N.S. government questioning Cape Breton rail subsidy invoices

The Nova Scotia government is starting to ask questions about a subsidy it's paying to keep the rail line open in Cape Breton.

In 2017, the province signed a rail preservation agreement to pay Cape Breton and Central Nova Scotia Railway up to $60,000 a month to keep the line in place.

However, documents released under freedom of information legislation show the railway has been billing the province for legal fees to migrate land and to sell land.

The province requires land being sold, subdivided or mortgaged to be migrated — or converted — into the land registry system.

Several monthly invoices from the railway include legal fees for land migration, although the locations of the land parcels and the fees themselves are redacted.

One recent invoice also bills the province for legal fees associated with selling land to the Port of Sydney.

The railway is owned by U.S.-based parent company Genesee and Wyoming.

Geoff MacLellan, Nova Scotia's Minister of Business, said legal fees for land migration and sales don't sound like they should be covered under the subsidy agreement.

"We're going to reach [out] directly to Genesee and Wyoming and get those answers specifically as to what those relate to," he said.

"This is about the preservation of the Cape Breton rail line. This is not about any other fees incurred for a rail line."

MacLellan said he'll be asking the railway company for clarification.

"With some of this language, I want to make sure that Cape Bretoners and Nova Scotians can be confident that what's being put into this subsidy for that preservation agreement is exactly and directly connected to keeping the line covered from an operational cost perspective," he said.

MacLellan said the rail preservation agreement was struck to keep the line in place after the company applied to abandon it.

Questioning subsidy renewal

He said Cape Breton Regional Municipality wanted the line available in case the municipality was successful in attracting a container terminal to Sydney Harbour, and other companies were interested in shipping goods by rail.

The deal is renewable every 12 months, and MacLellan said he is starting to ask serious questions about whether there is any point in renewing the subsidy at the end of this year.

"This is specific to giving our island, giving the region time to develop any of the business opportunities that exist, and if they don't exist, we can't do this forever," he said.

"That doesn't mean that we're looking to chop it right away. It doesn't mean that it's sunsetting. What that means is we want to start having serious conversations about what those real, palpable options are."

Port of Sydney interested

Christina Lamey, who speaks for the Port of Sydney, said the port authority is interested in a small, unused piece of rail line along Sydney Harbour next to the cruise ship terminals.

However, she said, there is no specific plan for its use and no deal to buy the land has been reached.

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