CN Acquires 4 Subsidiaries Of Quebec Railway Corp

This includes CN's former Intercolonial Railway line from near Riviere du Loup to near Moncton. The route of VIA's Ocean.

http://www.cn.ca/en/media-featured-stor ... e-mdle-qrc

Any theories as to why they would sell the line only to repurchase it later?

I have my ideas, but I want to hear others first.

chriskay wrote:Any theories as to why they would sell the line only to repurchase it later?

I have my ideas, but I want to hear others first.

I've read that CN's current (former NTR) main through New Brunswick will be needing major repairs in the near future, including replacing a large bridge, and CN wants to have the ICR as an alternate route. This still does not explain why CN also purchased the Ottawa Central and the line to Matane Quebec plus the ferry to Baie Comeau, unless it was a package deal.

It's interesting that the CN announcement makes no mention of the Chemin de Fer Baie des Chaleurs. All other properties of the Quebec Railway Corp are specifically either included or excluded. Since the operating contract for the Chemin de fer de la Gaspesie is being taken over by CN, it only makes sense that CN is also taking over the CBC.

chriskay wrote:Any theories as to why they would sell the line only to repurchase it later?

I have my ideas, but I want to hear others first.

Something to do with the union maybe ?

My thoughts exactly... They sell the line to get rid of union issues, then buy it back once the problems are gone and you can operate the line much more cheaply than before.

hey guys,

i believe it's a combination of what Chris thinks (the union) + the fact the line was probably deemed surplus + cost of maintenance. It appears to me the reason why CN and other class 1s would sell perfectly good and young diesels to leasors and lease them back.

I just don't see how this is going to be beneficial for VIA. CN will have the right of way therefore delays for the Ocean and Chaleur. It would have been something had VIA purchased it instead of CN with the intent of upgrading service.

Mark Charlebois
Montreal,QC

An opportune time for the return of The Atlantic Limited!

Makes me wonder why CN wants the Ottawa Central back in the fold. The mainline has been abandoned between Pembroke and Capreol so there is very little propect of any bridge traffic between Montreal and western Canada via Ottawa and North Bay. The main customer for the OCRR was the Smurfit-Stone paper mill in Portage-du-Fort but they are closing at the end of the month if not already. There's the steel mill in L'Orignal and very few customers in Ottawa itself. Pembroke has a few as well but is in decline due to the hardships of the lumber industry. As well, CN doesn't even own the Alexandria sub anymore! I also always wondered why CN kept ownership of the trackage within the city of Ottawa itself around the train station.

As for the NBEC, perhaps CN wants it's second mainline through New Brunswick back in the fold. If they need to perform track work on the Edmunston-Moncton mainline, the NBEC will undoubtfuly be very uselful.

For me, the big head scratcher is the OCRR. I just can't figure it out.

I'll say this though... farewell OCRR! You lasted barely 10 years but you had personnality (MLWs kinda do that!). They serviced their customers well. Good-bye OCRR... you will be missed!

This must be the first time a Class-I has purchased a ferry instead of trying to unload one. What goes around comes around.

Ken V wrote:

chriskay wrote:Any theories as to why they would sell the line only to repurchase it later?

I have my ideas, but I want to hear others first.

I've read that CN's current (former NTR) main through New Brunswick will be needing major repairs in the near future, including replacing a large bridge, and CN wants to have the ICR as an alternate route. This still does not explain why CN also purchased the Ottawa Central and the line to Matane Quebec plus the ferry to Baie Comeau, unless it was a package deal.

It's interesting that the CN announcement makes no mention of the Chemin de Fer Baie des Chaleurs. All other properties of the Quebec Railway Corp are specifically either included or excluded. Since the operating contract for the Chemin de fer de la Gaspesie is being taken over by CN, it only makes sense that CN is also taking over the CBC.

I know the place and people working on CFBC and NBEC. Let's begin there...

