CN, the rail giant accused of being a “bully” over its decision to shut down the rail line to Hay River, has begun the formal process of discontinuing the track.
The Hay River line was until recently central to the delivery of fuel to many NWT communities, alongside some other goods.
However, the section leading north of Enterprise to Hay River was damaged by wildfires a year ago and has not been repaired.
Earlier this year, territorial officials told Cabin Radio CN had no intention of fixing that 30-km section of track unless government funding was provided. (CN’s annual revenue amounts to around $17 billion. The GNWT’s annual revenue is approximately $2.5 billion.)
CN has now confirmed to Cabin Radio that it will not repair the line, while documents show the company has begun the process that could permanently close it.
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Rail companies are obliged to enter a three-year process any time they plan to shut down a section of line.
The line from Enterprise to Hay River is the northern terminus of what is known as the Meander River subdivision of the network, a branch that begins in High Level, Alberta. CN’s public “discontinuance progress report” has since May 23 included an entry for miles 354 to 376 of the Meander River subdivision, locations that correspond to the line between Enterprise and Hay River.
Once the line has sat on that list for a year, CN can try to sell it. If no buyers emerge and more years pass, the line can be formally discontinued.
In an email to Cabin Radio, a spokesperson for CN confirmed the company had on May 23 “communicated our formal decision to initiate the discontinuance process of our line from Enterprise to Hay River with all levels of government, key stakeholders, and our customers.”
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The spokesperson said the decision to begin that process “was made following thoughtful engagement and discussion with local stakeholders and customers.”
Imperial Oil, which has used Hay River as a hub for barge delivery of fuel to its Norman Wells facility, is one such customer. The territorial government, which is responsible for fuel delivery to more than a dozen NWT communities via Hay River, is another – and the territory has vocally opposed the suggestion of closing down the line. The GNWT instead said it was “eager to see the railroad service to Hay River restored as soon as possible.”
One politician, Hay River South MLA and cabinet member Vince McKay, called in May for CN to “essentially quit being a bully and try to work with the Town of Hay River and the government to get that line built.”
Nine days later, CN started discontinuance proceedings.
Repair cost ‘not proportional’
Closing the line to Hay River doesn’t mean the end of the NWT’s rail connection to the south, but it does relocate it.
In Enterprise, a rail yard recently built by former Hay River mayor Brad Mapes has instead become the central loading and unloading point for the territory.
Politicians like McKay have expressed concern that using Enterprise as the rail terminus will place more stress on the road network, with many dozens more truckloads of cargo causing more wear and tear to an already fragile and expensive-to-maintain highway system.
CN, though, said it was making “operational decisions in a manner that is beneficial to both our customers and the relevant communities within which we operate.”
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The company’s spokesperson said CN “recognizes and appreciates concerns expressed around its decision to not repair the line to Hay River” – but insisted the decision had merit.
“Customers expressed interest in pursuing other opportunities out of Enterprise, even if Hay River were to be restored,” the spokesperson wrote.
“Following last year’s wildfires, CN reallocated resources from elsewhere on our network to help restore the rail operations to Enterprise in order to meet customer commitments.
“This engagement, along with a cost analysis, revealed that the costs of repair for the lines were not proportional to the volume commitments of customers in the region.”
While CN didn’t directly answer Cabin Radio’s questions about what happens next – instead pointing to federal rules that govern the process – a company representative did elaborate in a separate message to a Hay River resident in June, seen by Cabin Radio.
In that email, the representative said the line must remain on the discontinuance list “for at least one year before CN can take the steps to discontinue this portion of rail.”
“Through the discontinuance process, there will be opportunities for interested parties to purchase the segment for continued operations,” the message continued.
“In the event there are no interested parties for continued operations, the segment will be offered for net salvage.”
