Canadian Railways Unload Subdivisions

The Canada Transportation Act, passed in the summer of 1996, permits railways to sell or discontinue service on their subdivisions. They are getting on with it

One big complaint the railways had before the reform was that they weren't allowed to close lines that weren't earning their keep. So the politicians listened to both the railways and to concerned citizens: the railways may now discontinue service, but only after offering the lines in question to shortline operators, and if a deal can't be reached, the line may be offered to different levels of government.

If there still are no takers, service may be discontinued. In the past two months, the Canadian Pacific Railway has announced that service on four prarie subdivisions, totalling 114 km, will be discontinued. The process of offering the lines for sale started in April, and thus took a half year to complete.

Canadian National has had a better string of deals; 485 kms of line in Québec and New Brunswick will be sold to the Quebec Railway Corporation, an established shortline operator. And a further 1100 km in northern Manitoba are now owned by OmniTRAX, an American operator. Nationalists questioned putting the Manitoba line, which includes a "strategic" port, in the hands of foreigners. However, the federal and provincial governments like the benefit of keeping the line going, and are putting C$34 million in the hands of OmniTRAX, and in exchange, OmniTRAX will invest C$50 million in the line.