Canada Calling
June 1998

by Bryce Lee

Industry News

At Canadian Transportation Agency (CTA) hearings that began March 30, 1998, Canadian Pacific Railway (CPR) demonstrated how it overcame the crippling effects of persistently severe weather throughout the winter of 1996/97. In the course of the CTA hearings, CPR and CN presented their responses to a complaint filed by the Canadian Wheat Board (CWB), alleging the railways failed to meet level-of-service obligations in the movement of Canadian grain during the 1996/97 crop year. As well, the railway's evidence showed how employees endured the ordeal, endeavouring to overcome the debilitating effects of blizzards, avalanches, rock and mud slides, severe cold and, eventually, flooding. The CTA hearings are expected to last several weeks, with presentations from CPR, CN, the CWB and many witnesses and interveners. The CTA is to deliver the results of the hearings by June 30, 1998.

The whole grain transportation system, not just the railways are to blame for bottlenecks and backlogs that cost farmers millions of dollars in the 1996-97 crop year. The Canadian Transportation Agency is hearing a complaint filed by the Canadian Wheat Board. The wheat board said CN and CP Rail provided inadequate service to grain farmers beginning in December 1996 and discriminated against farmers by preferentially shipping other commodities. The board said the backlog delayed shipments to major grain customers including China, Algeria and Italy. Farmers lost C$65 million in penalties and cancelled sales. The problem continued in the summer as the railways caught up and the ports became backlogged. The railways have said brutal winter temperatures and drifting snow brought on the backlog. A ruling by the agency is due by June 30, 1998. If it finds against the railways, it has the power to order remedies such as making them buy more locomotives. The agency has no power to order monetary awards but the wheat board could use a victory to pursue civil action.

The president of United Grain Growers says he supports the idea of short line railways. And he says UGG will continue to operate elevators along many lines abandoned by the big railways if short lines move in. The UGG is among many who believe CN and CP have too much power in the market. The grain transportation system would run more efficiently if short line railroads were allowed to operate along lines being abandoned by the big railways. The UGG says the whole system of rail transportation needs to be commercialized so that CN and CP don't have such a strong grip on the market.

The United Grain Growers has an idea for federal government officials expecting a C$1.25-billion windfall from the sale of thousands of federal grain cars. The UGG wants the money spent on fixing country roads damaged since rail line abandonment took hold on the Prairies. The roads have taken a pounding since heavy grain trucks began replacing rail shipping about a decade ago. The need to get out of regulating train movements plus the desire to privatize non-core activities has prompted the Federal government's desire to privatize the fleet of grain cars. Less rail has also meant less need for grain cars, however this is only part of it... unless mass acres are taken out of production these 13,000 cars will be still needed to haul product to market. Ottawa still plans to sell 13,000 cars from the federal fleet.

CN and the CWB announced April 17 they had reached a confidential commercial agreement. As a result, the CWB has discontinued its level-of-service complaint against CN. While CN is no longer a party to the public hearings, the CWB has not withdrawn its complaint against CPR, although the complaints cannot be separated. The hearings began March 30, 1998. Details of the settlement won't be disclosed by either side.

Canadian Wheat Board commissioner Richard Klassen says he believes that the settlement will mean significant benefits to Canadian farmers. The board and CN say both will now be able to concentrate on the grain handling review being conducted by Justice Willard Estey. CN president Paul Tellier says a long dispute isn't in anyone's interest. Farmers say they lost up to C$65-million dollars because of grain backlogs in 1997. The rail companies had blamed extremely bad weather last winter for the delays in getting grain to market. The settlement leaves CP Rail to defend itself alone at the hearings and company officials asked for a one-week adjournment to consider the development. Canadian Pacific said the settlement raises questions about the need for the hearings to continue.

CPR was to argue at the hearings that the principles of transparency and fairness demand that the secret pact between CN and the CWB be disclosed, not only to CPR and the Agency, but to all grain industry stakeholders, including producers. Mr. Rick Sallee, CPR's vice-president of grain, noted "While CPR is seeking to bring a greater level of transparency and openness to the hearings; and to the grain handling and transportation system; the CWB is at the same time seeking to maintain secrecy. That erodes the fairness of the hearings."

Canadian Pacific Railway will not get to see the terms of a deal between its competitor, Canadian National Railway, and the Canadian Wheat Board over a complaint of poor grain shipping service in 1996-97. In a decision handed down on April 28, 1998 the Canadian Transportation Agency also denied a CP Rail request to dismiss an identical complaint filed against CP by the Wheat Board. The Wheat Board brought an application against CP and CN last April, alleging they cost western-Canadian farmers $50-million by giving other commodities preferential treatment in shipping to port. For their part, the railways argued that unusually bad weather was to blame for the slow service. But in April 1998, the Wheat Board and CN announced they had negotiated a confidential, no-fault settlement including financial compensation and freight rate breaks for farmers.

