Railways, Contemporary

In the 4 decades following World War II, Canada's 2 major railways became major conglomerates, among the largest companies in Canada. During the 1950s and 1960s a number of major resource railways were completed. The Pacific Great Eastern (later the BRITISH COLUMBIA RAILWAY) served mining and timber areas in northern BC. The Great Slave Lake Railway was built by CN to serve mining and timber areas in northern Alberta and the Northwest Territory. The QUEBEC, NORTH SHORE AND LABRADOR RAILWAY was completed in 1954 to haul iron ore from the Knob Lake region near the Québec/Labrador boundary to Sept-Îles. The mid-1980s saw the establishment of short-line railways to operate former parts of the CN and CP systems.

Passenger Transportation

The post-WWII era saw a contraction in the railway share of passenger transportation as the AUTOMOBILE and airplane became dominant (see AVIATION). In 1945 the railways carried 55.4 million passengers (including commuters), accounting for 20% of their revenue. Ten years later passengers had fallen to 27.2 million, accounting for less than 10% of revenue, in spite of both major railways having invested in new fleets of passenger equipment.

This decline was one of the problems addressed by the MacPherson Royal Commission of 1959-61. Noting the advantages of the automobile and airplane, the commission recommended that uneconomic passenger trains be discontinued, with provision of a subsidy during a transitional period. This recommendation was adopted in the 1967 National Transportation Act, which provided for a federal subsidy of 80% of the losses sustained by passenger trains retained in the public interest. Even with this provision, during the 1960s and 1970s many of Canada's passenger trains were withdrawn and the number of stations served was gradually reduced as many trains became express or semi-express. Over this period the railways, especially CN, undertook various initiatives, such as the Red-White-and-Blue discount fares introduced in the 1960s, to improve passenger service, but with limited success. Although there was some resurgence of passenger traffic, the subsidies grew.

In 1977, at a time when annual passenger subsidies had increased to more than $200 million, a new step was taken with the formation of VIA RAIL CANADA LTD, a crown corporation which assumed responsibility for most passenger trains, operating them under contract with the federal government. VIA Rail owns only the trains and employs only some of the staff. The remainder of its services it purchases from the railways at cost. Although it has tried to make passenger rail travel more attractive by modernizing and upgrading facilities, VIA Rail lost approximately $500 million in the mid-1980s. To reduce losses, VIA discontinued service on several unprofitable lines. It still serves the country as a cross-country passenger rail service, but most traffic is in the Windsor-Québec corridor.

Freight Transportation

Freight, especially bulk commodities, has become the dominant railway service. Each year Canada's railways move millions of tonnes of bulk commodities, including coal, potash, grain and sulphur. Other freight commodities include grain, forest products, chemicals, petroleum, and automobiles and automobile parts. Railways can transport large quantities of bulk materials over long distances at relatively low cost, enabling the products of Canada's mines, fields and forests to compete in world markets.

The railways have withdrawn from the "small package" freight market, leaving it to their trucking or express subsidiaries. Many rail shipments are multiple carload lots, much of it in unit trains, which often consist of 100 or more cars, each capable of carrying 100 tonnes. For the most part, freight stations in smaller cities have been closed and low-density branch-lines abandoned.

Canadian National Railway

CN is Canada's largest freight railway. It operates a network of approximately 22 000 km of track in Canada and the US. In 1998, it had 21 500 employees across North America. At the end of 1998, CN operated 1400 locomotives and approximately 64 000 railcars. Precision scheduling allowed CN to reduce its assets by 500 locomotives and 10 000 railcars, significantly reducing operational and maintenance costs. CN plans a merger with Illinois Central, and will become the only transcontinental railroad in North America and the only railroad to serve all 3 coasts on the continent. Through a marketing alliance with Illinois Central and Kansas City Southern Railway, CN will reach all 3 NAFTA nations.

Canadian Pacific Railway

Calgary-based CPR is a wholly owned subsidiary of Canadian Pacific Ltd, which also operates CP hotels, CP ships, PanCanadian Petroleum and Fording Coal. It operates approximately 25 000 km of rail line in Canada and the US. Late in 1995 CPR began a sweeping reorganization, moving its headquarters from Montréal to Calgary, where 80% of the railway's business originated in 1996. Concurrently, CPR created an eastern subsidiary, St Lawrence and Hudson Railway (StL&H), headquartered in Montréal and responsible for operations in the Montréal-Toronto-Chicago corridor and the northeastern US.


The period since WWII has been a time of modernization and technical change for the railways. The most visible of the early steps to modernization was the conversion from steam to diesel-electric power. While there already existed an electrified line in Montréal, nearly all of the railways' 4400 locomotives in 1945 were steam engines, although many were oil rather than coal fired. Conversion to diesel-electric began in the late 1940s. In 1950, 91% of Canadian trains were pulled by steam engines; by 1960, steam engines accounted for only 1.4%.

The diesel engine was less expensive to operate, and more powerful and flexible. In the 1980s the bulk of the locomotive fleet was made up of 3000-hp units which could go 800 to 1000 km without servicing. Larger trains with multiple locomotives could be operated. Firemen were no longer required, and the need to change or service steam locomotives every 150 to 200 km was eliminated. Both these developments created labour difficulties in the 1950s and led to a decreased importance of many small towns which had been railway division points. The typical freight train of the 1980s may have had over 100 cars pulled by 3 or 4 locomotives, with a 4-man crew, running nonstop between major terminals.

There have also been changes in freight cars. The 40-foot boxcar, long the standard of the industry and capable of carrying 40 to 50 tons, has been replaced by larger cars and special purpose cars. In the 1980s much of the bulk freight is handled in 100-ton (91 t) cars. The railways have an increasing number of unit trains which were dedicated to specific services and move directly from shipper to consignee without intermediate classification. Between 1945 and 1980 such innovations allowed the railways to increase the amount of freight carried while reducing the number of employees required by 32%, and to offer freight rates which have increased far below inflation rates.

Other, less visible, technological changes adopted by the railways since the 1940s include the use of Centralized Traffic Control, microwaves and radios for train control, modern metallurgy and continuous welded rails, automated rail-laying machinery, automatic car identification and the application of computers in all aspects of the railway business.