Province to study rebuilding Oyen-Strathmore rail

Posted on April 6, 2023 by Ryan Dahlman

By Collin Gallant

Southern Alberta 

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A million-dollar study will examine reopening a railway network between Oyen and Strathmore – a distance of 286 kilometres over which track would have to be rebuilt on an abandoned Canadian National right-of-way.

The study, announced late last month as part of the province’s new “economic corridors strategy,” will evaluate returning direct freight service to 80,000 square-kilometres of land in the Special Areas.

That has been the hope of regional leaders there since the CN line was decommissioned in 2010, and gets new life after the Oyen railyard came online five years ago and alongside new efforts to expand irrigation to farmland in eastern Alberta and Acadia Valley.

“It’s a first step towards it,” said Doug Jones, mayor of Oyen, located about 200 km north of Medicine Hat.

“It’s a feasibility study and we’ll see the viability of it. These days you see more and more traffic going to rail … it’s a more efficient way to move more large volumes.”

A new line, which could cost $500 million or more to reconstruct, would also connect the 155-acre Oyen Logistics yard, serviced by Canadian National from Saskatoon, to the main CN yard near Calgary.

It could be operated by a new short-line rail company owned by investors who use the line – as was unsuccessfully proposed 14 years ago when CN announced it would shut down the line due to a lack of traffic – either owned or leased.

“CN would be involved one way or another but it’s very preliminary at this stage,” said Jones.

The study, which could take nine months to complete, involves a Canadian National railway line between Oyen and Lyalta, Alta., near Strathmore, that was abandoned in the early 2010s.

Through a regulated process, Class A railways that plan to decommission track must offer it for sale to the province, then municipalities for purchase, usually for scrap value of the steel rails.

Saskatchewan has seen more than 18 locally owned short lines, like the Leader, Sask.-based Great Sandhills Shortline, built up with provincial support.

The Alberta government took a hands-off approach in the 2000s and 2010s however, and only three are in operation, including Forty Mile Rail, in Foremost.

In Oyen’s case, a group called Badlands Railway was incorporated to vie for the Oyen-Hanna-Lyalta line, but wasn’t successful in negotiations that ended in late 2010.

The tracks were removed several years later.

The Province of Alberta is paying for about half the new feasibility study, $475,000, equal to funding from the federally-controlled Canada Infrastructure Bank.

The Oyen Regional Rail Company, incorporated in 2020, will provide $25,000 and the remainder will come from Special Areas and the Oyen Development Corporation, an arm of the town.

Transport Minister Devin Dreeschen said in a release the line would bring corridor access to eastern Alberta from the central stem of the provincial transportation network.

Combined with increased irrigation, which is currently being studied for eastern Special Areas, the outcome could boost agricultural yields and the shipping requirements, said Ag Minister Nate Horner.

“This proposed rail development will unlock the economic potential of all communities in the region,” said Horne, whose riding spans nearly the whole length of the proposed line. “If approved, the rail line would support increased agricultural production and attract new opportunities to producers and processors in the area and across Alberta.”

The line right of way follows Highway 9 from Oyen to Hanna, then south to Drumheller, and ends in the hamlet of Lyalta. That point, northwest of Strathmore is connected by operating CN track to the company’s main yard in the Calgary area, north of Chestermere.

The UCP government’s “Economic Development in Rural Alberta Plan” was unveiled in December as a five-year initiative to promote, in part, interconnectivity in regional economic planning.