No mention of CFBC, because it has been previously absorbed by CFMG (Chemin de Fer Matapedia et du Golf). QR has been trying to abandon the line from Matapedia to Gaspe since the mill at Chandler shut down, VIA's Chaleur is keeping it alive along with a subsidy from the Provincial Government. If you look at the map on the CN press release, CFBC is not the same color as the other lines, however it is mentioned that the LINE from MATAPEDIA to GASPE will be continue operations under CN.

WHY did they spin-off these lines less than a decade ago only to repurchase it? On top of it being a money-loser, the entire creation/sale of NBEC, CFBC & CFMG was the biggest sham of a UNION BUSTING stunt perpetrated under the nose of the Canadian people in a long time. There's no union now, CN workers were given the choice of relocating or taking a buyout and continuing with the new, dinky railroad with their hand-me-down equipment. CN also sold those lines at a time they were moving to generate cash for the IC purchase. I predicted at that time, it would only be a matter of years before CN bought it ALL back, after shedding scores of people eligible for handsome pensions. Most of the people there who took the buyout (CDN 20-40K, depending on time invested) pissed through it faster than a case of beer on a Friday night. With eyes larger than their wallets, they purchased ski-doos, built new barns, bought big trucks, flew to Cuba and bought big trailers to haul to Alberta .... it was sad to watch, for most, a financial advisor was not in the equation. Then you had some who opted NOT to pay the TAX which caught up with them later..... Today, there's a lot of sad storys on these lines akin to Lotto Winners.

Now, without hope of buying their seniority back and even new people aboard, the field is ripe for CN to return to the "rescue". There has also been talk about taking advantage of the deep port at Gaspe and developing it for container traffic. That would be something to see double-stacks on the Gaspe. CN also needs to buy back these tracks for make a monopoly before Irving LTD moves into the territory, as they did with former CP trackage on the old Transcon from New Brunswick into Maine.

You also have to take into account the factor of the impoverished issue of Quebec Sovereignty, as if they don't have that already. There was a time when it looked like Quebec was going to pull out of the Confederation, and EVERYBODY wanted to pull out for economic reasons. Without subsidy from Ottawa, Quebec would topple as a welfare state basket case. This was another reason for CN to shed what they could do without, yet remain with a transcon line. Separation is now pretty much a dead issue, thanks to the INternet and the satellite dish which brought the truth of the outside world into the homes of the Francophonie.

Personally, I've seen how these lines have degenerated in less than a decade without CN in charge, and it will be good to see Canadian National return. Then again, CN always was issuing train orders over NBEC, so were they ever actually out of the picture?

NON!

D/

brs1201 wrote:As for the NBEC, perhaps CN wants it's second mainline through New Brunswick back in the fold. If they need to perform track work on the Edmunston-Moncton mainline, the NBEC will undoubtfuly be very uselful.

For the one or two trains a day they operate? Highly doubtful. They run something like 16 trains a day on the Toronto - Winnipeg mainline, and just recently ripped up the abandoned the Kinghorn Sub between Thunder Bay and Long Lac, Ontario... effectively killing off a second route between Long Lac and Winnipeg, which may very well have been handy for re-routing of trains off the line vis Souix Lookout for work or derailments.

The sad truth is, this type of planning makes great sense in about every way except financially, which is all that matters in business. I've heard a rumour that the NBEC line has more on-line traffic sources than the main via Edmundston, and that CN may be planning to abandon the shorter route in favour of the better revenue generator. I am almost totally ignorant of these lines, and like I said, this is only what I've heard speculated by others.

When weighed in terms of cash, if the seemingly stupid decision is cheaper, it usually prevails.

Any updates on the Gaspe line from Matapedia east? The Provincial Government was doing an infusion and there's more traffic on the line in a long time, however it's difficult to get a straight answer if CN is taking the line back, or trying to push to abandon it.

There has been talk for a long time about using Gaspe as a deep water port and putting in a container terminal there, xfering containers from ship to rail. So far, it's all been talk, and with the economic downturn, who knows if it's totally dead or just on hold.

