SASKATOON – In an announcement described as good news for its shareholders, CN Rail last week announced plans to pare its Canadian rail system by 13 percent.
In its official three-year rationalization plan, the rail company says it will cease operations on 3,421 kilometres of branch line across the country, including 2,361 km in the three prairie provinces.
And the company promised more cuts in the future.
“CN is slightly ahead of schedule for line rationalization and clearly on target to meet its goal of 4,000 miles (6,437 km) of rationalization through 1999,” said president and chief executive officer Paul Tellier.
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The two national railways are already preparing to abandon at the end of this month 17 lines totaling 861 km, as recommended following a 1995 federal government review of high cost branch lines.
CN spokesperson Jim Feeny said the changes announced last week reflect the new realities in the grain transportation industry, including the privatization of CN and the passage of the Canada Transportation Act, which sees rail service as a strictly commercial enterprise.
“We no longer have a crown corporation’s mandate,” he said, adding the railway has no intention of subsidizing unprofitable lines. “And certainly the kind of process we started (last week) could not have taken place without the CTA.”
He acknowledged some of the abandonments will force farmers to haul grain greater distances to elevators, but said farmers shouldn’t direct all their frustration at CN.
“Certainly there’s an impact on grain movement, but it’s based on a number of changes that are all happening at the same time,” he said, including the desire of grain companies to centralize their handling activities at large, high capacity inland terminals.
In its plan, CN proposed three lines be turned over to short-line operators, although no deals have been negotiated.
Conspicuous by its absence from the list was the Herchmer sub-division, which provides service to Churchill. However, two Saskatchewan branch lines which provide grain for the port were slated for abandonment.
Feeny said CN didn’t list Herchmer because it is involved in direct negotiations for the sale of the line, adding the plan was not designed to either starve or boost prospects for Churchill.
CP Rail is expected to release its official three-year rationalization plan by early August. It’s expected to list about 2,735 kms for abandonment, mainly in Eastern Canada.
Rail closures: where, what and how
CN cuts announced last week will affect grain growers from southern Manitoba to the northernmost reaches of Alberta.
- In Manitoba, six lines totaling 706 kilometres are slated for abandonment, on the following subdivisions: Oak Point, Steep Rock, Cowan, Erwood, Sherridon, Winnipegosis. Two lines covering 232 km – the Miami and Hartney subdivisions – are proposed to be turned over to a short-line rail company.
- In Saskatchewan, nine lines totaling 407 km will be abandoned on the following subdivisions: Arborfield, Big River, Lampman, White Bear, Chelan, Cudworth, Tisdale, Imperial, Mantario. The 60-km Avonlea line is proposed for a short line.
- In Alberta, three lines totaling 218 km will be abandoned, on the Smoky, Lac La Biche and Waterways subdivisions. The Manning and Meander Rivers subdivisions, running 376 km from near Peace River to Hay River, NWT, are proposed for a short line.
Lines can be added or dropped from the list at any time.
The timing for these changes was not stated. Under the Canada Transportation Act, CN must publish within 60 days a final list of lines that will be abandoned. Interested buyers then have 60 days to begin negotiations to purchase a line. If no offer is made, federal, provincial and municipal governments are given 30 days to buy the line for salvage value.
