Canada Calling
May 1999

by Bryce Lee

CANADIAN NATIONAL

The merger of Canadian National Railway Company (CN) and Illinois Central Corporation (IC) won approval of the U.S. Surface Transportation Board (STB) March 25, 1999 in a unanimous vote. The STB is scheduled to issue its written merger decision on May 25, 1999. That decision, reflecting the March 25 oral vote, is expected to become effective June 24, after which CN will be permitted to exercise control over IC operations and assets. A step-by-step integration of the two railroads is expected to start July 1, 1999. Implementation teams are working to ensure a safe, smooth integration process. The two railroads have developed a comprehensive safety integration plan that has been approved by the U.S. Federal Railroad Administration. The merger joins CN and IC in an end-to-end combination at Chicago. CN/IC (the only true North American railroad on the continent will span Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, offering shippers: integrated, efficient single-line service in fast-growing North American Free Trade Agreement trade corridors; new routings and gateway choices, and strong competitive alternatives to the Big Four U.S. railroads and trucking companies in many markets, and quicker, more efficient handling of freight shipments around and through the busy Chicago rail hub, along with smoother interline freight movements with other railroads. The Board, which has the authority to impose conditions to mitigate the harm that a merger would otherwise produce, imposed the following conditions upon the CN/IC merger:

• Geismar Shippers. In 1995, KCS sought regulatory approval for construction of a build-in line that would allow it to access three IC-served shippers (BASF, Borden, and Shell) in Geismar, Louisiana. The CN/KCS Access Agreement provides, among other things, for KCS access to these shippers via haulage rights over IC. Three other IC-served Geismar shippers (Rubicon, Uniroyal, and Vulcan) have expressed concern that this aspect of the Access Agreement will eliminate KCS's incentive to construct the build-in line, which (these three additional shippers claim) would have enabled KCS to reach not only BASF, Borden, and Shell, but also Rubicon, Uniroyal, and Vulcan. To ensure that the Access Agreement does not result in a reduction in the IC versus KCS competition that Rubicon, Uniroyal, and Vulcan might otherwise have enjoyed, the Board imposed a condition requiring applicants to grant KCS access to Rubicon, Uniroyal, and Vulcan under the same terms and conditions that will govern KCS's access to BASF, Borden, and Shell.
  
  
• North Dakota. The state of North Dakota has expressed concern that the CN/IC merger will result in the elimination of an efficient routing via Chicago for its agricultural commodities moving to the Gulf Coast area, which are originated in North Dakota by the Soo subsidiary of the Canadian Pacific (CP), which are then transported by Soo to Chicago for interchange with IC, and which are then transported by IC to the Gulf Coast area. To ensure that the Chicago gateway remains open for these commodities, the Board imposed a condition holding applicants to their representation to keep open and competitive their Chicago gateway with CP's Soo subsidiary.
  
  
• Detroit River Tunnel. CN and CP each hold a 50 percent interest in the Detroit River Tunnel that runs under the Detroit River between Detroit, Michigan, and Windsor, Ontario. CN also has a 100 percent interest in the recently built St. Clair Tunnel that runs under the St. Clair River between Port Huron, Michigan, and Sarnia, Ontario. CP has argued that, because CN now has access to a modern tunnel and CP does not, and because any attempt by CP to modernize or replace the Detroit River Tunnel would involve the right-of-way of that tunnel, CN has an incentive to use its 50 percent interest in the Detroit River Tunnel to thwart any effort by CP to expand or replace that tunnel. To protect CP's ability to make improvements to or replace the Detroit River Tunnel, the Board imposed a condition holding CN to its commitment not to exercise unfairly any rights it may have under the CN/CP Partnership Agreement respecting that tunnel to oppose any proposed improvement project that has sufficient engineering, operational, and economic merit to attract the necessary capital for its construction without derogating the value of CN's existing investment in the CNCP Partnership. And, as part of its oversight, the Board will monitor issues related to CN's operational control of the Detroit River Tunnel.
  
  
• Rail Labour. In approving mergers such as the CN/IC merger, the Board is required, by statute, to impose "labour protective conditions" for the benefit of the employees of the applicant railroads. The Board therefore imposed, for the benefit of the rail employees of CN and IC, the New York Dock conditions that are customarily imposed in railroad mergers. However, in view of the international character of the CN/IC merger, the Board modified the New York Dock conditions, as applicable to the CN/IC merger, by providing that, if and when CN/IC work is moved to Canada, CN/IC's United States employees who choose not to follow their work to Canada will not be deemed to have forfeited their New York Dock protections. The Board also clarified that good faith bargaining has always been an integral part of the New York Dock process and that an arbitrator, and the Board, if necessary, can properly take notice of any abuse of process in any deliberations over labour matters under that process. As requested, the Board imposed as conditions specific settlement agreements the applicants reached with the United Transportation Union and the Brotherhood of Maintenance of Way Employees. Consistent with established policy, the Board also made clear that approval of the merger transaction did not indicate approval or disapproval of any particular collective bargaining agreement overrides, but rather that such issues should be resolved through negotiation, if possible, or arbitration as necessary. The Board also noted that applicants at oral argument had acknowledged the importance of prior labour agreements, and had indicated that they do not expect that wholesale overrides would be necessary to carry out this transaction. Furthermore, the Board clarified that applicants must abide by their representation at oral argument that they would continue to engage in a consultative role with the Federal Railroad Administration with respect to any future merger-related changes with safety implications for the territorial United States (e.g., transfer of the dispatching function to Canada) and that they would give sufficient notice of any such proposed changes.
  
