Federal funding extends Algoma rail service 3 more years

The federal government is giving $5.3 million to keep passenger trains running between SaultSte. Marie and Hearstfor the next three years.

The announcement came Tuesday,just as previous federal funding was about to expire.

• Deadline looms for passenger rail service in Algoma

"This is very big for tourism and very big for all those who have access along the line," saidBryan Hayes, the Conservative MP for Sault Ste. Marie who helped to reach the deal.

Hayes said approval for funding of this magnitude can take up to four months. He said he didn'tknow he was going to turn to the federal government for ongoing support until late January.

"It's a verysignificant announcement and I'm very proud."

'We can do a fabulous job'

Algoma resident Linda Savory-Gordon said she is thrilledto hear this news.

"It was a really big surprise.I had thought that what we were going to have to do was to continue fighting on this."

A third-party operator called Railmark is set to take over the current operations of the Algoma passenger train, as CN Rail stops operating the service April 1.

CN Rail is giving up its operations after TransportCanada announced last year that it would no longer provide a subsidy for the service.

Last year, the federal government stepped in to re-fund the Sault-Hearst passenger rail servicefor an additional year.

This gave a group of stakeholders known as the Coalition for AlgomaPassenger Trains time to make a business case for Railmark to take over.

"With our team now, we're all working together," said Savory-Gordon, who sits on theboard for the coalition. "I think we can do a fabulous job."

Hayes said the rail service brings in between $38 and $48 millionin economic benefits tonorthern Ontario.

"We believeRailmarkis the team, in consultation with the stakeholder group, that will be able tobring this to fruition to increase the passengers significantly and to secure the longevity of theresorts and lodges, along the way of which 11 out of the 14 had access only through the railservice," hesaid.

The value of the properties along the rail line's corridor is between $60and $67 million.

Review to come

The federal government will reviewRailmark's business after the three-year funding periodis up, to determine if additional funding is needed to sustain passenger rail service.

"Certainly we believe the government will be prepared to visit that at that time," said Hayes, addingthat there's no guarantee federal funding will continue.

Hayes said the federal government thought the private sector would have already stepped in bynow to fund the rail service.

The federal government has been providing financial support to theAlgoma line since 1977.

Meanwhile, Railmark is entertaining a number of ideas to increase the number of passengerswho use the line. One idea is to establish a rail and freight service from Hearst to Cochrane.

"I think it'd be kind of cool," said Allen Brown, CEO of Railmark. "I'm prepared to do someunique things with our trains."