CP had asked the transportation agency to force disclosure of their competitor's deal, arguing that the complaint against both railways was inextricably linked and it would be unfair to proceed with one and not the other. CP also said it should be released from the complaint and that the Wheat Board should further specify its case. However transportation agency chairwoman Marian Robson said CP did not satisfy the panel on any of its motions. Robson added that each railway is individually responsible for any level of service failure. Canadian Pacific Railways have no plans to settle with the Wheat Board because the railway must now present its case and protect its reputation.

Saskatchewan Agriculture Minister Eric Upshall suggested Canadian Pacific should follow the example of Canadian National Railway and work out a monetary settlement with the Canadian Wheat Board on a backlog of grain last year. Upshall and Transportation Minister Judy Bradley say they'd like to see farmers who lost their incomes compensated in the near future. The Canadian Wheat Board took the initiative to protect the interests of Prairie grain farmers by making the rail companies more accountable. The minister says now they need to push for a long term solution so farmers don't face problems like this in the future.

Paul Johnson of the Johnson Family Foundation which is building the Grand Concourse network of walking trails throughout the city of St. John's has apparently paid the money necessary to ensure historic railway locomotives, cars and memorabilia; part of the Newfoundland Transportation Museum, will stay in St. John's, Newfoundland. The Transportation Museum, which went into bankruptcy last year. Since then were have been concerns the equipment might have been scrapped or be sold outside the province.

Canada's Railway Safety Act will come under scrutiny in June, 1998 and that could reflect on the accident liability of railways. The Supreme Court of Canada will hear a BC case in June. In 1995 the BC Court of Appeal ruled that the CPR and City of Victoria were only half liable for injuries suffered by an individual. He injured his knee and hip in 1987 when his bike wheel got caught in one of the rails set into the pavement on a Victoria street. His lawyer says the man can't work on oil rigs as well as before. The appeal court overturned a lower ruling that the railway and city were fully liable for the man's injuries. The Supreme Court will rule whether railways have what's called "duty of care" to the public.

BC Rail Ltd. has successfully concluded a new five-year rail transportation agreement with Quintette Coal which will bring economic stability to B.C.'s north and protect jobs at the Tumbler Ridge minesite, Energy and Mines Minister Dan Miller announced today. Miller is also responsible for northern development and provincially-owned BC Rail Ltd. Export shipments of coal are transported from the Quintette minesite by BC Rail to Prince George and by CN Rail to Ridley Island Terminal at Prince Rupert. This agreement demonstrates that CN and BC Rail recognize the continued importance of northeast coal to the economy of northern British Columbia, the workers and families of Tumbler Ridge, the port of Prince Rupert and the ongoing operations of these two rail companies. Paul McElligott, President and Chief Executive Officer of BC Rail, commented that "both railways are satisfied with the outcome of these very difficult negotiations and are pleased that Northeast coal will continue to be an integral part of British Columbia's exports. We have once again demonstrated that our organization is customer-focused and market-driven and that we can work constructively with our customers in difficult circumstances to produce a win-win deal." Quintette's new sales contracts with the Japanese steel industry call for annual export volumes of three million tonnes in each of the next five years at world competitive prices after a transitional year. This represents a decrease from 4.75 million tonnes for the last six years and a decrease in the selling price of northeast coal.

A fight over Toronto's Union Station returned to the courts. The dispute has to do with back rent the city is owed for the land the station stands on. The rent is owed by Toronto Terminal Railways, the company that owns the station itself. Toronto Mayor Lastman was trying to negotiate a settlement in the decades-long dispute. April 2, 1998 was the deadline; and a deal was not reached by the deadline. So now, the city will ask the courts to settle the matter. Union Station is a crucial part of the plans for the new Maple Leaf Gardens. The Leafs' owner wants to use the station as the main entrance to the Air Canada Centre. But the dispute over the back rent has to be settled first.

First-quarter profits at Canada's two largest railways surged despite a severe ice storm in January 1998 that battered parts of the country's two most populated and industrialized provinces. Montreal-based Canadian National Railway Co. reported a first-quarter net income of C$104 million, or C$1.22 a share, compared with C$71 million, or 84 Canadian cents, in the year earlier quarter. CNR's revenues were C$1.06 billion versus C$1.02 billion. CNR said its US$2.4 billion acquisition of Chicago-based Illinois Central Corp., if approved by U.S. regulators, would allow it to take advantage of growing freight traffic flows in key north-south markets.

Calgary, Alberta-based Canadian Pacific Railway, a wholly-owned unit of publicly traded Canadian Pacific Ltd., more than doubled its operating income to C$150 million in the latest first quarter from C$62 million a year earlier. CPR's net income was C$70 million versus C$4 million in the 1997 first quarter. CPR's freight revenues grew 4 percent to C$830 million from C$798 million, buoyed by Canada's vigorous economy. Canadian Pacific Ltd. said its railway unit led the energy, transportation and hotel company's overall first-quarter operating profit improvement, and announced an increase in its quarterly dividend to C14 cents from 12 cents. Canadian Pacific's operating profit improved to C$163 million in the first quarter from C$159 million a year earlier. Net income was C$163 million or 48 Canadian cents a share against C$182 million or 53 Canadian cents a share in the 1997 first quarter, which included C$23 million of income from discontinued operations. Canadian Pacific said its railway unit should continue to benefit from cost-reduction initiatives during the year.

