SHORT LINE RAILROADS

sociation of Canada (RAC) counts 39 short line railways among its membership. Short line railways operate in nine Canadian provinces, playing a critical role in domestic and international supply chains, from coast to coast to coast and many places in-between. Short line railways (class II rail carriers) are defined as railways that earn less than $250 million in annual revenues for two consecutive years.

Short line railways operate in nine Canadian provinces, playing a critical role in domestic and international supply chains, from coast to coast to coast, and many places in-between. The majority of short lines in Canada fall under provincial jurisdiction and operate within a specific region. While a short line railway may manage less infrastructure than a Class 1, the economic impact of Canada’s short line railways is significant and cannot be understated.

The development of Canada’s modern short line freight rail industry can be traced back to amendments to the Canada Transportation Act of 1996. Key amendments in this Act allowed the Class 1 freight railways to manage their own networks and shed less profitable rail lines. This resulted in a dramatic growth in the short line rail sector as entrepreneurs purchased these rail lines to continue operations. RAC’s short line railway membership increased from fewer than 10 short lines in the early 1990s to over 35 in the early 2000s. As of 2022, approximately 40 of RAC’s members provide short line freight services.

Many shortlines work collaboratively with Indigenous communities, municipalities, local industries, agricultural producers, and co-operatives, to ensure that the socioeconomic benefits of short line railways are shared. Specific actions include, but are not limited to, community safety initiatives [e.g., partnering with Operation Lifesaver, the Transportation Community Awareness and Emergency Response Initiative (TRANSCAER)]; procurement policies favouring Indigenous and local companies; a focus on local and regional economic development, employee training & development; environmental stewardship; and support for charitable/community causes. Some short line railways are locally owned. For example, the Boundary Trail Railway (BTR) located in South-Central Manitoba was formed by a group of agriculture producers in 2008 after purchasing a portion of the former CP LaRiviere Subdivision that was scheduled for salvage. This producer-led short line provides the benefits of freight rail to seven communities and shippers of agricultural products, shippers of energy products, industrial products, and manufactured goods. BTR ensures that local shippers receive personalized local service while continuing to have full access to the North American rail network.

The challenges facing the short line sector often date back to their beginning. Challenges include lower traffic volumes, high operating ratios, and competition from other modes of transportation that operate on public infrastructure. There is also limited access to private financing also means that capital investments are limited in size and scope, which further inhibits growth. The result is that many short lines can only maintain status quo operations rather than investing in growth projects.