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Friday, September 07, 2012

What does the ONR actually cost?

If you listen to the McGuinty government, you will come to the conclusion that Ontario Northland costs millions of dollars a year to run and that each Northlander passenger is subsidised to the tune of $400.  If you listen to the unions, the subsidy is lower and could be minimal if the ONTC was absorbed into Metrolinx funding.  If you listen to Steve Paikin, the entire system is simply too expensive.  In a recent article, Paikin argued that the railway now costs far too much to operate, especially if crews on nearly-empty trains are making six-figure salaries.  Nothing new so far - the unions have been calling for a restructuring for a decade to improve the ONTC's efficiency.

What is new is Paikin's suggestion that as many as 400 employees (close to 40%) could be able to claim a 14-year severance package, something that would cost more than the government could possibly hope to save from the sale.

North Bay Nipissing News has looked further into this claim and found that MPP Vic Fedeli is also trying to find out if such a severance package does exist.  Both have filed requests with the Ministry of Northern Development and Mines in the hopes of confirming the claim.  So far, there has been no useful response.

For its part, the ONTC unions readily acknowledge that the clause does exist and is in line with agreements at both CN and CP.  The clause can only come into effect in the case of layoffs, something that has yet to happen.  The unions were also quick to note that half of the ONTC's workfore does not have a job security clause.

How much does the ONTC cost?  It's hard to say.  The government claims it can save $270 million by selling it.  However, if this 14-year clause is correct, the government may be forced to pay out up to $450 million, according to Fedeli.  Add to this the ONTC pension fund, which may cost up to $200 million.  I've never been strong at mathematics, but this seems to me that the government may have to pay up to two-thirds of a billion dollars in order to save $270 million.  Something doesn't add up.


  1. What is not mentioned here is that those who have the 14 years of job security are the most senior the government has to abolish 550 jobs before they even get to these 400 what is the government realy up to eliminating 950 jobs is that what there saying...

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  2. The documents already show that the government is willing to wind down everything that doesn't sell. I think this means that what the government really wants to do is get out of northern infrastructure altogether, regardless of the cost.