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Canada Invests Over $100 Million In Rail-Related Infrastructure Projects

FreightWaves

Federal agency Transport Canada and Minister of Transport Marc Garneau have made a string of rail-related infrastructure funding announcements in recent weeks.

These announcements come as politicians gear up for the federal election on October 20, sources said.

The rail infrastructure projects receiving funding are part of a multi-year, billion-dollar program by the Canadian government to invest in key trade corridors. 

The C$2 billion National Trade Corridors' Fund "is a useful program as traffic, both international and domestic is growing," said Bob Ballentyne, president of the Freight Management Association of Canada. "Investment in ports, rail facilities serving ports, as well as other rail facilities across the country, is needed to support this growth and minimize congestion and other service delays." (A Canadian dollar is currently valued at US$0.76.)

The most recent announcement details plans to fund infrastructure improvements at the Port of Montreal. The government said on August 12 that it plans to spend C$18.5 million to improve truck flows at the port, with one of the initiatives being to build a railway bridge outside the truck entrance to improve truck traffic at the port.

While the announcement about the Port of Montreal focuses on Canada's eastern trade efforts, the government continues to make significant investments in western Canada amid wider efforts to increase trade opportunities to Asia. On August 9, Garneau said the government will invest C$12.4 million in two projects in Saskatchewan to enhance rail capacity, reduce bottlenecks and increase competition for shippers by offering them increased access to two railways instead of just one.

One project will be to upgrade the track on the Great Sandhills Railway short line that runs from Burstall, Saskatchewan to Canadian Pacific (NYSE: CP) rails outside of Swift Current. The upgrade will increase the number of trips on the line. The other project will be to construct three loop tracks and a repair shop that serve the Edmonton corridor between Saskatoon and Edmonton. CP and Canadian National (NYSE: CNI) both serve the corridor.

The Canadian government also continues to invest in rail infrastructure surrounding the Port of Vancouver, which is prone to bottlenecks because of the port's geographical constraints. 

On August 7, the government announced a C$20 million investment to increase rail capacity near Abbotsford for track leading to the Port of Vancouver. The project entails the construction of a 5.6-kilometer track that will run alongside an existing single track, thus eliminating the single tracking there. The track will be part of a 40-kilometer stretch of CNI track that runs to the port, and it will serve import and export terminals at Burrard Inlet and Roberts Bank.

And then on July 23, Garneau said the Canadian government will invest C$102 million in five projects to improve efficiencies at the Port of Vancouver. These projects, each of which were identified in a 2030 strategy plan developed by the Gateway Transportation Collaboration Form, are: C$42.7 million to consolidate the operations at the Annacis Auto Terminal and the Richmond Terminal to accommodate the growing Asian automobile market; C$12.2 million to improve road and rail traffic operations and develop new rail-serviced bulk export marine terminals within the Fraser Surrey Port Lands; C$39.4 million to improve traffic flow and reduce congestion in the Portside/Blundell corridor of Richmond; C$1.6 million to evaluate the viability of short sea shipping in greater Vancouver as a means of handling increased trade volumes; and C$6 million to develop a real-time dashboard for the Ports of Vancouver and Prince Rupert to measure the end-to-end performance of the supply chain for all cargo moving through both ports. 

"We are undertaking a number of projects beyond the port to improve the flow of goods and seek to alleviate the impacts of growing trade on our local communities," said Robin Silvester, Vancouver Fraser Port Authority president. 

Meanwhile, the railways have responded to the government's efforts to improve Vancouver's rail infrastructure by building upon their partnerships with existing customers. Canadian National said on July 26 that it reached a multiyear agreement with General Motors (NYSE: GM), in which GM will use two new automotive compounds, one in Vancouver and the other in Minneapolis. The compounds will provide additional capacity, vehicle throughput and timely deliveries for GM and its customers throughout the northern Midwest and British Columbia, CNI said.

Canadian Pacific opened a new automotive compound adjacent to its Vancouver intermodal terminal, the company said on June 6. The compound has 36 multi-level auto racks and nearly 1,200 bays for vehicles, and it has the capacity to accommodate 168,000 vehicles annually.

"Vancouver is Canada's primary automotive gateway for Asian imports and one of the largest destination markets," Jonathan Wahba, CP's vice president of sales and marketing for intermodal and automotive, said in June.

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