Kelowna firm upset by limited railway service startup

CN's plan to restart Kelowna Pacific Railway service only from Kamloops to Lumby Junction detrimental to Ashland Canada.

  • Sep. 28, 2013 4:00 p.m.

A local company is upset that a plan to revive the Kelowna Pacific Railway won’t include the rail service between Kelowna  and Lumby Junction.

In a new release issued Friday, Ashland Canada stated it was both surprised and disappointed to learn of CN’s plan to reboot the rail service but exclude Kelowna from the planned route startup between Kamloops and Lumby Junction.

The company says this decision directly jeopardizes the future of our Ashland Canada Performance Materials manufacturing facility in Kelowna and the livelihoods of the plant’s 35 employees.

In making this decision, Ashland Canada contends CN apparently plowed ahead without asking for any input from more than a dozen Kelowna businesses that depend on the rails to sustain their operations and serve their customers, or from those in the local community with a vested interest in rail service being maintained.

“Our Kelowna plant has depended on service over that rail line for more than 43 years to deliver and transport raw materials. Those feed stocks are turned into structural plastics and coatings used by a variety of industries and customers, including Canada’s largest recreational boat builder (Campion Marine), Canada’s leading provider of tub/showers to the housing industry (Kohler Canada), and the world’s largest waterslide producer (Whitewater/Formashape),” said the news release.

Kelowna-Lake Country MP Ron Cannan is also quoted in the news release, saying while it is encouraging an arrangement has been reached to restore rail service to Vernon and Lumby, he is worried that a lack of commercial rail service to Kelowna “may literally knock the local economy off track.”

“It’s important to maintain transportation corridors, including vital railway service to Kelowna,” said Cannan, who has been working closely with local government representatives and businesses that depend on being able to transport products by rail since Kelowna Pacific Railway Ltd. entered bankruptcy proceedings, shutting down the rail line.

“Rail service is a key component to our economic engine, because it supports well-paying jobs and helps keep our tax base strong, providing funds to pay for services like parks and trails. Ultimately, my goal is to have a multi-use corridor along the rail line, because I believe that trails and railstogether are part of a well-balanced and sustainable local economy.”

Brock Elliott, president of Campion Marine in Kelowna, called the decision to exclude Kelowna  short-sighted. “How can this be taken as good news when businesses from Kelowna to Armstrong, which depend on critical components from Ashland Canada, will continue to be severely impacted?” Elliott asked.

“Campion Marine is just one of many fibreglass manufacturers in the Okanagan that will continue to be negatively impacted by Ashland Canada not being able to get the required feed stock delivered by rail. Additionally, other businesses, such as lumber and cement, will be negatively affected.

“And, on a longer-term basis, the cities of Kelowna and Vernon may need this rail line to deal with future growth, which connects them for possible future commuter transit service, including to the Kelowna Airport, while holding the promise of other opportunities such as a tourism-related  wine train  passenger service.”

Since service was suspended in early July, Ashland has been forced to pay steep additional costs to transport its raw materials and finished product by truck rather than rail—an action that will lead to increased air pollution and greater risk of accidents. This will mean millions of dollars in additional shipping costs each year for the company.

“CN claims to be a true backboneof the Canadian economy. If left unchanged, this decision will let down those who are contributing so much to Western Canada’s growth,” said the news release.

Ashland’s facility in Kelowna is the only one of its kind in Canada. Manufacturing about 30 million pounds of structural plastics and coatings per year, it is the leading supplier to the Canadian and Pacific Northwest composites industry, with sales in the region of $25 million per year. About  50 per cent of its sales are for the export market.

KPR, which leased its network from CN in 1999, entered receivership on July 5  and halted operations. Besides the bankruptcy trustee, Tolko Industries, the main customer of the rail line, along with the  Teamsters Canada Rail Conference (TCRC) and TCRC-Maintenance of Way Employees Division (TCRC-MWED) representing the 35 locomotive engineers, conductors and track maintenance workers employed by the insolvent B.C. short-line railway, signed off on CN’s proposal to restart the rail service.

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