Communications and Public Affairs
P.O. Box 6042, Station
Montreal P.Q. H3C 3E4
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Volume 22 Number 10
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December 1992/January 1993
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CP Rail System Seeks to Abandon
Operations East of Sherbrooke
By Tim Humphreys
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Dominion Atlantic Timetable folder
1 Apr 1919.
Saint
John - The Merlin message was short, to the point, and reflected the business realities of CP Rail System's
decision to file Notices of Intent with the National Transportation Agency (NTA) to seek authority to abandon
its operation east of Sherbrooke, Quebec.
"It's business as usual. You bet!" wrote Canadian Atlantic Railway's Don Lagacy to sign off a quick
note that additional traffic had been secured from the Irving group two days after the railway's
17 Nov 1992 announcement.
"They called me yesterday for a rate quote and today they ordered 20 cars", Mr. Lagacy said between
calls to CAR's clients.
"Our customers understand our situation", added Jim McMahon, CAR's manager of marketing and sales.
"After all, they're businessmen too".
"Our customers also understand that we will continue to aggressively bid for their business and our people
will continue to provide the quality service they've come to expect from CAR. It's everyone's interest to do so.
WEEK OF MEETINGS
The encouraging response from the business community capped a hectic week of meetings, media interviews, and
phone calls to inform and reassure CAR's various stakeholders that it will be business as usual as the railway
enters the regulatory process.
The morning of 17 Nov 1992 began with employee meetings in Saint John, McAdam, Kentville,
Brownville Junction, Farnham, Sherbrooke, and Megantic. The railway currently has 320 permanent Canadian and
U.S. employees involved in its operations east of Sherbrooke, Quebec.
Many of these employees are protected by the employment security provisions of their collective agreements,
which ensure them full wages and benefits until they are of pensionable age. The balance of unionized employees
have other forms of protection in their respective collective agreements. Although it is premature to speculate
on the specific impact of a decision by the NTA to grant authority to cease operation, CAR General Manager Pat
Pender said the railway is prepared to initiate discussions with its affected unions, at an appropriate time,
to minimize the impact of an abandonment on employees.
"Bear in mind that this is a long process", he told employees in Saint John, "It will be at
least nine months before the NTA will render a decision".
SPECIAL BROCHURE
While CAR marketing and sales staff called their customers, commodity managers across CP Rail System did the
same.
Supported by an information brochure entitled, "Tough Times, Tough Decisions", they reinforced CAR's
intention to conduct operations as usual during the regulatory process.
CP Rail System filed the Notices of Intent with the NTA after sustaining losses of $52 million in the three
years ended 31 Dec 1991.
The railway will seek similar authority from the Interstate Commerce Commission (ICC) to abandon the railway's
U.S. operations in the State of Maine.
In the U.S., the railway will initiate the process with an official filing with the ICC of a System Diagram Map
showing the affected line. This filing was to take place early December.
Meanwhile, the railway also announced that it is putting most of the Dominion atlantic Railway's (DAR)
operations up for sale.
With the exception of a segment of track between New Minas and Coldbrook, Nova Scotia, which the railway
intends to seek authority to abandon, operations on 93 km (55.8 miles) of track between New Minas and Windsor
Junction are being offered for sale as a regional railway.
"Despite the best efforts of employees, customers, and government officials, there is no substantial new
traffic to be secured and no new real revenue gains to be made", Mr. Pender said during a news conference.
"Our revenue is shrinking faster than our ability to cut costs and our outlook is for continuing losses
for CAR in the Maritimes. This decision does not mean we are locking our doors, turning out the lights, and
putting our equipment on idle".
VIA Rail Canada, which operates passenger services on the CAR's main line from Montreal to Saint John, N.B.,
three days a week, has been advised.
CAR has identified some operations with potential for a short-line operator. Among them are Saint
John Terminal at the Port of Saint John; and New Minas, N.S., to Windsor Junction, N.S., on the DAR.
"The railway is prepared to explore with government and other interested parties solutions that could
make a continuing railway presence possible in the transportation market currently served by CAR.
Meanwhile, the Federal Court of Appeal has dismissed five appeals launched by McCain Foods Limited against
abandonment orders granted by the NTA, some going back to 1989. In July, the railway filed Notices of
Application with the NTA for the abandonment of railway operations on uneconomic trackage north of CAR's main
line.
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This CP Rail News article is copyright
1992 by the Canadian Pacific Railway and is reprinted here with
their permission. All photographs, logos, and trademarks are the property of the Canadian Pacific Railway
Company.
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