(The following story by Adrian Ewins appeared on the Western Producer website on April 15.)
SASKATOON — Con Johnson wasn’t sure what to expect when a group of 47 farmers gathered at a meeting hall in Climax, Sask., on a Monday evening in late March.
Over the previous few months, Johnson and some fellow farmers had been devoting their time and energy to try to save rail service to the isolated southwestern corner of the province.
Just nine days were left to the March 31 deadline to make a down payment to buy 550 kilometres of track, along with the rail company known as Great Western Railway, from their B.C.-based owner.
The group had collected pledges totalling more than $400,000. Not only was that short of the $550,000 down payment, but the pledges weren’t easily convertible into cash or financing.
“I had gone to the meeting hoping to get some kind of a letter of credit or something from the rural municipalities at best,” he said in an interview last week.
What happened next was beyond the wildest dreams of Johnson and his fellow rail promoters.
“People stood up and said, ‘if we’re going to do it, then we’ve got to do it now’,” he recalled.
The chequebooks came out and when the ink had dried, Johnson left the meeting with $400,000 in personal cheques, along with a commitment for $150,000 from two RMs.
“It was all pretty amazing,” said Johnson, chair of the board of the numbered company set up by local residents to buy the railway. “There was a real sense of community after we were done.”
At a similar meeting in Shaunavon a few days later, another group of producers came through with $150,000 of their own money to replace the RMs’ contribution.
With the money now in hand, the group was able to make the down payment and take a giant step toward its goal of shipping grain via a locally owned and operated railway.
Johnson said the unexpected influx of cash led to a realization that it simply had to be done.
“I guess down here we’ve lost just about everything there is to lose, and we weren’t about to lose our rail line too,” he said.
Under terms of the agreement with Westcan Rail Ltd. of Abbotsford, B.C., the farmers will buy Westcan Rail Saskatchewan Ltd., which owns the land and track, and Great Western Railway Ltd., which is the operating company running trains over the line.
The agreement provides for 90 days to carry out due diligence and arrange financing. The $5.5 million deal is to close by November.
Johnson said the group expects to receive a loan of about $1.7 million from the Short Line Railway Financial Assistance program operated jointly by the Saskatchewan and federal governments. It will sell ownership shares once a business plan has been completed and approval received from the Saskatchewan Securities Commission, and will take on commercial debt if necessary.
“We know we can’t stand a lot of debt,” he said.
Westcan bought the track from Canadian Pacific Railway four years ago. The line snakes its way through the rolling country southwest of Swift Current, running west almost to Alberta and south almost to the United States.
Despite the closure of almost all of the elevators on the line, the GWR has shipped as many as 2,590 cars in a year. In the first seven months of 2003-04 it shipped 1,447 cars, including 865 producer cars.
The company says it expects to ship about 2,700 cars by the end of the year.
GWR general manager Stacey Wallis said the uncertainty of the last few months has been nerve-wracking for the railway’s employees.
“This is very, very good news,” she said, adding that local ownership will bring a number of benefits. “Any perception that we’re not sticking around maybe will go away now.”
At the end of the day, she said, the only way for the railway to survive and prosper will be to increase traffic. Now that local farmers have a direct financial stake in the line’s future, that could spur more business.