Monday, November 04, 2013

Derailed: Kelowna's fight to save the railway and 500 jobs

By Jennifer Smith - Kelowna Capital News Updated: November 02, 2013 9:31 AM
It's been four months since Kelowna Pacific Railway went into receivership and the Central Okanagan lost all rail service. For a good sector of the business community it means profit margins will slip right off the tracks. This week the Central Okanagan evaluates the line, efforts to save it and the opportunity it presents for tourism. There is one month and three days remaining to save the Canadian National Railway line from being sold in the wake of the Kelowna Pacific Railway collapse. An interim injunction to force CN to open the line from Kelowna to Vernon has failed. “Last week, we learned that the Canadian Transportation Agency turned down our request…seeking to restore service immediately,” said Barry Penner, a former provincial Liberal cabinet minister. Based out of Vancouver, Penner filed the injunction with the CTA as part of an appeal to try and block CN, which owns the tracks, from selling the line. CN has already started the discontinuance process that could see first right of purchase as early as Dec. 3. Working on behalf of Ashland Chemicals, a small division of the Fortune 500 company with just 35 employees, Penner says his client could be forced to leave the Okanagan without the trains. “If you lose this line, you will not get rail transport back in the Central Okanagan,” he said.Bringing in the chemicals and products needed to make things like fibreglass and plastic polymers, Ashland supplies the products for Campion Boats, here in Kelowna, to build its luxury yachts. Kohler Canada, in Armstrong, needs its materials to produce its bathtubs, showers and bathroom fixtures. And FormaShape: 3D Architectural Design in Winfield works with Ashland in its waterslide component and gas station canopy outfit. Ashland is also the reason there is now a node of the Composites Research Network at UBC Okanagan. Unbeknownst to many people living in the region, this area has become a key manufacturing niche for composites with at least a dozen manufacturing businesses working in the sector. Bottom line, the loss of rail transportation could mean 500 to 600 job losses, according to the Canadian Manufacturers and Exporters. “If one key business fails, so (could) many others as their supply chain is further disrupted,” said Marcus Ewert-Johns, CME vice-president, in a letter to Mayor Walter Gray and Kelowna city council. Manufacturing in B.C. is on dicey ground as it is, Ewert-Johns explains, pointing to the re-introduction of the Provincial Sales Tax, loss of tax credits geared at light industry, increasing property taxes and B.C.’s carbon tax as stressors. At UBCO, the news has yet to trickle down. Abbas Milani, UBCO engineering professor working with the composites network, has not heard of fallout from their industry partners. It stands to reason that if Ashland disappears and some of the technical companies pull out of the area, the research node and all of its potential for developing new, innovative products—like aerospace parts—could be in danger as well, according to Penner. But there is a difficult flip-side to Penner’s pitch. The rail line is in enough disrepair that it’s curbed the line’s customer base. While Penner says he’s heard quotes from independent rail providers interested in contracting on the line that peg the repairs as low as $3 million, CN’s figures don’t align. CN says the short corridor needs $10 million in upgrades. It’s hard to verify the sum. Transport Canada can only confirm annual inspections on the line met the Railway Safety Act right up until KPR shut down in July.(more)

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