Regional District of Nanaimo Board Terminates Island Corridor Foundation Contribution Agreement

Derek Kilbourn

Sounder News

Wednesday, March 23 2016

At the Board meeting this past Tuesday, March 22, the Regional District of Nanaimo (RDN) Board voted to provide the Island Corridor Foundation (ICF) with a 60-day notice of termination of the Contribution Agreement.

This will effectively sever the RDN from providing any funding to the ICF to use for restoring passenger rail service on Vancouver Island.

The RDN also voted to support a resolution from the Capital Regional District at the upcoming Association of Vancouver Island and Coastal Communities (AVICC) convention. That resolution will be seeking to have AVICC foster a discussion with stakeholders to conduct a financial review of the ICF.

The RDN entered into a Contribution Agreement with ICF in 2014 to provide up to $945,000 for rail upgrades and the reintroduction of passenger rail service. The funds were collected through taxes under the Grants-in-Aid service and from provincial funding under the Strategic Community Investment Fund grants. In the letter provided by the RDN to the ICF, the RDN says one of the reasons it is severing ties is that the ICF has never provided the Regional District with the budget contemplated within the Grant Agreement, and failed to tender the project in 2014. Nor was the project tendered in 2015. 

“The Regional District notes that it has no obligation under the Grant Agreement to provide any part of its contribution after 2015. The Regional District is very disappointed that the project for which public funds were committed has not been able to move forward.”

“The Regional District considers that as a result of ICF’s failure to provide the Regional District with the anticipated budget and to proceed with the tendering and award of the project as set out in the Grant Agreement, the ICF is in breach of the Grant Agreement.”

RDN Board Chair Bill Veenhoff (Electoral Area H - Shaw Hill, Qualicum Bay, Deep Bay, Bowser, Spider Lake and Horne Lake) and RDN Director Howard Houle (Electoral Area B - Gabriola, Mudge, DeCourcy) both said that after five years of waiting for this project to move forward, the Board has grown tired of delays and has lost confidence that the day-to-day operations of the ICF reflect the interests of the RDN. 

Veenhoff said, “When the Board initially voted to support this project, the scheduling plan was significantly different than what it is today and at this time it does not appear that the project will move forward in the foreseeable future.

“As elected officials and stewards of our constituents’ tax dollars, the Board feels that it is not good management of taxpayer funds to hold $945,000 for a project that will not move forward in the foreseeable future.”

Veenhoff and Houle said the Board feels that alternate uses for the corridor should be explored. The vote to provide notice of termination of the Contribution Agreement was passed unanimously. The Board said they feel that it is important to protect the Island Corridor land.

In 2012, the RDN board voted to fund $945,000 towards rail improvements.

The federal government and provincial government have both promised $7.5 million respectively towards the ICF.

The five Regional Districts of Vancouver Island (including the RDN) had promised a total of $5 million, of which the RDN portion was $945,000.

As that $945,000 was collected during previous budget years, it was sitting in reserve to be paid to the ICF once the project began.

Asked what will happen to those funds if they are not going to the ICF, Veenhoff said, “These are early days, we haven’t had that discussion yet. I don’t want to get to that too quickly. Our motion...I see that as a springboard for a fulsome and collegiate discussion on where we go on the island with rail.

“Those discussions should take place before we start eyeballing where we want to go. We can’t spend it on stuff that it wasn’t taxed for.”

“Our vote was unanimous - and that is a big deal - that expresses how alienated we feel with some of the aspects of the ICF.”

The Board of the ICF put out a statement on Monday, March 28, responding to the RDN’s notice.

In it, the ICF stated the Board , “is disappointed with Regional District of Nanaimo (RDN) decision to withdraw their funding support of approximately $950,000 for the island rail infrastructure project on March 22, 2016. Restoring rail to Vancouver Island has long been a vision of Islanders, a vision the ICF is working hard to achieve.”

According to the ICF Board, it recognizes how frustrated the RDN is with delays in moving passenger trains again, however the Board remains optimistic they are close to receiving the federal funding sign off of the $20.9 million Island Rail Infrastructure Project. 

According to the ICF, freight trains continue to operate in the Nanaimo area.

“The lengthy funding process has been complicated by conditional agreements involving five regional governments, the provincial government and VIA Rail before the federal government would sign-off.”

The ICF claims the Government of Canada sign-off was delayed by the Federal election in October and then earlier this year by the Snaw-Naw-As First Nation (Nanoose) filing a Civil Claim against the ICF and Canada. The ICF filed a response at the end of February and the Government of Canada will file by the end of March.

“The Nanaimo Region stands to benefit significantly with rail passenger service between Nanaimo and Victoria,” says Judith Sayers, co-chair of the Island Corridor Foundation. This project is a major economic and tourism opportunity for communities along the Corridor, and with the rails and trails connection, also provides a substantial benefit to residents as well.”

The ICF Board will investigate other funding and operational alternatives through consultations with ICF stakeholders and the railway operator, Southern Rail. The ICF Board says it remains open to working with the RDN and other partners to secure the funds to make rail on Vancouver Island a reality.

The notice from the RDN came just two weeks before an event being planned by the ICF in Nanaimo to celebrate 130 years of rail history on Vancouver Island.

The same day the RDN sent the letter to the ICF, a heritage train, The Island Explorer Excursion Train, was being unloaded by rail staff at the downtown Seaspan docks in Nanaimo.

On April 8, those who purchased tickets in advance will be able to ride along the Island Rail Corridor from the Nanaimo Train Station to Wellington with public departures at 2:00 p.m. or 4:00 p.m. The heritage streamliner train is owned by the West Coast Railway Association.