On this day in 1977, Via Rail Canada was created when then Federal Minister of Transport Otto Lang announced the creation of a new Crown corporation that would take over all passenger rail services in Canada. It was called Via Rail Canada. Until 1977, both the Canadian Pacific Railway and the Canadian National Railway had operated a mix of profitable freight services and debt ridden passenger services.
The Liberal government had promised to create VIA Rail almost three years earlier during the 1974 election campaign. The new corporation is designed to halve the $200 million per year passenger rail subsidy that CN and CP receive from the federal government. Passenger services will be streamlined, and some routes may be cut. Train fans are worried, while some critics believe the passenger rail system should be scrapped completely in favour of cheaper, more dependable buses.
VIA Rail eventually took possession of all CN and CP passenger equipment and personnel. However, VIA Rail does not own a single rail line and must pay right of way fees to CN and CP and contract with them for maintenance. Gradually, the corporation takes over CN and CP routes, beginning with the busy Quebec City to Windsor corridor on April 1, 1978. By 2000, VIA Rail is carrying almost 4 million passengers a year.