New lease on life for northeastern Ontario short-line railroad
By: Northern Ontario Business staff
Canadian Pacific Railway (CP) and Rail America Inc. have struck a new operating agreement to keep a smaller portion of a threatened short-line railroad in northeastern Ontario open for the long haul.
The two carriers announced Oct. 4 that they have entered into a long-term deal to continue to operate a 253-kilometre section of track between Sudbury and Mattawa, known as the Ottawa Valley Railway (OVRR), including a branch line to western Quebec.
The new agreement is for five years with an option for a future extension.
The announcement is good news for communities along the track like Sturgeon Falls and North Bay, and the OVRR's largest shipper, forestry giant Tembec which ships products to market from its Temiscaming, Que. pulp and paper mill.
Canadian Pacific owns a larger 550-kilometre length of track between Sudbury and Smiths Falls in eastern Ontario. It had leased the line to Rail America, a Jacksonville, Florida-based carrier, which uses a smaller subsidiary, Rail Link, to provide locomotive power to industry customers along the track.
After CP said in 2009 it was pulling its eastbound cross-Canada freight off the OVRR and re-routing it through southern Ontario, Rail America announced within months it was terminating its lease with CP.
Aside from Tembec, there is little local business to keep the operation viable. Rail America began by cutting service on the most eastern portion of track between Smiths Falls and Camspur (near Petawawa), but kept the Sudbury to Mattawa section open until CP found a new short-line operator. That operator appears to be Rail America-Rail Link.
Rail America Inc. owns and operates short-line and regional freight railroads across North America.
“We are pleased to maintain this railroad as part of our portfolio and continue our relationship with CP under this new operating agreement,” said Rail America president-CEO John Giles in a statement. “The current operation remains an attractive enterprise for both us and CP. We look forward to a productive, long-term relationship with CP and the customers of the OVRR.