  
• Environmental Matters. To fulfil its obligations under the National Environmental Policy Act, the Board imposed the various mitigation measures recommended by the Section of Environmental Analysis in its Final Environmental Assessment. Included was a safety review process to ensure the safe implementation of the transaction.
  
  
• Oversight. Various parties have expressed concerns over potential harms that may flow from the merger in conjunction with the Alliance and Access Agreements. In response, the Board has imposed an oversight condition of up to 5 years, which will enable the Board to address: concerns expressed by the United States Department of Transportation and others regarding the operation of the Alliance Agreement, particularly with respect to ongoing IC versus KCS competition in the Baton Rouge-New Orleans corridor; concerns expressed by North Dakota with respect to the Soo/IC interchange at Chicago; concerns expressed by CP with respect to the Detroit River Tunnel (including concerns respecting CN's supervision of the day-to-day operations of that tunnel); concerns expressed by certain labour unions with respect to lack of appropriate labour protective conditions if unauthorized control of applicants and KCS should occur; and concerns with respect to the potential effects on domestic lumber wholesalers of Canadian lumber producers' alleged unfair pricing practices currently under investigation by the United States Department of Justice. The oversight process will also enable the Board to monitor the environmental conditions it has imposed.
  
  
• KCS Trackage Rights Application. The Board, though it approved the CN/IC merger application, denied a simultaneously filed CN/IC/KCS terminal trackage rights application that sought, for a KCS affiliate, terminal trackage rights over several miles of Union Pacific and Norfolk Southern track in Springfield, IL. The Board ruled that, because the terminal trackage rights sought by the KCS affiliate had no real connection to the CN/IC merger, the terminal trackage rights application would have to be evaluated on the basis of the strict criteria generally applicable to such applications. The Board further ruled that this terminal trackage rights application failed to satisfy those criteria. The Board's vote was issued in Canadian National Railway Company, Grand Trunk Corporation, and Grand Trunk Western Railroad Incorporated--Control--Illinois Central Corporation, Illinois Central Railroad Company, Chicago, Central and Pacific Railroad Company, and Cedar River Railroad Company, STB Finance Docket No. 33556. A written decision of the Board, reflecting the Board's vote at the voting conference, will be issued by the Board on May 25, 1999.

An unusually wet winter and a faulty drainage system are to blame for a fiery train crash near Conrad, BC, in March 1997 that killed two crew members, says the Transportation Safety Board of Canada. Two locomotives and the first six cars hurtled into a hole 50 metres wide and 20 metres deep and burst into flames on March 26, 1997, which occurred 175 kilometres northeast of Vancouver. The CN freight had no warning that a mudslide had washed out the main line of track upon which it was approaching. In its final report the safety board said water saturation and a build-up of pressure in the railway fills caused the collapse of the roadbed under the tracks. The crew wasn't warned about the washout because signal information still showed the track was intact. Shortly after the incident, measures were taken by the railway industry, Transport Canada, and the B.C. Ministry of Transportation and Highways to address safety concerns. At the accident site, drainage and monitoring of the track has been improved by physical inspections and through the installation of sensory equipment buried beneath the rail. The locomotives involved were SD75 5658 and GP40-2 9446, both of which were encased in cement and buried at the scene.

Canadian National Railways is disposing of another 50 kilometres of track and transferring 250 kilometres of track to other operators. CN plans to discontinue operations on 46 kilometres of track on the following lines in Canada: a two kilometre section of the Doney siding in Pointe-Claire, QC; the 24-kilometre Leamington spur near Essex, ON; the Ilderton, Leaside and Bowmanville spurs in Ontario, totalling eight kilometres; and the 13-kilometre Battleford spur near North Battleford, SK. The Canada Transportation Act requires that the lines first be offered for sale to the private sector. In the United States, CN will also seek abandonment authorization from the Surface Transportation Board for the three-kilometre Vicksburg industrial spur in Michigan. The following lines are to be sold to short-line operators: the 77-kilometre Canal lines, made of several spurs connected to the Canal and Cayuga subdivisions in Ontario's Niagara Peninsula; the Cornwall spurs in Cornwall (8 km), ON; Okanagan Subdivision in Southern British Columbia (between mileage point 14.4 in Campbell Creek and 70.8 in Armstrong, and between 85.5 in Vernon and 118.9 in Kelowna); and the Lumby Subdivision, between mileage point 0.0 at Lumby Junction and 14.4 at Lumby, BC, 167 km. In 1998, CN sold or discontinued 2,346 kilometres of track. About 87 per cent was transferred to short-line operators while the rest was discontinued. As of December 31, CN was operating 22,113 route kilometres in Canada and the United States.

Canadian National announced March 12 that it has won the Carrier of the Year award for 1998 from Occidental Chemical Corporation (oxychem) for the third consecutive year. The award was presented to CN officials at OxyChem's headquarters in Dallas, Texas. CN was rated first in performance, ranking ahead of eight other Class 1 railroads. This is the sixth year for the Carrier of the Year award, which OxyChem awards to a carrier that demonstrates exceptional performance. Carriers are rated for safety, on-time performance, bad-order car reporting, billing accuracy, timely reporting of quarterly reviews and carrier surveys. In 1998, CN hauled 97,000,tons of chemical products for OxyChem, as well as 450,000 tons of industrial grade potash from the Kalium mine at Belle Plaine, Sask., to OxyChem's plants in Alabama and Delaware.

