‘t push in the slightest the needle of the BCR for upgrading Highway 69 to Highway 400…
It is interesting. You answered the "Why" without me even saying why. The reason we should invest in services that will require a subsidy is the benefits to the population who live along it. To me, if the intangible benefits exist that warrant it,then it should be done. Those intangible benefits cannot be fleshed out by the 'bean counters', but can be expressed by those that would use the service. Things like not wanting to park or drive in Toronto, not having their trip canceled due to snow, or not spending multiple nights in a hotel are all intangible, but are things that should be considered.
You talk of city pairs as a means to talk about service to them to justify them. Connecting SSM and Sudbury and North Bay to each other, and to Toronto should be the next thing that the province looks at if,compared to their planning, the Northlander becomes a success.Via won't, and really shouldn't. So, the next logical group would be the province. This isn't fantasy if you live here any more than the GO extensions to Bolton or Peterborough are. For here, a fantasy would be HSR, or even HFR.




