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Yesterday, CN announced its intent to enlist the help of partners, such as the province of New Brunswick, to develop an agreement that would preserve rail service in northern New Brunswick despite declining traffic and the need for significant rail infrastructure investments.
 
Traffic on most of CN's Newcastle Subdivision, specifically a 139-mile stretch between Irvco and Catamount, has been declining steadily since the Class I re-acquired the line in 2008. Current volumes don’t justify needed investments of up to $50 million to maintain service on the line, CN officials said in a prepared statement.

CN officials decided to place the 139-mile section in a federally regulated rail line discontinuance process. The earliest any segment of the subdivision can be discontinued is March 2014, which allows ample time to forge partnerships, and develop and implement solutions, CN officials said.

“CN will work in good faith with stakeholders and interested parties to find a way to preserve rail service,” they said. “Critical factors will include shippers' willingness to put more traffic on the line and the willingness of governments to partner in funding major capital upgrades needed to retain the line's ability to efficiently handle freight traffic.”
 
CN and the province will begin working on an agreement to preserve segments of the line that offer potential growth opportunities. The province, which has identified potential business opportunities on northern and southern segments, agreed to help prepare a detailed funding proposal for consideration by partners that would ensure the necessary maintenance and upgrades are completed, CN officials said.

The railroad will continue to cover operating losses over the term of the agreement. The Class I also will ensure that passenger-rail service between Montreal and Moncton and beyond can be maintained, either on the segment or other CN corridors, railroad officials said.