The federal government is pouring hundreds of millions of dollars into Via Rail to fix up aging trains and move more passengers.

Finance Minister Jim Flaherty said the government is giving $691.9 million to Via Rail over five years to provide faster, cleaner and more reliable service across Canada.

Flaherty made the announcement at Union Station in downtown Toronto along with federal Transport Minister Lawrence Cannon. Via chairman Donald Wright was also there.

The announcement marks the first significant injection of new money to the cash-strapped Crown passenger rail corporation in years.

The money is expected to be earmarked for capital acquisitions, refurbishing locomotives and passenger cars, increased rail capacity and day-to-day operations.

Via Rail receives about $170 million in annual operating subsidies from the government.

The company has been struggling with aging stock and capacity problems since the government of former prime minister Paul Martin reversed a $700 million commitment announced by Jean Chrétien's government in 2003.

But Via has managed to increase ridership to about 4.1 million passengers in 2006 from about 3.8 million.