Ask any reporter and they will tell you that some interviews are painfully difficult while others are incredibly easy. For me, the easy ones are where I don’t even have to look at my notes. I can just have a conversation with the person I am interviewing and let the course of the discussion steer the interview.
GO Transit’s CEO, Gary McNeil, was that kind of interview. He is forthright and honest when it comes to his views on transit and isn’t afraid to call a spade a spade. A 1973 graduate of York University, McNeil went to work in the Ministry of Transportation (basically the Canadian equivalent to the highway department). He spent several years there before moving into environmental assessments before moving to Vancouver and working on the startup of the SkyTrain.
“That kind of launched me into really being actively involved in transit,” McNeil says. “At that stage of the project it was in its planning going into design stage, so I got involved in the planning and then I got involved in design, and then I got involved in construction and then I got involved in actual testing, commissioning and operations planning for the system. I was there for three to four years and it’s just kind of rolled since then.”
McNeil would eventually leave Vancouver and enter private consulting, but found that it was beginning to burn him out, “I was putting in 80-hour weeks in the consulting world and I saw no end in sight and an opportunity came up here at GO Transit.
“At the time I was looking for a change. I was getting tired of doing studies and never really seeing anything come through to fruition.
“So I really looked at the Greater Toronto Area and said this is probably where, if anything is going to happen in transit, this is where it is going to be, in the interregional transportation services.
“In my stint in the consulting world I had spent about six years with the Toronto Transit Commission (TTC) seconded into their program management team that was responsible with building the Shepherd Subways. So I knew an awful lot about what was going on in the TTC and its potential for growth was limited. 1) Because of so much money that was involved in subway construction and 2) because a lot of the new growth in the Toronto area was out in the 905 area, which is the development around the Toronto area — all of the suburban towns, which have all really grown together now. You can’t see one border to the next really; they’ve all just combined in together.”
McNeil came into GO Transit as the director of rail services, looking to work for Rick Ducharme, GO Transit CEO at the time, but that wasn’t going to last. Just three months after McNeil came onboard, Ducharme retired and eventually transitioned to become the TTC’s chief general manager. The GO CEO position remained vacant for several months, and McNeil never considered himself for the position until he was asked why he hadn’t applied yet.
“I didn’t put my name in it initially for the first go round because I had just been with the company about three months and I thought, no I’m not going to. After about two or three months they hadn’t selected anyone yet and the chair approached me and asked me why I hadn’t put my name in at least to be involved in the recruitment process or anything,” McNeil says.
“So I put my name in the hat. I guess they were looking to growing GO Transit at the time. We’d been through fairly … about a 10-year period of cutbacks and reductions here at GO Transit. And I guess the board was ready to grow and I had the right mix of the public sector and the private sector and I wanted to grow the organization and it must have clicked. Now seven years later I am still here, so hopefully it is still clicking.”
Since arriving in GO’s top spot, McNeil has looked at redirecting the company to expand and be as successful as possible, and that goal came down to one thing — focus.
“Well I think a lot of it really is from an operational perspective. I think the main thing that has changed is that we are really focusing more and more on customer service,” McNeil says.
“We are really changing the way we approach things. And that is something that I’ve tried to bring to the organization. When we do something, look at it from the customer’s perspective; don’t just look at it from this is the standard and you’ve got to apply the standard or this is how we have to operate it because it is the way the railways tell us we have to operate it this way. We really have to look at these things and say, if I was a customer sitting in a seat, does this make sense. If I was a customer getting off the train, is this the best way to get to my car.
“It’s that whole approaching it as a business from the customers’ eyes as opposed to it being a government agency that has rules to follow and things. If we find that we’ve got rules or we’ve got some operating process or any other element that just doesn’t make sense from a customer’s perspective, then we’ve got to change it because we rely upon our customers so much for our business.”
GO recovers an astounding 89 percent of its operating costs from the farebox. With the intent of being completely self-sufficient for operating expenses, McNeil tells his employees that they have to remember who pays their checks.
“I try to tell my staff when you get your paycheck, the majority of that paycheck comes from customers, not from the government,” McNeil says.
And while a lot of transit agencies here in the United States would love to get that sort of recovery rate from the farebox, McNeil says it’s probably too high — a nice problem to have.
“As a public agency you’ve got that social side of the business that you’ve got to deliver as well as operating yourself as a business to be fiscally responsible. What 89 percent tells me is one we have a lot of efficiencies in our system and we do a lot of things very competitively and cost-effectively as best we can,” McNeil says.
“But at the same time it usually means that the trains are too crowded, that we’re probably not putting service out when there is a demand for it, but because we’re not recovering enough money from that service we don’t bother putting it out. So it really means we’re probably not providing all of the functions a public agency would be expected to do.
