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After a trying 2009, Canadian freight and passenger railroads are hoping for a better 2010.

Freight roads’ traffic tumbled about 25 percent during 2009’s first half and remained sluggish in the latter half as demand for coal, sulphur, containerized goods and other export commodities continued to lag, according to the Railway Association of Canada (RAC).

However, a number of locomotives and freight cars came out of storage toward year’s end as demand began to increase in several sectors, including grain and specialty crops. In addition, freight railroads landed some new business, such as ethanol and wood pellets used at power plants, RAC said.

“From all signs, the decline in freight-rail traffic hit bottom during this summer and has begun to rebound,” said RAC President and Chief Executive Officer Cliff Mackay in a prepared statement. “[But] it may take a couple of years for the business to rebuild to the peaks of the mid-2000s.”

Meanwhile, VIA Rail Canada Inc. and other commuter railroads received federal and provincial funding last year to expand capacity and are counting on more financial assistance this year. For example, the federal government allocated about $900 million to VIA Rail to modernize locomotives and cars, build stations and add tracks, and federal and provincial governments provided financial support for major renovations to Toronto’s Union Station that will benefit VIA Rail’s and GO Transit’s services.

“The railways should get a boost when the federal government’s infrastructure expansion and economic stimulus programs hit full steam during 2010,” RAC officials said.