CANADIAN NATIONAL RAILWAYS

The Canadian Auto Workers accused Canadian National on April 2, 1998 of snooping on its employees and union representatives. The union director of transportation, said CN is covertly collecting and reading e-mail messages of its employees and union representatives, as well as installing secret video and audio recording devices in an unknown number of workplaces. The union said it will lay charges against CN under the Canada Labour Code for unlawfully interfering in the affairs of the union and bargaining in bad faith. The two sides are locked in a contract dispute. Canadian National denied the charges. The union said that a union representative, working at the CN customer service centre in Winnipeg, discovered that her personal e-mail had been read before appearing in her in-box. The union found that the covert monitoring was widespread and that it reached the highest level of the union. The CAW's 6,400 members form the largest union at CN. They voted in March 86 per cent in favour of a strike to back their contract demands. There have been no negotiation sessions since February of 1998.

CN's recent offers of settlement are totally inadequate, failing to address the key issues outlined by the union, the Canadian Auto Workers union announced April 15, 1998. The CN offers don't meet any of the needs identified as key by the union such as pension improvements, decent wage increases with a COLA, contracting-out restrictions, work ownership, an eight-hour day and a long-term disability plan. The CAW's announcement was made after a review of CN offers-of-settlement were delivered to the federal conciliator. The CAW was to meet with its leadership at CN across the country over the next few days and prior to the next meeting scheduled with the federal conciliator on April 24. The CAW represents 6,400 workers at CN including shopcraft workers who repair and maintain locomotives and railway cars, customer service clerks, dispatchers and labourers as well as owner/operator truckers who haul cargo from the yard to customers. The collective agreements at CN expired on December 31, 1997. The CAW has received an 86 per cent mandate from its membership for strike action if necessary.

Canadian National Railways has signed a three-year labour agreement with 5,820 train operating employees in Canada, as of April 15, 1998. The deal includes pension plan improvements and wage increases. CN and the Canadian Council of Railway Operating Unions agreed to improve pension benefits for both pensioners and employees during the contract if the pension fund performs well. Workers will get wage increases of two per cent a year in the agreement, retroactive to January 1, 1998. The company also agreed to share with employees financial gains resulting from reduced costs or better train performance. As well, operating employees will be able to buy CN shares through payroll deductions. Tentative collective agreements covering about 5,200 maintenance employees, traffic controllers and electrical workers remain subject to ratification.

Canadian National Railway Company (CN), Illinois Central Corporation (IC) and Kansas City Southern Railway Company (KCSR) announced Wednesday April 15, 1998 a 15-year marketing alliance that will offer shippers new competitive options in a rail freight transportation network linking key north-south continental freight markets. CN and KCSR have also signed a separate access agreement regarding certain haulage and trackage rights, which is contingent upon United States Surface Transportation Board approval of CN's previously announced merger with IC. The affected tracks are owned by IC and KCSR.

Neither CN nor KCSR will acquire equity interests or other financial holdings in the other. CN-IC-KCSR plan to launch their marketing alliance immediately; it does not require approval by the Surface Transportation Board. The marketing alliance will offer shippers pro-competitive connections to new rail routes for their products and the ability to tap new markets through a coordinated rail network. Services will link points in Canada with the major U.S. Midwest markets of Detroit, Chicago, Kansas City and St. Louis, along with the key Southern markets of Memphis, Tennessee, Dallas and Houston. In addition, this new marketing alliance will give shippers access to Mexico's largest rail system, Transportacion Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM").

Under terms of the marketing alliance, the companies will coordinate sales and marketing, operations, fleets, and information systems, but not for traffic movements where any two of them provide the only direct rail service. The railways will target new markets in key north-south international and significant domestic U.S. traffic corridors. They will also seek to increase rail business in existing markets, primarily in automotive and intermodal, but also in key carload markets, including those for chemicals and forest products. CN-IC-KCSR expect the marketing alliance to generate revenue and earnings growth and position them as the pre-eminent north-south rail carriers in the NAFTA corridor, where north-south transborder railway traffic is growing annually at between 12 per cent and 14 per cent. The carriers plan to utilize two main interchanges:

• Jackson, Miss., for traffic moving between southern KCSR territory or Mexico and CN or IC territory;
• Springfield, Ill., for traffic moving between CN and northern IC territory, and U.S. Midwest KCSR territory.

To improve customer service and operating efficiency at Jackson - a critical junction between IC and KCSR; the railways have agreed to arrange for joint operation of yards, terminals, transload and intermodal facilities.

