UPDATE: (SK) SHORT LINE RAIL SYSTEM

UPDATE: (SK) SHORT LINE RAIL SYSTEM

Postby Oscar » Mon Jul 30, 2007 8:41 am

SHORT LINE RAIL SYMPOSIUM - University of Saskatchewan, SASKATOON, 12TH MAY, 2007 - PANELISTS PRESENTATIONS

Rod Haugerud Mayor of Craik:

I want to talk from the point of Craik and what it means to us to have a rail-line in as far as Craik’s sustainable living project.

Environmental issues that we see arising from removing the rail-lines and onto the roadways. I would never have thought, as the Mayor of Craik, I would have to stand here and say we need a rail-line in Craik. I assumed the main line from Regina to Saskatoon would be safe for a number of years. And that just tells you what happens when you assume things.

We have been fighting so hard in rural Saskatchewan, we have been fighting so hard in Craik to maintain not only what we have but to grow. And this rail-line is a key factor in whether we can succeed or not; the rail-line allows us to bring in companies as far as the hemp production slated for Craik this year. One of the first questions they asked me was can they get some land near the rail-line? And whether or not they can ship or receive by rail.

The number of companies that have approached us since that time who too want to be located not only near the production plant where their going to make the hemp fiber, but near the rail line. And as I travel in my area and watch the number of large trucks, traveling my highway that I am helping to pay for, it makes me very angry to see the rail-line rusting away next to it.

I’m going to leave this partially or fully, maybe, at the feet of both the Provincial and Federal Governments that are allowing this to happen, by allowing larger trucks to license; they eliminated our small elevators. And when our small elevators were eliminated every farmer went out and bought larger trucks and they didn’t haul to the next elevator as wheat producers’ thought they would. But hauled to the third or fourth town, which put a huge amount of pressure on the structure of the roadways.

In our case between Regina and Findlater, there are approximately seventy semi-loads of gravel a day that get hauled out of Findlater and go to Regina on our highway. Now somebody with more information could probably correct me but my understanding is that you could pull seventy semi-loads with one locomotive and make one trip per day down that rail-line. Through the front side of our towns we have six, I believe, STC buses a day, two in the morning that goes either way, two in the afternoon and two in the evening and our rail-line is rusting away. We have numerous trucks pulling grain out of our area; our elevator companies don’t even need even need an elevator anymore. They run around buy the grain, ship it to Moose Jaw , to Davidson or wherever across our roads. And I don’t blame them because the infrastructure in getting rail cars to Craik is gone. What is the alternative that they have?

So that is why when George and Martin approached us about a short line rail-line and the fact that there are a number of successful ones in the province and that if we don’t do it for ourselves. There is no chance anybody is going to step up and do it for us. And so as a municipality the last thing we want to do is to own a rail-line or to be even part owners in a rail-line, you would think that there is enough economic benefits to that, that somebody would step forward and do that.

The town of Craik has taken the approach at two different SUMA conventions to bring resolutions to the floor that were passed calling on the Provincial Government to send more freight by rail and to help promote freight by rail, all of them were passed. What happened we came back the next year and passed another because nothing happened. So if I sound bitter, I may be, but I don’t think we have passed the point yet especially in our area of no return, we still have a rail-line its rusting away but its still good and we have a chance now, maybe, to save it as a short line.

But I have some questions, I’ve been the mayor of Craik now it will be ten years in October, during my first term we got a letter from CN rail talking about the main line that was going to run between Edmonton, Northern Alberta, Northern Saskatchewan, going to the Soo Line down to the United States, expect seven to eight trains a day coming through Craik. So you better be ready for all this traffic that’s going to be coming down this line, less than ten years ago, to abandonment?

If that was feasible ten years ago why is it not feasible today? People are talking about the container port in Regina, are they going to eliminate Saskatoon? Are they going to eliminate the whole northern part of our province? By not having a rail-line connecting Saskatoon to Regina unless you go out through Watrous or out through North Valley? I think what is happening is that people are not sitting down and planning. Planning for the future of our children, planning for our future that’s going to connect us with the world. I’m sorry but we live on the busiest highway in Saskatchewan, there are some would say No. 1 but No. 11 is as busy or busier and there is no way we can keep it up, so I really feel for people who are living off those main highways as they watch their roads crumble. I’ve spent the last two months teaching in Southey and having to drive around in that area, everybody drives on the grid-roads because the highways are beat up, why? Because there are no elevators and everyone is hauling their grain by truck over the roads. We have some other opportunities in our area through eco-tourism, that calls for rail tourism that could happen in our province and maybe with our new President of Sask. Tourism some of this could come about, but if the rail-line is gone how can you do any of these things? That is the point Martin spoke of and that I will speak of, once it’s gone it ain’t ever coming back. You can’t get it back; we can’t afford to put it back down. Every developing country puts in a rail line, because it is the best way to haul freight, what the hell are we doing going the other way?

Peter Prebble-Sask. NDP MLA:

I’m going to touch on this in the context of the climate crisis that I see facing our planet, which I think will drive a lot of things over the next forty years, including what we do with rail.

I am hoping it will lead to a significant revival of rail.

