Rail line subsidy termination surprises CBRM mayor
The mayor of the Cape Breton Regional Municipality says she was caught off guard by the Nova Scotia government’s decision to terminate a deal to keep an inactive Cape Breton rail line in place.
“Nothing official has come through the municipality at this point, but this decision does impact our municipality,” Mayor Amanda Mcdougall-merrill said Thursday.
“For the past seven years, we’ve heard from community advocates insisting the importance of rail not only for future projects but also for existing business ventures that are here in the CBRM. I’m thinking about many of the multiple businesses in the Sydport area saying, ‘It would be a remarkable change in costs if we switched to rail and other alternative modes of transportation.’”
According to a Nova Scotia government spokesperson, the province decided against renewing a rail line preservation agreement, first reached in September 2017, that saw the Cape Breton portion of the Cape Breton and Central Nova Scotia Railway preserved for a period of time, in exchange for the province reimbursing some operational expenses.
‘IF THERE IS A BUSINESS CASE’
The line is owned by American holding company Genesee & Wyoming (G&W).
“CN and Genesee & Wyoming are ultimately the ones who need to determine if there is a business case to maintain the Point Tupper to Sydney portion of the line going forward,” spokesperson Marla Macinnis said via email on Thursday.
Mcdougall-merrill said she wants to get more information on the reason for the decision. With CBRM’S population, the mayor said that the addition of rail would provide plenty of opportunities for further economic growth.
“I’m hoping it signals something positive, rather than negative,” she said. “My hope is that the province has already engaged in conversations … is there a plan to develop things with the new owner? Could this be based on different economic opportunities?”
The Post reached out to CN for an update, but a spokesperson for the national railway company declined to comment.
‘AUTHORIZED DIRECT OPERATING SUBSIDIES’
For several years, the province was spending anywhere between $30,000 and $60,000 per month — on a rail line that hasn’t been in operation since 2015 and, for that matter, has hardly been touched in terms of maintenance and repairs.
As Macinnis explained via email, “the province did authorize direct operating subsidies from 2003 to 2014 totalling $15.5 million. As part of the 2017 rail line preservation agreement, “a total of $2,851,148 has been paid through (to) March 2024. This would bring the total of all operating subsidies and preservation agreements paid since 2003 to $18.3 million.”
“The termination of the subsidy doesn’t surprise me in the least," said Mary C. Senecal-macpherson, chair and secretary of the Scotia Rail Development Society. “It seems the province has a fiduciary responsibility to their shareholders.
“I know they are still keenly interested in the line. But they have to know if there is a business case in order to move forward.”
Senecal-macpherson believes there is a business case, and perhaps the decision to end the subsidy might be somewhat short-sighted on the government’s part.
“They’re certainly not looking ahead for the economy of Cape Breton, if they’re letting that go,” she said. “But I think what they’re trying to do is get CN to make a move and … want them to act and decide if there’s a business case.”
Senecal-macpherson further noted that as part of the rail preservation agreement, the line was supposed to be better maintained.
But glances at different sections of the rail line — whether in Orangedale, Georges River, North Sydney and Sydney — the rails have either been overgrown or rotting away in disrepair.
MINISTER’S EXPLANATION
At Province House, Sydney-membertou MLA Derek Mombourquette called for Economic Development Minister Susan Corkum-greek to explain the reason for ending the subsidy.
“A lot of Cape Bretoners are asking questions (on this),” he said during Thursday’s sitting of the House of Assembly. “I’ve spent the morning talking to local government representatives and advocates within the community who had no idea the government was making the decision to end the subsidy, which protected key infrastructure, and the future potential of rail in Cape Breton.”
In response, Corkum-greek said the decision to terminate the subsidy largely came out of discussions with “CN, businesspeople from the island and proponents of Novaporte … and a decision was made not to renew this agreement.
“We know that there are people in Cape Breton who are disappointed at this news. And I respect that the government of the day entered into the rail preservation agreement to retain the opportunity of a return of rail service onto the island with the purchase of the acquisition of a stake by CN.”
That didn’t seem to satisfy Mombourquette, who accused the PCS of abandoning rail service on the island and again requested Corkumgreek to explain the reasoning.
‘A COW PATH’
Corkum-greek replied that the infrastructure currently in place was, in her estimation, “a cow path. It’s a corridor and taxpayers have been paying $360,000 a year for the last number of years but $18 million since 2003 first to subsidize a railway line when it was operating and since that time, to preserve this opportunity.”
The minister, however, said ending the subsidy did not mean that rail service will never return to Cape Breton, “but it is going to take a business plan identified by the private sector to do so,” she said.
Premier Tim Houston called the issue “a difficult situation.”
“It’s a sad, sad situation in many ways for the province,” he told reporters afterward. “I’m not aware if they came to the province or not. That’s not to say they didn’t but I’m not personally aware.”