FINANCIAL ASSISTANCE FOR SHORT LINE RAILWAY DEVELOPMENT ANNOUNCED

Released on August 26, 1998

The governments of Canada and Saskatchewan will offer financial

assistance to help communities in Saskatchewan develop short line

railways.



The funding was announced today by Ralph Goodale, the Minister

responsible for the Canadian Wheat Board, on behalf of Agriculture and

Agri-Food Minister Lyle Vanclief; Saskatchewan Highways and

Transportation Minister Judy Bradley; Saskatchewan Association of

Rural Municipalities (SARM) President Sinclair Harrison and

Saskatchewan Urban Municipalities Association (SUMA) President Mike

Badham.



Federal and provincial governments will each provide up to 16 per cent

of the capital required to purchase rail lines slated for abandonment.

The groups or individuals interested in federal-provincial funding

must obtain all other financing from the financial community, local

municipalities and/or private interests.



The total investment of the provincial government will not exceed

$4 million and will be matched by Government of Canada assistance.

The federal funding comes from Saskatchewan's share of the Canada

Agri-Infrastructure Program (CAIP) and will be administered under the

existing CAIP committee process. CAIP is designed to help the

agriculture sector adjust to changes in Western grain transportation.

"This assistance will help small Saskatchewan communities

maintain rail lines to support their rural economies," said Mr.

Goodale. "Helping farmers build for the future and adapt to

change is a priority for the Government of Canada and we are

happy to support this initiative."



"By undertaking this partnership we are giving rural producers

and farming communities an opportunity to retain rail service

where it can be demonstrated that such service is important for

their economic and social growth," Ms. Bradley said. "The

funding is a commitment to rural Saskatchewan that will assist

communities in getting the capital needed to start short line

railways."



"Short line rail systems help lighten the load carried by our

road systems, reducing trucking costs for our producers and

upkeep costs for our municipalities," said SARM President

Sinclair Harrison. "These two costs pose a great concern and

every effort possible must be made to save as many of the branch

lines as possible."



"Short line rail development is becoming increasingly important

to Saskatchewan's economic and social well-being, especially in

our smaller communities," said SUMA president Mike Badham. "The

funding will go a long way towards maintaining a vital service

and creating jobs within this province and is an excellent

opportunity for communities to take their futures into their own

hands, with the help of all three levels of government."



The funding is a transitional initiative that will help local

communities acquire the necessary rail infrastructure to pursue

short line rail development. Producer commitment remains key in

the development of viable short line rail operations.



Before a community is eligible for federal/provincial funding, it

must develop a sound business proposal that demonstrates an

ability to successfully operate a short line rail system over the

long term. Strong local support will be a necessary factor if

branch line services within Saskatchewan communities are to be

retained.



Feasibility studies and business planning activities associated

with short line rail development may also be eligible for support

under the CAIP.



"This is one of the many ways we are working with provincial

governments under the Western Grain Transportation Adjustment

Program to help rural communities adapt to changes," said Mr.

Goodale. "The Government of Canada is committed to rural

development and a variety of work in this area is being conducted

under the Canadian Rural Partnership, the government's overall

strategy for building stronger rural communities."



"Although short line rail development will be a very challenging

and lengthy process for communities, I am confident we will see

strong commitment from our community members," added Ms. Bradley.

"Our railway advisory unit will continue to assist rural

communities by providing advice to potential community-operated

short lines."



Details associated with the financial arrangement are expected to

be available within the next few weeks.



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Please see the attached backgrounder.



For more information, contact:



Howard Migie

Policy Branch

Agriculture and Agri-Food Canada

Ottawa

(613)759-7315



Bernie Churko

Executive Director

Logistics, Planning & Compliance

Saskatchewan Highways and Transportation

Regina

(306)787-4866