Under a separate access agreement, subject to STB approval of the CN-IC merger, CN and KCSR plan investments in automotive, intermodal and transload facilities at Memphis, Dallas, Kansas City and Chicago to capitalize on the growth potential represented by the marketing agreement. The railways' access to the proposed terminals would be assured for the 25-year life span of the facilities, regardless of any change in corporate control. Under the terms of this access agreement, KCSR would also extend its rail system in the Gulf area. For traffic other than coal, KCSR would receive overhead trackage rights on the merged CN-IC in Mississippi between Jackson and Palmer, and overhead haulage rights between Hattiesburg and Mobile, Alabama. The merged CN-IC would reach the Port of Gulfport from Hattiesburg under overhead haulage rights in Mississippi granted by KCSR. The access agreement would give KCSR access to three chemical plants at Geismar, Louisiana, now served by IC, with associated overhead haulage rights from Geismar to Baton Rouge and, for traffic moving to or from certain eastern centres, from Baton Rouge to Jackson. KCSR access to the three Geismar plants is expected to take effect in the fall of the year 2000.

The president of Canadian National Railways says pensioners who picketed the company's annual general meeting in Winnipeg have nothing to worry about. Paul Tellier says officially there is no surplus in the company's C$10-billion pension plan. Outside the meeting, a Canadian Auto Workers official said everyone knows CN's pension fund will show a surplus of up to C$1-billion when it is reviewed in a few years. The CAW official CN has made it clear during bargaining it wants to decrease pension contributions. CN recorded record profits of C$403-million in 1997. Tellier says CN will become a true North American operation when it takes control of Illinois Central and forms an alliance with the Kansas City Southern Railway.

A strong increase in intermodal freight traffic through Edmonton is behind Canadian National's decision to start construction this fall on a new C$18 million intermodal terminal. The terminal will occupy 370 acres of industrial land on the city's western outskirts, adjacent to CN's main line and the Yellowhead interprovincial highway. The terminal is scheduled to begin operation in September of 1999. Intermodal traffic comprises containers that move from origin to destination by a combination of truck, train, and ship. The new terminal will feature 10 tracks, 4 of them 7,000 ft long and able to handle entire trains without the need for switching. It will have an initial capacity of 150,000 intermodal units, with an eventual capacity of 225,000 units to accommodate expected increases in traffic volumes.

On April 20, 1998 CN removed all trackage from under the now-vacant CanadIan National Railways passenger station on James Street North in Hamilton, Ontario. The station was last used as a passenger station by GO Transit, before GO moved to the refurbished TH&B station located in uptown Hamilton a few years ago. As the station is a Heritage Building it can not be demolished.

CANADIAN PACIFIC RAILWAY

Canadian Pacific Railway (CPR) has captured 100 per cent of Chrysler's Canadian domestic traffic, winning an open-bid competition for distribution of all Chrysler Canada finished vehicles. From the timely supply of bi-level rail cars for Chrysler's domestic business, to outstanding customer service, to quality damage prevention, CPR's team effort is paying off for the company and its customer. The contract, initiated February 1, 1998, sees CPR moving vehicles from Chrysler's Windsor, Ontario mixing centre, and from United States and Mexican origins via Chicago, Illinois to all Canadian destinations. At destination, trucks move the vehicles to Chrysler's dealers.

Rail traffic on the main CP Rail line between Sudbury and Toronto was halted by a washout which occurred sometime on April 2, 1998 about 20 kilometres south of Bala. About 12 metres of track was washed out. A temporary dam was built until repair crews could repair the track and dig drainage culverts. Rail traffic was being held up until repairs were made. A signal indicator detected the washout before any trains passed through the area. The region was hit by heavy rains and flooding prior to the washout.

Canadian Pacific Railway employees who maintain track, buildings and bridges have ratified a three-year collective agreement through to the end of 2000, the fifth of the railway's seven unions in Canada to ratify an agreement. CP now has agreements with more than 71 per cent of its unionized employees in Canada. Settlements have been ratified by 4,100 train crew personnel, 1,420 clerical workers, 485 signal system maintainers, and 230 traffic controllers, in addition to the 2,700 track maintenance workers who are represented by the Brotherhood of Maintenance of Way Employees. Negotiations are continuing with the Canadian Auto Workers union, representing 3,500 mechanical shop employees, and the Canadian Pacific Police Association, representing 40 security officers. The agreement provides for wage increases of 2 per cent in each of the three years, introduces work rule changes that will help improve productivity and includes a gain-sharing provision under which employees can share directly in the benefits of the productivity gains they help achieve. In addition, the contract reduces employee pension contributions and provides for improved benefits for extended health, vision and dental care.

