There have been two high-profile short line rail issues in Canada in the past year with the closing of the Hudson Bay Rail Line in Manitoba due to flood damage and the recently announced plans to cease operations on the Huron Central Railway in Northern Ontario.
RAC says the country’s short lines are an integral part of its transportation system and expressed “profound discontent at the lack of capital funding programs dedicated to helping” those railroads invest in their infrastructure.
RAC points to the recent Canada Transportation Act Review report, which recognized the importance of Canada’s short line rail sector and recommended the creation of a federal-provincial program to support capital short line infrastructure investments through contributions, grants or low-cost, long-term financing.
“Despite similar studies and reports recognizing the lack of public funding for local and regional railways – or short lines – governments have not created programs to help these companies capitalize on growth opportunities and meet evolving rail safety regulatory requirements,” said RAC Acting President Gérald Gauthier. “This type of program might have prevented the discontinuance of Huron Central Railway. Closure of this railway – and potentially other short lines – puts safety at risk, increases congestion on public roads and harms the environment.”
RAC also focused on the fact that despite being eligible for federal programs, short line railroads have not benefited from them. RAC provided the example of the New Building Canada Plan, which provides stable funding during a 10-year timeframe, as well as its predecessor fund. The plan has only awarded short line projects .07% of available public funds to date.
During the pre-federal budget 2018 process, RAC recommended that the Canadian Government should create a capital funding program of C$365 million ($282.9 million) over seven years (effective in 2017 and ending in 2022) that would support shortline infrastructure investment and reduce the costs associated with new rail safety requirements.
“Investments in short line infrastructure would help to maintain vital rail service to remote communities, improve safety and limit transportation-related emissions,” said the association.