Cape Breton business leaders dream of reviving dormant rail line. Can the math work?

The former Orangedale train station in Orangedale, N.S., now a railway museum, and the dormant Cape Breton and Central Nova Scotia Railway are seen in this handout photo on May 14, 2025. THE CANADIAN PRESS/Handout-Zachary Taylor.

HALIFAX — For more than a decade, empty rail tracks have faded into Cape Breton’s picturesque landscape, evoking the loss of the industrial economy that was once the lifeblood of the Nova Scotia island.

But business people like Jim Kehoe have never stopped pushing for the return of freight trains.

Kehoe owns rope manufacturing companies in the area around Sydney, the largest population centre in the sprawling Cape Breton Regional Municipality. He used to bring in raw material by rail; now it’s transferred to trucks in Port Hawkesbury, just off the mainland, for the 130-kilometre trip to Nova Scotia’s second-largest municipality.

“It’s really affecting our bottom line,” Kehoe said in a recent interview.

The Cape Breton and Central Nova Scotia Railway was once an outlet for coal and steel, industries that dominated the island’s economy for generations before largely vanishing in the early 2000s. With no comparable industry emerging to replace them, the area lost 12 per cent of its population over the next 20 years.

The population has begun to recover since the COVID-19 pandemic immigration boom, but the economy is still largely dependent on tourism, retail, education and public service delivery. And while the railway tracks remain, they suffer from broken ties and washouts. In some areas the surrounding forest has crept in with overgrown trees and bushes elbowing for space between the rails.

Now, many in the business community are pushing for a revival, hoping that shifting trade patterns — and an elusive major customer — can make a compelling business case. Alberta oil, Saskatchewan potash and local mining products have all been pitched for the railway, but no business proposal has so far come forward.

“Our population is growing, the need for East Coast ports is growing and we’re quite confident that a business case will materialize,” Tyler Mattheis, CEO of the Cape Breton Partnership economic development agency said in an interview.

The Cape Breton and Central Nova Scotia Railway runs 394-km from Truro, N.S., about 80 km north of Halifax, over the mainland and across the island to Sydney. Since 2015, service has stopped near Port Hawkesbury, where a paper mill still uses the tracks.

The final 157 km of line have fallen into disuse. Owner Genesee and Wyoming said it was shipping just 300 cars a year when the service stopped, a fraction of the 10,000 cars it needed to break even. A 2023 study found local businesses would move some of their shipping onto a restored railway, but they would still be a few hundred cars below the target.

The railway’s former owner, CN Rail, purchased a stake in the line in 2023, renewing hope of a revival. The company says it’s been integrating the active part of the railway with its larger network.

“Any future investment in the unused section of the line must be supported by a clear business case, which supports the significant investment of capital to restore the line,” spokesperson Tom Bateman said in an email.

Nova Scotia Public Works Minister Fred Tilley says the 2023 restoration cost estimate of $120 million is probably low. He said no proponent has come forward with a restart proposal.

“I’d be happy to discuss it if that comes forward for sure,” Tilley said in an interview.

Rail in Cape Breton has always been linked to industry. Herb MacDonald’s book “Cape Breton Railways: An Illustrated History,” says there’s evidence the first line, hauling coal to the wharf in horse-drawn cars, was built in the early 1830s in North Sydney.

A rail link between Nova Scotia, New Brunswick and Quebec was proposed in the 1850s, and Cape Breton pushed for Sydney to be the end of the line, a position that ultimately went to Halifax. The Sydney route, a section of the Intercolonial Railway that would later become part of CN, didn’t open until 1890.

Cape Breton steel and coal shipments pushed the line to capacity during both world wars. The surge continued into the 1950s, with traffic reaching a high of 180 cars a day, but by the mid-1970s automobiles and transport trucking sapped demand by 50 per cent. The big blow came in 2001 when Sydney Steel and the last DEVCO coal mine closed down, though rail service would limp on for another decade.

Studies have looked at a limestone mine or green concrete operation emerging as railway backstops. Increased seafood shipping has also been discussed. But many say the railway’s future is tied to the development of Sydney’s underused port.

“I see the Port of Sydney is one of the biggest untapped resources, maybe in the country,” said Dan MacDonald, a consulting engineer who has studied railway options.

“It’s the closest (Canadian) port to Europe … It’s been dredged in 2012. The port needs the rail and the rail needs the port.”

There have long been plans for a Sydney container terminal but in January the municipal council ceased negotiations with proponent Sydney Harbour Investment Partners. The company had been pursuing a 500-acre terminal called Novaporte, which would have had capacity for about 3.2 million containers a year. The firm declined to comment.

The case for Sydney’s port is complicated by established rivals such as Halifax and Saint John, N.B., which are well under their total capacities. Meanwhile, a long-planned Port of Montreal expansion in Contrecoeur, Que., was the first of Prime Minister Mark Carney’s fast-tracked “nation-building” projects to begin construction.

MacDonald says ports like Halifax may have more capacity for shipping containers, but Sydney could do business in bulk cargo such as minerals, western oil and heavy equipment.

“You’re going to need a massive amount of land .... We support Halifax, but the amount of land and stuff to ship bulk is not available in Halifax,” he said.

Mattheis says Sydney could capitalize on renewed interest in Canada’s natural resources as the country looks to diversify export markets. He points to Alberta Premier Daniel Smith’s public comments about shipping oil to Sydney to obtain ocean access.

Matteis says there’s also been talk of Saskatchewan potash heading east. A recently announced base for the Canadian Coast Guard’s Arctic operations in Sydney is another potential customer. If Nova Scotia’s plans for massive offshore wind development takeoff, Matteis said Sydney could become the port from which turbine parts are moved.

“They’re not brand new industries,” said Matteis. ”These are existing industries with existing markets that are changing rapidly with changing geopolitics.”

This report by The Canadian Press was first published June 9, 2026.

Devin Stevens, The Canadian Press