New Funding and New Operator for ACR Passenger Service

Well this came right down to the wire. With the ACR regular passenger service slated to be no more as of April 1st without a decision on support from the federal government, it was announced today that the government will renew a subsidy for the passenger service for a further three years.

See the article on Sault Online here:
Passenger Rail Service Funding Extended for Three Years

From the article:

The City of Sault Ste. Marie will receive federal support for three years for the continued operation of the passenger rail service to establish a new regime of passenger rail service in the area. This would allow Railmark, the proposed operator, to demonstrate its ability to deliver on its business plan. A review will be carried out at the three-year mark to determine if additional funding is warranted.

That new operator is Railmark Holdings Inc., in the form of a newly incorporated Canadian subsidiary, Railmark Canada, to operate the train service in Ontario.

Over the last few months articles have appeared in the local media documenting the bidding and evaluation process for finding a new operator for the passenger service (or at least what information could be known outside of the standard business NDAs covering the negotiations). As the months leading up to the deadline became shorter, several companies had submitted bids for evaluation by CN and the local stakeholders group, which then turned into one (as then yet unidentified) finalist selected for final negotiations, and then the announcement that agreements were basically in place between CN and the new mystery operator, with a grand plan to expand the services and make the operation no longer dependent on the federal subsidy in about five years. As the months became weeks, the request for additional interim federal funding was submitted to the government, and it was gradually revealed that Railmark was the final bidder, while as the weeks became days, the parties awaited the recommendation and decision from Transport Canada. And on the last day before the service would have become another page in the history book of Canadian passenger operations, that funding decision came down.

Railmark seems to have grand plans for the service, including additional options and changes to the service, cross-promotions with other tourism activities in the area, and additional dinner trains and special runs. If this all sounds a little vague, well, I tend to agree. A lot will need to be proven here, and I’m pretty skeptical about a short-distance dinner train in a remote market like the Sault, although special runs to things like folk music festivals in Searchmont seem to have been relatively well patronized locally in the past. The above article also mentions a return of the winter Snow Train through Agawa Canyon, which has not been running the last few years. This could be a good thing, if the demand is there. We will have to see. (Note that Railmark’s bid includes taking over the operation of the Algoma Central Railway passenger services, including the Agawa Canyon Tour Train.)

Railmark has a lot to prove over the next three years. Railmark markets themselves as a railway company with 15 years of experience in the business, although they don’t appear to have any current operations. Two previous dinner train operations are defunct; one was shut down and sold during the major recession several years ago, the other appears to be the focus of a complicated dispute with the city of Columbia, MO and also involving a failed merger with another company, Train Travel Inc. RailMark’s website announces this merger on their news releases, but fails to follow up the fact this this merger was unwound scarcely two months later. Keep digging around these companies and find a dizzying collection of small shell corporations with little or no actual apparent operations or assets.

Railmark was also involved in some bidding last year for some CN branch trackage between London and St. Thomas in southern Ontario. While this has gone absolutely nowhere so far (CN is still operating those tracks at the moment, and former CP and Trillium Railway lines in the St. Thomas area are now under Ontario Southland’s banner), Railmark doesn’t seem to have a serious reputation in this area talking to some friends who know some contacts in the local railway scene.

So, today’s announcement means that the “show will go on”, at least for now. What that show will be, time will tell. In the immediate term, Railmark needs to get their ducks in line in order to prepare to even take over the current operation and hopefully get that all sorted out before the tourist season really starts. (I’m not even sure what the immediate situation is as of tomorrow, as before this afternoon’s announcement, today’s train was basically slated to be the last if no support was provided.) And then they really need to prove themselves on this operation. While I remain cautiously optimistic for the future for now, there’s some red flags here that are slightly unsettling.


CN has recalled laid off employees and will continue to operate the service until Railmark is ready to take over, so passenger service will continue to operate this week. Note that the subsidy funds will actually be managed by the city of Sault Ste. Marie, which to me sounds like a good thing, and allowing the local stakeholders to hopefully be able to keep the operator(s) accountable.

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