Old Time Trains

Algoma Central Part 2

by R. L. Kennedy

All material not otherwise credited: Old Time Trains archives.

Cover of the 1971 annual report depicting a winter scene by railway artist Russ Porter.

Algoma Central entered a period of uncertain times in the 1980's that was to eventually lead to a restructuring and the sale of the railway.

In 1971 sintered ore movements from Wawa to Algoma Steel in Sault Ste.Marie were up 27% and in 1972 100 new 100 ton hopper cars were acquired from National Steel Car in Hamilton to handle this traffic. 200 more cars were acquired in 1972 and a further 300 in 1974-75.

In 1973 Newaygo Timber Co. Ltd. was completing construction of a chipping and sawmill complex in Mead at a cost of about $5 million. Lumber went to Canada and the US, while the wood chips went to mills in Wisconsin. This operation soon reached its annual capacity of 60 million board feet of lumber and 80,000 tons of chips for which 90 new chip cars were acquired.

Some of the new equipment acquired:

Bulkhead flat car

Hopper car

Woodchip car

Caboose

One of three (9607-09) cabooses acquired in 1990 from CPR built Angus 1981. Wayne V. Brittain

At the same time heavier motive power was acquired beginning in October 1971 with three 3000 HP GMD SD40's, the first six axle units on ACR. This was followed in 1973 with six newer model SD40-2's; and in April 1981 with a return to four axle power, six GP38-2's at a cost of $917,000 each.

In between, a factory (GMD) remanufacture of five GP7's in 1977 at a cost of $320,000 each and a similar rebuild (CNR Transcona) of four more GP7's in 1979 at a cost of $377,000 each before it was decided to return to buying brand new units.

A late acquisition was two former Soo Line upgraded GP40's acquired in 1994. These were rebuilt by NRE (D) with dash 2 electrical and Q-Tron microprocessor to equal a dash 3 model. They were used on the Agawa Canyon Tour train.

AC 190 acq.1994 ex SOO 2018, MILW 2018 nee 192 EMD GP40 #32300 10/66 Wayne V. Brittain

Beginning in 1973 a program of replacing 85 pound rail with new 100 pound rail was undertaken at the rate of 5 miles per year. The work was sporadic with changes year by year, some years nothing was done.

Changing times saw the railway facing uncertainty with a major tonnage decline due to the pending closure of Algoma Steel's iron ore mine at Wawa. This traffic accounted for about 50% of ACR's freight revenue and Algoma Steel had been warning since 1986 that it was facing difficulties with iron ore costs. So serious was this potential loss of traffic that it threatened the viability of the entire railway. Algoma Central received subsidies from the Ontario government to allow it to haul this freight at rates ASC could afford as well as to bring tourists into the area. Starting in 1987, ACR received $4 million per year for a total of $15,000,000 under a Canada-Ontario tourism agreement. In addition, the Federal government began payments in 1978 of 80% of the operating losses (72% after April 1, 1993) for passenger service. The yearly amounts received ran from $1,883,000 in 1980 to $3,668,000 in 1993. In addition, the Northern Ontario Heritage Fund Corp. made payments to ACR of $5,000,000 in 1990 and $3 million beginning in 1991 to keep the railway operating.

The aging fleet of passenger equipment was in need of replacement yet, the operation was not profitable enough to warrant the expenditure. The ACR had never bought new passenger equipment, instead buying secondhand cars of many different origins and makers. The rapidly expanding tourist passenger service required a large increase in equipment 1969-73 including 18 CPR 2200 series lightweight picture window coaches. Again, in 1992 the need returned for additional coaches due to difficulty maintaining aging equipment especially the CPR coaches which were equipped with a unique style of truck. The Ontario government once again stepped in to protect the tourist trade and acquired a fleet of 24 newer ex CNR coaches built in 1954 by CC&F (plus two steam generator cars built by GMD in 1958-9) being disposed of by VIA, which it then leased, through ONTC, to ACR for a nominal amount.

AC 75 ex VIA nee CN 15450

AC 5494 ex VIA nee CN 5494

Wayne V. Brittain

Skyrocketing inflation reached a peak in 1980 when 5 year GIC's from Trust companies paid a record 19 ½ % interest! 1980-81 and 82 were poor years while 1983 was a turnaround year. Still, the 1992 annual report stated no dividend had been paid to shareholders since September 1, 1990. In 1988 and again 1989, the NTA denied ACR the authority to set up a separate company for the railway. It was feared by many that the marine and realty operations and valuable lands would be kept while the railway would be forced to go it alone and soon go broke. Effective April 30, 1990 with shareholder approval the name was changed to Algoma Central Corporation with the Algoma Central Railway becoming a division of it.

Difficulties continued and after $40 million of subsidies from the Ontario government over the past six years, the new (NDP) government decided to get out. The ACR was put up for sale. The asking price and conditions attached brought little interest. The NDP kept sweetening the deal until finally, an American "regional" railway stepped in the acquire it. Unfortunately, earlier interested parties (including CPR) were not permitted to bid on the much revised deal. This generous deal (some would say, a giveaway) saw the Ontario government through its Northern Ontario Heritage Fund, give an interest-free loan of $4 million plus a $6.6 million grant (as in gift), along with the purchase of $1 million of stock in the new Algoma Central Railway Inc. The Province was to buy the track for $10 million and the railway's operation was turned over to Wisconsin Central. The motive power (23 locos) and rolling stock (966 pieces) was purchased by a WC subsidiary, WCL Railcars Inc., for $15.5 million. January 31, 1995 was the date it was all over. Finally, Algoma Central was out of the railway business after some 95 years. The remaining marine and realty operations have continued to prosper.

Office building in Sault Ste. Marie ("The Soo") after its restoration 1998.

1971 Agawa Tour train had grown to the point where a second train was required in the Fall colour season.
It was to nearly double in just another three years!