But let’s just begin for a moment by reflecting on the nature of this crisis; the United Nations has just delivered, through the intergovernmental panel on climate change, three major reports to the international community on the consequences of climate change and today it is important to bear in mind the nature of this United Nations intergovernmental panel on climate change; this is a consensus process. Hundreds of scientists are involved from around the world and more than a hundred governments have to sign off on this report before it is made public. So by its very nature its cautious and this report is predicting that global temperatures are going to rise between one half and five degrees centigrade over the next century from a current average temperature of about fifteen degrees centigrade, up at least a degree and a half and possibly as much as five and by the way at least 20% of scientists on the team believe it will go past five degrees centigrade. And this international body is also saying to the world community that if average surface temperature on the earth raises between 1.5 and 2.5 centigrade, 20 to 30 % of all plant and animal species in the world are at risk of extinction. It is also forecasting over the course of the next century sea levels will raise between one third and nine tenths of a meter. There are at least a hundred million people in the world who live at less than a meter above sea-level, which will require major relocation of cities, coastal areas will be flooded, the panel is also forecasting widespread melting of glaciers across the world. Many of the communities that rely on the water supplies from those glaciers, and this particularly applies to China and India will be placed at very significant risk as a result of that glacier melt disappearing. So these are some of the consequences of climate change, the United Nations panel is also forecasting, approved by the UN, that extreme weather events will become much more wide-spread. Already flooding has increased in the world five fold over the last five decades, the UN is forecasting a big increase in the intensity of hurricanes, the intensity of tornadoes, the insurance industry is very, very worried about this. The UN is forecasting that drought areas, areas that have already experienced drought will experience much more severe drought and areas that have experienced flooding will have much more severe flooding, so those are some of the consequences of climate change. And climate change of course is being driven, at least 80% of it is being driven by our ever escalating increased use of fossil fuels and the other 20% of it is largely being driven through the release of methane and nitrous-oxide into the atmosphere and much of that is tied to energy use but a lot of it is tied to our agriculture practices and tied to more wide spread intensive live-stock operations around the globe, more liquid manure admitting methane into the atmosphere and the like. But the bulk of this, the vast bulk of this is related to fossil fuel use and the scientific community is saying to the world very clearly and the world doesn’t seem to be listening. The scientific community is saying and the UN is saying emissions must be reduced by 80% over the next forty years, greenhouse gas emissions have got to come down at least 80%. It is in that context that this whole debate around the use of rail should be viewed.
Obviously rail is a very energy efficient means of moving people, and particularly of moving freight and therefore preserving our rail lines and looking for opportunities to expand the use of rail in our province is simply sensible public policy.

Now in terms of our emissions in Canada, 26% are greenhouse gas emissions that are a result of the transport sector. If you look at that transport sector closely the vast majority of these emissions are related to road transport, approximately 74% of emissions are related to road transport and that’s within the transportation sector itself. So the transportation sector in Canada is about a quarter of our greenhouse gas emissions and then 74% of the transport sector emissions are coming from road transport; in contrast 3% of the greenhouse gas emissions are related to rail. And that’s despite the fact that rail on the freight side, if you look at it from the point of view of tons shipped per kilometer, rail is transporting 65% of the freight on a tonnage basis and it is only producing 3% of the emissions. So that tells you something of the energy efficiency of rail. We all need to take heed of that, as I know all of you in this room share obviously the concern that I’m raising. With this question of freight, what’s been happening nationally and what’s been happening in our own province, as Rod has very articulately said, more and more freight is being moved by road. And what’s been the result of that over the last thirteen years, well the result has been that greenhouse gas emissions that are related to world transport of freight are up 60%. If Canada wants to meet its Kyoto obligations, even by 2020, it simply can’t allow that kind of circumstance to happen.

Remember Canada’s international legal obligations are to reduce greenhouse gas emissions 6% below 1990 levels. Canada now faces the situation where its emissions are 27% above 1990 levels, in Saskatchewan our emissions are 62% above 1990 levels. Obviously one of the very sensible things to do if you want reduce emissions is to reduce the amount of freight that is being handled by road, and to move it back to rail and we need to look for opportunities to do that. I’m speaking personally as the MLA for Saskatoon Greystone and on the behalf of the province of Saskatchewan, but it’s my view that this should be a major provincial priority. It’s my view that as part of that it makes sense to preserve the rail-line that we are particularly focused on today, which is the line between Davidson and Regina. There are all kinds of opportunities, and Rod has identified some of them for utilising that line very well. There is obviously the opportunity to ultimately look at re-establishing passenger rail service on the line. There’s been the opportunity of using that line for a lot of freight that now moves back and forth on that line between Regina and Saskatoon. I guess my message this morning is that I don’t think the international community and Canada and Saskatchewan will ultimately have a lot of choice about these matters. We simply have got to reduce our global greenhouse gas emissions and now there are not a lot of alternatives and therefore we have got to be very practical about this.

I think the provincial government has done a lot of good things over the past decade to foster the use of short-line rail, in fact approximately nine-tenths of all the branch lines that have been put up for abandonment since 1996 have not been abandoned, they’ve gone into short-line rail. That’s the result of entrepreneurial efforts of people along those branch lines who’ve seen business opportunities and have acted and invested for the betterment of the local communities and for the betterment of their businesses to take what was going to be an abandoned rail line and make it a short-line rail instead. They have been supported in doing that by a good little unit in the provincial government of which Ed is going to speak later and is part of, that’s been doing great work with local communities in terms of facilitating, if communities want to do feasibility studies or if local businesses want to do feasibility studies on preserving a rail line and converting it to short-line rail. Eighty percent of the cost of those feasibility studies are covered by the province, up to $25,000. If more money is needed by the business or the community to get basically the capital that’s required to make these investments again we’re prepared to loan about a third of the money at low interest rates. So Ed’s unit does this work and works with local governments and local businesses to facilitate this. So over the last 14 years the work that has been done at the local level has meant that nine hundred miles of rail-line that would have been abandoned has gone into short-line rail. And that’s very good, and we need to keep the process going with a lot of the line that’s up for abandonment now. But it will still be very nice if the Federal Government simply said to the railways “You can’t abandon this rail-line. Period, full stop.” Let me just conclude with a few suggestions about policies that I think we should consider. First obviously the Regina to Saskatoon rail-line should be preserved, and as I’ve said there are lots of opportunities to do that well. These opportunities need to be clearly identified but I think this is one line where there is a sensible role for the province to get involved with local governments in making an investment. I’ll be pleased to make that case to the provincial government. Generally speaking we don’t become involved in direct investment on these lines. So far it has been local governments and local businesses that have carried the ball but this is a strategic line between the two major centres in the province. I think it makes sense for the provincial government to be involved. Secondly there is a very, very strong case to be made for provincial and federal investment in short-line rail, to in, effect recapitalize it and to insure that it is able to handle the heavier freight cars that ultimately it will be called on to handle. So we need to invest in the provincial short lines, so Ed advised me. Ed’s advice is we need a hundred million dollars, of recapitalisation to keep our existing short-line rail in place and functioning well over the next several decades. I think two of the other big issues that have to be considered are the re-establishment of something equivalent to the Crow Rate which would very much help those branch lines stay in business. With opportunities to haul even more freight than traditionally they had, we are looking at big expansions for instance in the mining industry in the province.

