To help continue freight operations and to maintain tracks, among many other things, Huron Central Railway’s parent company Genesee & Wyoming Canada is desperately seeking public funding.
Huron Central Railway was hit with significant insurance premium hikes following the 2013 Lac-Mégantic train disaster. Under the Safe and Accountable Rail Act of 2015, tighter insurance requirements were imposed on all railways, particularly those that ferry “significant volumes of dangerous goods,” which must be covered for up to $1 billion.
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On top of having to deal with stiff insurance requirements, the railway company also has to deal with railroad upkeep costs.
In a reply to Northern Ontario Business’s email, Genesee & Wyoming Canada president Louis Gravel said that the railroader needs around $5 million to $6 million each year “in order to sustain the infrastructure.” Gravel also pointed out that freight volumes along the 278-kilometre line are “sufficient to cover the operating costs, but not the capital investment.”
The Sault Ste. Marie-based railway company hauls freight for Essar Steel Algoma in the Sault, the Domtar pulp and paper mill in Espanola, and the EACOM sawmill in Nairn Centre.
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Previously, Sault Ste. Marie, Ottawa and Queen’s Park came together to create a $33 million fund to help pay for the costs of maintaining the rails that the company used, but that pool was emptied by 2015.
“The short-line railway in Canada needs more government support at both the provincial and federal levels, as it is a key component of regional economic development,” Gravel reasoned. “We reduce the congestion, accidents and maintenance costs on regional roads caused by an increased usage of heavy trucks.”
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