Canadian Pacific Railway (CPR) is satisfied with the April 21, 1998 decision by the Canadian Transportation Agency (CTA), approving construction of a 12.6-km (eight-mile) rail line to a planned Union Carbide polyethylene plant at Prentiss, Alberta. A comment by the vice-president of CPR's resource products group noted "the favourable decision by the CTA confirms that CPR selected a rail route that best balances the interests of the community and the shipper. In its ruling, the Agency recognizes that CPR's extensive program of public consultation and environmental assessment was successful in identifying a route with the least impact on the community and environment, while also meeting the needs of Union Carbide." Conditions imposed by the CTA in its ruling, primarily aimed at ensuring adequate monitoring of, and compliance with, measures designed to mitigate environmental impacts, are consistent with those called for under the railway's own proposal for construction and operation of the rail line. On December 19, 1997, CPR filed an application with the CTA, seeking approval to build the rail line, which is to run southeast from the railway's existing Lacombe Subdivision, about four km (2.4 miles) from the Town of Lacombe, to Prentiss. CPR's public consultation and impact studies began in late 1995, following a request by Union Carbide for proposals to meet the needs of its planned polyethylene plant at Prentiss. The CTA decision followed public hearings last month in Red Deer, during which the Agency heard arguments from CPR, Union Carbide, Canadian National and the community. The Town of Lacombe and Lacombe County supported CPR's application. The line ensures competitive transportation options for Union Carbide.

On Vancouver Island, Nanaimo-based E&N Railfreight announced April 27, 1998 that parent company, Canadian Pacific Railway (CPR), is seeking bids to purchase a 109-km (68.1-mile) section of the E&N rail line between Port Alberni and Nanaimo, on Vancouver Island. This announcement comes after CP said the line was not for sale. Freight service over this line is currently provided by E&N Railfreight, which was established in March 1996 by CPR to provide the locally based management focus that is required on Vancouver Island. E&N Railfreight business has had some success, but requires further restructuring to achieve long-term viability. CPR is seeking a prospective buyer with expertise in the operation of small, local or regional railways. The company will review bids for the Port Alberni-to-Nanaimo, portion of the E&N rail line throughout the spring and summer, and is seeking to complete negotiations for a sale of this line segment by the end 1998.

CPR has no plans to sell the parts of the E&N rail line running north from Victoria to Nanaimo, and from Parksville to Courtenay. The company will retain the right to operate between Nanaimo and Parksville and will explore the alternatives available for operating the line between Victoria and Courtenay most efficiently. The planned restructuring will not affect VIA Rail Canada's ability to continue passenger services over the E&N line from Victoria to Courtenay. CPR will continue to fulfill current arrangements with VIA Rail for maintenance and train operations.

Canadian Pacific Railway (CPR) announced April 28, 1998 a proposed amalgamation of its wholly-owned subsidiary St. Lawrence & Hudson Railway Company (St.L&H) with two other CPR subsidiaries dating from the late 1800s. The two companies are the approximately 80 percent owned Ontario and Quebec Railway Company (O&Q) and the 68 percent owned Toronto Grey and Bruce Railway Company (TG&B), both of which have been inactive since 1884, when all their assets were leased to the CPR. The O&Q lease is perpetual, while the TG&B lease is for 999 years. The amalgamation will be implemented by way of a plan of arrangement under terms of the Canada Business Corporations Act and will be subject to court, shareholder and regulatory approval.

The amalgamated company will be a wholly-owned subsidiary of the CPR and will be named the St.Lawrence & Hudson Railway Company Limited. Under the arrangement, O&Q shareholders will receive for each O&Q share their choice of either a number of Canadian Pacific Limited (CPL) shares having a value of C$650, or a special share redeemable for C$650 in cash. Each O&Q share receives a fixed annual dividend of 6% on its C$100 par value, which is paid by CPR. TG&B shareholders will receive for each TG&B share of C$100 par value their choice of either a number of CPL shares having a value of C$100, or a special share redeemable for C$100 in cash. No dividend has been paid on the TG&B shares for more than a century. Holders of other securities involved in the arrangement, the O&Q 5% permanent debenture stock and the TG&B 4% first mortgage bonds due 2883, will be paid at par. The amounts to be received by security holders represent substantial premiums over market prices. It is anticipated that shareholder meetings will be held in June 1998 and, subject to necessary approvals, the transaction is expected to be completed towards the end of that month.

Canadian Pacific Railway increased its offer May 1, 1998 for shares in the Ontario and Quebec Railway Co., a defunct railway which has been the subject of lengthy court battles. CP is now offering C$800 for each O and Q share, significantly more than its earlier offer of C$650 per share. CP wants the shares in O and Q, which effectively died in 1884, to wrap up a proposed amalgamation of its eastern Canadian subsidiaries. The plan is to fold two inactive subsidiaries: Ontario and Quebec Railway Co. and Toronto Grey and Bruce Railway Co. into Canadian Pacific's St. Lawrence & Hudson Railway Co. But that requires shareholder approval. And while there is nothing contentious about Toronto Grey and Bruce, O and Q; which was leased to CP in perpetuity has been the subject of court battles involving minority shareholders who feel their shares have been undervalued. CP Rail's latest offer allows shareholders in O and Q to choose payment in either cash or equivalent common shares of Canadian Pacific Ltd.

Canadian Pacific Railway has launched the first railway retail "Web store" in Canada, offering fast, convenient whistle-stop shopping. It offers a variety of retail goods featuring CPR's new logo which returns the historic beaver and shield to prominence, as well as memorabilia from CPR's storied role in uniting the country and settling the Prairies. The store, called Station 29 Collectibles, is located on CPR's home page (http://www.cpr.ca). Browsers can window shop or buy on-line from Station 29 using its convenient click-and-order features for selecting merchandise and creating an instant invoice, complete with a retail tax application that recognizes the buyer's location and applies the appropriate provincial rate.