There will be a need for rail service to those new and expanded mines; and that’s just one example of the business opportunities that exist.

I think at the federal level there has to be some account taken when prices are set, of the environmental costs that are associated with greenhouse gas emissions and climate change. That means that some value has to be attached to carbon and the other greenhouse gases, without that being done and this is just my personal view, without that being done, it is very, very difficult for rail to win out over road because road is not paying the real price that is associated with its operations, that is the reality. There is no value attached to greenhouse gas emissions and none of the cost that we will have to ultimately pay to get rid of these emissions are being built into business decisions today, and it is time to change that. The moment you change that, rail becomes way, way more attractive than it is right now. Finally in the road networks in the province, and road generally, road transportation generally is able to write off its business assets pretty quickly. You can change the depreciation period for the federal capital cost allowance. You can depreciate trucks in three to four years to achieve the federal capital cost allowance but there’s absolutely no way you can do that with rail.

It’s time to put those two on a fairer scale in terms of greater capital cost allowance. If you depreciating a rail-car you are doing that over twenty years, you can write off forty percent on a truck in the first year of operation. That’s very, very advantageous to the business that’s investing in road transport.

It’s time to look for things that are going to make rail investment more attractive from a tax point of view. The capital cost allowance is just one example.

Don Mitchell-Federal Candidate, Palliser Riding:

I am here to learn. I have some experience with these issues from the perspective of Transport 2000 Canada and municipally. It’s pretty clear that we have to reach public opinion on some of these major concerns. Political engagement is difficult considering the life style that people live and this issue hasn’t been presented in a way that people feel is vital. But when we look at the political reality from the community level, whether we are talking about freight or passenger service, and whether we look at the global level of climate change, there is a lot at stake and a lot of potential interest if we can engage people and the political will to push it forward.

The fact is that in terms of public policy for public transportation, compared among the OECD countries, Canada ranks near last, even further down than that of the US and this has happened only recently, because historically transportation has been very central to the development of this country. Because we had extensive support for the major rail systems. So we have had an abandonment of public policy, and an abandonment by the major institutions of the structures that we need to develop an alternative. And given what Peter has said, we have this incredible time warp where the issues that are supposed to be on the public agenda, including green house gas emissions, are not connected up to the infrastructure and to public policy in initiatives that are needed to achieve the reduction of green house gas emissions. Sixty-five percent of the freight is moved by rail, contributing three percent of the emissions. There has been a shift towards trucking in recent years. Trucking requires six times more energy per unit volume than rail. The shift to rail freight would reduce diesel fuel green house gas emissions, road repair costs, and common air pollution such as particulates and smog forming pollution which are not so much a problem here but certainly need to be in national policy for clean air. That kind of shift could be encouraged through public policies using price and taxation changes to include, in the cost of moving by truck, the external costs to public health, highway damage and climate change and the whole question of carbon taxes on the trucking industry. This of course relates to climate change which the public is very concerned about, and so could be engaged on this issue.

The second issue is fueling the transportation system –fossil fuel peaks and the fact that we are running out of conventional oil supplies. If you project forward, with the current volumes in Sask and the export commitments that we are locked into through NAFTA, and not counting further discoveries that are occurring at a lesser rate, we have only a seven year supply of conventional oil. World wide, thirty-three of the forty-eight oil producing regions have peaked already and are facing lesser supplies. So the crunch between supply and demand is there and is reflected in the market, with oil and gas prices spiking. So we are going to have to be looking at other sources of fuel for our transportation system. That relates to other points of discussion such as the potential of bio-diesel from natural sources.

That raises the issue of whether we are going to convert food crops into fuel, which seems to be a US policy which we are tracked on and raises serious questions about our agricultural system and its sustainability. But there are certainly natural sources for bio-diesel which could be engaged in along with electric and solar energy.

The third general point is the food and agricultural system. We are looking at the industrial food model as the pillar of globalisation and international trade that engages transportation in a way that is not sustainable, with current fuel prices, let alone ten years from now. So as fossil fuel begins to run out, we can’t fly in our salads from the Caribbean twelve months of the year. It’s a policy that already is approaching non sustainability, but as we project forward, we can’t continue with that system.

Globally there is going to be a shift towards more local and regional sustainable food markets and processing systems, much like we grew up with in our communities after settlements in the 20s, 30s, 40s, 60s when we had food processing systems that were feeding local/regional markets.

That raises the question of the different transportation links that we have now and the possibility of linking communities such as between Regina and Saskatoon, both for the local agricultural produce marketing, like the shifting of cream and eggs that used to be part of the rail transportation system, as well as for passenger service.

