Short-line railways surviving, not thriving: rail expert calls for government investment into regional rail.

• Author: Ross, Ian
• Position: NEWS

The survivability of Canadian short-line railroads is approaching a critical junction, according to an independent rail expert.

The struggles of northeastern Ontario's Huron Central Railway should be a "canary-in-the-coal-mine" warning that government needs to support small railroaders in the same manner that it subsidizes other modes of transportation, said Greg Gormick, an Oshawa-based consultant.

Short-line railroads have long carried the burden of track maintenance costs, but new federal safety regulations could reach a "tipping point" that kills freight service to many regions of Canada.

"If short lines vanish, 20 to 25 per cent of CN and CP's traffic vanishes," Gormick said.

"Since they are the smallest player in the rail system, they suffer the most because our governments don't pay attention to railroading."

For the second time in less than a decade, the Huron Central is appealing for public funding to maintain the 278-kilometre Sault Ste. Marie-to-Sudbury line.

Operating in self-described "survival mode," the Huron Central's parent company, Genesee & Wyoming Canada (G & W), claims the freight revenue generated from the line only covers operating expenses. Millions more are needed for federally mandated upgrades.

It's asking for a five-year funding lifeline of $5 million to $6 million annually from Ottawa and Queen's Park.

The 44-employee Huron Central hauls freight for Essar Steel Algoma in the Sault, Domtar pulp and paper in Espanola, and EACOM sawmill in Nairn Centre. Those companies account for 88 per cent of the line's traffic, amounting to 12,000 carloads annually.

"In five years, there is a lot that can happen," G & W president Louis Gravel told Sault Ste. Marie city councillors on April 24.

Down the road, he said, mining and other business could "improve the volume and the tonnage to make it profitable in the long term."

Short lines are often overlooked and underappreciated for the specialized role they play in Canada's transportation network.

They feed freight to the major railways on branch lines deemed too marginal for Class 1 carriers like CN and CP Rail to operate.

These routes are either sold off or leased to more efficient and customer-focussed small railroads.

But what they inherit is often years of deferred track maintenance that they must finance on their own.

Simply passing those costs onto the shipper can hurt both the rail company's and the customer's competitive position.

Gormick said Ottawa and Queen's Park's...