CN investment in Nova Scotia railway could affect provincial subsidy for Cape Breton line

The Cape Breton and Central Nova Scotia Railway has a new investor andthe deal israising doubts about the future of a subsidy for the tracks that extend from Point Tupper to Sydney.

CN and Genesee & Wyoming, which owns the Cape Breton railway, announced Wednesday a partnership aimed at "long-term growth opportunities."

Neither company would comment, but in a news release, CN said the partnership wouldfurther reinforce itspresence in eastern Canada, "where we believe there will be a growing role to play in the competitiveness of North American trade."

The deal comes several months after the federal government said it was considering putting some money into a proposed container terminal at Melford in Guysborough County, across the Strait of Canso from Point Tupper.

Since2015, trains haven't run on aportion of the line that runs across Cape Breton Island from Point Tupper to Sydney.

Genesee & Wyoming has discontinued that line and applied to abandon it, but the Nova Scotia government has been paying the company $360,000 a year to keep it in place, in case a container terminal is ever built in Sydney harbour.

The rail line on the island has become washed out or overgrown in many places.

Nova Scotia Economic Development Minister Susan Corkum-Greek said the CN announcement is good news for the Strait area, but it's a significant change that will have to be considered during the province's annual review of the subsidy for the island's tracks.

"That's absolutely the central question: Does this make sense for the taxpayers of Nova Scotia to hold on ... to preserving essentially, you know, it's not a cow path, but it's the route," the minister said.

"It's not really an asset. We couldn't put a train there tomorrow."

Corkum-Greek said her department has been trying to talk to Genesee & Wyoming about its intentions for the rail line, but has not been successful.

The minister said the government will also be trying to talk to port promoters in Sydney to see if there's any need to continue the subsidy, given the state of the rail line.

"At this point ... it would take something significant to justify the kinds of investment that would bring that rail back to activation," she said.

Sydney developers switch focus

Novaporte, the company given the exclusive right to try to attract a container terminal toa piece of Cape Breton Regional Municipality's land in Sydney harbour, announced earlier this year it was switching its focus to offshore wind development.

The developers said they still wanted the rail line, but that it would not be needed for an offshore wind turbine marshalling yard, which would only involve shipping at sea.

MORE TOP STORIES