Defunct Cape Breton rail line 'very likely' to keep $60K monthly subsidy

A provincial government subsidy that's maintaining Cape Breton's defunct rail line will run out at the end of this month.

Business Minister Geoff MacLellan says line should be maintained in case Sydney lands container pier

Freight service was discontinued between St. Peters Junction and Sydney in October 2015. (Joan Weeks/CBC)

A provincial government subsidy that's maintaining Cape Breton's defunct rail line will run out at the end of this month.

The Nova Scotia government is paying up to $60,000 a month to Genesee and Wyoming to maintain the line, even though it's not being used.

The government wants to preserve the infrastructure in case a container terminal is built in Sydney.

Business Minister Geoff MacLellan said it's "very likely" the subsidy will be renewed. He said he will take the request to cabinet at the end of the fiscal year.

Business Minister Geoff MacLellan couldn't say exactly how much has been spent on the subsidy. (CBC)

The agreement with the company requires that it keep the tracks "in the current position and status," in case there are positive developments around the Port of Sydney, he said.

In return, the province reimburses the company for such expenses as salaries, insurance, security and building maintenance.

MacLellan couldn't say exactly how much has been spent on the subsidy, but did say it's under the $60,000 allocated each month. CBC News has requested the exact numbers from the Department of Business.

Traffic on line dropped to 500 carloads per year

In 2014, Genesee and Wyoming first signalled its plans to abandon the rail line and tear up the tracks between St. Peters Junction (near Port Hawkesbury) and Sydney.

The line needs 10,000 carloads per year to break even, but by then it got only 500.

Even if rail traffic is revived with a major development at the Port of Sydney, a huge investment will be needed to put the line back into service.

A study done by consulting firm Hatch, and released last month by the Port of Sydney, suggests between $43 million and $105 million will be needed to repair and upgrade the track, bridges and sidings to handle container traffic.

About the Author

Wendy Martin

Reporter

Wendy Martin has been a reporter for nearly 30 years. Her first job in radio was at the age of three, on a show called Wendy's House on CFCB Radio in Corner Brook, N.L. Get in touch at wendy.martin@cbc.ca