With the Federal Government’s one-year funding extension into the Algoma Central Railway passenger service set to expire March 31, stakeholders sent a follow-up letter to Transport Minister Lisa Raitt earlier this week. In it, the ACR Passenger Service Stakeholders Working Group reiterates the fact that time is of the essence and a response from Transport Canada – along with a meeting with the Minister or her staff – is needed immediately.
In 2014, the Working Group conducted an Expression of Interest and Request for Proposals processes that resulted in identifying a qualified third-party rail company, which signed a letter of intent with CN to operate the Sault-to-Hearst passenger service. The third party’s business plan projects increased revenue and ridership by diversifying the types of tourism products and services offered to passengers and states that the operation will be self-sustaining in five years.
The Working Group sent a funding proposal to Transport Canada on December 19. The proposal requests the Federal Government enter into a five-year, $7-million contribution agreement (maximum) with the third party, similar in design and structure to the annual agreement Transport Canada has had with CN. The current proposal includes a 45% net funding reduction for the agreement period (over the past five years) and, more importantly, sees the public investment fully terminated after five years.
“We have a number of parties at the table working on a solution, including regional stakeholders, CN and the third-party rail company that’s expected to take over the service later this year. The only piece missing from the puzzle is a response from Transport Canada,” said Joe Fratesi, Chair of the Working Group and Chief Administrative Officer for the City of Sault Ste. Marie. “MP Bryan Hayes has been kept fully informed throughout this process, and his positive engagement and efforts to-date are greatly appreciated.”
Without some form of public investment, this remote passenger line will not operate or have the opportunity to transition to self-sustainability. As a result, a number of businesses, communities and residents will be unable to access their properties, homes and cottages via public thoroughfares. In fact, 400 km of the 470-km Algoma rail line is not accessible by public road. Although there are some industrial roads into the rail corridor, they are built and maintained at the discretion of the private sector – mostly logging companies – and cannot be relied upon for dependable, safe or long-term public access.
Based on an economic impact assessment from BDO Canada in 2014, the ACR passenger service generates between $38 and $48 million in annual economic activity, supports up to 220 jobs and generates more than $5 million in tax revenue each year. The discontinuation of Algoma’s passenger train will result in a significant loss of these benefits, along with and an additional one-time impact on the values of properties located on, or in close proximity to, the rail line in an amount between $60 million and $67 million.
“For a relatively limited investment, the Federal Government can keep this critical remote service in operation,” said Tom Dodds, a member of the Working Group and CEO of the Sault Ste. Marie Economic Development Corporation. “With time running out before the March 31 deadline, we need to hear back from Transport Canada in the very near future.”
Meanwhile, municipalities, First Nations, and other stakeholder organizations are now in the process of passing resolutions of support for the continued operation of the ACR passenger service. Similarly, stakeholders are also drafting letters of support to Transport Canada, along with other government agencies and officials.
Formed in February 2014 after Transport Canada announced its intention to cut its annual investment in the ACR passenger service, the Working Group represents a larger committee of concerned regional stakeholders, including the City of Sault Ste. Marie, Sault Ste. Marie Economic Development Corporation, Municipality of Wawa, Town of Hearst, First Nations, Township of Dubreuilville, Tourism Sault Ste. Marie, Algoma Kinniwabi Travel Association, Coalition for Algoma Passenger Trains, and land and cottage owners serviced by the ACR line.
More information on this critical initiative, including reports and updated news items, is available online at www.algomapassengerrail.com.