Canadian National has implemented a new toll free number that improves and simplifies public access to information about CN operations anywhere in North America. Effective immediately, anyone seeking general information about CN, or who has a concern about railroad operations, can dial 1 888 5909 for service 24 hours a day, 7 days a week. The number offers callers the convenience of an option menu that connects with either a specific department, or with an operator trained to handle concerns and general inquiries. Calls received outside of regular business hours are recorded and responded to the next business day. The new toll free number is in addition to two others already in place: one for emergency calls to the CN Police, the second specifically for CN's customers. In addition, calls from the media and the investment community will continue to be handled through previously existing contacts.

That portion of CN's Newmarket Sub. between mileage 230.53 and mileage 233.40 is abandoned effective February 11, 1999.

On March 11, 1999 CN received Ontario Hydro units CP 5784, 5786, and 5860 in Winnipeg and they will become CN 5396, 5397, 5398, assigned to Symington for maintenance. Subclasses will be GF-30x and GF-30z, in with the other former CP Hydro units in the same two subclasses, according to their GMD orders. These units were reassigned to CN by Ontario Hydro, the owner, to properly distribute the Hydro units according to the amount of Hydro business done by CP and CN.

A pair of Union Pacific locomotives were in Toronto March 14, CN 460 operated from Proviso to Battle Creek Michigan with UP SD60 6059, SD40-2 3176. Then, 396 to Toronto ran with the same pair, and picked up, on the head end in Sarnia, CN GP40 9469, SD75I 5609, SD75I 5623. Returning March 15 from Toronto on 393, were SD75I 5623, GP40-2 9469-UP SD40-2 3176, SD60 6059, DW&P SD40 5907. On March 17, a train of empty auto racks operated from C&NW Proviso with units CR SD60I 5536, UP SD40-2 3071 and lifted units GTW SD40-2 5930 and CN SD70M 5604 on the head end at Sarnia and operated to Toronto MacMillan Yard via Oshawa.

Also visiting Toronto March 21, were D&RGW SD40T-2 5397 and SP SD45E 7417. Train 393 left Toronto March 22 with CN SD75 5646, GP40-2 9411, DW&P SD40 5910, UP SD40-2 3071, and CR SD60(I) 5536, with the last two heading back to the UP.

A pair of Wyoming coal trains headed eastward on the South Bend Subdivision of the GTW the morning of March 24 had on train 760, BN SD60 9234, KCS SD40u 698, and BN C30-7 5068. KCS 698 is none other than Canadian-born former QNS&L 202. On train 764, were BN SD60 9211, and Oakway SD60's 9025 and 9037.

A special Bombardier train interchanged to the UP at Griffith IN around noon on March 21, enroute to the Pueblo Colorado test centre. It consisted of two new Acela locomotives as well as new Bombardier-built coaches on the train numbered 3402, 3500, 3502, 3503, and 3505. Of note, the six idlers were Grand Rapids & Eastern plug door cushion underframe boxes. The train was powered with CN GP40-2 9439 from St. Albans Vermont to Montreal, KCS SD40u 6636 from Montreal to Sarnia, CN C44-9W 2506 from Sarnia to Battle Creek, and SP 7365 & UP 9262 from Battle Creek west. The train would have gone through Bayview Junction, near Hamilton Ontario around 0200-0300 Saturday March 20, 1999.

Installation of Centralized Traffic Control on the Strathroy Subdivision is scheduled to start May 21, 1999. The portion of the Strathroy Subdivision that is still ABS is from Rideout, mile 0.2 just west of London, Ontario to Blackwell, mile 55.6. By July 15, 1999 it is hoped the installation will be completed to mile 15 which would be somewhere between Srathroy and Komoka. To relieve some of the workload for RTC K, he/she will handle only to Rideout, and an additional desk, YZ, will handle the OCS portion of the Strathroy Subdivision. Some track realignment may well also take place. Come the fall of 1999, there will be a complete realignment of the Toronto based Rail Traffic Controller's territories.

A deal to sell the old Alberta Resources Railroad line to a Montreal-based short-line railway company is officially off, Canadian National Railway says. No reason was given. CN announced last October it had sold the 586-km line to Genesee Rail-One. Much of the route northeast of Jasper to beyond Grande Prairie was known as the Alberta Resources Railroad which CN purchased from the Alberta government in 1992.

CANADIAN PACIFIC

Service on a 71-km (44-mile) rail line in southern Alberta, between Claresholm and a point just south of High River, has been discontinued as of March 1, 1999 by Canadian Pacific Railway (CPR), in accordance with the Canada Transportation Act (CTA). On April 1, 1997, CPR announced the line, part of the railway's Macleod Subdivision, was a candidate for discontinuance under its three-year network plan. In recent years, traffic on the line has been steadily decreasing.

The Canadian Wheat Board and Canadian Pacific Railway have reached an out-of-court settlement March 8, 1999 in the dispute over the shipping problems experienced during the 1996-1997 crop year. The value of the settlement, payable to the CWB to be distributed to Prairie farmers, is approximately C$15 million. The settlement will be paid to the CWB in 1999 and 2000. In addition, under the terms of the agreement, the CWB will discontinue its lawsuit against the CPR. This is a no-fault settlement. The CWB, which serves as Canada's grain marketing agency on the western Prairies, late last year launched a C$45 million lawsuit against the rail system for more than 1.5 million tonnes in lost grain sales during the tough 1996-97 winter. A federal, quasi-judicial agency ruled last year that the CPR did not give grain shipments headed from the Prairies to Vancouver on the West Coast a reasonable share of the railway's capacity. Calgary-based CPR, a subsidiary of Canadian Pacific Limited, operates about 24,600 km of track in Canada and the United States and has about 19,900 employees. The CWB is one of the world's largest wheat and barley marketers. Headquartered in Winnipeg, Manitoba, it is Canada's fifth largest exporter and largest net earner of foreign currency. Marketing Prairie-grown wheat and barley to over 70 countries around the world, the CWB returns all sales revenues, less the costs of marketing, to farmers in Western Canada.