Fourth, talking about rail passenger service and a rail passenger link between Regina and Saskatoon we first need to look at having passenger rail service into Regina, Moose Jaw, Medicine Hat, Calgary which was abandoned by the Mulroney government in 1990.
Those of us who were involved municipally at that time tried to organize resistance. The Federal opposition, at that time, under Lloyd Axworthy held hearings across the Prairie Region to challenge the policy direction that was being taken. All that fell on deaf ears, so we now have Federal policy around rail transportation that eliminates one whole sub-region of the country, the Southern Prairies, from Winnipeg to Calgary, from what is a national policy institution, namely VIA Rail and continues to ignore that, in spite of the pressures for reduction of fuel emissions. Why in a comprehensive plan for clean energy and reduction of gas emissions, you would not look at rail passenger service to replace not only the single automobiles that link intercity transport from Winnipeg to Calgary, but also the jet fuels which are a major source of greenhouse emissions. Again the real cost is not there in terms of airport infrastucture that system represents. So the direction of public policy, provincially and federally requires tax incentive and investment policy. I think in 1998 there was a joint federal/provincial commitment with a cap of four million to capitalize short-line railways. The precedent is there for direct recapitalization from fed/prov governments. This should be raised as public policy now. If we are going to have regulation, and restoration of having something like the Crow Rate to develop and protect our rail infrastructure, we are going to run directly into the challenge of free market strategies of trade agreements that shift the balance of rights to corporations, against local governments or provincial governments taking any initiatives to regulate economic forces. I am referring here to the TILMA agreement, between B.C. and Alberta which Sask. is now discussing. If that agreement comes into place, the capacity of municipalities, provincial governments, health regions or school boards to provide initiatives to develop local and regional economies is going to be seriously under challenge by international corporations. We need to think about the trade restrictions that are being brought in and are supported by the current federal government and by the opposition party provincially. The current provincial government hasn’t fully landed on this but will hold hearings in June. So TILMA is something we have to be looking at if we want a publicly regulated and supported transportation system. Thank you.

David Orchard-Political Activist, Campaign For Canada Protagonist:

As a fourth generation farmer I have a long interest in rail issues. I ripped up my Crow’s Nest Pass cheque publicly because I believed that it was not for sale. I wrote a book with a chapter: The Great Canadian Train Robbery. The fourth point in my document in my bid for the leadership of the Progressive Conservative Party, was to put greater emphasis in public policy on rail and greater use of rail across the country. That deal didn’t survive too long!

The history of CN Rail:- the Borden Government in 1917 acted against massive opposition from the financial and banking interests, to nationalize five major railways with thirty thousand kilometres of track, into Canadian National. Before this CP was the great link that held our country together, that enabled Canada to survive, that enabled British Columbia to become part of Canada rather than a part of the United States. There were many small railways popping up and they were not making a go of it until the Borden Government acted. And the first president, Henry Thornton said, “Our goal is to make our Railway, the people’s railway, a real service to the people of Canada.”

And that is what CN set out to do. It ran one of the best passenger services in the world. It an medical cars, dental cars, and it ran schools on wheels which took educational programs and teachers out across the country. CN pioneered the first radio network in North America, which became the CBC. Later it founded the air-line which became TransCanada Airways and then Air Canada. CN was a world leader, the only truly transcontinental Railway. It had the best grades out through the Rocky Mountains and excellent ports on the West and East coasts. But then in 1995, CN was sold and the CN Commericalization Act was passed and put on the New York stock exchange for a fraction of its value. CN shares were put on the market at a price that in my view was absolutely criminal. In three years the price of CN shares quadrupled, 65 % of stock was sold in the United States, so the investors quadrupled their value on the backs of those Canadians who had built it from George Etienne Cartier down through the decades.

Under the CN Commericalization Act CN found it easier to abandon rail lines. As many in this room know, many were abandoned throughout the Sixties and Seventies, but this act made it easier to do so. Then CN sold their line to Churchill and a couple of lines in Saskatchewan putting even more of our infrastructure in foreign hands. I wanted to make the point of what CN was and what rail transportation can be. Now we are told constantly that we can’t afford this any more. We could afford it when we were a much poorer country than we are today, it’s a question of priorities.

The focus today is on the abandonment of the Davidson to Regina line. This is the line between Saskatchewan’s two major cities. This line should be running passenger and freight service in a regular and scheduled fashion. Instead, passengers are being forced into private automobiles and jet aircraft, and freight by truck. Countries around the world are refurbishing existing track and building new rail lines while Canada has simply taken leave of its senses.

Environmentally it is a given that moving freight and passengers by train is less damaging both in terms of pollution and in resources expended. There is a lot of unprecedented babble about concern for the environment. This of course is an interest of mine. I’ve been an organic farmer for thirty-two years.

The question now is: are we going to destroy what previous generations have built? We’ve got the options right there. ( Unfortunately due to technical hitches with 2 tape cassette recorders, the balance of this presentation is unavailable)

Rodger Gadd-General Manager,Great Western Rail:

This speech may sound a little discouraging to somebody starting up a short-line but it is really meant to let everybody know what kind of a commitment you have to make to run a short-line, to operate a short-line and be successful at it. Which I think we have so far. I’d like to give you a little background on Great Western Railway and the evolvement from the start-up and to where we are today. Great Western Railway came into being in 1999 when WestCan Rail the B.C, salvage company, purchased three hundred and thirty miles of track from CP Rail and that covered four subdivisions in southern western Saskatchewan. The original track acquired in the purchase covered the area of Assiniboia to Val-Marie where there are three subdivisions and the Vanguard sub from Myron to Swift Current.