“Now a lot of that is driven by the fact that the province of Ontario, which is our state here, is not providing us with enough funds to put out more services. So it’s kind of like the cost recovery thing is being driven on us because they are only allowing so much money and because of that we force ourselves to deliver as best we can. But we really would like to provide more services for the customers but we just don’t have that subsidy.”
So what would be an optimal rate?
About 75 percent says McNeil, “There you’re still being fiscally responsible, but you’re probably putting out more off-peak services, services on the weekends that you know you may only be carrying 20 people on a bus as opposed to 50 on a full bus, but at least you are providing a service so people have a way of getting home with transit as opposed to driving their cars.”
For most transit agencies raising rates is a necessary evil done to get some much needed extra capital, but for GO Transit rate changes are just part of the plan — a very successful plan.
“Every year we’ve introduced a nominal fare increase, five cents, 10 cents, every year to keep up with inflation. And the customers while they don’t like it, they accept it,” says McNeil. “I think that most of them know that inflation is eating away at them as well and they’ve got to pay their way.”
McNeil admits that to keep GO’s amazing farebox recovery rate, you don’t provide discounts.
“You try to actually take more money from people,” McNeil says. “And that’s one of the things that we’ve done.
“The cost to park downtown is almost equal to the cost for taking GO Transit, so most people are really taking us for convenience factors.
“They know that when they get on the train that they can fall asleep, which we don’t encourage people to do when they are driving,” McNeil says with a smile.
“They can read their newspaper. Quite often on the train it’s a social gathering because a lot of our customers are repeat customers. They sit in the same seat all of the time. Their friends are sitting there waiting with a cup of coffee for them when they get on the train. So it really becomes an extension of their work or social life.
“I know myself – I take the train as many times as I can – I take it probably four days out of five each week.
“You know 15 minutes of sleep is worth a lot of money. I would pay an awful lot of money for 15 minutes of sleep, and I think a lot of our customers are the same way.
“A lot of people take us for quality of life issues. While we have reliability issues, 80 percent of our people are getting home on time, whereas if you were driving in your car I can almost guarantee everyone would be getting home at a different hour every day. One day would be good, one day be bad, the next day would be worse.”
McNeil says the Toronto area is looking at a large transportation infrastructure problem in the near future with few extensions or expansions built to area freeways in the past two decades, but that problem is one that creeps up on you.
“In a way transportation congestion is like cancer, it slowly eats away at you. And because it takes so long for big, big problems to materialize, governments tend to put off doing anything about it.”
So have these rate increases affected GO ridership? Not according to McNeil.
“We never have a problem getting people to take GO Transit. That’s never been a problem. We’ll put a train out and in two weeks it will be filled to the brim. We have big latent demand — standing room only.
“Most of our trains in the rush hour are standing room only. Our parking lots are jammed. Our trains are jammed. Customers are complaining about reliability issues, but also saying they want more services.”
As with many agencies here in the United States, GO Transit’s trains run on freight lines. The majority of those lines belong to Canadian National (CN) Railway, with the rest belonging to Canadian Pacific (CP) Railway. Using the freight lines for your service often means being at their mercy when push comes to shove, and for GO, whose trains are also operated and dispatched by CN employees, things can get … tense.
“It’s a strained partnership. Like in the States, it’s the same really up here in Canada. The freight railways, we’re not their main business,” McNeil says.
“Even though we provide them with a fairly good revenue stream for railway access fees and crew overhead and things like that, their main business is moving freight. I sometimes jokingly say, but there is probably a certain amount of reality in there, the freight railways wish we would go away because we interfere with their trains.
“So it is a strained relationship. We realize that there are certain things that have a major impact on us.”
McNeil says that while GO doesn’t necessarily interfere with CN’s trains, they do fill most every block during the rush hour period.
Adding to this tension is that as of the time of this interview CN operators were currently on strike. Both CN and the workers’ union, the United Transportation Union (UTU), have pledged to not let the strike effect GO service (and so far it hasn’t); there is always that potential for the trains to stop. And in fact it did happen about a decade ago when GO service was halted for nearly two weeks. To forestall this sense of helplessness, GO has begun a process of taking control of its rail lines and locomotives.
“We’ve gone aggressively to buy any rail corridor that the railways are interested in getting rid of. And we now own about one-third of the tracks we operate on,” McNeil says.
“As the railways start to rationalize their own services and get down to defined corridors, if they’ve got a corridor where they are only running a few freight trains on, then we say to them well we’ll buy it and you can still run your freight train on it, but it allows us to do the maintenance on it to the level we would expect and provides as much service on it as we can.
“And likewise we’re in the process right now of going out with our own third-party crewing contract to get away from the crewing component of CN and CP. And that mainly is because the collective agreements that the railways have with their unions really address a freight environment. They don’t address a commuter environment.
