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Community Ownership Key To Successful Short Lines

There is seldom enough money available in moving grain on branch lines to afford extensive services from outside contractors.

Nobody likes rain on the day of a parade. And so the metaphor about raining on someone’s parade is pretty apt. You don’t get to be the crowd favourite if you’re disrespecting an idea the crowd cherishes.

So I write this column with some hesitation, because the parade I am going to sprinkle on is getting lots of positive press right now. And no one seems too concerned about the implications.

Short line railways haven’t been too far from the news since they had their western Canadian beginnings in 1986. That was when colourful and outspoken Alberta entrepreneur Tom Payne began Central Western Railway in, well, central-western Alberta. Three years later, Saskatchewan had a humble start in the short line business when Southern Rails Co-operative took over short sections of CN and CP track in southern Saskatchewan.

While Southern Rails is still operating, though not with all its original track, Central Western has gone the way of the dinosaur. The difference? Central Western was privately owned and failed to return enough to its investors to justify its continued operation. Southern Rails is community owned, and its owners benefit by its operation, not from a return on investment.

The story has repeated itself several times in Western Canada. Perhaps the worst and most striking example came when a company from Salt Lake City purchased the Miami and Hartney subdivisions in southern Manitoba in 1999. Local governments and farmers had organized tentatively to look at buying the line but never coalesced.

The Tulare Valley Railway, owned by rail salvager A&K Railroad Materials, convinced CN it could run the lines as a short line. By 2007, the track was gone and customers on the line were crying the blues.

It’s an interesting truth that neither Manitoba nor Alberta has a short line railway operating on a grain-dependent branch line at this time, while Saskatchewan has many, and the numbers increase yearly. As in the early beginnings, the difference is in ownership. Saskatchewan’s successful short lines are all community based. None are seen as investment vehicles. All are rather a means to an end – the end being the continuation of rail service for the benefit of the farmers and communities involved.

I won’t dwell on the lack of entrepreneurial spirit displayed by farmers in Saskatchewan’s

sister provinces. That would be a cheap shot. And I won’t mention the failure of governments in either Alberta or Manitoba to support community-based short line ownership, compared to Saskatchewan’s many efforts in this regards. That would simply be taunting the less fortunate. Besides, if recent news is any indication, that may be changing, at least in Manitoba.

The newly formed Boundary Trails Railway Company is the first short line in Manitoba to be largely owned by producers. It also received substantial aid from the provincial government, in the form of a $615,000 forgivable loan. Everyone involved, from farmers to the province has waxed eloquent about the benefits of a producer-owned short line.

All this is good. And it’s about time Manitoba farmers followed

the successful model from Saskatchewan. But now for the rain. The railway will be operated by another company, cited in press stories as the Central Canadian Railway, which will provide “car hauler, maintenance services, links with major railroads on traffic and delivery issues, snow clearing and basic administrative services.”

Most Saskatchewan short lines do most of this work themselves.

The simple fact is that there is seldom enough money available in moving grain on branch lines to afford extensive services from outside contractors. Many Saskatchewan railways learned this the hard way.

It is a bit of an odd way for farmers to do things. Few would consider hiring custom operators to carry out every bit of their farm operation, from seeding to bookkeeping. There would be very little left over if they did. The short line railway isn’t much different from a farm, and requires similar management. If times are tough, you watch every penny. Outside contractors have a different expectation, and often simply want to maximize their involvement and return.

I hope the new and optimistic owners of the Boundary Trails Railway have considered this.

On a related note, rumour has it the same company that consumed the Miami and Hartney subdivisions is poking around the Alliance subdivision in Alberta, and wants to talk to producers on that line, which CN has up for sale. Now that’s a parade that deserves a thunderstorm.

Paul Beingessner writes from his farm near Truax, Sask.

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