Thursday, April 19, 2012

CN weighs acquiring Ontario Northern

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CN Wednesday gave indications that it might be interested in purchasing Ontario Northern Railroad operations in whole or part.

Late last month Ontario's provincial government said it planned to terminate fiscal support of Ontario Northland Transportation Commission, which oversees the Ontario Northland Railroad,. The province was contributing C$103 million a year in fiscal support for the railroad, which provides both freight and passenger service to Ontario's sparsely settled northern areas.

CN spokesman Mark Hallman on Wednesday told Canadian media the Class I railroad will be "carefully assessing the opportunity" created by the provincial government's decision to divest itself of the property.

CN previously had entertained a purchase of the railroad, but a deal fell through in 2003.

Brian Kelly, a spokesman for the ONTC unions, said CN is the only likely potential buyer. Canada's other Class I operation, Canadian Pacific, is primarily focused in areas west of Thunder Bay, Ontario, Kelly observed.