The City of North Bay Ontario has purchased 38 acres of railway property adjacent to its downtown waterfront. The council held a special meeting March 9 to sign the C$5-million deal with the CPR. Trains will still travel along the city waterfront. But there will be only one track instead of a huge rail yard. The yard will be relocated south to Ontario Northland property. It'll take at least three years for the city to completely take over the land. In the end it'll increase the size of North Bay's already popular waterfront and connect it to the downtown. The city hopes to turn part of the property into a tourist attraction. It would promote North Bay's rail, native and fur trading past...and be known as Passage North.

The CPR announced March 24, 1999 it has reached an agreement with Red Coat Road & Rail Ltd. (RCRR) for the purchase of the 115-km (71.5-mile) CPR branchline between Pangman and Assiniboia, in southwestern Saskatchewan. The agreement is a culmination of about 10 months of discussions between the two parties; is scheduled to close by June 30, pending final payment for the rail line by RCRR. While the Assiniboia Subdivision is a low-density branchline, CPR is hopeful that Red Coat Road & Rail ultimately will be successful in establishing a viable shortline operation. RCRR is an organization consisting of representatives of the communities adjacent to the rail line, including Rural Municipality No.72 (Lake of the Rivers); RM No.40 (Bengough); RM No.71 (Excel); RM No.70 (Key West); and RM No.69 (Norton), as well as the villages of Ogema, Viceroy and Pangman. Several other parties were instrumental in the negotiations, including the Saskatchewan Department of Highways and Transportation, the Saskatchewan Association of Rural Municipalities (SARM) and Judy Bradley, Minister of Highways and Transportation. The asset purchase agreement between CPR and RCRR covers the sale of land and track, but no equipment or other assets. It is expected that RCRR will contract with a third party to operate and maintain the line. As part of the proposed operating service agreement between the two parties, CPR would provide connecting rail service to RCRR, providing empty grain cars and picking up loaded cars at an interchange point just east of Assiniboia.

Canadian Pacific Railway (CPR) in cooperation with Union Pacific Railroad (UP) and Transportation Ferroviaria Mexicana S.A. de C.V. (TFM) is introducing the most comprehensive intermodal service ever between Canada and Mexico. The trailer on flatcar services will provide shippers with links between Canada and 16 different locations in Mexico, more than any competing services. The services are also available between Minneapolis-St. Paul and Mexico. Robert Ritchie, President and Chief Executive Officer of CPR made the announcement during an address to the ninth annual Transporte International Conference in Monterrey, Mexico. Shipments to and from Western Canada and the Twin Cities will be interchanged with UP at Chicago, while shipments to and from Eastern Canada will be interchanged with UP at East St. Louis, Ill. Services within Mexico will be handled by both UP and TFM. CPR will use UP's Aztec Eagle, a direct rail intermodal service into Guadalajara, Queretaro and Mexico City, as well as its Passport service to Laredo, Texas, where UP trucking services handle freight to and from 16 Mexican cities, including Monterrey. Freight moving via UP's Aztec Eagle will clear Mexican Customs at final destination, rather than at the U.S.-Mexico border. Freight moving via the Passport service will clear Mexican Customs at Laredo. Northbound freight from Mexico will clear U.S. Customs at Laredo, and Canada Customs at destination. TFM, Mexico's northeastern rail franchise, is jointly owned by Kansas City Southern Industries Inc. and Transportation Maritima Mexicana S.A. de C.V.

The CPR will be cutting the 1999 operating budget of C$2.8- billion by C$60 million as a result of softness in coal and grain shipments. While no final determination has been made, some staff could be affected. CPR spokesman Len Cocolicchio said "Our reductions are budget-oriented, not body-oriented".

Canadian Pacific Limited (Canadian Pacific) announced that its board of directors has approved the issuance of eight million 5.6501 Cumulative Redeemable First Preferred Shares Series A at an issue price of C$25.00 per share. The company has entered into an agreement with a group of underwriters led by Nesbitt Burns Inc. providing for the issuance and sale of the preferred shares on a "bought deal" basis. The underwriters will offer the preferred shares for resale to the public at an issue price of C$25.00. The transaction, involving an aggregate issue amount of $200 million, is expected to close on March 31, 1999. The agreement with the underwriters includes an over-allotment option that would permit the underwriters to purchase up to an additional 800,000 preferred shares from the company, or an additional issue amount of C$20 million, up to 30 days after the closing date. Canadian Pacific intends to file a preliminary prospectus related to the issuance of its First Preferred Shares Series A by March 17, 1999. Subject to approval by the securities commissions concerned, a final prospectus is expected to be filed in late March in order to qualify the issuance and sale of the preferred shares. The company will apply to have the preferred shares accepted for listing on the Toronto, Montreal and Alberta stock exchanges. The First Preferred Shares Series A will carry an annual dividend of 5.65%, payable quarterly. Proceeds from the issue will be used to reduce outstanding short-term debt and for general corporate purposes.

Canadian Pacific Railway has offered the following locomotives for sale with bidding to close in April. Two SD40s located Ogden Shops, Calgary Alberta CP 5504 & 5535, rebuilt 1994 and 1991; to be sold as package a SW1200 slug 2118, at Thief River Falls, Minnesota, & GP15Cs 4100-4101, 4103-4106 at Ogden; to be sold as a package GP30C SOO 4300-4302 at Ogden; package of highnose GP7 SOO 378/GP9 SOO 401 at Thief River Falls Minnesota; and a package bid of SW1200s CP 1207, 1209, 1212, 8105, 8107, 8110, 8115, 8119, 8122, 8124, 8147, at Winnipeg, Manitoba.

