Category: CB Rail

Commentary by Donald R. MacLeod

The owners of the Truro to Sydney rail line (Genesee and Wyoming) have been given permission by the Nova Scotia UARB to discontinue service on that section of the line between Point Tupper and Sydney later this year. The owners claim that there is not sufficient traffic volume over that subdivision to justify continued train operations, even with a Nova Scotia government subsidy to make it at least break even. The line between Point Tupper, with its heavy industry, and Truro operates in the black, and overall the whole between Truro and Sydney is profitable. Why would the owners want to abandon this section with prospects of potential future traffic good, infrastructure funds available for upgrades, and the Province’s offer to continue the subsidy?

The answer could be that by closing the line and liquidating the assets including the rails, other infrastructure and long stretches of property fronting on the Bras d’Or lake would bring immediate and handsome return for Genesee and Wyoming – much more than continuing operating the trains at break-even.

The Nova Scotia Railways Act was passed back in the 1990’s when several secondary lines in the Province were sold by the major railroads to short line operators, bringing them under provincial jurisdiction. Back in the 1990’s there was little thought given that when railroads close, rails removed, the buildings torn down and the yards vacated there is left what could be described as an environmental quagmire. The only sections in the act that dealt with abandonment of a rail line was that the Province would have the right of first refusal to the assets – which when looking back appears to have been an oversight.

The Province recently had to remove several bridges on an abandoned rail line in the Annapolis Valley at very high cost, and now potentially faces the same situation in Cape Breton where the environmental clean-up could reach many million of dollars. The Province is now in the process of amending the act and regulations so that the owner will be responsible to leave the property in a fit condition as part of the abandonment process. This is a good move for two reasons.

First: faced with the high clean-up costs on leaving, the railroad owners should be more financially accommodating in arranging a takeover by the province or another potential operator. As one person said to me recently, it is possible that the price could be as low as a token dollar as the owners abandon Cape Breton.

Second: If the Province takes over the line across Cape Breton as salvage, at least the proceeds of the salvage (rails, property) would offset the clean up cost which could balance out at a small gain or loss. If the line cannot be saved, the government would have control of end land use for purposes of hiking trails, commercial use or recreational parks, and it would be cleaned up properly.

All considered, the legislative action is the right move for the Province to take at this time, and I believe the amendments to the Railways Act will ultimately save the line across Cape Breton Island.  The Orangedale whistle may indeed once again be heard.

A ruling has been issued by Nova Scotia’s Utilities and Review Board (UARB) on the application by the Cape Breton and Central Nova Scotia Railway (CBCNS) to discontinue service between St. Peter’s Junction near Point Tupper and Sydney.  But there’s a great deal of uncertainty as to what it means.  Meanwhile, a group of users, several business organizations, the provincial government, and the Cape Breton Regional Municipality are not prepared to pronounce the rail line dead at this point.

The railway’s owners – US-based Genesee and Wyoming Inc. – have made it clear that they are finished.  Company representatives bluntly told the UARB hearing on December 8 and 9 that no trains would operate after December 31, 1014, under any circumstances, and the line has now effectively been shut down. But the board’s ruling on January 15 set a different date for the end of service – October 1, 2015.  Until then, the UARB says, “CBCNS must deliver goods by rail if that service is required by a shipper and the shipper is prepared to pay a reasonable rate for that service…”

Under the legislation governing provincial shortlines, the UARB cannot order a company to continue an uneconomic operation, but does have the authority to set the timeframe for discontinuance of service.  Furthermore, under amendments to the Railways Act that received speedy passage with all-party support in the Legislative Assembly last fall, the actual physical abandonment of a line now falls under the jurisdiction of the transportation minister – not the UARB.   In order to remove the tracks, CBCNS will have to negotiate with the Honourable Geoff MacLellan – a Cape Bretoner who is on record as supporting the retention of rail service.  And, the minister would appear to have a lot of public support on the island. Continue reading “Discontinuance approved for Cape Breton rail line …but is it really the end?” →

– by Tim Hayman

(Editor’s Note: Don MacLeod, Ashley Morton and Tim Hayman represented TAA at the Sydney UARB hearing in December.  Ashley Morton delivered the opening statement, but was unable to be present for closing arguments due to other commitments.)

The hearing got off to an interesting start, with the legal counsel for the CBNS (Michel Huart) raising concerns about potential bias on the part of the Chairman of the Board (Peter Gurnham), as Mr. Gurnham had been legal counsel for NSPI during the previous abandonment hearing in 2002. After a short period of deliberation, the board decided that there is no bias issue, as Mr. Gurnham had taken an appropriate period of abstention (three years) following his original appointment to the board.

CBRM was first to present, and made their case that the hearing should be adjourned until CN is at the table. They argued that the proposed discontinuance plan is not adequate if CN is not involved, due to “the letter” (I’ll just call it that, as we all know what that means). The Chair questioned whether CN’s obligation would only kick in if the CBNS discontinuance actually goes through, rather than at an earlier stage. CBNS responded simply: “we’re not CN, and we’re not the province”.

The board determines that the meeting will continue, as the Chair notes that UARB has no jurisdiction over either the province or CN, but suggests that it will be acceptable for participants to refer to that issue throughout their arguments.

CBNS began the formal process, by calling two witnesses for examination by Mr. Huart – these are Josée Danis, AVP of Corporate and Industrial Development for Genesee and Wyoming Canada, and Gareth Martin, in charge of sales and marketing for the CBNS. It is noted that Ms. Danis was assigned specifically to oversee the discontinuance and abandonment of the Sydney Sub. She has past experience (10 years) at CN, and seems very well versed in this kind of setting.

Continue reading “The UARB hearing – an eyewitness account” →