"Continued funding for these rail services is the most cost-effective way of ensuring that remote communities have access to the national transportation network," said Transport Minister Tony Valeri. "These services also support economic activities in the lumber, mining, recreation and tourism sectors and provide an essential lifeline for isolated communities."

The contribution program will provide funding for passenger services in Ontario between Toronto and North Bay, and between Sault Ste. Marie and Hearst; between Quebec and Newfoundland and Labrador connecting Sept-Īles, Labrador City and Schefferville; and in Manitoba between The Pas and Pukatawagan.

Transport Canada will provide $20 million to the contribution program, while Indian and Northern Affairs Canada will provide a one-time contribution of $4.4 million to establish a First Nations' railway that would operate the Sept Īles/Labrador City to Schefferville service.

"Maintaining the railway will ensure that these Aboriginal communities will continue to have access to services and resources which are available to Canadians," said the Honourable Andy Mitchell, Minister of Indian Affairs and Northern Development. "This, in turn, increases access to economic opportunities which is another step toward closing the social and economic gap between Aboriginal and non-Aboriginal Canadians."

For the past eight years, Transport Canada has provided funding to remote and regional passenger rail services that are not provided by VIA Rail. Transport Canada supports the concept of a third party operation of these rail services, and continues to explore opportunities to transfer these services to the private sector, local interests or other levels of government.

The funding will be used in support of operating, capital and start-up requirements for the four services.

Federal funding for this project was approved through Budget 2004, and is built into the existing financial framework.

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