On a typical day, more than 34,000 people drop by the CPR Web site, and the number is growing quickly. They spend on average almost nine minutes browsing the site, including Station 29. For easy shopping, the retail merchandise in Station 29 is displayed in four store sections: collectibles, photos, posters and videos. Clicking on any item in the list of merchandise brings up an image of it, a description and the price. Clicking on a ``buy'' button puts the item in an electronic shopping cart. To get to the cash register, click on checkout and the invoice is automatically created. In addition to electronic shopping, CPR has a Station 29 kiosk on the second floor of Calgary's Gulf Canada Square, where the railway's headquarters is located.

VIA RAIL

An early morning crash between a Via Rail train and a pickup on April 1, 1998 killed two people in a truck. The passenger train, with 85 people aboard, was heading from Quebec City to Montreal when the crash occurred at a level crossing. Names of the victims were not immediately available. The crash happened near St-Basile-Le-Grand, Quebec about 25 kilometres east of Montreal. The train passengers were not injured in the accident.

Via Rail Canada carried more passengers in 1997 even though its annual federal subsidy shrank again, the national rail passenger service announced April 22, 1998. Via said 3.8 million passengers took the train in 1997, up three per cent over 1996. Passenger revenues grew by seven per cent to C$179 million. At the same time government funding declined to C$196 million for operating expenses from C$205 million in 1996. Including extra funding for non-operating expenses like new equipment and reorganization charges, subsidies amounted to C$229 million in 1997, compared with C$245 million the year before. In 1998 Via expects to receive C$178 million from the federal government for its operations, representing a drop of 54 per cent from 1992. It also anticipates operating revenues to increase to C$204 million, which would be up 31 per cent compared with 1992. Via President Terry Ivany reiterated that Via needs to invest in new equipment. It has suggested it be allowed to go to the private sector for capital to buy new trains.

Federal Transport Minister David Collenette accepted with regret the resignation of Terry W. Ivany as President and Chief Executive Officer of VIA Rail Canada Inc. effective Friday April 24, 1998. Mr. Ivany is returning to private industry after heading Via Rail for the previous five years. Mr. Collenette stated last fall that VIA needed to be restructured and recapitalized with the possible involvement of the private sector, and that his department was seeking creative ways to provide excellent passenger rail service to Canadians, without increasing the fiscal burden on the taxpayer. VIA Rail Canada Inc., a Crown corporation, was created in 1977 to operate Canada's national passenger rail service. VIA's Board of Directors is accountable to Parliament through the Federal Minister of Transport.

A special railway train which was part of a 50th anniversary promotion for one of Japan's leading tour operators, Hankyu Express International, operated from April 19 to April 27, 1998 between Banff, Alberta to Golden, British Columbia. Via Rail supplied the passenger cars and on-board service on a charter agreement, while the crew and track belonged to Canadian Pacific Railway. Via's passenger cars were requested because of its dome cars, which are closely identified by the Japanese with Canadian passenger trains. The Via Banff/Golden "TPT Special" charter consisted of FP40H-2 6444; FP40H-2 6457; HEP-2 Club 4006; Skyline 8507; Skyline 8515; Skyline 8517; Skyline 8510; Skyline 8509; HEP-2 Club 4002; dome observation Kootenay Park 8708. Each day the train originated in Banff with up to 120 passengers and made the 145-kilometre journey to Golden in three to four hours. It was met there by a second group who travelled to Golden by bus. The two groups changed places for the return trip to Banff.

Via Rail is installing Global Positioning System units on the top of all of its rolling stock. In theory this is to tell VIA where each piece of rolling stock is located as the Canadian National car tracing is not accurate. Also GPS are being installed on all VIA locos and all stainless steel dome cars. For a demonstration of the technology; point your Internet Browser to http://www.kcaprs.org and scroll down until you see the map.

The following cars were purchased by Nagel Tours for the "fun train" in Edmonton. Baggage Car 9653 (NSC 1958), Coaches (Canadian Car & Foundry (CCF-1954)) 76 passenger: 5446, 5522, 5590, 5440, 5473, 5487, 5532, 5585, 5603, 5654; Cafe Lounge (CCF-1954) 44 passenger: 752, 755; Club Galley (CCF-1954) 38 passengers: 653, 654, 658, 659; E-Sleepers (Named after cities and towns beginning with "E") 24 passenger 4 Bedrooms, 4 Sections, 8 Duplex Roomettes (Pullman Standard 1954): 1128-Elmsdale, 1137- Enfield, 1159- Eldorado, 1157-Evelyn. No word on locomotives as of yet.

VIA Rail retired and sold by tender in mid February 1998 its oldest passenger cars: combine 7201 built in 1919; combine 7209 built 1928 and 5186 built 1937. 7209 has stayed in Canada going to Nova Scotia, the other two went to the United States to a shortline by way of a car sales company. The 7209 has been delivered to Cape Breton & Central Nova Scotia who have leased it from a private party.