D/

A few weeks ago while in the region, I was able to speak with some former NBEC and CN employees.

General sentiment now with the workers is as I speculated years ago; the sell-off of these lines was just a Union Busting folly to get out of paying pensions, CN had their hand in everything all along.

Strangest of all is the reason circulated to the workers, defying what we are used to hearing, and hard to believe; CN allegedly bought NBEC back bacause "they were worried for the safety of the passenger train, what with the tracks being in disrepair". Now, when the hell was any class 1 railroad concerned with passenger safety in the past 40 years ON A LINE THEY DID NOT OWN??

NBEC was a nickle and dime operation, it's people tell me they chinced on EVERYTHING from spikes to equipment. Speeds on VIA Rail's OCEAN fell from 110 KMPH to 70 KMPH on stretches in New Brunswick, causing chronic delays for passengers and snarling up freight traffic coordination efforts west of Mont Joli, QC. It sounds convincing until you get the real dirt........ This was the smokescreen given for Federal and Provincial approval....

Poop for years has been that the deep water port of Gaspe on the end of the peninsula in Quebec, may be used for a container port. Politics and logistics have now shifted that effort to using the deep water port of Belledune, New Brunswick, for a MAJOR container facility for CN. Belledune is a depressed industrial pit, halfway between Dalhousie and Bathurst, NB.

Real estate in Halifax has become too expensive to make expansion of existing CN container facilities feasable, forcing the exploration of other options. With the collapse of the softwood industry in northern New Brunswick, and the impending closing of the world's largest nickle mine in the world just south of Bathurst, the depressed port of Belledune looks appealling to CN, but there's a major problem with Belledune......

Belledune is home to a large lead smelter, belching lead smoke day and night. The area now sports one of the highest cancer rates in Canada, we drove through it on the way to the Pabineau First Nation indian reserve south of Bathurst, and a thick smog is hanging in the air in the area, it's so bad that even with the windows up in the car, you can TASTE it. The towns between Campbellton and Bathurst, probably down through Mirimachi, are all in serious trouble, Dalhousie since the closing of an Abitibi-Bowater plant, is virtually a ghost town. A modern 100K home can be easily picked up for 40K these days, everybody's gone west for employment.

This environment makes for a corporation to snap up cheap land, but who wants to live near a lead smelter? People hungry for work will, unfortunately.

When asked about the need to double track the former Intercolonial Railway mainline from Belledune to Mont Joli and potentially all the way to Quebec City to accomodate an anticipated explosion of container trains, NBEC veterans and CN people told me that would not be necessary, but dispatchers would be busy juggling east/west traffic for sure.

On the heels of this development, came the news late last week that Irving Oil LTD. was nixing it's plan for a 65 billion investment in a new, massive oil refinary in St. John New Brunswick, the first new refinary in eastern North America in over 40 years. Reason cited; gasoline demand has declined in the northeast US.

On the Quebec side of the Chaleur Bay, Chemin Fer Baie Chaleur is giving locals mixed signals. With only one year of Provincial subsidy left before the threat of an permanent shutdown, spirits with employees are high, and infrastructural improvements are being carried out, despite rejection by CN for purchase. A mill in Chandler shutting down has hurt the line, however, a wood mill in Nouvelle is keeping the line busy, and VIA Rail's passenger train, "The Chaleur" is busy twice per day and full of tourists and locals.

Surprisingly, old trestles have been replaced with oversized culverts and land fills, one bridge in the swamp at Pointe a la Croix (just east of L'Alverne Road) has been replaced with a modern structure of all new STEEL. Somebody's confident the line will be around for a long time to come with work like that being done.

Developments over the next 18 months should prove interesting to watch. Buzz in the industry is that Halifax is operating at only 40% capacity, and that using Gaspe or Belledune are pipe dreams. We shall see.

D/

Sounds like our federal government at work .... Saint John sits all but idle except for one ship per week and they wanna build a super port up there for no reson,nice to see my tax dollars at work

Go figure