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Winnipeg Free Press - PRINT EDITION

From being railroaded to future rail-line barons

By: Bill Redekop

Posted: 12/11/2009 1:00 AM | Comments: 0 (including replies)

Don McLean (above) credits John Buhler for helping seal the deal. (MIKE.DEAL@FREEPRESS.MB.CA)

DARLINGFORD -- Maybe older farmers here had just lost too many times to big corporations to think they had any chance to save their rail line.

And maybe they'd just seen too many grain elevators demolished, too many rail lines ripped up -- over 3,000 kilometres in Canada in the past dozen years -- and their voice in the grain industry reduced to a whimper, to think they could change things.

Then a group of young farmers in their 20s and 30s proved them wrong. As the ribbon of steel that follows Highway 3 was already being yanked from the ballast for salvage, the mostly young farmers began organizing and pooling their money.

In June, they bought the line and formed Manitoba's newest rail company, the Boundary Trails Railway Company.

"If you go back to the 1930s and 1940s, it's really like we're starting the pool elevator (co-operative) again," said Kevin Friesen, 34, president of BTRC, who farms near Manitou, 145 kilometres southwest of Winnipeg.

"There's no farm ownership anymore" like when grain co-ops gave farmers a say in the industry, Friesen maintained. "It's gone so much the way of taking things out of our hands. We just figured this was one way we could control our own destiny."

It was almost too late. In fact, it was too late. CP Rail had warned three years ago it was going to close the line. It wasn't until the track was actually being lifted out and hauled away that farmers felt something like a collective anvil-drop inside their chests.

The original line was about 120 kilometres from Morden to Killarney. They ended up buying was what was left: 37 kilometres of track between Morden and just west of Manitou.

"Most of us farm with our dads, and our dads thought it was maybe hopeless," said Friesen. But the small group of friends who first met at someone's home grew to 82 shareholders, most of them farmers, pooling nearly $1.5 million of their own money.

The RM of Pembina chipped in $400,000 -- some of the compensation, as mandated by the Canada Transportation Act, that it received for line abandoned within its borders. The province chipped in a $615,000, not repayable unless the line is sold, and Ottawa $1 million. Mission Terminal Inc., with a terminal in Thunder Bay, became a 20 per cent shareholder.

They still needed $1.5 million to buy the line for $4.3 million, plus money to operate, but no creditor would lend it. The bad optics of ripping out rail line if BTRC failed, scared away lenders.

So businessman John Buhler, whose roots are in the Morden area, put up their mortgage. "Mr. Buhler stood up at our public meeting and said his first job was on this rail subdivision," said Don McLean, another one of the young farmer board of directors -- he's just 26. "Without him, we probably wouldn't have been able to do the deal."

What kind of railway company has 37 kilometres of track but no actual rail cars and no grain elevators?

Here's how it works. It is a farmer's right to bypass grain elevators and load his or her own grain onto a rail car and ship it directly to a port terminal, under a century-old court decision.

The farmers load what are called "producer cars" using a grain auger at three sidings along the branchline the farmers purchased. A company called Canada Central Railway Co. does maintenance on the line, like snow clearing, and pulls hopper cars in and out.

The farmers are saving $1,000 in grain elevators charges by loading the producer cars, even after a $400 charge to BTRC. Friesen loaded 32 cars last summer for a saving of $32,000. (He won't say how much he's invested in BTRC.)

That's $32,000 that stays in the community instead of "trucking down the road to a company owned by investors in Toronto."

bill.redekop@freepress.mb.ca

Republished from the Winnipeg Free Press print edition December 11, 2009 A12

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