When E&N Railway first announced in 2001 it would suspend uneconomical rail service on southern Vancouver Island, local communities rallied to save the service and came up with a unique arrangement they hope will revitalize it as well.

They intend to “buy back” through a swap deal most of the rail corridor between Victoria and Courtenay, and co-operate with the Canadian Pacific and E&N railway companies to operate rail services.'

“This kind of agreement doesn’t exist anywhere else,” says Mary Ashley, acting chairwoman for the Island Corridor Foundation, an association of municipalities, regional districts and First Nations on the line.

The foundation is seeking status as a charity. If granted, Canadian Pacific Railway would donate its Island land to the foundation in return for a charitable tax receipt.

Glenn Olsen, for Business Edge
Island Corridor Foundation looks to keep the dayliner train running through Nanaimo station.

“The foundation will hold these assets in trust for ever and ever for the communities on the Island,” says Ashley.

VIA Rail will continue to provide passenger service and the E&N freight service.

“We’re trying to establish a public-private partnership for the long-term future of the railway,” says Shawn Smith, regional vice-president of E&N Railway, whose parent company, RailAmerica, owns the Nanaimo-Parksville-Port Alberni portion of the line. “It’s not something one company in future is going to do alone.”

Florida-based RailAmerica Inc. is the world’s largest short-line and regional freight railway operator, with 47 railways and 16,400 route miles in the U.S., Canada and Australia.

Public involvement changes railway economics, especially if it provides for lower property taxes.

“Property taxes are our second-highest expense,” says Smith. “Railways have to compete with subsidized highways.”

Many Islanders believe a healthy rail line will provide freight, commuter and excursion services. Currently, only one substantial freight contract exists, and one dayliner takes passengers north from Victoria in the morning and returns in the evening.

But at its peak, the Esquimalt & Nanaimo Railway was an Island lifeline, with 89 stations and busy freight and passenger schedules. Freight and passenger loads have dwindled over time and ownership of the line has changed. The loss of a major freight customer in 2001 precipitated announcements the service would be discontinued, raising the fear railway rights-of-way would be sold.

Rail service is a long-time Island tradition, says Qualicum Beach town councillor Scott Tanner.

“An obligation to provide passenger service was part of the deal in the Island joining Confederation” – rail companies were given land and financial grants to build a line and maintain service in perpetuity. “Now they’re saying they can’t operate it profitably . . . and want to maximize their assets by selling them off.”

Alarmed communities up and down the line quickly altered zoning to ensure the land remained a transportation corridor and not available for lucrative housing developments that would rob communities not only of important historical artifacts (tracks, trestles and stations) but also a viable transportation link.

The Vancouver Island Rail Initiative provided a cost- benefit analysis that showed a railway could be viable with sufficient freight, passenger, commuter and excursion traffic. A group of local companies and individuals formed the Vancouver Island Railway Corp. (VIRC) and kicked in money in the spring of 2003 to keep service going while they and the foundation negotiated with rail owners to take over operation.

“We are very interested in making sure it remains a viable railway,” says Scott Brown, general manager of supply and transportation for Superior Propane, which contributed financial help and donated expertise to VIRC.

Superior Propane ships between 500 and 600 rail cars of its product annually. “It’s more efficient to move it by rail,” says Brown. “And there are other considerations, not the least of which is finding enough trucks” to carry the volume.

Brown and others also see a conflict between commercial truck traffic and the volume of tourist traffic, sometimes on narrow, twisty roads.

The VIRC dropped out of negotiations earlier this year, and local hopes are now pinned on the foundation to negotiate with the railways and on local communities to get behind the deal.

Some communities are already enthusiastic boosters.

“Five days a week we have volunteer greeters who meet the northbound and southbound trains,” says Wendy Maurer, general manager of the Qualicum Beach Chamber of Commerce.

Qualicum Beach is ideally located for daytrippers. The train pulls into the picturesque station twice daily – just before noon on its way north to Courtenay, and at about 2:30 p.m. on its way back to Victoria.

Qualicum Beach now welcomes several hundred daytrippers a month, says Maurer. Improved service can only boost those numbers, she believes.

Local involvement in decision-making will get more Islanders and their communities onside, adds Qualicum council’s Tanner.

“I would have to say the biggest problem is currently (that) the people making the decisions are all east of the Rocky Mountains,” he adds.

Local communities didn’t have much stake in promoting rail service because extra revenues are not necessarily earmarked for use on the Island. “So what’s the incentive?” asks Tanner.

A commuter service could be one such incentive. “Lots of people live in Duncan, Mill Bay, Cobble Hill – even Nanaimo – who work in Victoria,” says Al Lorimer, owner of All About Travel, located across the street from Duncan’s train station.

“And it would help the whole Island if they provided transportation when people wanted it.”

Lorimer also sees large potential for excursions to the Island’s wine country.

Rail service is part of co-ordinated transportation services that will see the tourism industry grow, says George Stuart, a major shareholder in Mt. Washington Alpine Ski Resort near Courtenay.

“I can see ski trains, if amenities were provided on the train.” The ski hill has already seen what improved transportation can do for business – visits to the resort increased to 400,000 from 300,000 after WestJet began direct flights from Calgary.

“I’d certainly like to see better access by rail,” agrees Brad Minton, of Comox Valley Rice Financial. “It’s another means of getting people here.”

Courtenay-Comox’s economy has been revitalized by the WestJet air service, which sparked growth in real estate and tourism as well as cargo shipments.

Minton has watched the success of Rocky Mountain Tours, which offers train tours from Vancouver to Banff, and believes such success can be had on the Island, too. “But it will definitely take changes. From the business person’s point of view, we’d like to see a business-like approach.”

Not every central Island community can have an airport, but they are all served by the rail line. Improved rail service could spark some freight business, too, says Stuart, who points to coal deposits now uneconomical to develop.

Superior’s Brown agrees. “We’ve had a great relationship with E&N and RailAmerica. Our business continues to be handled well. When the railway becomes more viable, it will attract more freight.”

Although unwilling to share details until charitable status is approved, Ashley says the foundation does have a business plan, and several interesting agreements it will explore.

“We don’t want to say anything until we know for sure,” says Ashley. “And word is imminent.”

E&R TIMELINE
* 1867 – Vancouver Island, then the population centre in B.C., makes rail service a condition of joining Confederation.
* 1884 – Victoria coal baron Robert Dunsmuir begins construction on The Esquimalt and Nanaimo (E&N) Railway to support lumber, agriculture and coal industries on the Island and the Royal Navy base in Esquimalt.
* 1887 – Tracks reach Nanaimo.
* 1905 – The E&N is sold to Canadian Pacific Railway, which extends the line to Lake Cowichan, Port Alberni, Parksville, Qualicum Beach and Courtenay. At its peak there were 89 stations along the line.
* 1953 – CPR stops passenger service to Port Alberni, and by the late 1970s plans to abandon all passenger service.
* 1979 – VIA Rail assumes responsibility for passenger services.
* 1998 – RailAmerica buys the Nanaimo-Parksville-Alberni line.
* 2001 – RailAmerica’s primary customer abandons rail freight service; discontinuation of passenger service announced.
* 2002 – The Vancouver Island Rail Initiative does a cost-benefit analysis that projects an economically viable rail service dependent on community involvement.
* 2003 – Vancouver Island Railway Corp. formed; also the Island Corridor Foundation. RailAmerica extends the passenger service deadline as the railways, VIRC and foundation begin negotiations.
* 2004 – Talks break down. The Island Corridor Foundation awaits a ruling on its charitable status.