I believe WestCan had planned to tear up the line for salvage and had been bitten by the short-line syndrome with the need to keep Southwestern Saskatchewan alive. They originally tore up the track from Val-Marie to Bracken and had planned to salvage the Northwest end of the Vanguard sub; it was decided to try a short-line operation over the remaining three hundred and eight miles of track consisting of eighty-five pound rail and forty-five bridges. On November 1st, 2004 the railroad was purchased by a large group of local shareholders, four hundred and fifty or so, and today’s Great Western Railway Limited operated from our Shauavon office is overseen by a board consisting of eleven directors, managed by myself to a staff of thirteen permanent employees and eight seasonal employees. GWR has three Alco 2000 horsepower locomotives and all of the required maintenance machines to maintain our track. In 2006 GWR began to service 60 miles of track on the newly formed Fife Lake Railway. Dave Marrit, on the panel here, heads up their board of directors. Fife Lake Railway runs from Assiniboia to Coronach and the Great Western Railway is a partner/shareholder. This year in April we began to service Redcoat Road and Rail, another seventy-two miles from Assiniboia to Pangman. All of these lines interchange with CP Rail in Assiniboia and GWR also interchanges with CP in Swift Current. With each expansion of our service area, the operational challenges increase. Primarily for the individual or a group looking at rail abandonment in their area and the initial planning for short-line operation the challenges seem to be quite enormous. Both CN and CP deal with rail-line abandonment and acquisitions of these rail-lines for short-line operations in much the same fashion. A business plan for the line is a prerequisite and the dealings begin. Salvage value of the rail line in question is norm for market value and this is based on the weight of the rail for each particular piece of track. In the past few years salvage value for these rails has increased dramatically and of course the class 1 railways view the highest numbers initially to discourage the prospective buyers from ways of reducing the cost of the line and they can make a few more bucks on it. Once this hurdle has been covered and the price established for the purchase, the hurdles become shorter but there are many more to cover. The high cost of establishing a contract to operate a short-line is further hampered by the cost of insurance and must be maintained for interchanging with CN and CP with a $25 million liability clause. The class 1’s are required to maintain this amount of liability insurance for each province across the whole country. They use this amount for the short-line operator’s criteria to operate within their interchange tracks. It is a clause that either discourages interested parties from entering into the business or can mean the make or break point with the existing short-lines, namely, the cost of maintaining the premiums. Short-line operators have confidential contracts with the interchange railroads and the established car haulage rates and car hire charges are different for every operation. The short-line base for car hire, and many do, this is an added expense for every minute that the cars are on your line.

Just a short note on CN and CP, and there are a lot of people that aren’t aware of this fact, but in the last year 25% of gross revenues for CN and CP were contributed by short lines and that’s quite a startling fact and quite a startling number. Up until a couple of years ago we were up to 15%, but 25% that’s really quite an amazing figure. Each short-line is required to qualify and maintain the status of their train and track employees to the standard as required by the interchange rules of the interchange carrier. Costs of education, training and safety management are other challenges that the short-line operators face.

Track maintenance is a daily cost and a lot of the rail-line abandonment today is due to the fact that the class 1’s have neglected these lines for many years and short-line operators are faced with the task of upgrading the track to safe levels.

Short-line operators must be aware of the environmental issues, spraying of right-of-ways, not only in the courts but also of local, provincial and federal laws. Locomotive emissions, although a small percentage of emissions from trucks hauling commodities across the country have been further reduced on our particular short-line railway with the introduction of low emission boilers in our three engines.

GWR has installed environmentally friendly anti-freeze in our engines and when not in use are shut down year round, are heated by the boilers during the winter.

Even the class 1’s with their hotstarts cannot compete with GWR’s low emission rate, but there is a cost to this and the cost for each boiler application for an engine is approximately $10,000.

Another challenge faced by short-line railways is the maintenance of the road-crossings in the province with the most roads in Canada. GWR has 285 road-crossings that go over our track and are a constant problem and the cost today is mainly paid for by the railway. Land and school taxes can also be a burden, as the assessment of the railway is based on the salvage value. Locomotives purchased by short-lines are generally over 30 years of age and are high maintenance items that are a major cost of the operations.
By far the largest expense to the short-line besides insurance is the cost of fuel for the locomotives and company vehicles and machines.

The Saskatchewan fuel tax at 15% for railroads is the highest of any province in the country. In the past few years we have made some head way in convincing the major railways to sell equipment to short-lines at their cost and give us some breaks on used equipment and notification of sell items.

This still continues to be a challenge and the cost of maintaining our individual rail-lines from year to year. The cost of purchasing track equipment, tampers, sprayers, hiabs, high rail trucks, etc. and maintaining them is a constant challenge and must be weighed with the alternative of subcontracting. If you go with the equipment finding an experienced or qualified people to operate the machines, locomotives and train runs can be frustrating.

A number of short-lines employ retired or ex-class 1 railway employees or face training new people from the ground up. With the resurgence of short-lines across the country the price of older four axle locomotives has tripled in the past couple of years and has a definite impact on the start up of lines and the existing lines that need to increase the size of their power inventory. Train crews require rest stations and this may include the cost of hotels or establishing bunk-houses, which we have done in Assiniboia.

Maintaining these shelters, office and track or engine equipment buildings and the ever increasing cost of wages and benefits are the major factors in any short-line’s bottom line. A huge operating challenge to short-line railways is the newly upgraded cars that can handle a total weight of close to 286,000 pounds. In most cases short-lines could not bear the cost alone to upgrade their lines to handle the new weight cars.

Until this year, Quebec was the only province in Canada that had a cost sharing arrangement split evenly with the province, federal government and the short-lines for upgrading to 286,000lb capacity.

