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Pulling rails possible - but one certainty is feds would need to pony up

The CP Rail yards in Winnipeg's city centre. Ottawa does find cash for some megaprojects.


The CP Rail yards in Winnipeg's city centre. Ottawa does find cash for some megaprojects.

Hey there, time traveller!
This article was published 30/3/2015 (1762 days ago), so information in it may no longer be current.

Over the weekend, the Free Press published details of an ambitious, $1-billion plan to relocate rail yards and lines dividing Winnipeg, drafted by Winnipeg businessman and self-admitted railway junkie Art DeFehr.

In DeFehr's plan, both the CP Rail lines through the north part of Winnipeg and CN's main line through the south would be rerouted on a single right-of-way to the south of the Perimeter Highway. The $1-billion cost would be offset by the sale of railway land and the bridges and underpasses that would no longer have to be built, repaired or replaced.

The relocation is theoretically possible thanks to federal legislation providing the power of appropriation to municipalities and provinces that can agree on a plan that is financially neutral for the railways — in other words, causing neither a gain nor a loss.

There are problems with DeFehr's plan, of course. It is a very rough estimate of the total cost. Nor does it account for potential opposition from bedroom communities to the south, or the prickly matter of the property appropriation necessary to accommodate the relocated rail lines.

And yet the plan is solid in one respect: It dares to dream of a comprehensive solution to Winnipeg's traffic and infrastructure woes.

Relocating railways is not a panacea for the challenges we face today. However, removing the mainlines and yards and relocating them to the outskirts of the city would kick off exponential economic benefits. That $1 billion would, by current Conference Board of Canada formulas, generate about $300 million in provincial tax revenue and $1.1 billion in GDP growth.

When you add up all the pluses and account for all of the minuses, there are very few ambitious infrastructure plans that could have such a seismic impact on Winnipeg's future and the economy of the entire province.

However, one significant hurdle could make consideration of a plan of this magnitude a worthless endeavour. On their own, provinces and municipalities are unable to take on major projects such as this. And right now, there is no federal fund for such huge, effective infrastructure projects.

That has not always been the case. Ottawa has in the past found money for projects of national significance — code for horrendously expensive, once-in-a-generation projects — apart from its annual allocations for core infrastructure.

That was how British Columbia acquired $800 million in federal funds to improve transportation infrastructure related to Asia-Pacific trade. Closer to home, it's also how the province was able to pay for the $650-million expansion of the Red River Floodway. And how the Canadian Museum for Human Rights got $100 million to complete its construction.

Unfortunately, there is no separate pot of money right now for infrastructure projects of national significance. There is the Building Canada Fund, a 10-year, $50-billion program that is a hilariously inadequate response to Canada's overall infrastructure needs.

Consider that Ontario alone spends on average more than $12 billion a year on infrastructure. In the context of that program, Ottawa's $5-billion annual grant, which is divided among all provinces, is rather woeful.

So, forget about revolutionary projects such as railway relocation. And welcome to the pothole generation.

Under current federal funding limits, we are living in an era in which filling potholes may be the pinnacle of our infrastructure ambitions. It's really all we can afford right now. There will be a new underpass here, a road extension there, and even a new bridge from time to time. But most of these expenditures will be stop-gaps, because we don't have the resources to tackle progressive infrastructure.

The current Conservative government prefers modest, targeted tax credits to massive investment in infrastructure. It is how the Tories can justify things such as income splitting, or cutting the GST by two points, when there are so many critical needs in infrastructure.

The GST itself is an interesting study. One point was shaved off in 2006; the second point was cut in 2008.

Most consumers would be hard-pressed to identify the real value of that tax cut now. However, if the Tories had kept the tax intact and invested the two points in infrastructure, how different things could be now.

When the GST was cut, each point generated about $5 billion a year. That is $60 billion less tax revenue during the last six years alone. If that money had been spent on infrastructure, it would not only have eased the upward pressure on municipal property taxes, but also created billions of dollars in economic growth without having to borrow money to make it happen. It would have also meant a realistic possibility of relocating rail lines from Winnipeg.

Despite all the current challenges, we should still dare to dream about rail relocation. Even though for now, we'll have to make do with a filled pothole.


Dan Lett

Dan Lett

Born and raised in and around Toronto, Dan Lett came to Winnipeg in 1986, less than a year out of journalism school with a lifelong dream to be a newspaper reporter.

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Updated on Monday, March 30, 2015 at 6:51 AM CDT: Replaces photo

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