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Ontario Northland Railway – Vital public transportation link and Freight railway being sold from under our noses, yet massive highway projects continue

By shost at 2:41 pm on Monday, May 14, 2012

A quick divergence  from GO Transit to the Ontario Northland, another Ontario operated Railway line from Toronto northward:

Ontario Northland Railway, a vital public transportation link for remote Northern Ontario towns is being sold and decomissioned in the name of austerity, and why? Apparently $100 million a year in subsidy is too much money, and on the surface it may seem that way. Privatizing Ontario Northland will not end the subsidies, and by comparison to the $3.9 billion spent on new highways to Sudbury AND North Bay, the Ontario Northland is a cost effective subsidy this Ontario resident is willing  to live with.

In its simplest form, the Ontario Northland provides Freight train, Passenger rail, Bus, Ferry (Moosonee to Moose Factory) and Telecommunications services to remote communities in Northern Ontario, between North Bay, Ontario and Moosonee in the North, and Hearst in the North-West, and Rouyn Nouranda in Quebec (connecting Ontario to CN lines in Quebec and Montreal).

The Northlander is a daily passenger train from Toronto to Cochrane, which is proposed to be cut in the last Ontario Budget, while the Cochrane to Moosonee “Polar Bear Express”, a vital transportation link will continue along with it’s subsidy.

Ontario Northland bus services will be sold to the private sector, where they too, will request a subsidy as illustrated in the $30 million Greyhound Manitoba debacle

Ontario Northland Freight services (Rail freight) has been the backbone of the Northland for many years, most often profitable, so much so that Canadian National tried to buy the ONR in 2002/3 and failed due to Job guarantees. You can bet CN is gunning to purchase the ONR, especially after the Government has downplayed their financial performance, CN will ultimately steal the railway from under our noses if it’s not sold with an accurate, transparent bidding process!

The total subsidy in 2011 (According to ONTC public Financial reports) is $46 million or $3.83 per Ontario resident. (This is contrary to Ontario saying it’s $100 million)

Between 2003 and 2011 $3.9 BILLION has been spent on Ontario’s single largest construction project, the Barrie to Sudbury (Hwy 400 extension), and Barrie to North Bay highway 11 twinning (Divided highway with interchanges), which both highways are being blasted through Canadian Shield rock. This amounts to $325 for every single Ontario resident, and in 2009 alone $700 million or $54 per resident was spent on these highways. These highways will also have upkeep and maintenance and I have no doubt it will be more expensive than the Railway option.

So on one hand Ontario’s current Government wants to slash spending, but these highway projects continue and are not yet completed, and a flash in the pan, the Northland, will be cut apparently to save us from our financial ruin.

Ontario also wants to be a leader in new forms of economic development, and the ring of fire is a tantalizing opportunity (link 2) that is only seen once every few generations. The Ontario Northland is one of only two railways in the area, but ONR, and Ontario is apparently broke, and I assume can’t afford to fund a new Railway. However, Canadian National is interested in funding new Railways into northern Quebec, a strategy Quebec is using to bring economic prosperity in the face of a re-newed search as a country to exploit our resource wealth.  CN will likely be tapped for the first Ring of Fire Railway, and all indicators are the railway will connect to CN at Nakina, Ontario.

What does this have to do with Ontario Northland? CN tried to buy the Northland in 2003, the Northland’s route is hundreds of miles shorter for CN’s Quebec traffic, but most importantly, if the Ring of fire is just getting started, multiple companies will vye for new smelters, processing facilities, mines, and possibly Railways to the ring of fire to compete with Cliffs mine and smelter near Sudbury. CN will see Ontario Northland as potential competition, but not if CN purchases the Ontario Northland Railway, now before anyone else (Canadian Pacific, or the Northland itself etc) get into the game..

