The McInnis Cement Plant, part-owned by the Caisse de dépôt, will be a key beneficiary of the Gaspésie railroad redevelopment, which will cost Quebec nearly $1 billion.
• Also read: The McInnis cement plant still spews sticky dust at its neighbors
Last week, Transport Secretary Geneviève Guilbault announced an investment of almost $872 million to repair the rail link that stretches 325 kilometers between Matapédia and Gaspé. Completion is scheduled for 2026.
- Listen to Sylvain Larocque’s business section live at the Gaspésie railway via QUB radio :
The bill exploded
“When the initial announcement was made in 2015, we were talking about $100 million and a full reopening in 2022. After that, deadlines and costs skyrocketed. There was the pandemic, there were many things,” says Éric Dubé, Mayor of New Richmond and President of the Société du chemin de fer de la Gaspésie (SCFG).
Éric Dubé, Mayor of New Richmond and President of the Société du chemin de fer de la Gaspésie. Photo from the Ville de New Richmond website
As of December 2020, trains can run to Caplan thanks to an investment of nearly $55 million. Next year the government plans to complete the redevelopment of the Port Daniel–Gascons railroad – works worth US$300 million.
This is good news for McInnis Cement Plant. “The rails pass in their yard,” emphasizes Mr. Dubé.
Currently, McInnis cement is shipped from the company’s marine terminal or trucked to an SCFG terminal in New Richmond where it is loaded onto railcars.
Once the railroad is rehabilitated, McInnis will be able to do this work right on his property.
“Currently, under the agreement with McInnis, trucking is the responsibility of the SCFG,” explains Éric Dubé. Replacing trucks with rail “will improve our operating costs,” he notes.
Since 2015, Quebec has subsidized SCFG operations with nearly $59 million. The government has pledged to provide the organization with an additional $21 million over the next five years.
Looking for other customers
McInnis is currently SCFG’s largest customer. It also supplies Groupe Lebel, a large forestry company, and a handful of other customers.
A train running on the Gaspésie railway. Photo from the SCFG website
“What brings profitability is volume,” recalls Mr. Dubé. We have to develop our markets further.”
Remember that the cement factory, the construction of which was initiated by the Bombardier-Beaudoin family thanks to significant financial support from the government, started its activity in 2017. Two years ago, Brazilian giant Votorantim took control of McInnis. The Caisse owns 17% of St Marys Cement, Votorantim’s North American division.
The rehabilitation of the final stretch of rail between Port-Daniel-Gascons and Gaspé is expected to cost nearly $518 million and be completed by the end of 2026.
The SCFG and the government are already in talks with VIA Rail to persuade the Federal Crown Corporation to resume service to Gaspé. The last time a passenger train got this far was over 10 years ago.
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