The CPR main line was been reopened following a derailment in Yoho National Park. An avalanche swept three empty potash cars off the tracks late March 24, 1999, just east of Field. The slide swept the cars down a 110-metre embankment but they stopped just short of a riverbank. Crews worked through the night to repair the tracks.

INDUSTRY NEWS

When North America's fastest locomotives begin pulling passenger trains between Boston and Washington in the year 2000, at the controls will be engineers trained by Canac Inc., a subsidiary of Canadian National. When New York's transit authority needed to replace 330,000 wooden ties with concrete ones on a 217-kilometre commuter line, without interrupting traffic, Canac did the job in one summer. These are two projects undertaken recently by Canac, a railway services company taking advantage of massive consolidation in the North American rail industry. Besides out-sourcing by the railways themselves, Canac has developed a niche managing the rail section of manufacturing plants which have a locomotive and tracks on their premises, connected to a main line. Canac offers consulting services, or may operate the in-house railway. The biggest future growth area is the petrochemical industry in Texas and Louisiana, where 1,400 companies use rail, and in the steel and automotive regions of Michigan and Illinois. Canac has eight offices in North America. Texas. The firm has 520 employees, including 120 added last year, and expects to add another 150 to 200 this year. Revenues should reach C$100 million this year, double that of 1997. About half are from CN contracts, but CN's share is dropping. Main competitors are engineering companies, and a similar firm, UP Tech, set up by Union Pacific Railroad. In December Canac bought CSI, a Washington-based firm which owns a software program able to evaluate train performance over a route, already sold to several dozen railways. In January 1999 it bought Vectran Corp. of Pittsburgh, maker of remote control units for locomotives and cranes. This will complement a Canac-invented device that allows a worker on the ground to manoeuvre empty locomotives around a railway yard. Canac was set up in 1971 to sell CN's expertise, especially in developing countries. The focus now is only North America. Canac also maintains locomotives, and is a broker for used rolling stock and locomotives.

Ontario Hydro, Canada's largest utility, moved some of its computer systems ahead so at midnight Saturday March 6, 1999 so that they read January 1, 2000. The idea was to see if the power would go out in a test area, which covered west-central Toronto. Ontario Hydro planned to set their computer systems to mimic January 1, 2000 in a test at their Manby Transformer Station in Etobicoke. While Hydro advised the TTC that this was unlikely to cause any power loss, the TTC stopped subway service and stayed in stations for a short duration to avoid trains being stuck in tunnels if power was to fail. At five minutes before midnight on Saturday, March 6, 1999, TTC Transit Control issued a stop and stay order to all trains on the Bloor/Danforth and Yonge, University, Spadina subway lines until the test was completed. All trains were to be held in the stations for approximately ten minutes. In addition, streetcar service stopped for approximately ten minutes in a safe location until the test was completed. When midnight arrived, there were no power disruptions; which was a relief for police stations and hospitals that had backup generators on standby.

Vancouver residents are worried about increasing crime around local Skytrain stations following a recent violent gang shootout. Shots were fired between what police believe are rival Hispanic and Asian gangs near a downtown station. No one was hurt in the incident. All suspects escaped on the train and by foot. The RCMP said drug trafficking, property crime and gang warfare are concentrated around the stations that take commuters between the Vancouver waterfront and the suburb of Surrey. Transit security and police are doing what they can to respond to the problem. BC Transit has increased the number of constables and SkyTrain attendants working in the stations. At Broadway station, evidence of gang activity is written on the walls.

Politicians in the state of Alaska have voted to set aside land for a railway right of way connecting to the Yukon. But unless similar action happens on this side of the border the move could be a step towards a train to nowhere. The idea is to protect a railway right of way connecting existing rail lines in Alaska to those in the southern US States. Representative Jeanette James sponsored the bill. But she says unless links through the Yukon and BC can be established the idea is going nowhere. She's hoping the Alaska vote will help change attitudes in Canada. The Alaskan Senate still has to vote on the measure but with a unanimous vote in the house and politicians of all stripes supporting the move that's expected to be a formality.

Amtrak took the wraps off the first high-speed rail system in the United States on March 9, 1999, a $2-billion US service that will whisk passengers between Boston, New York and Washington at 240 kilometres an hour. But while Amtrak has high hopes for its bullet-train service, a proposal for a comparable system between Toronto and Quebec City is stalled. The US project, dubbed Acela, has been a boon to Montreal's Bombardier Inc., whose Bombardier Transportation unit is supplying 20 train sets, including 160 train cars and 15 electric locomotives, for Amtrak. Its portion of the deal, as part of a Bombardier Alstom consortium, is worth C$972 million. Bombardier is also part of a consortium that proposed the now sidelined high-speed train service in the Toronto-Quebec City corridor. The proposal for the so-called Lynx project, from a group that includes SNC-Lavalin, AGRA Monenco Inc. and Ellis-Don Construction, asked the federal government to put C$25 million toward a feasibility study. The group hoped to carry 11 million passengers a year on trains that would reach speeds of 320 kmh, making a trip from Toronto's Union Station to Ottawa in only an hour and 15 minutes. It also hoped to have trains operational by 2008 in time for the Olympics; if Toronto is named host of the Summer Games. Meanwhile, the Federal Transport Department is developing a long-term business plan that will outline Via Rail's route network and funding needs. The ministry will likely be watching Amtrak's Acela service when deciding on the fate of the home-grown high-speed proposal. The proposed Lynx would require construction of a new rail line, while the Acela uses existing track most of the way.

