Decision looming on railway subsidy, says provincial business minister

SYDNEY — A decision hasn't yet been made whether to extend a provincial government subsidy that preserves Cape Breton's rail line.

Business Minister Geoff MacLellan did say Thursday that a decision will be made by the end of the month. However, that decision could be simply to extend the deadline for making a final determination.

“It's still status quo,” MacLellan said during a conference call with reporters following a cabinet meeting, in response to a question from the Cape Breton Post.

“Technically speaking, we do have until the end of the month for the notice period for the 90 days before we would have to make anything official. However, there are still opportunities should we need it in the new year to agree with Genesee & Wyoming to extend that, if it's necessary.”

There are specific concerns about certain line items in some of the bills that have been submitted under the agreement that the government wasn't comfortable with and remain an issue, MacLellan said. Responses are expected within the next week or so.

“We're not going to do anything in particular until we find out what's happening with those invoices that were submitted that we need clarification on first,” he said.

MacLellan said the conversations also involve what potential additional traffic may be out there for the railway.

“Those conversations obviously are incredibly important to give direction on what's going to happen in the future here to this rail line,” he said, adding they want to ensure all obligations are satisfied under the agreement before any continuance goes ahead.

MacLellan said in September that December would likely be the month when word on the extension of the railway preservation agreement would be forthcoming.

The agreement, which has been in place since 2017, sees shortline railway operator Genesee & Wyoming agree not to abandon the Cape Breton section of the Truro-to-Sydney line as long as it receives subsidies of up to $60,000 monthly for eligible operating expenses.

The agreement is set to expire in March.

All along, the future of the line and the subsidy maintaining it have been closely linked to potential development of the port at Sydney. MacLellan has said any chance of resuming freight traffic on the line will be directly tied to the fortunes of a proposed container terminal in Sydney harbour. He has said the support from the province to keep the rail line idle while the port of Sydney is marketed worldwide can only go on for so long.

The subsidy does not allow for repairs or capital improvements to the line, but the province can pay for expenses directly attributed to the line such as salaries, insurance, security and building maintenance.

The subsidy can be renewed annually by both parties, but it can also be terminated with 30 days' notice by either side.

MacLellan said as the province deliberates whether to extend the subsidy, it will want an understanding of what the prospects are for the next year in terms of potential traffic or commercial viability for the line and harbour development.

He added that neither the government nor the company are looking at the railway preservation agreement as a perpetual deal.