“So their operating areas, their work rules and all of these kind of things really reflect the fact that it’s a long distance freight operation, not the fact that it’s a guy who runs a train at 6 o’clock in the morning, gets off that train at 9 o’clock and comes back at 3 o’clock to run the train again.”
McNeil admits that while the third-party crewing and increased ownership of infrastructure will help prevent being held at the mercy of another company’s union, it won’t prevent it entirely.
“Until we’re completely owners of all the infrastructure we operate over, which I don’t think will ever happen because CN still has to provide an intercontinental train service. Until that happens we’ll always be open for a potential strike. And likewise because we are going out with third-party crewing, that will become a unionized workforce and they could go out on strike as well.
“It doesn’t avoid it, but it means that the issues that are being raised are specific issues related to GO and its services as opposed to an issue in Northern British Columbia, you know there’s a wildcat strike and everyone puts down their tools and walks out kind of thing, which is the potential right now with the railways.
“Again it comes back to you wanting to try to control and manage as much of your existing system as you can because you are masters of your own destiny that is very important.”
As to dealing with CN directly on these matters, McNeil says that they have a captive market — it’s their rail lines and GO has to operate under their timeframe.
“If it was a non-monopolistic contract with the railways, if we could go to the railways and say fix it or else we are going to take our trains somewhere else, then the railways may pay attention to us. But really, they’ve got us. It’s a captive market,” McNeil says.
“They’ll basically fix it, but they’ll fix it within their timeframe and we know that they’re being driven to keep their costs down. Even though we will say to them we will throw whatever money is required to fix the problem, it’s still not being fixed in a permanent way that we really need it.”
And how do you get past that mammoth roadblock to increasing or even bettering your service? McNeil says it will take time.
“Continued meetings, requests for cooperation, try to establish friendships with the people we are working with so there is a bond between us so this is not purely on a business footing. Try to convey to them the importance of this to themselves,” McNeil says.
“When the rail corridor goes down, you’ve got business executives coming into the major financial towers in Canada, so if a train is late constantly and you’ve got a senior vice president on that train, he knows that CN is responsible for it. So when someone comes along and says should I invest in CN — hmmm — he scratches his head and says boy there’s some problems with CN, their train isn’t on time all of the time.
“Our ontime performance is a reflection on the railway. And it’s trying to convey to them that it makes good business sense for them to invest. Especially when it’s a no cost investment because we pay 100 percent, well, probably 150 percent, of our expense to the railways. So they actually make a profit out of us even when it is related to infrastructure repair and improvements.
“It is a strange and strained relationship.”
McNeil says he feels that the railways subliminally don’t feel like commuter rail is going to be here for the long term like they will be. Passenger rail died in the 1950s, so who’s to say that commuter rail won’t die out just the same?
And McNeil’s thoughts on this, “We’re here for the long term. I think we’ll actually survive the freight railways really. You look at the European marketplace, less and less stuff is being moved by freight trains and more and more people are being moved. Especially in an urban environment we’re really going to be the key component of moving people around. The number of people we move that are important to the downtown core of the city of Toronto is just unbelievable.
“We move 180,000 people a day right now and the majority of which are into and out of the downtown core. We’re probably going to break 50 million passenger trips this year and most of it is into this downtown, serving the business community of the downtown of Toronto.”
If you ask Gary McNeil what the No. 1 concern for GO Transit is, he will likely say ontime performance. With performance dropping by nearly 20 percent recently, this is a major concern for the agency and a major complaint of its riders. What makes it all that more difficult is that CN and CP dispatch GO’s trains for them, which leads to a collision of philosophies.
“This is the hard thing for us. It’s kind of like … there has been a bit of a philosophy change I think in the railways. Five years ago or whatever there was a philosophy out there that says a scheduled train takes precedence over an unscheduled train. So if you’ve got a scheduled train move that would have a priority,” McNeil says.
“It seems that the railways are slipping freights in front of us and also slipping VIA trains (Canada’s interregional rail service) in front of us, which then causes us to have like a, in the case of a freight train, 20-minute hit because it takes that long for the freight train to get through the block it’s operating because the block could be 3km long.
“And likewise with the VIA train, although they slip them in front of us, typically the VIA train is operating about 95 mph, so it’s going a lot faster. Our GO trains operate at a maximum speed of 80 right now. So sometimes when they slip in front of us it has less of an impact. But still if that causes us a delay to get out into that window, typically it’s impacting another train that was operating in another window and it ripples right through the system. So our ontime performance has been suffering quite a bit.”
McNeil says the railways state that their profit lies in moving freight, so the freight trains will get priority. And now with profits being ever more critical, GO isn’t getting the priorities they used to. And GO’s customers?
“They hate us,” McNeil flatly states.