The last Saskatchewan government provincial budget has detailed future money for short-lines on a cost shared basis and hopefully some where down the road the feds will join in as they have in Quebec. I believe there is a misconception out there with many short-lines that believe 80 or 85-pound rail cannot sustain 286,000-pound cars. The study presented to the RAC short-line committee in Calgary in October of last year debunked that misconception. Although 80 or 85 pound rail can sustain 286,000-pound cars in most cases it will still be a very expensive proposition to upgrade short-lines to that point. The study found that the 286,000lb cars will result in a 10% increase in axle load and of course will mean additional loading and wear on track structure and bridges. In most cases a good roadbed with an additional number of supporting ties is more important than the size of the rail. This of course will be followed by track surfacing, alignment, gauging, etcetera. Most importantly would be the upgrading of bridges to sustain 286,000-pound cars over short-lines that probably have more timber trackage. Therefore more costly to upgrade as compared to concrete or steel and speed of course could be reduced to compensate over some structures. I’ve spoken about the challenges we face with the on going expenses but our revenues remain to be the greatest challenge in maintaining our business. If you’re a grain dependent line, every year can make or break your company due to the area you’re in and the condition of the crop. This can also be exacerbated by the railways you interchange with and all of the factors of internal politics at play. If you only interchange with one class 1 railway you may be effected by strikes by either railway. Cars can be effected by strikes at the railway ports, train derailments, wash outs, etc. and also have to win over the class 1 operator. As a short-line operator you might be a go between with your producers, elevators, and the major rail lines and it sometimes can be a delicate balance. If the short-line still has any of the major grain company elevators on their lines this is another challenge to keep them there. We as short line operators must be willing to advertise and sell ourselves to our customers as well as diversify, look for new business and at the same time keep our class1 interchange partner happy on the turn around time of cars on our line. I have given a brief overview of the operational challenges faced by short-line operators and I must add that we are joined here today on the panel with Ed Zsomba who is Director of the Saskatchewan Highways and Transportation short-line rail services. He has been one of the single greatest factors in helping to establish short-lines in the province for many years now. The Short-line Advisory Committee in the province is unique for its dedication in preserving abandoned rail line and assisting short-line rail operators in their day-to-day and their future challenges; with teleconferences, meetings and a willingness to listen and offer valuable advise. Ed and his group see the value in maintaining these lines to not only keep communities alive but by also protecting the province’s roadways. Thank-you to Ed and his Advisory Board for making many of our operational challenges bearable.

Terry Pugh-NFU:

Unlike the other fellows up here I’m not a railway man, I work for the National Farmer’s Union, I’m the Executive Secretary. I think that it’s been very interesting in the last few days to learn as much as possible about short-lines and about railways in particular and I think one of the issues we have to deal with is: are short-lines the answer to the solution? I think they are a partial solution, they are really a workable option if they are operated in the interests of farmers, rural communities and the province as a whole.
They really have to be incorporated really into a larger legislative and policy context that allows them to be viable in the long run. Now people, I think, are aware that farmers historically have been captive to rail transportation, this has been our history in Saskatchewan, and even now even with the changes to trucks and so on, we really are still very much captive to these class 1 railways.

The trucks are basically doing shorter hauls; they are either taking the grain from the farm to the elevator or from the elevator to the processing plant.

When you’re talking about moving to port position that’s done by class 1 railways.

Of course the people that talked earlier this morning about the huge difference in the energy expenditure between trucks and rails, a study done in the late ‘90s by Trimax showed that its costs between a quarter and a half the amount of energy to move grain by rail and now in the years since then it has increased in favour of railway because they are more efficient, they use less people to move those tonnages longer miles.

Short-line railways really have to be more than simply branch-lines that are operated by independent companies, as Roger pointed out there are a lot of challenges there.

A lot of their viability really depends how many connections they’ve got with class 1 railways if they’ve just got a single connection with the class 1 railway then they really come under the thumb in a lot of ways from the decisions of the bigger railways. If they’ve got two connections than they’re in a little better shape.

A little comparison between short-lines in Canada and the United States; there’s probably around 500 viable short-lines in the United States and of these over half of them actually have connections to more than one class 1 railway.

There’s one in South Dakota for example that has seven connections that runs into Minneapolis, Rapid City, and then into four neighbouring states as well and its an east-west line that carries a lot of goods. Ethanol is a big component of a lot of these newer short-lines that have started up in the States because of the tremendous tax incentives that go into these plants. There is a lot of money to be made in moving that ethanol right now, I’m not saying that’s what should be happening in Canada, but that’s one of the factors as to why they’re viable.

A little bit of history there’s always really been two visions of rail ownership in Canada, that kind of have been played out, there’s been one vision that was pretty much articulated by John A. MacDonald and that vision is the one we’re working with right now. That is pour a lot of public money into privately owned railways, the other vision is you pour a lot of public money into publicly owned railways and that second vision of public ownership of railways was in place four years back from 1873-1878. The prime minister at that time was a guy named Alexander MacKenzie and his administration was sandwiched between John A. MacDonald’s first term and the second term and you know for railways in those days that was the big issue.

So Alexander Mackenzie wasn’t opposed to public investment he just thought it should be used on an as needed basis and that was similar to most of the systems in place in the other British Colonies at that time. Australia and all the other Commonwealth countries really had public ownership of the railways.

In Canada under MacDonald they went along the American lines private ownership model but with public funds and that’s evolved now so that we have complete private ownership of these railways with tremendous amount of public funds that go into it. David earlier mentioned 1917 when CNR was nationalized it was coincidental,that this was the farmer’s platform in 1917. This was put out by the Canadian Council of Agricultural and at that time it was the Grain Growers Association of Saskatchewan and Manitoba and even Ontario and what they called for was of course the “N” word, the complete nationalization of the railways to operate in the public interest.

