William Brehl, president of the Teamster's Canada Rail Conference, Maintenance of Way Employees Division, said the demise of the Huron Central Railway (HCRY) could signal a domino effect for other rail operations that serve the North.
“I'm very worried that the OVR (Ottawa Valley Railway) and the Algoma Central are the next two to go,” said Brehl, whose union represents 4,000 track workers at short lines across Canada, including the troubled North Bay-based OVR.
The Huron Central's announced June 15 it was stopping service between Sudbury and Sault Ste. Marie by Aug. 15, and between Sudbury and Espanola by Oct. 31.
The Montreal-based subsidiary of Genesee & Wyoming cited declining freight volumes and poor track conditions, which are dire need of $33 million in capital upgrades, for the decision. The news has sent management at Essar Steel Algoma and Domtar scrambling for alternatives.
Brehl said with the economy tanking and overall rail traffic down, Class One carriers like Canadian National Railway (CN) and Canadian Pacific Railway (CP) are pulling through-traffic off of short lines. CP recently “repatriated” all of its business off of Ottawa Valley Railway.
When short lines disappear and track is abandoned, customers are left to fend for themselves and are forced to turn to more expensive trucking options.
Briehl said vast volumes of bulk raw material commodities, fuel, food, supplies and people cannot be moved by road. “You have to have these rail lines running. They are a necessity especially for the Northern communities.”
The Huron Central is a 305-kilometre track between the Sault and Sudbury that serves as a feeder freight line for Canadian Pacific Railway which leases the track to the HCRY to serve CP's customers, Essar Steel Algoma and Domtar.
“All short lines are need of renewal,” said Brehl who added the decline in traffic and safety issues could spell the end for more than one of Ontario's 14 short line operators this summer.
If that happens, “you will have a lot of industry start failing, because they just can't get the raw material in and the goods out.”
In the mid-1990s, CN and CP started divesting themselves of railroad lines considered too marginal in freight volume and profits to keep operating. Lines were abandoned, sold or leased out to small entrepreneurial operators to service the customers of the big railroads while feeding freight onto the main high-traffic lines.
Brehl said depending on the lease agreements, it's usually left up to the short line operators to take on the costs of track repairs and capital upgrades.
“Railways are the most economically, ecologically and environmentally friendly means of mass land transport that we have. But they do take over maintenance and the railroads have to pay road tax on the diesel they use and yet they maintain their own infrastructure.”
It's why the teamsters are supporting a funding proposal by the Railway Association of Canada. The Ontario Short Line Railway Infrastructure Partnership would have Ottawa, Queen's Park and short line operators each invest $29 million toward improving provincial railroad infrastructure.
“We're usually at odds with them, unions and the railways, but this proposal is a win-win for everybody,” said Brehl.
A similar arrangement was struck in Quebec with a $75 million fund of public and railway money that's proved successful in bringing short lines up to safety and operating efficiency standards.
“This is not a bail-out, this is an investment,” said Brehl.
Investing in short lines less pollution, less highway congestion, creates jobs and would help re-energize the slumping economy. “Sixty thousand jobs lost in Ontario in May. We've got to start rebuilding.”
On the same day that Huron Central president Mario Brault was in the Sault meeting with customers “to close the loop” on the railroad, Sault MPP David Orazietti was announcing the McGuinty government's roll-out of $1 billion in new highway investment, including $678 million to four-lane highways in Northern Ontario.
It didn't sit well with Al Errington, a Sault Ste. Marie passenger rail advocate.
“Government has to get their head around the fact that rail is infrastructure,” said the co-chair of the Coalition for Algoma Passenger Trains (CAPT) and a remote tourist lodge operator.
“There's a lot of businesses that will go down if these short lines go down,” said Errington. “Roads are great for local travel, but not for moving vast amounts of heavy freight over long distances.”
Errington's group, which has been lobbying for government recognition and investment in local passenger rail, said the Huron Central's demise is proof of the lack of a balanced national transportation strategy and an Ontario government that is fixated on expensive highway projects.
”We need smarter decision making on infrastructure and planning.”
He favours Queen's Park taking over the operation and maintenance of the Sault-to-Sudbury line, similar to the Crown-owned Ontario Northland Railway, to ensure both passenger and competitive freight can run.
Orazietti did not return phone calls by Northern Ontario Business, but issued a release saying he is working with Energy and Infrastructure, and Transportation ministry officials to improve short line rail infrastructure.
He said the province and feds are working to develop a process for a call for proposals to allow not-for-profits and the private sector, include short line operators, to apply for stimulus funding. “If successful, the province looks forward to receiving these submissions.”
Federal NDP politicians between the Sault and Sudbury are putting pressure on provincial Infrastructure Minister George Smitherman to invest in railways to prevent carriers like the Huron Central Railway from pulling out.