VIA Rail has acquired the CN Alexandria Subdivision between Montreal and Ottawa. There was an severe ice storm in Quebec and eastern Ontario in the early part of 1998. In the case of the Alexandria subdivision, CN communications systems suffered nearly C$4-million in damage. In view of their agreement with VIA Rail, CN would have had to spend a considerable amount of money to repair the communications system along the track. Since CN was already negotiating with VIA Rail, with the intent to give up this section, Canadian National sold the subdivision to VIA for $1.00. Presently there are two freight trains a day on the line and six to eight VIA passenger trains. The line also serves as the rail connection for the RailTex owned Ontario L'Orignal Railway.

SHORTLINES

As of the end of April, 1998, the RailTex owned Cape Breton & Central Nova Scotia C630M's 2003, 2016 were still being used as trailing power. C630M's 2029, 2032, 2034, 2039 were stored.

In regard to the sale of former Canadian Pacific RS18u's that were MLW built, Alco powered locomotives, the following have been sold to the New Brunswick East Coast: 1813, 1814, 1818, 1821, 1834, 1835, 1840, 1841, 1845, 1851, 1853-1858, 1867, 1868. Some units were at Canadian Allied Diesel in Lachine, Quebec for repair before moving on to the NBEC. CP RS18u 1825 has been purchased by Montreal Locomotives Sales but will give up its main generator to 1867.

The New Brunswick East Coast operating from Pacific Junction, New Brunswick (near Moncton) to Mont-Joli in Quebec have leased the following units: CN M420W 3532, 3540, 3545, 3547, 3555; SD40 5020, 5093, 5096, 5213; SD40-2 5339; SD40u 6016. Leased from CANAC: 3515 (retired by CN), 3536 (black, really exBBD 7000); and leased by Merilees 3300 (ex. CR/PC 2895 U33B).

Dispatching duties of the Newcastle and part of the Mont-Joli Subdivision from Mont-Joli Quebec to Campbellton New Brunswick) will be taken over by the NBEC (New Brunswick East Coast Railway) and the MVR (Matapedia Valley Railway-Chemin de fer de la Vallee de Matapedia) on May 10th 1998. The dispatching office will be located in the former CN offices in Campbellton N.B. The same parties already operates the former CN Chandler & Cascapedia Sub from Matapedia to Gaspe Quebec. They interchange with each other at Matapedia Quebec. They will interchange with the CN at Catamount NB. near Moncton NB and at Mont-Joli Quebec.

The Ontario Southland Railway operating the Guelph Junction Railway between Guelph Junction on the St.L&H Galt Subdivision west of Toronto has seen its motive power change twice time since the beginning of operations January 2, 1998. OSRX 504 (ex-CP RS23 8044) the first unit had overheating problems and was then replaced by 502 (which was an ex-BC Rail S-13); which had a high metal count and was leaking oil. Current motive power is the OSRX 505 (ex-CP RS-23 8021) at Guelph Junction, painted in the burgundy and cream colours of the Toronto Hamilton & Buffalo and polished to a high gleam. It looks and operates very well. Former CP caboose 434900 at Guelph will be repainted over the course of the summer using the burgundy and cream of the former TH&B passenger equipment. Sometime this summer the caboose will receive roller bearing trucks.

RaiLink Investments Limited of Edmonton, Alberta, has purchased and will operate approximately 637 miles of ex-CN track in northern Alberta from Smith, Alberta (130 miles north of Edmonton) to Hay River, Northwest Territories. The routing generally aligned in a north south direction This line will operate under the name "MacKenzie Northern". Power will consist mainly of a handful of purchased and transferred GP38's as well as some short term leased CN GP38's and some leased CN GP9's. In addition, RaiLink 4201, 2001, TOR (Trans Ontario Railway which is actually Ottawa Valley RaiLink, a.k.a RaiLink) 2009 and 2004 have been seen. The Mackenzie Northern Line is expected to handle in the neighbourhood of 30,000 cars annually. According to RaiLink, the MacKenzie Northern is scheduled for start-up at 0001 Mountain Daylight Time on Sunday May 3, 1998. The northern end was the Great Slave Lake Railway. The lower end was part of the Northern Alberta Railways.

MOTIVE POWER

Canadian National Railway:

The following motive power has been retired: GMD1s: 1134 April 20, 1143 April 21, 1116 April 24, 1127 April 30. HR616s: 2100, 2113, 2115 all April 30, the last of this class. SD40s: 5128 April 21, 5006, 5010, 5040, 5080 April 24, 5021 April 30, GTW SD40 5926 April 24.

By the end of June 1998 there will be no leased power on CN except for GEC-Alsthom SD40-3s GCFX 6030-6079 being utilized in western Canadian coal service. With an estimated surplus of 110 locomotives CN does not need to lease motive power! All of the Conrail EMD units have returned, the LMS locomotives are expected to be returned during the month of May 1998. The former Detroit Edison now HLCX units 5001-5006 are off lease and are awaiting repairs before being returned to Helm. The HATX 425-428 and HLCX 4290 have been returned to Helm. The NREX SD40s (ex-CNW) 869, 870, 872, 878, 882, 886, 889, 892 will also be returned.

