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With plan in place, passenger rail supporters press Ottawa to release subsidy

Supporters of a cancelled passenger rail service are waiting on Ottawa to make good on a commitment to release a federal subsidy to allow a new railroader to take over operations on the Sault Ste. Marie-to-Hearst corridor.
Passenger rail supporters are pressing Ottawa to release a subsidy to restore the Sault Ste. Marie-to-Hearst service.

Supporters of a cancelled passenger rail service are waiting on Ottawa to make good on a commitment to release a federal subsidy to allow a new railroader to take over operations on the Sault Ste. Marie-to-Hearst corridor.

As the wilderness tourism season got underway in June and lodge owners along the 470-kilometre line faced cancelled bookings, Missanabee Cree Chief Jason Gauthier felt “very, very confident” service will be back on the rails this summer.

With a business plan submitted and a handpicked new rail operator ready to mobilize, the First Nation and the Coalition for Algoma Passenger Trains (CAPT) have been campaigning with letters and petitions to convince the federal government to release a $5-million-over-three-years subsidy to reinstate service.

Both groups were anxiously awaiting word from Transport Canada and Transport Minister Marc Garneau on the release of the funds, which had been promised by the previous government in early 2015.

“We have pretty reasonable assurances that the ($5.3 million) is there,” said CAPT co-chair Al Errington, who was expecting service to resume in July or August.

The Sault-based Missanabe Cree has selected Keewatin Railway, a First Nations-owned passenger and freight carrier from northern Manitoba, to run the operation.

The track, historically known as the Algoma Central Railway, had seen passenger service for more than 100 years until it was terminated by CN Rail in July 2015.

A Michigan company, Railmark, had a brief and disastrous fling last summer before being punted by CN after it was unable to secure private financing to run the three-times-a-week operation and didn’t meet Transport Canada’s criteria to receive the subsidy.

With the service in doubt and another operator search underway, the Missanabie Cree took the lead in March to restore service after the Sault Ste. Marie Economic Development Corporation backed out.

Keewatin Railway has signed a memorandum of understanding (MOU) with Missanabie and applied for a federal rail operating certificate to run in Ontario more than a month ago.

Transport Canada has been slow to give its stamp of approval, but neither Gauthier nor Errington believes it poses much of a regulatory hurdle.

Getting the subsidy released and striking an access agreement with CN is deemed more important.

The subsidy, which would be directed to the First Nation and funnelled to Keewatin, would be earmarked for running rights and track maintenance fees.

Keewatin would serve as both as an interim operator – supplying the crews – and help train a locally-sourced workforce with the goal of handing over the service to a new not-for-profit transportation entity, Mask-wa Oo-ta-ba (Cree for Bear Train).

“They’re going to help us transfer over into an operator role,” said Gauthier, estimating it will take a couple of years to make the changeover.

Since all the parties involved have signed a disclosure agreement with CN, Gauthier was unable to comment if CN if approves of the business plan and a new operator, but Errington said based on his interactions with CN officials there appear to be no red flags.

“We’ve had a fairly good relationship at this point,” said Errington, who was accompanying Gauthier to meet CN officials in Toronto on July 8.

“I’m pretty confident we’ll have an access agreement with CN. The only thing holding it up at this point would be the funding agreement with Transport Canada.”

In his conversations with Sault Ste. Marie MP Terry Sheehan, Errington said the subsidy remains available and is included in the federal budget. Both expected positive news to come fairly shortly.

“We’re not stopping,” said Errington, who runs a remote eco-tourism lodge near the line. “In a lot of ways we don’t care how long it takes.”

Gauthier, Errington and Keewatin Rail all helped craft the business plan, which is in the hands of Transport Canada and CN.

According to Errington, their proposed operation contains a more flexible year-round schedule to address the peaks and valleys of passenger volume.

The decades-old problem with the service, he said, was that the succession of rail carriers and Transport Canada “wouldn’t talk to us” to optimize the schedule. Often times in early spring or late fall the coaches would run empty, “which was a waste of tax dollars. We’d be fine with one train a week in those time periods.”

Errington said with all the necessary agreements and approvals in place, Keewatin could be ready to deliver service on short notice. Part of the proposal includes buying the passenger coaches from CN and arranging for locomotives either through purchase or leasing from CN or from another rail supplier.