6 RAIL TRANSPORTATION

INFRASTRUCTURE

The structure of Canada's rail system remained relatively stable in 2004. There was only a slight loss of track: Canadian Pacific Railway discontinued 129 kilometres of track in Saskatchewan and Alberta, while Southern Manitoba Railway discontinued about 100 kilometres of its system. There was also a large transfer of track, approximately 2,300 kilometres, when CN completed takeover of BC Rail in July. The only other transfer was in southern British Columbia, where Burlington Northern Santa Fe partially sold and leased nine kilometres of track to the newly formed Kettle Falls International Railway.

Table 6-1 shows the distribution of trackage by key carriers and carrier groups in 2004.

Notes: By definition, route-kilometres do not include parallel trackage, spurs, sidings and yard trackage. Totals may not add up due to rounding.

1. 2003 figures revised slightly to reflect improved data.
2. Terminal and switching railways, Canadian subsidiaries of U.S. railroads and passenger railways.

Source: Transport Canada

As previous annual reports have noted, the latter half of the 1990s saw an explosive growth in the number and activity of shortline railways in Canada. Shortlines began modestly in the late 1980s. Their numbers grew slowly during the early 1990s with only 11 new ones formed before 1996. After the Canada Transportation Act 1996 came into force, the number of shortlines in Canada grew quite dramatically with 37 new ones formed between 1996 and 2000. In the past four years, however, the sector has plateaued and only a few new shortlines have been created. While more transfers will probably occur in coming years, it is unlikely they will do so at the same rate as in the 1990s.

Between 1990 and 2004, approximately 9,800 kilometres of rail line were discontinued. The majority of this was divided fairly equally between CN and Canadian Pacific Railway (CPR). In previous years, the majority of discontinuances were in eastern Canada, mainly Ontario and Quebec. In recent years, however, most of the track loss has been in the Prairie Provinces. Transfers typically occur from CN or CPR to other carriers. Recently, a substantial amount of track has been transferred among other carriers as well as from other carriers to CN, as with Algoma Central and BC Rail.

Table 6-2 shows rationalization activity in the rail sector in 2004 and from 1990 to 2004.

Note: Totals may not add up due to rounding.

Source: TransportCanada

The 25,867 kilometres of line rationalized since 1990 have resulted in major changes in the structure of the rail industry in Canada. CN and CPR remain the dominant carriers, accounting for about 90 per cent of industry activity and revenues. However, they operate about 70 per cent of the total domestic rail network, whereas a decade ago they operated about 90 per cent of the trackage. This may change somewhat as provincial governments continue to sell regional railways. While CN was not successful in acquiring Ontario Northland Railway, it was recently successful in acquiring BC Rail.

Both CN and CPR are expected to continue the rationalization of their networks. It is also likely that second-order rationalization (the rationalization of track acquired by shortline or other operators from CN or CPR) will continue.

Addendum tables A6-1 and A6-2 show further detail of railway rationalization in Canada by province.

Major Events in 2004

Infrastructure

Industry Structure

Employment

Energy

Freight Transportation

Passenger Traffic

Price, Productivity and Financial Performance