The Algoma Central Railway is an north south line freight and passanger rail line and you can follow the pictures from Sault Ste. Marie and Hearst courtesy of Chris van de Heide.




Third-party rail operator found for passenger rail service
By Elaine Della-Mattia, Sault Star
Friday, January 9, 2015 4:41:00 EST PM


Letters of intent has been inked with an unnamed rail firm that will see it operating both the ACR passenger rail service between Sault Ste. Marie and Hearst and the tour train.

It's expected that the final operating agreements will be penned shortly and the name of the operator will be released at that time.

The selection of the passenger train operator comes as a result of a year-long process led by the ACR Passenger Service Stakeholders Working Group that was formed to represent stakeholders and develop a plan that will see the continued operation of the service.

CN has signed a similar letter of intent with the same operator to operate the tour train service.



It was announced last February that the federal government intended to cut its $2.2 million annual funding for the remote passenger rail service.

A one-year extension by the federal government was granted to give the stakeholder group an opportunity to determine the rail line's long-term viability.

The selected operator has detailed plans on ways it expects to increase revenue and ridership. Those plans include diversifying the types of tourism products and services available to passengers, as well as making the service self-sustaining within five years.

The federal government is being asked to contribute $7 million over the first five years to facilitate the transition.

Federal Transport Minister Lisa Raitt will be shown that the transition period funding represents a $4 million savings to the government over the five year period, reducing the contribution amount to an average of $1.4 million annually, from the current $2.2 million.

The business case is designed to make the operation self-sustaining after five years and area residents will maintain its passenger service and have extended regional tourism options.

The minister is reminded in a six-page letter signed by CAO Joe Fratesi, who chairs the stakeholder group, that the continued service and developed plan will bring enhanced economic benefits.

“I can tell you that the company has a wide-range of experience in a variety of rail services in North America, including tourism excurisions,” Fratesi said in a press release. “The stakeholders are committed to working with this pasenger-focused firm to achieve long-term success for this critical regional passenger train service.”

An earlier impact study of the passenger service concluded that the line results in between $38 million and $48 million in annual economic benefits.

The plan also calls on the Economic Development Corp. to serve as the interim recipient of the federal government's contribution agreement to administer the five years of financial assistance for the operation of the passenger service on behalf of the region's stakeholders.

EDC CEO Tom Dodds said 100 years ago the rail like was designed for industry and grew to offer passenger services but CN's focus remain that of industry.

“Over time, after the remote passenger service began, there are people who bought property and their only access is that train and are argument has always beent hat the remote passenger service is important to this region and the region's economy,” Dodds said.

The proposed third-party operator is focused on passenger and passenger revenue and will continue to keep that service running, he said.

“I believe we have a reasonable pitch to the government. We still need some funding, but we're saving them some money over the first five years,” he siad.

Fratesi requests that Raitt and her staff prepare a contribution agreement quickly so that the transition can occur to the third-party operator before the March 31 deadline.

The third-party operator has been described as an experienced railroad company, with international, tourism and Canadian-based operations.

The business proposal also met CN's guidelines and it is designed to increase passenger and tour train revenues within five years.

The plan calls on significant stakeholder involvement and participation in the future and a commitment to “substantially increase and diversify the types of tourism products and services available to riders on the railway.”

The plan will also include an aggressive and target marketing promotion program and a commitment by the tourism and economic development organizations to integrate rail into marketing promotion programs.

CN director of communications Mark Hallman said a similar letter of intent has been signed for the rail operator to operate the tour train.

He said that along with the city's stakeholder group, the experience of the operator and the business case were viewed positively.

“We will now continue to move our negotiations forward and due our due diligence to move towards a definitive agreement,” Hallman said. “We believe there will be valued added to the tour train service.”

Hallman noted that CN's focus is freight railway, not tourism or passenger rail service.

Stakeholders say the ACR passenger train operation provides a vital service for residents, businesses and visitors in the Algoma region.


Stakeholders send rail funding proposal to Transport Canada
By: Northern Ontario Business staff


A group of stakeholders is working to save the CN-owned Algoma Central Railway passenger service between Sault Ste. Marie and Hearst.

Stakeholders vying to retain the CN-owned Algoma Central Railway passenger service between Sault Ste. Marie and Hearst have sent a funding proposal to the federal government.

The stakeholders say the request would cost Transport Canada considerably less than its financial support of the service in recent years, and includes information from a third-party rail company that’s expected to take over the service in 2015.

“With a relatively limited investment, the federal government can keep this critical transportation line in operation,” said Joe Fratesi, chair of the ACR Passenger Service Stakeholders Working Group and CAO for the City of Sault Ste. Marie. “We look forward to hearing back from the Government of Canada in the coming weeks.”

Following a request for proposal process that saw three qualified rail companies bid to assume operation of the Algoma Central Railway passenger service, one bidder has been selected for final negotiations.

That followed a thorough analysis of the firm’s bid, which detailed plans to increase revenue and ridership by diversifying the types of tourism products and services available to passengers, as well as making the service self-sustaining within five years.

A letter of intent was signed with that company, and a definitive operating agreement is expected to be reached early in the weeks ahead, at which point the party will be identified.

According to an economic impact assessment from BDO Canada in 2014, the ACR passenger service generates between $38 and $48 million in annual economic activity, supports up to 220 direct and indirect jobs, and helps deliver more than $5 million in tax revenue to government coffers every year.

Formed in February 2014 after Transport Canada announced its intention to cut its annual investment in the Algoma Central Railway passenger service, the working group represents a larger committee of concerned regional stakeholders, including the City of Sault Ste. Marie, Sault Ste. Marie Economic Development Corp., Municipality of Wawa, Town of Hearst, First Nations, Township of Dubreuilville, Tourism Sault Ste. Marie, Algoma Kinniwabi Travel Association, Coalition for Algoma Passenger Trains, and land and cottage owners serviced by the ACR line.