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$2.2-million investment nets $48-million return on ACR, says report

Accounting firm BDO Canada says that the federal government's $2.2-million investment, in the form of a subsidy to CN Rail to continue the ACR passenger service between Sault Ste.
Accounting firm BDO Canada says that the federal government's $2.2-million investment, in the form of a subsidy to CN Rail to continue the ACR passenger service between Sault Ste. Marie and Hearst, nets an economic impact of $38-million to as much as $48-million annually.
Representatives from BDO presented the results of their draft impact assesment to stakeholders Thursday afternoon at the Civic Centre.
Tom Dodds, CEO of the Sault Ste. Marie Economic Development Corp. (SSMEDC), said the study offers valuable insight moving forward with attempts to save the passnger service.
"Now we have this momentum going, we have to keep pushing and get more stakeholders on board, get the provincial and federal government on board," said Dodds.
Dodds said he wants to see the advisory group expanded to include CN Rail, Transport Canada, Ministry of Transportation, Northern Development and Mines and FedNOR.
The SSMEDC created the survey, which was made available to stakeholders, and the resuling numbers were compiled by BDO into the draft impact assesment.
CN Rail contributed to the study by providing ridership numbers to the SSMEDC.
Joe Melisek, associate in charge of advisory services at BDO Canada, said he was pleased by the number of stakeholders who participated in the survey.
Melisek said about 500 responded to the SSMEDC survey, amounting to almost 10 percent of yearly riders.
Lindsay Fedchyshyn, regional manager of public and government affairs for CN Rail, said that the company is looking forward to hearing what solutions the stakeholders come up with over the next year.
"With the subsidy restored CN will continue to operate the service and will assist our stakeholders as they work to determine the future of the passenger train service," said Fedchyshyn.
Dodds said the study is a good foundation to go back to government and demonstrate the impact of their investment, and has already forwarded the results to relevant ministers at the provincial and federal level.
The city of Sault Ste. Marie contributed $50,000 to the creation of the study, with other affected municipalities and stakeholders agreeing to contribute proportionately, said Dodds.
(PHOTO: Sault Ste. Marie Chief Administrative Officer Joe Fratesi addresses stakeholders seeking to save passenger service on the ACR during a meeting April 17, 2014 at the Civic Centre. Armstrong)
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SAULT STE. MARIE - The Federal Government’s $2.2-million investment into the Algoma Central Railway passenger line nets a significant return.

According to a socio-economic impact assessment from BDO Canada – now in its final draft stage – the transportation service generates between $38 and $48 million in annual economic activity, which supports up to 220 jobs and helps deliver more than $5 million in tax revenue to government coffers every year.

“Our position has always been that the ACR passenger service provides a substantial economic benefit for Northern Ontario and the country as a whole, and now that we have this report from BDO, one of Canada’s leading accounting and advisory firms, our position has been confirmed,” said Joe Fratesi, Chair of the ACR Passenger Service Working Group and CAO of the City of Sault Ste. Marie.

“According to the preliminary report, the rail line also supports more than $60 million in property value and provides untold social benefits, making the continued operation of the service of the upmost importance.”

BDO’s impact assessment was created using ridership numbers and industry standards, along with a stakeholder survey prepared by the Sault Ste. Marie Economic Development Corporation, which garnered nearly 500 responses.

The final draft of the report, which uses conservative estimates, is now being shared with Transport Canada, CN Rail and stakeholders who use the rail service.

The document is available online at under the “Reports/Info” section. Stakeholders are invited to send comments and feedback to The deadline to respond is April 30.

In early-2014, the Federal Government indicated that it was cutting its annual investment into the Sault-to-Hearst rail service. Without the funding, CN Rail, the owner and operator of the line, announced that it was ending the run.

The ACR Passenger Service Working Group, which represents a broad range of concerned stakeholders, has been striving to find solutions to keep the link operating in the short term so that longer-term solutions could be explored.

Earlier this week, the Honourable Lisa Raitt, Minister of Transport, announced that her government was restoring its investment into the ACR passenger line until March 31, 2015.

“Now that the rail service received the one-year extension in funding from Transport Canada, we have an opportunity to further engage stakeholders and all levels of government to come up with sustainable solutions,” said Tom Dodds, CEO of the Sault Ste. Marie Economic Development Corporation and a member of the ACR Passenger Service Working Group.

“We thank all the stakeholders for their efforts so far, and we will continue to work with them on this key transportation initiative in the months to come.”