So it was coincidental that it came out at the time of a tremendous amount of public support for that CNR move. Now when we see there is a rationalization of railways the cross had been borne completely by the public and farmers. The justifications have always been by the Canadian Transport Agency that it is economically efficient and therefore in the public interest to abandon railway lines and let railways basically dictate what that network is going to look like. We saw what happened in the early 1980s with the demise of the Crow Rate and the abandonment really sped up at that point. When the Crow benefit subsidy was eliminated completely in 1995 farmers paid the full cost of moving their grain.

So what you had was a situation where farmer’s percentage of their input cost that freight constituted went from a fairly small percentage before the 1980s until now where it is actually constitutes a really huge proportion of their input cost. When you add in seed and feed, fertilizer, fuel, all those input costs plus interest we’re at a point now where the average net income per farm is actually negative $10,000 to $20,000. These farmers are in the hole, they are operating in the hole and many of them are now operating on the basis of borrowed money. Once we see interest rates climb again you’re going to see an awful lot of farmers not farming any more. The challenges for short lines, of course Roger already went over them, mentions the number of connections to class 1 railways and the kind of contract you can get with those railways. It has to be very iron clad, there can’t be any wiggle room for these class1’s to change the terms after you have signed the contract because they will try and get the best deal they can. In many ways the class 1’s have encouraged short-lines to take over because it is actually cheaper for them to do that than to abandon rail lines because under the CPA rules they are required to pay $10,000 per mile per year, for three years, to the local government for any line that is abandoned. So it is much cheaper for them to basically sell off at salvage value; they get a lot of money back in return and there is also a lot of ways they can play around with that. They can put it on the abandoned list and then just before the time is up they can put it back on the retention list, so you can play around with it that way too. Basically they have abandoned it in all but name. Along with competition issues for short-lines echo farmers issues with these railways as well. Particularly with producer cars, one of the big advantages for farmers to have a short-line is that they are able to load producer cars on the short-lines. Without some one operating that line, of course there is no line, they have got to truck their grain to a main line and they still have the hassles that come with you know trying to get cars from the railway.

Right now they’ve got some allies on their side, the short-lines brought those cars, they also have the Canadian Grain Commission and the Canadian Wheat Board which helps them to obtain those cars. Actually the Canadian Grain Commission is basically in charge of allocating those cars but they do it in cooperation with the Wheat Board and I think without the Wheat Board there to actually advocate on behalf of farmers to make sure those cars get to where they want to go then I don’t think you’re going to see the kind of access either on the short-lines or on the main-lines for those producer cars.

The Wheat Board also has a big role to play in making sure that there are customers for those cars; just loading a car is only one end of that whole system. You’ve got to unload that car at the port, you’re going to have a customer that’s going to take that grain, so if you’ve had trouble finding a customer that car is not going to go anywhere.

The benefits of producer cars, of course, are that farmers can avoid elevation charges, handling charges, mixing charges, all those others that these elevators charge they can avoid that or if they own a producer car loading facility themselves then those benefits come back to the farmers.

The whole reason short-lines and producer car loading facilities have started up is because they had to.

There is no service out there or there is very little service from those main line railways and the Canadian Wheat Board and Canadian Grain Commission is a huge part of that mix. If the Wheat Board goes you’re going to see a tremendous drop off in the business that short-lines and producer car loading facilities had and a lot of people out in the country maybe don’t realize the extent of that, but it is huge.

One of the things is that class 1 railways always have a privileged position but when it comes to switches and so on you were saying about level crossings; with the big railways 80% of the cost for lights and switches and all of that stuff for level crossings that’s all paid for by public funding and the provincially regulated short-lines that’s all the railway’s responsibility, they have to pay for it.
So that needs to change. Short-lines really are huge benefits to farmers, but they are a really huge benefit to the public treasury as well. A study done in Kansas in 2004 show that short-lines saved the state $58 million a year annually in road repairs. They saved farmers over $21 million in shipping costs just because they could use the railway.

So that’s going to be similar in Saskatchewan in many ways. Rural Saskatchewan and the provincial government I don’t think can afford to back fill the losses that we’re going to see if we can’t use short-lines and if the Wheat Board goes. We’re going to see the kind of drop in farm income that we saw and are continuing to see because of the abandonment of the Crow Rate.

So in conclusion short-lines are an important mix in an over all solution, they are part of the mix. They are not the total solution, you have to have, as the people mentioned this morning, that a political policy mix between federal and provincial government that really needs to help short-lines over come these challenges has got to be put in place. And a key too, I think, is that the short-lines need to be directly linked with producers. If farmers aren’t saving money right back to the farm gate then they are not going to be able to use these short-lines. We’re going to continue down the path that we’ve got right now.
Last edited by Oscar on Tue Jan 29, 2013 8:01 am, edited 2 times in total.
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Postby Oscar » Fri Aug 03, 2007 9:49 am

President Martin Wooldridge
P.O. Box 184
Edenwold, SK S0G 1K0
Phone (306)771-4669
mwooldridge@transport2000.ca

June 13th, 2007

Re: Request for funding support

Transport 2000 Prairie is taking a proactive role in a campaign to retain the maximum amount of the prairie railway network. Since October 2006 CN and CP Rail have listed 1200 miles of branchline railway line for abandonment. 800 miles are in the province of Saskatchewan including the southern leg of the most direct rail route between Regina and Saskatoon from south of Davidson a distance of just over 180 kilometers.

The abandonment process has a 3-year time period during which actions must be taken to prevent abandonment of valuable infrastructure. With the changes to transportation choices in the future driven by the ever-increasing climate change and environmental concern as well as the continuing increase in fuel costs the rail option will be the obvious selection. Canada’s railway system currently carries 65% of the total freight volume moved but only contributes 3% of total carbon emissions. These facts speak for themselves.

