History of railways in Canada
Canada has a large and well developed railway system that today primarily transports freight.
System in 21st century
There are two major privately owned transcontinental freight railway systems, the Canadian National and Canadian Pacific Railway. Nation-wide passenger services are provided by the federal crown corporation VIA Rail. Commuter trains serve Montréal, Toronto and Vancouver. Smaller railways such as Ontario Northland and Algoma Central also run passenger trains to remote rural areas.
Canada has 49,422 km total trackage, of which only 129 km is electrified. Canada uses standard gauge track for the majority of its railway system. The exceptions to this are small lines isolated from the main North American rail network used in resource industries such as mining or forestry, some of which are narrow gauge, and the broad-gauge streetcar and subway lines of Toronto.
History
Philosophy of railroading
According to den Otter (1997), as products of the Enlightenment, Canadians believed in economic and moral progress, and shared the technological optimism of eighteenth- and nineteenth-century Liberalism. Modernizers had upon a "mission" to "civilize" (or conquer) the wilderness for the expansion of British trade, commerce, and culture. The Canadian market itself was always much cmaller than the nearby American market, which Canadians sought to exploit. They adopted American technology to escape British financial and military control. At the same time, because they rejected American democratic values and were content with Britain's elite social and political institutions, Canadians resisted incorporation into the U.S. and envisioned an independent transcontinental nation, one politically distinct and economically competitive with the United States, but never entirely independent from America's larger market opportunities. Unfortunately, metropolitan rivalries between Montreal, Halifax, and Saint John caused Canadians to build more railway lines per capita than any other industrializing nation, even though they had neither sufficient capital resources, nor freight and passenger traffic to make all of their schemes pay. Over time, internal competition for resources forced Canadians to demand centralization and state intervention to support their expansionist plans, a situation that pitted Canadian regions against each other as urban entrepreneurs sought closer ties with either Britain or the United States.
Creating lines
The first Canadian railway, the Champlain and Saint Lawrence Railroad, was opened in 1836 near Montreal. Heavy expansion of the rail system did came after the Guarantee Act of 1849 guaranteed bonds on all railways over 75 miles. This led to rapid expansion of railways; there was excessive growth as uneconomic lines were built since the government guaranteed profits. This proved disastrous for government finances, however, and the Canadas were all but bankrupted by the subsidies. The largest rail project of this period was also a disaster. The Grand Trunk Railway linking Montreal to Sarnia, Ontario, was finished in 1860, but was mired in debt. In exchange for bailing out the company the government escaped its guarantee on the railway bonds.
Canadian confederation was made possible in part by the railways. The separate colonial governments had all but emptied their treasuries building railways, and a new and more stable method of financing them was required. It was also believed that union would allow for the needed construction of railways linking British North America. The Maritime colonies joined the Confederation in part because of promises to build the Intercolonial Railway. British Columbia was lured by the promise of a transcontinental railway.
Subsequent governments avoided the problems of guarantees and funded no other railways with them. Instead, the government fully controlled the construction of the Intercolonial, placing Sir Sanford Fleming in charge.
The railway to the Pacific, the Canadian Pacific, was financed by private funds and through massive land grants in the Canadian prairies, much of it of little value until the railway arrived, $25 million in cash and a guaranteed monopoly. The railway, an engineering marvel that was then the longest in the world, was completed in 1885 to great fanfare.
The booming Canadian economy after 1900 led to plans to build two new transcontinental railways. The Canadian Northern, a successful system covering the northern part of the prairies, and the Grand Trunk (through its Grand Trunk Pacific subsidiary) both launched ambitious plans to expand. The government at first encouraged the two to come to some arrangement and only have one new line, but in the end no agreement was made and the government supported the expansion of both lines. The federal government itself built the National Transcontinental, a line from Moncton, New Brunswick through Quebec City to Winnipeg, Manitoba, passing through the vast and uninhabited hinterland of the Canadian Shield.
This aggressive expansion proved disastrous when immigration and supplies of capital all but disappeared with the outbreak of the First World War. The Canadian Northern, Grand Trunk Pacific, and Grand Trunk were nationalized by the federal government, which absorbed the debt of over two billion dollars. All three railways, along with the Canadian Government Railways (formed by the Intercolonial, National Transcontinental, and several smaller lines) were then merged into the Canadian National Railways between 1918-1923.
20th century
The years after the First World War saw only moderate expansion of the rail network and the age of the great railways were over in Canada. The automobile and truck provided growing competition by the 1920s, and after 1945 most passenger service was lost to airlines. During the post-war period several large resource lines were opened in Quebec, Labrador, and British Columbia - several of which are not directly connected to the main North American network.
In 1978 the government created VIA Rail which took over all national passenger service in the country. In 1987 the National Transportation Act partially deregulated the railway industry in Canada and removed much of the red tape that railways experienced when attempting to abandon unprofitable lines, however the NTA is now viewed as more of a failure in that railways used the legislation merely as a first-resort after "demarketing" a line, rather than a last-resort after trying to find a short line buyer. In 1995 the federal government privatized CN and in 1996, the government corrected the NTA 1987 shortfalls with the Canadian Transportation Act which more fully deregulates the railway industry.