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Genesee & Wyoming suspends plan to terminate Sault-Sudbury freight service

With government funding talks going well, short-line railroader will maintain service - for now
Huron Central locomotive 2
(File photo)

Six months after threatening to drop rail freight service between Sault Ste. Marie and Sudbury, Genesee & Wyoming Canada (G & WC) said government negotiations to secure funding for track maintenance are going well. Their plan to terminate service is suspended.

Before last Christmas, the Montreal-based short line railroader granted an extension on its self-imposed Dec. 18 deadline to withdraw service in order to get stalemated talks restarted with the federal and provincial governments.

The railway said it needs a $40-million subsidy for maintenance and safety upgrades to the Huron Central Railway, similar to a funding deal reached in 2010.

The 278-kilometre line is a critical piece of transportation infrastructure for industrial customers in northeastern Ontario.

A disruption in rail service would pose a major logistical crisis for some companies and threatened the economic viability of their operations. As well, 43 railway jobs are at stake.

The railway moves steel, forest products and chemicals for Algoma Steel in the Sault, Domtar in Espanola and EACOM in Nairn Centre. CP Rail, the track's owners, leases the line to Genesee & Wyoming. The lease agreement runs through 2040. CP does not contribute any money toward track maintenance.

In a May 26 news release, the company said since the beginning of the year, there have been regular negotiations with the provincial government, "which have progressed constructively and rapidly."

G & WC said they've also received confirmation that short line railways will now be eligible to access funding from the National Trade Corridors Fund, delivered through Transport Canada, a funding program that had been previously denied to them.

“We are pleased to report on the progress we have achieved in discussions with our government partners,” said Rick McLellan, president of Genesee & Wyoming Canada, in a statement.

“I want to thank Minister Rickford, Minister Mulroney, Minister Romano and the Government of Ontario for their diligence and attention to this important railway.”

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GW & C mentioned it would also like to see a greater commitment from customers to increase freight and boost carloads on the line.

The company said it will keep working with both levels of government to secure the funding to sustain its operation, and is counting on customers to keep shipping on the refurbished rail, "which will be an integral part of any final infrastructure investment plan."

“We applaud the Government of Canada for listening to the concerns of stakeholders, in particular the short line rail sector and the natural resources and other industries that depend on Canada’s regional transportation corridors,” added McLellan.

“Renewing the National Trade Corridors Fund with more inclusive program eligibility will be critical for our sector and the communities we support. The large employers served by HCRY across Northern Ontario can be encouraged that this federal funding program will soon be available for project application.

“We want to thank Transport Minister Omar Alghabra and his predecessor, Minister Garneau, for recognizing the importance of the short line rail sector to Canada’s natural resource economies,” McLellan said.

“I also want to thank Sault Ste. Marie Member of Parliament Terry Sheehan for his steadfast support for the Huron Central Railway. He has always appreciated the importance of this railway to the region and his constituents.”