With the two major railway carriers (CN and CP) increasingly wishing to concentrate on major trans-national routes, the role of shortline railways becomes of paramount importance as replacement operators for regional railway lines. In recognition of this fact Transport 2000 Prairie hosted a Symposium at the University of Saskatchewan on May 12th 2007. The next phase of our campaign involves feasibility/ business case studies to determine the present and future potential of lines that are in jeopardy.

While the Saskatchewan provincial government provides partial grants of up to 80% of $25,000 for feasibility studies with the remaining 20% to come from other sources.

As a community leader and an organisation with a concern for the environment, we invite you to make a contribution to the costs of a feasibility study. Together we can make a difference for the future of the province.

Please make your cheque payable to:

Transport 2000 Prairie
C/O Treasurer John Jory,
102 Darke Crescent,
Regina SK S4S 3X9.

The cheque should be marked “Shortline Railway Feasibility Fund”.

Yours Sincerely,

Martin Wooldridge
President
Transport 2000 Prairie
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Transport 2000, Craik Mayor meet with Sask Party Econ. Com.

Postby Oscar » Sun Oct 07, 2007 8:44 pm

Media Release - For Immediate Release

Transport 2000 Prairie Region and Craik Town Mayor Meet with Saskatchewan Party Economic Committee to seek support for retention of CN Saskatoon-Regina railway link


Regina-September 15th 2007 Transport 2000 Prairie Region members and Mayor Rod Haugerud of the Town of Craik met with members of the Saskatchewan Party’s Economics Committee on Thursday September 13th to propose ways the province could assist in the retention of the railway line.

"This line is an extremely important asset for the province for current and future economic development" Craik Mayor Rod Haugerud stated prior to the meeting.

"Existing shortlines in this province show how locally based railway companies attract economic development such as seed cleaning in Avonlea or producer car loading facilities on the Great Western Railway. This is not to mention the much needed relief to rate payers in terms of avoiding major infrastructure costs that come with a loss of rail infrastructure".

Transport 2000 President Martin Wooldridge was encouraged by the Saskatchewan Party’s interest in options to retain the Regina-Saskatoon CNR line.

"The Saskatchewan Party has followed the lead of the municipal governments in showing a strong interest in retaining the Regina and Saskatoon CN line. We have been happy to meet with a group of Sask Party MLAs. It has to be said that this in contrast with the provincial government who have, with the exception of one MLA, declined our requests for meetings. We hope our meeting with the Saskatchewan Party will encourage more interest from the province and in particular the Premier and the Minister of Highways and Transport".

Wooldridge stated that with an upcoming provincial election the provincial government should work with local governments to retain and enhance the Regina-Saskatoon CNR line.

"This line is vital for the future of both rural and urban Saskatchewan. Any political party which hopes to form the next government must address issues both rural and urban which are vital to long term sustainable economic and social development, such as this rail corridor linking the two major economic hubs in the province and the intermediate communities."

For more information:

Phone Martin or George at (306) 771-4669 or (306) 535-0635

Or Mayor Rod Haugerud at the Town of Craik (306) 734-7767 or (306)734-2250
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Postby Oscar » Wed Mar 05, 2008 9:37 pm

Press Release

The Saskatoon-Regina CN Railway Rentention Effort Continues to Roll Forward

December 16, 2007

REGINA - The Craik Stakeholders Committee recently held a meeting in Chamberlain (7th December), to report on preliminary discussions with Canadian National and to further define how rail line purchase will be funded and to develop the negotiation strategies.

It was decided to hold a further meeting at Kenaston Place, Kenaston at 2 pm on Friday January 4th 2008 to continue moving the retention and future operation of the line in a positive direction. In addition to the original stakeholders committee members the meeting is open to all interested parties. The 4th January meeting will emphasize on developing a business plan that will draw private and public investment.

Rod Haugerud Chairperson of the Stakeholders Committee and Mayor of Craik stated that "the widest possible range of individuals, organisations and businesses are encouraged to become involved in this important mission to save a critical part of our transport network. This railway line links are two major cities and should be retained to ensure an effective, green economic corridor can thrive"

For more information please contact:

Rod Haugerud at (306) 734 2865
or Cell (306) 734 7767

Martin Wooldridge (306) 771 4669
or Cell (306) 535-0635
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Re: SHORT LINE RAIL SYMPOSIUM: Saskatoon-Regina 2007

Postby Oscar » Mon Mar 30, 2015 10:54 am

(SK) PROVINCE INVESTS IN UPGRADE TO SHORTLINE RAILWAYS

[ http://www.saskatchewan.ca/government/n ... rsp-grants ]

Released on March 30, 2015

Thirteen Saskatchewan shortline railway operators are sharing nearly $1 million in grants to improve rail infrastructure in the province.

Through the Shortline Railway Sustainability Program (SRSP,) a total of $900,000 in grants will be provided to shortline operators for upgrades to their infrastructure. SRSP grants are matched by each shortline, meaning at least $1.8 million will be invested in shortline tracks this year.

“Shortlines provide an efficient connection to mainline rail which benefits the rural economy,” Minister responsible for the Saskatchewan Grain Car Corporation Nancy Heppner said. “This grant improves service to our export-based economy and removes trucks from our highway system.”

The SRSP provides grants for projects like upgrading track, stabilizing track roadbeds and repairing bridges. The grants are funded by the Saskatchewan Grain Car Corporation.

Including this year, the SRSP has provided $5.6 million in grants since 2008, leveraging a total investment of more than $11 million in Saskatchewan’s shortlines. -30-

For more information, contact:

Doug Wakabayashi
Highways and Infrastructure
Regina
Phone: 306-787-4804
Email: doug.wakabayashi@gov.sk.ca


Related Items
SRSP Grants Backgrounder - LINK is at source URL above
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