Taxpayer deal gives Cape Breton rail line reprieve

The Nova Scotia government has bought a further one-year reprieve for a money-losing section of railway in Cape Breton, paying $720,000 in a deal that will help keep the tracks from being ripped up by the line’s U.S.-based owner.

Business Nova Scotia Minister Geoff MacLellan said Friday the one-year “preservation agreement” would cover expenses on the line formerly operated by the Cape Breton and Central Nova Scotia Railway. MacLellan said parent company Genesee and Wyoming has agreed not to apply to abandon a portion of the rail line between St. Peter’s Junction and Sydney, while the government will cover the railway’s valid expenses at a cost of $60,000 a month.

He said it’s a matter of the company seeing the big picture with efforts underway for a proposed container terminal in the port of Sydney. “They realized there would be some significant work on their part to formally abandon the line,” he said. “And they were hopeful that the potential of the Sydney port would turn into a reality and there would be container traffic moving up and down the Sydney subdivision (line).”

MacLellan said the money would cover employee costs, insurance, security and building maintenance, but won’t be used for repairs or improvements to the rail line, which hasn’t seen freight service since the fall of 2015. The line operated by the railway between St. Peter’s Junction and Truro is not affected by the new agreement.

He said Genesee and Wyoming were looking for a multi-year deal and it’s his hope the current agreement will be extended.

But a spokeswoman said the company would reassess its position when the initial agreement expires and has made no promises that it is interested in moving beyond one year.

MacLellan said the new investment is justified, given what’s at stake with efforts to strengthen the Cape Breton economy. The Canadian Press