GO Transit passengers can now get schedule and fare information on the World Wide Web. GO launched its website March 12, 1999 at www.gotransit.com, giving customers another way to access GO information, 24 hours a day. The website lets people generate train and bus schedules, link to other transit systems, and find lots of other information about GO Transit. Using the interactive schedule finder feature, customers enter a starting point and destination, and the website will display the appropriate timetable or fare. For customers who don't have Internet access, GO Transit information is still available by phone (including 24-hour recorded information) at 416 869-3200 in the Toronto local calling area, 1 888 GET ON GO (438-6646) long distance toll free, or 1 800 387-3652 for TTY teletypewriters only.

The federal agriculture minister says countries such as Japan are worried about Canada's ability to export grain. Japanese officials are concerned about a strike by public servants that has created a grain train traffic jam across Western Canada. The minister says striking public servants have "made their point" by shutting down work at Vancouver's grain terminals. But he says the federal government is "determined to keep the wheat moving." And he adds that back-to-work legislation could be tabled" at the drop of a hat" to ensure Canadian grain is exported. The federal government is considering back-to-work legislation against public servants. The federal government has ordered an end to the strike by people who weigh grain at the port of Vancouver. The "weighmen" went back to work in Vancouver March 16, on their own, ending their latest walkout. Now the federal government has started the process of making sure they don't go out again. Opposition parties would not give quick consent so the legislation. Meanwhile, a dozen ships are waiting in Vancouver harbour. More than four-thousand loaded cars must be moved to the terminals. The Reform Party's said they have documents that show politicians knew almost two months ago grain sales could be lost because of these strikes. Neither Reform MP's nor New Democrats would agree to the government's request to get the bill passed quickly.

The Toronto Transit Commission's 7,800 employees could be on strike next month after rejecting the transit system's first offer March 17, 1999. The offer was rejected by 99 per cent of members in the Amalgamated Transit Union local, the highest rejection percentage in the commission's history. The union had recommended that its members reject the offer. Every one per cent raise would translate into a C$5.5 million annual cost for the transit commission. Covering that with a fare hike would mean increasing the cost of a token by three cents. The last time transit workers struck the system was in 1991, when an eight-day walkout lost the system 15 million rides and won the union its last major wage increases of 4.95 and 4.75 per cent for 1991 and 1992.

Rail line rationalization in Ottawa moved a step closer today as the St. Lawrence & Hudson Railway (StL&H), the eastern subsidiary of the Canadian Pacific Railway (CPR), announced an amendment of its three-year plan under the terms of the Canada Transportation Act (CTA). VIA Rail's current passenger service in Ottawa will not be affected, nor will plans for future Bayview Greenboro commuter rail service. The CTA plan amendment clears the way for eventual termination of joint Canadian National-CPR ownership of about 18 kilometres of seldom-used industrial tracks and sidings and their transfer or discontinuance. Track and related facilities in the city have been jointly owned and operated by the CPR and Canadian National (CN) since 1963.

Steam locomotive 4-8-2 6060 owned by Rocky Mountain Rail Society will operate a number of excursions during 1999 over RaiLink Central Western trackage at Stettler, Alberta. All runs are round trips from Stettler: Sunday, May 23, 6060 shake-down run to Coronation (1/2 price); Saturday, June 19, to Coronation (120 miles round trip); Friday, June 25, to Halkirk and return; Sunday, June 27, 6060 will be at Big Valley under steam doing run-bys (during Rail Fan Days) with 2-8-0 #41 pulling the train from Stettler to Big Valley and return; Saturday, July 03, to Coronation and return; Saturday, July 10, to Castor and return; Friday, July 23, to Big Valley and return; Friday, July 30, to Halkirk and return; Saturday, Aug 07, to Castor and return; Saturday, Aug 21, to Halkirk and return; Friday, Sept 17, to Halkirk and return.

Federal Transport Minister David Collenette announced March 29, 1999 that he has received the report of a VIA Rail Canada-Canadian National Railway task force designed to address the need for increased passenger train frequency in the Quebec City-Windsor corridor. The task force's report was presented to the Minister by VIA president and CEO Rod Morrison and CN president and CEO Paul Tellier. The results of the task force will provide VIA Rail with the ability to improve its corridor service during 1999 on several key routes, including Montreal-Ottawa, Montreal-Toronto, and Quebec City-Toronto. The task force has produced the following results for VIA's passenger service: an additional Montreal-Ottawa frequency; a faster Montreal-Toronto return frequency; improved scheduling for Quebec City-Toronto trains; provisions for an additional Toronto-Montreal frequency.

Mr. Tellier noted that CN and VIA worked together to produce this report, which describes how the two companies can jointly improve passenger rail service in the corridor. The task force was formed on the invitation of the Minister of Transport as part of the government response to the Fourth Report of the Standing Committee on Transport, The Renaissance of Passenger Rail in Canada. The task force examined questions of network capacity in the busy Quebec City-Windsor corridor. It was agreed that a key element of passenger rail revitalization will be the continued co-existence of freight and passenger operations in the corridor.

VIA rail president Rod Morrison says the study of service in the busy corridor will result in improvements a number of areas including better scheduling for trains between Toronto and Montreal and Toronto and Quebec City.