But in conclusion, I argue the following:

  • The subsidy of the Northland as a whole is very small as compared to other forms of transportation, $3.83 per Ontario resident per year as opposed to over $50/year for new highway construction in the same region
  • If Northern Ontario residents are to help develop the ring of fire, they need vital transportation links to get around, ONR is that link for many until such time services can be upgraded by other means (such as a substantial increase in population and resultant services improvements)
  • ONR can be a vital and prosperous freight rail link to the Ring of Fire should we invest in this, in Quebec, two major railways connect the iron ore belt to the rest of the world and CN is studying a third, the same may hold true for the Ring of Fire in 50 years time or less
  • ONR has been profitable in the past, Freight has carried the company for many years, but it’s only the recent economic downturn that has forced increases in the subsidies and losses. Agian the ring of fire plans to change everything, only if Ontario Northland is in the game.

If the Northland is sold off,

  • Subsidies will continue, bus operators will demand them or cut services, Moosonee will still get the lions share as they have no other choices other than the rail line (no roadway at all to Moosonee)
  • The railway will be sold at fire sale prices, the railway is depressed, but has potential to return, and can be sold off then at much greater prices to realize better taxpayer return
  • The Northland will be cancelled, but VIA RAIL shout at least be tasked with continuing the Toronto to Cochrane Northlander services as an alternative to bus transportation

Ultimately, I can’t see any reason why Ontario is so focused on divesting themselves of the ONR, if anything, the realization Ontario can’t fund a Railway into the Ring of Fire and the private sector (Cliffs, CN)’s want of the same Railway has forced this into play, all in the name of Austerity, for a pittance by comparison to our real problems. The next few months will be interesting, I just hope we don’t have another BC RAIL on our hands, folks.

Please post any comments below, and if you want sources of information, find the ONTC public financial reports, or browse the links above or search for your own. I may update this post from time to time.

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Comment by sea austin

May 17, 2012 @ 9:51 am

thanks for a more “true cost accounting” look @ ontario/northland…news from the street has CN (buying) all the onr tracks north of north bay…passenger rail service can work for sure with a re-organization/re-marketing…there are millions waiting to take the train…+ one can imagine in the future that sweet modern train leaving from toronto to moosonee/ocean for a northern link-up….

keep up the good work

sea austin
train station master

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Comment by Wendy Morrish

May 17, 2012 @ 1:40 pm

Thank you for the accurate, insightful article on the ONTC. We, in the North,have been desperately trying to get the message out to all Ontarians that the ONTC can be profitable and is a much needed asset to our communities. Unfortunately, Bartolucci, McGuinty and the Liberals have been smearing the ONTC with untruths and incorrect statistics trying to justify their underhanded and callous attack on the services belonging to the people of Northern Ontario. Sadly, the NDP also kicked us while we were down.

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Comment by Mark Dowling

May 21, 2012 @ 2:14 pm

It’s interesting that a railway to North Bay can’t be saved but all sorts of money can be found for one to Peterborough. The Feds will save $2.5m/year if Toronto-North Bay rail is discontinued – will some of that money find its way to the pet project of a prominent Federal Tory?

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Comment by shost

May 22, 2012 @ 6:54 pm

Good point Mark, I fail to see how VIA Rail can’t be tasked to continue the Northlander, except for the capital cost requirement and operating costs, Northeners should be at least petitioning for this option, but they aren’t….. blinded by the bigger picture. Asking VIA at this point may be akin to admitting it’s over and moving along.

News on the street, no kidding, Someone care to explain the extremely high amount of maintenance CN is doing on the Newmarket sub? They are spending millions when it has been many many years since this kind of money was spent on the line. CN is investing in the Newmarket as if they already own the ONR.

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Comment by Mark Dowling

May 25, 2012 @ 3:04 pm

It’s worth noting that the Feds already give ONTC $2,500,000 a year to maintain Toronto-North Bay (although that figure has not risen since initially granted about two decades ago)

If operated by VIA, at least as far as North Bay, the route would benefit from far stronger marketing support than ONTC ever deployed in Toronto. If the timings were done right the same consist could do a return journey rather than the current requirement for two since the existing Northlander proceeds to Cochrane. A Saturday service would encourage use in cottage country whereas the existing ONTC service omits that day, which I find incredible given it passes through a major leisure destination.

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