Via Rail will provide $10.2 million to Canadian National Railway to preserve 70.8 kilometres of track between Bathurst and Miramichi and to preserve the passenger service running on the line between Halifax and Montreal.
Federal Transport Minister Lisa Raitt made the announcement in Fredericton this morning.
In January, the New Brunswick government announced it would provide $25 million to upgrade parts of its rail line to keep freight service in northern New Brunswick and between Miramichi and Moncton.
However, a 70-kilometre section of the Newcastle subdivision between Nelson Junction and Nepisiquit Junction was not included in the agreement due to the cost of needed upgrades and the lack of freight traffic on the section. CN then initiated steps to abandon the line.
At Monday's news conference, Raitt joked that members of parliament from New Brunswick had been "stalking" her to lobby her on the Via line.
Via's chief executive officer, Yves Desjardins-Siciliano, said Monday's announcement was the result of "some would say pressure … demand" for funding from representatives in New Brunswick.
Desjardins-Siciliano said he tied the funding to a new target of increasing ridership on the Montreal-Halifax service by 50 per cent.
"It is a reflection of the hope we share at Via that through the rehabilitation of this line, we can create a new beginning that will see the traffic grow," he said.
About 80,000 passengers a year use Via's service from Montreal to Halifax. Desjardins-Siciliano wants to increase that to 125,000 passengers a year.
Raitt said she wants the provincial government and communities along the line to do more to encourage increased ridership on the Via route.
"It's a great day but I do look forward to seeing what Via and the communities of New Brunswick can do to take advantage of this renewed commitment," she said. "I'd love to see increased ridership."
New Democrat MP Yvon Godin of Acadie-Bathurst applauded the decision and said it was a result of pressure from the NDP and the community. Godin called $10 million "a drop of water in the Bay of Chaleur."