In a previous column there was some confusion to a reference about railways being responsible for their rails where people have to cross them to reach their destinations. It appears the recent Supreme Court ruling stems from the following news story. "Canada's so-called railway law came under scrutiny last June. In 1995 the BC Court of Appeal ruled that the CPR and the City of Victoria were only half liable for injuries suffered by Murray Ryan. He injured his knee and hip in 1987 when his bicycle wheel got caught in one of the rails set into the pavement on a Victoria street. His lawyer said 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 Ryan's injuries. The Supreme Court decision ruled whether railways have what's called "duty of care" to the public. Further to the news story...

Dr. Thomas Wilson, Regional Coroner for Southwestern Ontario, today announced that there will be an inquest into the death of Robert Ivison, who died March 20, 1997, in Chatham, Ontario. A response regarding the Supreme Court decision from Jerry O'Brien is the lawyer for the Ivison family in Chatham. O'Brien represented them at the inquest into the death of Robert Ivison almost two years ago. Ivison's wheelchair became stuck at a railway crossing in Chatham. People with disabilities made a case at the inquest for standards that would allow crossings to be safer than they have been up to now. The Supreme Court ruling will force railway companies to consider those safety issues by taking away protective laws that gave these companies immunity. For the past 90 years railways have had special status under negligence laws. They could not be held fully accountable in civil lawsuits filed after accidents at rail crossings. O'Brien said the ruling changes that; now rail companies have to follow the same public safety laws of all other property owners, and that means ensuring safe crossing for all people going over rail road tracks. "For anyone who has the misfortune of suffering injury or loss as a result of a dangerous crossing at a railway the ability to get compensated has now been greatly improved. Railway companies will have to ensure all crossings are safe whether someone is on a motorcycle, bicycle or in a wheelchair, or in an automobile."

SHORTLINES

Edmonton-based RaiLink Ltd revealed March 11, 1999 it is looking for a potential buyer. The short-line railway company has been the subject of takeover speculation in recent weeks because Denver-based OmniTrax Inc has bought up a 24.8 share of RaiLink's shares. The company said in a news release that it has authorized financial advisor HSBC Securities "to approach parties who may have an interest in consummating a transaction involving the company, including a number of parties who have already expressed such an interest."

Effective 0001, March 21st, 1999, Canadian National turned over the Coronado, Bonnyville, and Lac La Biche Subdivisions to RaiLink Ltd. Operations are on a 434 kilometre (271 mile) rail line located northeast of Edmonton. The rail line extends from St. Paul Junction, immediately north of Edmonton, to Boyle and northeast to Grande Centre and Elk Point. It also connects with RaiLink's existing Lakeland and Waterways line at Boyle, which serves Fort McMurray and Alberta's oil sands region. The acquisition of the line by RaiLink from Canadian National was originally announced in August 1998. The closing of the transaction was delayed pending completion of labour negotiations by CN relating to the sale of the line. RaiLink is a publicly traded regional railway company based in Edmonton, Alberta. RaiLink is the largest regional railway in Canada, providing freight transportation service to the national railways and a wide variety of shippers in Alberta, the Northwest Territories, Ontario and Quebec.

Effective 0400 March 1, 1999, an arm of Genessee Rail-One called Railterm has taken over the train dispatching of the Huron Central, Quebec Gatineau, and VIA owned or leased trackage as follows: from Coast De Beaujeu, mile 7.5 Alexandria Subdivision to Hawthorne, mile 72.7 and between Federal, mile 0.0 Smiths Falls Subdivision to Smiths Falls East, mile 34.5. Their RTC centre is in Outremont, Quebec with seven dispatchers (RTC's).

Ontario Southland finally commenced operation of the CP Port Burwell Subdivision from Ingersoll to Tillsonburg on Friday, February 26, using S6 500, former Vancouver Wharves 29, once upon a time Southern Pacific 1240.

Nagel Tours Wine Train looks to be closer to operation in the Okanagan Valley. The 22 former VIA passenger cars sold to Nagel Tours of Edmonton have all arrived in the Okanagan Valley, with the exception of baggage car 9653, which is still in Vancouver. The reporting marks for these moves was FTRN "Fun Train" not to be confused with the now defunct Florida Fun Train. The consignee was GE Capital Railcar. Now on site: coaches 5473, 5487, 5532, 5603, 5654, 5585, 5440; Cafe lounge 752, 755; E series sleepers 1128 Elmsdale, 1137 Enfield, 1157 Evelyn, 1153 Eldorado; and steam generator 15475. Club galley cars yet to come. Reporting mark is FTRN (Fun Train?). CN power is to be used in 1999; leased power in the year 2000. Cars to be kept in Kelowna in the off season.

Four commuter coaches from Montreal have been sold for use on the Timber Train, ex. AMT/STCUM/CP nos. 815, 824, 828, and 829. They were once steam-heated, but are now HEP. The other two cars planned for use this season are ex VIA Coach/Cafe Lounge 3034 and coach 5488. The cars will be numbered 3600 (3034) and 7600-7604 (5488 + four 800's). The first two digits of the new number indicate the seating capacity. The power will be FP9Au's 6303 and 6312. The 6312 has a steam generator however the 6303 has a big hunk of concrete in lieu of the steam generator.

MOTIVE POWER

CNR:

New SD75's delivered to CN from Alstom: Feb 19 5772, March 3 5773, March 14 5774, March 16 5775, March 19 5776, 5777 March 26.

