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Property taxes shouldn't be hiked for rail

Editorial, Alberni Valley Times, August 01, 2012

It's definitely worth investing some public funds into the E&N Railway to ensure the struggling line doesn't disappear. But there are limits.

The Island Corridor Foundation's potential request that the Alberni-Clayoquot Regional District, Nanaimo and 10 other local governments tax property owners $5.4 million to help fund repairs is going too far. We're glad that funding for the $15-million rail portion has been committed by federal and provincial governments, but taxpayers cannot be expected to continue to prop up a railway that has no guarantee of success.

The E&N Railway has seen a gradual decline in traffic since the 1950s, when highway upgrades began shifting people and freight off the rails and onto the roads. Slowly, portions of the railway fell into disrepair.

Restoring the historic line would bring benefits to the central Vancouver Island region, including a possible commuter service to Victoria, but it faces a host of challenges.

According to the "Rule of 100," a generally accepted economic formula for short-line railways, a minimum of 100 freight cars per mile, per year, are required before a line can make a profit.

The old E&N route now averages about 6.7 cars per mile.

Southern Railway estimates the Raven coal project could add 10,000 rail cars a year, if it gets approval, and gravel another 4,000.

That's still a bit of a long shot. It's unclear yet whether the Raven project will proceed or whether they would be interested in shipping that much coal a relatively short distance by rail instead of truck. The cost savings may not add up.

Transportation experts point out that rail transportation only makes sense for hauling high-volume freight long distances.

Vancouver Island provides neither of these factors. Even shortline railways in oil-rich Alberta have run into trouble, despite operating in far more resource-rich areas.

Although freight is the financial backbone of railways, people often point to commuter passenger services as providing the greatest benefits. Unfortunately, the E&N also faces major obstacles there. Vancouver Island's spread-out population doesn't justify spending millions to upgrade the tracks.

Nevertheless, there are clear benefits to maintaining a railway: Reduced traffic congestion along the Malahat and lower greenhouse-gas emissions top the list. But the benefits must be worth the financial cost.

Municipalities might set a dangerous precedent by hiking taxes to pay for the E&N Railway repairs. It opens the doors for other special interest groups to lobby local governments for additional funding tied to tax increases.

Also, we suspect that the crumbling E&N line will continue to need municipal taxpayer funding to keep it afloat. The $5.4 million in funding currently needed for repairs may not seem like much when spread among a dozen municipalities - that works out to only $2.50 per $350,000 home in Nanaimo. However, it's likely the ICF will continue to request additional hikes if other sources of government funding do not materialize or if the aging tracks suddenly require additional, unexpected work. They are 140 years old, after all.

We appreciate the ingenuity of the ICF - they're definitely trying their best to ensure the railway doesn't fail. But increasing municipal taxes isn't the answer.

Our elected officials need to closely examine how much funding we provide in the hopes of revitalizing this once-great rail line. We simply can't afford to pursue this project at any cost.

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© Alberni Valley Times 2012