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For Immediate Release


Nov. 25, 2003

Office of the Premier

Ministry of Transportation




VICTORIA – The Province announced it has selected CN as the successful proponent for a new BC Rail Investment Partnership that will generate $1 billion in investment for B.C., help to revitalize the BC Rail system and create opportunities for economic development and job creation in the North.


            “This partnership is a $1-billion investment in the future of B.C.,” said Premier Gordon Campbell. “It will provide lower rates, faster service, new transportation infrastructure, new jobs and new resources for economic development in the North.


            “Northern communities, shippers, and resource industries have made clear that BC Rail is failing them. This partnership directly addresses the needs that mayors and shippers told us must be met. By providing better service, an expanded Port of Prince Rupert and significant new community investments for Prince George and the North, the partnership will be a major new source of economic development for our entire province.”


Investing in the BC Rail System:


The addition of 600 new rail cars to the fleet, an average rate reduction of seven per cent for interline shippers, and 30 per cent faster transit times from Prince George to Vancouver will all benefit shippers. The partnership will provide access to a seamless, integrated North American rail network, including the introduction of a “Chicago Express” in the first quarter of 2004 that will transport freight from Prince George to Chicago two days faster. This will reduce costs for shippers, improve their competitiveness, generate stronger demand for B.C. products, and foster more secure jobs in the forest sector.


Additional highlights of the partnership include:


·        Establishing an Open Gateway Rate and Service Commitment to maintain access for shippers to competing railroad alternatives at Vancouver.

·        CN assumes responsibility for maintenance of the infrastructure and cars, which currently costs BC Rail $40 million a year, representing $3.6 billion in avoided costs for the BC Railway Company in today’s dollars over 90 years.

·        Continuing the D’Arcy-Lillooet and Takla shuttle services;

·        Re-opening the Dawson Creek-to-Hythe line to facilitate grain handling from the Peace region.


Investing in Jobs and Opportunities:


CN will establish a new B.C. North Division office in Prince George and will open a $1-million state-of-the-art wheel shop at the BC Rail mechanical complex in Prince George to service CN’s Western Canada operations. CN will also bring new locomotive and freight car repair work to the mechanical complex.


The Province will provide $17.2 million to support a major new expansion of the Port of Prince Rupert, including development of container terminal facilities. In addition, CN is also prepared to invest up to $15 million in new rail infrastructure to help support the port expansion, for a total investment of up to $32.2 million. The Province will also provide $4 million to the Prince George Airport Authority to support terminal and runway improvements.


BC Rail and CN are issuing a request for proposals to develop new tourist-passenger train services in B.C., through partnerships with third-party operators.


An initial $135 million of proceeds will be invested in a Northern Development Initiative to support investments in forestry, pine beetle recovery, transportation, tourism, mining, Olympic opportunities, small business and sustainable economic development.


Additional highlights of the partnership include:


·        Eliminating BC Rail’s debt of over $500 million, saving $30 million a year in interest.

·        CN will pay a forecast $8.3 million in municipal taxes, based on current assessment values – over four-and-a-half times the $1.8 million paid by BC Rail in lieu of taxes.

·        A $15-million BC Rail First Nations Benefits Trust.


Over the next three years, CN’s operating plan will affect a total of 430 BC Rail employees provincewide. It is estimated 250 employees will be eligible for early retirement, resulting in 180 involuntary departures, which will be achieved through attrition or severance. There will be a decrease of only 25 positions in Prince George, including 15 involuntary departures.


These job impacts will be more than offset by new job benefits in railway communities.  The redevelopment of the Port of Prince Rupert is projected to create up to 500 direct jobs and the Prince George Airport improvements will create 75 direct jobs. Seeking partners to establish passenger-tourist trains will potentially create hundreds of jobs in the tourism industry.

“CN set itself apart from the other proponents with its capacity to re-invest in the railway and to link shippers with markets across North America,” said Transportation Minister Judith Reid. “Combining CN’s infrastructure with that of BC Rail will ensure a prosperous future for British Columbia’s rail industry and railway communities.”


The new benefits and investments that will be generated are dependent on completion of the partnership. The Province will introduce legislation to implement the BC Rail Investment Partnership. The partnership is subject to approval by Canada’s Competition Bureau. It is expected to be complete and ready for implementation in the first quarter of 2004.




 2 backgrounder(s) attached.





Mike Morton

Press Secretary to the Premier

250 213-8218

Steve Anderson

Communications Director

Ministry of Transportation

250 387-7787


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