The following Canadian National Locomotives were retired during March 1999: March 3: SD40 5004, 5036, 5044, 5052, GTW GP38 6202; March 5: GTW GP38 6204, GP40 6400, 6402, 6403; March 8: SW1200RS 1367; March 9: SD40 5041; March 11: SD40 5016, 5121; March 15: SW1200RS 1359, SD40 5014, 5032, 5053; March 17: GTW GP9 4520 GTW GP38AC 5804, 5805, 6208, 6211, 6213; 6219, 6220; March 22: SD40s 5003, 5105. March 23: SD40 5007, 5019, 5178, GTW SD38's 6251, 6252, 6253, 6254; March 26: GTW GP38AC 5811, 6209, 6212.

CN GMD1 1063, formerly 1163, originally built as 1063 was released from Transcona Shops in Winnipeg on February 24, 1999. Unit 1063 received its A1A-A1A trucks from GMD1m 1602, which received the B-B trucks from unit 1163 (1063). Unit 1602 will be renumbered 1432. The only remaining main line trackage of 60 pound rail on CN is 105.4 miles of the Lewvan Subdivision, from mile 1.4 to mile 106.8. CN operates, from the Regina end, from mile 106.8 to Estlin, mile 100.4 only, as there are no customers on the balance. There are cars stored along the line, so it will see the three GMD1's 1600, 1063 and 1601 eventually.

Five former CN switchers owned by Canac were recently scrapped in Montreal. These were SW1200s CFMG 103, SW1200 7731, and SW900's 7907, 7914, 7937, and 7938.

Of the four ex-CN GMD1's heading to the Dardanelle & Russellville, only 1143 will go to the DR. 26L brake units 1151, 1155, and 1159 are going to the Ouachita Railroad in Eldorado, Arkansas. Both roads are owned by the same company.

CPR:

Retired CP GP30 5001, which is to move to the Broadway Motors agent in Calera, Alabama, it's a location on CSXT. Apparently CP SW1200RS 8100 will also go there. The Calera & Shelby shortline, is a former L&N line which runs east of this location.

Former CP GP35s 5003, 5004, 5007, 5020 have been sold by Helm to the Fort Worth and Western Railroad in Texas.

As of March 29, 1999 the CPR had 32 SD90MAC's in service.

The first SD40-2B units are now in hump service at Toronto's Agincourt Yard. The units are high-hooded former NS locomotives now CPR numbered 5476, 5478, 5480, 5481. The hump units consist of one GP9u with an SD40-2B at either end. The unique LCS hump control cab SW1200RS 1214, proved unsuccessful and was replaced by GP9us.

The following CPR/SOO locomotives are now stored unserviceable: CP SW9u 1204; SW1200RS 8138, 8142; SD40-2 5449; SD40 5504, 5516, 5535; SD40-2s 5589, 5622, 5628, 5632, 5646, 5710, 5740, 5855, 5963; Soo GP7 378; GP9 401, 410; SD40 750, 753, 773, 787; MP15AC 1422; MP15DC 1435; GP9u 1541, 1545; GP38-2 4421; GP40 4607, 4617; SD40 6401; SD40-2 6609.

Eleven SOO Line SD60's have been transferred to Agincourt Yard, Toronto: 6017, 6024, 6025, 6028, 6030, 6032, 6035, 6039, 6040, 6050 built between 1987-1989. Eventually there will be forty such locomotives based at Toronto Agincourt. This will allow older SD40 series locomotives to be placed in long-term storage.

SHORTLINES & OTHERS:

Renumbering of retired CN SD40's being outshopped from Alstom: CN#-NBEC#: 5087-6900, 5040-6901, 5065-6902, 5057-6903, 5021-6904, 5010-6905, 5080-6906, 5064-6907, 5067-6908, 5070-6909, 5077-6910. SD40s 6900 to 6903 will be lettered New Brunswick East Coast and the units 6904 to 6910 will be lettered Chemin de Fer de Matapedia et Golfe. Units 6900 and 6906 were released from Alstom on March 26, 1999.

RaiLink Mackenzie Northern returned GP9u 4017 March 1, 1999 and moved GP9u 4016 over to the Lakeland-Waterways. The two SD40's leased to RLGN, 5060 and 5215, returned to CN March 15.

Goderich & Exeter has returned GP40-2's 9643 and 9661. QGRY has returned GP9's 4012, 4117, 4119 to CN, and is now leasing GP40-2's 9637 and 9639. Omnitrax's Hudson Bay Railway has forwarded the following EMD's back to the Central Kansas in Witchita: GP7 2500, GP35 2501, GP20's 2505 and 2506, and GP7's 2507, 2509, and 2510. Canac has leased retired CN SW1200RS units 1338 and 1353 to Fina Oil in Houston, Texas.

Retired VIA FPA4 6765, now at the Canadian Railway Museum, is to be painted in the 1961 CN colour scheme, hopefully by the end of the spring of 1999.

Remanufactured BC Rail C30-7u (C36-8E) 3622 moved to BC Rail in late March. This unit is ex HLGX 6703, nee Conrail 6603, and is one of six being done. RaiLink SD10 1802 was enroute to RaiLink Mackenzie Northern in late March.

As Vancouver Wharves in British Columbia will now be switched by BC Rail, the fleet of locomotives consisting of SW1500 820, 821, 823 and SW1200 822 are up for sale. Slugs NREX 82 and 83 are now being used at Neptune Terminals in North Vancouver BC.

Thank you to the following individuals for contributions for the May 1999 Canada Calling: Rainer Auer, Will Baird, Phillip Blancher, Brian Bukowski, Gerry Burridge, Bruce Chapman, Tim Green, Doug Hately, Roman Hawryluk, Joseph F. Kazmar, Randy Kotuby, Jim Little, Doug Page, Carl Perleman, Earl Roberts, Jim Sandilands, LGR Smith, Rob Sterne, Mike Swick, Drew Toner, Terry Wolfe.

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