Canadian Pacific Railway:

The demise of the remaining CP Alco-powered Montreal Locomotive Works engines was forecast. However, some MLWs were still operating on Canadian Pacific Railway in mainline service at the end of April 1998. New Brunswick East Coast purchased additional motive power. Genessee Railone, operators of the Quebec Gatineau and Huron Central declined to purchase additional locomotives which left CP with operational MLW locomotives. CP chose to continue operating these remaining locomotives until they were either sold to other parties, or died in service or until their regular 90 day inspection became due. As a result, interesting sightings:

On Saturday April 25, 1998 these were some of the offerings on the Canadian Pacific/St.L&H (Stan Laurel & Hardy) Galt Subdivision:

• Ayr mile 67.3: 14:47-CP501; SD40-2 CP5665, CP5624, CP5612, 92 c;
• Killean mile 55.8: 16:15-CP#505; SD40-2 CP5666, CP5609; 16:30-CP#512; SD40-2 CP5870, CP5769, CP6024, CP5632, HLCX6066;
• Orrs Lake mile 60.6: 16:55-CP#505 after making a lift at Galt; 17:08-CP#270; SD40-2 CP5626, CP5544, STLH5449 56 cars;
• Cambridge/Galt (mile 57.2):
  • In the engine track at Galt, are the Grand River Railway's power GP9u 8247, GP7u 1508, GP40 HLCX 4203;
  • 18:07-CP#511; SD40-2 CP5603, SD40-3 HLCX6065, 35 cars;
  • 18:47-CP#509; SD40-2 CP5424, CP5669, CP5534, 85 cars;
  • 18:50-CP#503; SD40-2 STLH5447, CP5571, STLH5532, 76 cars;
  • 19:29-CP#515; SD40-2 CP5590, CP5547, GMD-built 2/51 SW9 nee C&O 5242, Port Stanley Terminal Rail L3, Ontario Southland 52, and EMD-built 1947 NW2u nee TH&B 51; this was in full TH&B paint and lettering, the 52 had spray painted numbers and letters. The 52 was set off at Ayr with a hot journal which was later replaced.
  • *20:15-CP#923, RS18u CP1842, CP1838, C424s CP4230, CP4219, CP4204!*
  • 21:00-CP#921; SD40-2 CP5602, CP5431, 53 cars;
  • 22:00-CP#271; SD40-2 CP5581, CP5504, CP55xx, CP5421, 47 cars;
  • 22:33-CP#507; SD40-2 CP5565, CP5536, CP5566;
  • 23:42-CP#924; SD40-2 CP5752, CP5592, GP9u CP1618;
• and on Monday April 27, 1998 at CP Guelph Junction point of the St.L&H (Stan Laurel & Hardy) Galt & Hamilton Subdivisions
  • 16:50-CP#924; RS18u CP 1838, 1842, C424 4204, 4219, 4230, 49c
  • 17:13-CP#529; SD40-2 CP 6043, Control Cab 1100 33 RoadRailers
  • 17:27-CP#511; SD40-2 CP 5505, IMRL 212 (in UP yellow) 39 cars
  • 17:32-CP#271; SD40-2 CP 5617, 5426, 5430 (last 2 UP Yellow)36 cars
  • 17:44-CP#522; SD40-2 STLH 5560, CP 5550, 5540, 62 cars

CP RS18u 1811 has been sold to the Owego Harford Railway in upstate New York. In addition RS18u 1850 has been sold to a group of private investors who will store the unit on the OHRY for future considerations. Both locomotives were expected to move south sometime during the first week of May 1998.

As of May 1, 1998 the following CP MLWs were still operating: RS18u: 1811, 1812, 1828, 1837, 1838, 1839, 1842, 1860, 1861, 1865. C424s: 4204, 4210, 4216, 4219, 4230, 4237, 4238, 4240. Also Caterpillar powered 4711 is still running and for sale. In addition, the original CP C424 #4200 and as-built M640 4744 are both stored unserviceable. If unserviceable MLWs remain after the last MLW dies or is removed from service, then any or all of the remaining MLW power at St. Luc will probably be scrapped.

Thank you to the following individuals for contributions to the June 1998 Canada Calling on the Internet: Andrew Blackburn, Will Baird, Peter Bowers, Gerry Burridge, Tom Box, Rich Chrysler, Paul Cordingley, Bruce Chapman, Brian Ellis, Tim Green, Roman Hawryluk, Ken Jones, Joseph F. Kazmar, Brad Kindschy, Randy Kotuby, Eric Lee, Mark Liddell, Bill Linley, Bill Miller, Raymond Morrissette, Steven Reeves, Kris Roenigk, Earl Roberts, Jim Sandilands, Mick Swick.

[ DEPARTMENTS ]