ACR Passenger Train Service on the Horizon? Sault Working Group and EDC Think So

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The Coalition for Algoma Passenger Trains (CAPT) remains doggedly hopeful that a third party operator will be found to run passenger service along the ACR after CN rejected a second round of requests for proposals (RFP) last week. Earlier this week, CAPT issued a press release to clear up confusion created by a recent article published by Northern Ontario Business, inclining folks to believe that restoring passenger rail service was a futile dream.

However, according to Tom Dodds, SSM EDC Executive Director, the working group was supportive of CN’s decision to pass on the most recent RFP’s. “Frankly, with the final outcome of the two proposals that came forward, we had no objection as a working group on the decision not to entertain their proposals. We looked at the proposals and we understood the concerns that CN had,” remarked Dodds.

Al Errington, co-founder of CAPT, runs a wilderness resort 206 miles north of the Sault. The majority of his guests arrive via passenger train. Despite taking a direct loss of about $150,000 thanks to the passenger train service debacle, Errington was chipper when discussing the future of passenger service.

“Now that we’re through the RFP’s we’re able to focus on something that we’ve been working on since 2007. It’s taken this length of time to get to the point where everything can come together.” Errington went on to say that it is hoped that the province will play a role in the proposal plans at some point. In the meantime, other funding agencies have been in discussion with CAPT regarding the development of certain pieces that are part of a multi-tiered plan. CAPT’s press release this week indicates that the initiative is under the direction of Missanabie Cree First Nation’s Chief, Jason Gauthier.

Tom Dodds is quite hopeful that a resolution to re-establish passenger service along the ACR is on the horizon. He explained that the working group has been working towards establishing a not for profit entity that would assume ownership of the ‘train set’- baggage cars, passenger cars, train engines and any real estate, like the Hawk Junction train station. The not for profit would work with an operator who would focus on what they do best- run the train up and down the rail line. According to Dodds, CN is on board with this proposal.

The success of the plan would more than likely rest upon Chief Gauthier and the Missanabie Cree First Nation. “They would be an appropriate owner. They could own the train set and then contract with an operator. Chief Gauthier is a great leader and really understands the issues which allows me the time to focus on what are pretty pressing issues in our community right now.”

Dodds indicated that the community should prepare for an announcement that this plan has been put in motion as early as next week, though was quick to clarify that the working group was still working through important details.

“At this point we’re concentrating specifically on getting the train up and running again and then optimizing the service and supporting development opportunities,” added Errington. “Overall, this proposal is much stronger in regard to tourism development opportunities but tourism development opportunities depend on having an effective passenger railway.”

An Economic Impact Assessment of ACR passenger services showed that between 2005 and 2008, ACR passenger revenues were between $2.5 million and $2.8 million, where $2.2 million of that profit was generated from financial assistance provided by Transport Canada. However, the spin off dollars created by the government subsidy is significant. Overall total economic annual impact in 2013 ranged from $38,136,000 to $48,072,000. According to the study, tourism passengers accounted for 24% of train ridership.

Sault Ste. Marie MP, Terry Sheehan, slid into this mess this fall. Speaking with him this week, Sheehan was reluctant to discuss the possibility of the Feds and the new government taking action should the passenger train never get back on track, saying that he wanted to wait for a report, ordered by the Sault Mayor, of the city’s EDC. The report is expected to detail the EDC’s activities including their role with the working group.

Of the previous government, Sheehan remarked, “They shouldn’t have taken away the subsidy [RPRP] in the first place. It was taken away in an effort to put forward a campaign style budget. And that’s what’s troubling. Then they said they would offer a subsidy for a three year term, and that was only in the eleventh hour. That’s what created the issue in the first place. And then CN said ‘no thanks, we’re not interested in running it’.”

The working group will be in discussions with Transport Canada this week. Dodds was positive about the Feds involvement. “We’ve got a letter from the previous Minister that they would come to this arrangement. The MP for Algoma is fully supportive and the MP for Sault Ste. Marie is fully supportive. I think we finally have the ingredients for success but it’s going to be a lot of work over the next few months to make it happen.”

According to the Ministry of Transport, two rail services are in receipt of the RPRP investment: Keewatin Railway (passenger rail service between The Pas, MB and Pukatawagan, MB), as well as Tshiuetin Railway (passenger rail service between Sept-Îles and Schefferville, QC).

The Government of Canada also supports VIA Rail, a crown corporation, generously subsidized by the Ministry of Transport. This fall, VIA Rail CEO, announced VIA’s $4 billion pitch to the Feds to be applied as an investment towards infrastructure, trains, stations and electrification. VIA runs along CN train tracks and, as in the past with such projects, CN will likely undertake any engineering work required for rail-line improvements.

Dr. Linda Gordon, co-founder of CAPT, disclosed that a portion of the proposal includes actions that would increase passenger ridership through the development of events and possibly new destination activities along the line. Cautiously optimistic, Dr. Gordon added, “I think the main thing is that we have been experiencing more cooperation with CN. I think that’s because it has been twice now that things haven’t worked out according to what they thought.”

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In January 2014, CN announced they were axing passenger service from Sault Ste. Marie to Hearst. The decision came from Transport Canada who made the decision that the ACR no longer met the criteria for the Remote Passenger Rail Program (RPRP). In March 2015, the Feds had a change of heart –it was election time, and promised a $5.3 million temporary subsidy if the working group could secure an operator by April 1st. The subsidy comes with an expiration date of March 2018. Railmark made it through the first round of RFP’s, satisfying criteria set out by CN and Transport Canada. Inevitably the partnership was a disaster, as any sixth-grader with a curiosity and internet access could have predicted.

Allen Brown, Railmark Canada president, has a rough history of running other train outfits off the track. Under Brown’s management: the Michigan Clipper Dinner Train was shut down due to poor ridership and increased costs in fuel and other expenses; Florida Rail Adventures went belly up; and the Columbia Star Dinner Train Inc. shut down in October 2014 after failing to properly maintain trains to resolve mechanical and engine issues, including not winterizing the train’s engine. They city of Columbia, Missouri has Brown on the hook owing over $12,000 in unpaid utilities, rent and track usage.

But CN, who has the final say on all matters regarding passenger service along the ACR, thought Railmark was the best choice. CN spokesperson, Mark Hallman, has made no bones about the fact that CN does not want to be in the passenger train business and that CN’s business is exclusively freight business- a multi-billion dollar industry.

CN’s actions fundamentally begs the question: Is CN an honest bargainer?

Let’s hope so but it is difficult not to recognize that neither the working group, nor the Sault Ste. Marie Economic Development Corporation, nor the folks living and running business along the ACR, nor any municipal politician has any sway with CN whatsoever.

The government is responsible for providing public transportation. They build our highways, provide subsidies for roads and highways and for go-trains in Southern Ontario, but Northern Ontario just doesn’t make it on the radar. The federal and provincial government should have an obligation to subsidize the rail as well. Maybe it’s time for the Feds and the new government to clean up the mess the Conservatives left behind when they removed the RPRP subsidy.

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