“Probably the last six months have been really, really bad for us. We’ve historically maintained an ontime performance level of anywhere from 90 to 95 percent and in January we were down to 77 percent. We seem to be holding at around 82 percent right now, 82 to 85 percent. Without much signs of really significant improvements, and it’s a combination, some of them are our fault because our equipment is getting old, and we’re bringing new locomotives on board, but it takes time to cycle a new locomotive onboard.
“So we’ve got equipment problems. We’re fighting a lot of signal problems from the railways. Their infrastructure is old. It almost seems and I can’t prove it, but it almost seems like they’ve stopped preventative maintenance. It seems like it’s more of a failure maintenance, a mode, in order to cut costs. So the signal maintenance size is probably a lot smaller than it was before.”
McNeil admits that the problem is again a clashing of philosophies and a concept of time — both wildly different when it comes to comparing freight versus commuter rail service.
“When a signal goes out, for example, when you have a signal problem on the Lakeshore Line, it may take about an hour to two hours to fix that signal problem. That doesn’t impact the freight to any extent at all,” McNeil says.
“For them coming in and fixing something in two hours doesn’t have a big impact on them, whereas for us it’s a big impact on our customers. So like I said, our customers are really not too happy with us.”
McNeil admits that while the GO Trains are operated by CN and CP crews, for the riders this makes little difference.
“From the riders’ perspective they are getting on a GO train, the CN crews which operate on our trains wear GO uniforms. So from the riders, they just go, ‘yeah there may be an issue with a CN plant, but you are responsible for the trip, so fix it with CN.’”
While not your typical “regional” service, GO serves the Greater Toronto Area, which all in total gives it a service area of about 8,000 square kilometers (a little more than 3,000 square miles). McNeil says although it is a large geographic area, there is a lot of “empty space” where the density is lower and GO focuses most of its efforts into a few corridors throughout this area.
“Really it’s a radial system,” says McNeil.
“The rail corridors all radiate down into the city. And the bus service really provides service across it. From a rail perspective we only have 38 actual operating trains which make up about 180 train trips a day, so we cycle trains repeatedly.
“We really rely on the railways to dispatch all of the trains for us. We store all of our trains out in storage layover sites at night, so at the end of the line they go into a storage line and are plugged in so the engines stay warm and the alarm systems stay active. So the train is there in the morning when it is ready to come in.
“[For] the bus system, we just really look and say where is there a big enough market for us to serve. And then we flip buses out and serve buses. We break it up on the bus and on the station side into three key zones — East, Central and West.
“And we just manage as best we can the assets that are available out there. So even though it is a large service area, the footprint of GO transit in that area is not great. Most of the people come to GO. Most of people in the 905 area around Toronto own two cars. It’s a very wealthy area, a solid middle-class market. So the majority of the people drive to our stations or to bus park-and-ride lots to get on GO Transit.
“It’s not like we have to go out in little fingers into the communities. We try to establish core corridors, really.”
Recently the Canadian government promised $1 billion to the Toronto area for expansion of its public transit system. McNeil says they could use about twice that.
“The federal government, the provincial government and the municipal governments wanted GO to grow and we had a list of projects about $2 billion long. And the federal government said they only had so much money available, but it was really the first time that the federal government had ever really contributed to GO Transit,” McNeil says.
“They came to the table with about $385 million of that $1 billion and the provincial government is matching their share and the balance is coming from the municipalities.
“This is for new tracks, rail to rail grade separations that we’re building where our commuter rail corridor is crossing a major freight corridor at grade. The freight railways have said you can’t run anymore trains and so therefore for us to run more trains we have to build like a freeway interchange really, which costs a lot of money. Taking trains over or under another track is very, very expensive.
“So a lot of that money is going toward infrastructure, which will allow us to operate more trains and it will also allow us operational flexibility, so when we do get service delays we have ways of getting around problems.”
McNeil says that none of the $1 billion is allotted for the purchase of new vehicles. The agency relies totally on the provincial (state) government to purchase more vehicles, but the new infrastructure will allow them to increase service.
“We will be able to flip trains out into remote locations and bring people in later in the morning and earlier in the afternoons so we can start gradually filling the shoulders of the rush hour,” McNeil says.
“So we will still be using the same equipment but we will be able to be allowed to operate in the rail corridors because we won’t be conflicting with the freight rail trains.”
McNeil says that the agency’s focus was, is and always will be the customer.
“The main thing for us is our customers. Over and over and over again our customers, we have a very, very demanding customer base.
“Their average age is like 25 to 55, disposable income, average family income is probably $80,000 Canadian. We know they can take a car whenever they want to, so for us it’s what do our customers, not so much do they want, what do they need.
“We know what they want and quite often we can’t provide them that. We can’t provide them with dedicated reserve parking spots for nothing and a train every three minutes, which is really what they want. But it is what they need in order to stay with us.
“We’ve done a very good job of doing that to date. Our big issue is reliability for our customers, we know that. And how do we address that and try to get ourselves back on stream with that.”