The decision, announced late Thursday evening by Transport Minister Jean Lapierre, is effective immediately. The statement says, "No compensation will be paid to Mr. Pelletier as he has already initiated legal proceedings in Quebec Superior Court to recover salary, benefits and damages."

In November, a Federal Court ruling said the federal government was unfair in the way it fired him as Via Rail chair in March 2004 and ordered it to review its decision. On Thursday Ottawa announced the result of that review. Pelletier, it said, would be "terminated."

Pelletier was dismissed originally after he called former Canadian Olympic gold medalist Myriam B?rd a "pitiful" single mother who was trying to attract attention because she'd been dismissed from her job with Via. He later apologized under pressure, but was dismissed nonetheless.

B?rd claimed she was fired after raising questions about excessive billing by one of the companies at the heart of the sponsorship scandal. An arbitrator's report later found B?rd quit voluntarily.

Pelletier fought the dismissal and, in November 2005, a Federal Court judge ruled in his favour, saying Ottawa had not followed proper procedure when it let him go. It was unclear whether that entitled Pelletier to return to his old job, or entitled him to a settlement over the dismissal.

Either way, the government said it wasn't taking him back.

"I don't have confidence in him to chair the board of Via Rail," Lapierre said in November, prompting Pelletier to start legal proceedings.

Pelletier was chief of staff to former prime minister Jean Chr?en. He was appointed chairman of Via Rail in 2001.

Don Pettit, the current acting chairman of the board of directors of VIA Rail, will continue in that position until a permanent replacement for Pelletier is appointed.