The Ontario government has introduced a temporary Ontario Shortline Railway Investment Tax Credit. Learn more about the tax credit, eligibility and how to apply.

Overview

Shortline railways are railway companies that operate trains with fewer people and run shorter distances than larger railroad networks.

Shortline railways:

  • can be used to move goods between shippers and main railway lines
  • can offer travel experiences for tourists (for example, a passenger train with a special event held inside the train or a trip on a shortline railway with tourist stops along the route)
  • are regulated by the province with tracks completely contained within Ontario
  • do not include urban rail transit systems or industrial railways

There are currently more than 1,000 km of shortline railway tracks in Ontario. Transportation companies must be licensed to run trains on these tracks and must follow applicable safety requirements and regulations.

Licensed operators

The following companies are licensed to operate shortline railways in Ontario:

Freight services

  • 2427811 Ontario Inc.
  • Cando Rail & Terminals Ltd.
  • Gio Railways Corporation
  • Guelph Junction Railway Ltd.
  • Huron Central Railway
  • Nylene Canada Inc.
  • Ontario Southland Railway Inc.

Passenger trains

  • Port Stanley Terminal Rail Inc.
  • South Simcoe Railway Heritage Corporation

Freight services and passenger trains

  • Agawa Canyon Railroad ULC
  • Southern Ontario Locomotive Restoration Society operating as Waterloo Central Railway

Become a licensed operator

To become a licensed operator of a shortline railway, you need to:

  • be a railway company
  • meet all requirements in the application form
  • have a minimum of $10 million liability insurance
  • provide documents to confirm the legal name of the applicant (for example, Articles of Incorporation)
  • have proof of insurance documents and the certificate holder identified as:

Registrar of Shortline Railways
Ministry of Transportation
Commercial Safety and Compliance Branch
301 St. Paul Street, 3rd floor
St. Catharines, Ontario
L2R 7R4

To apply for a shortline railway licence:

  1. Download the application form.
  2. Submit a completed copy of the application form to csio@ontario.ca or mail the form and supporting documents to the Registrar of Shortline Railways at the Ministry of Transportation.

If your application is approved, you will have to pay a $500 licensing fee.

Delivery

Applications will take 2 to 4 months to process depending on the complexity. Some applications may take longer if we need you to provide more information about your company or send additional documents.

Once an application is approved, we will send an invoice with instructions on how to pay the $500 licensing fee.

Updating your licence

If you are a licensed operator, you must provide operational updates to the Ministry of Transportation at least once every three years. You must also immediately inform us of any of the following changes:

  • liability insurance coverage is cancelled or altered
  • manner in which the railway is operated has changed so that the liability insurance coverage may no longer be adequate
  • address of the licensee changes
  • corporate officers of the licensee change
  • services provided by the shortline railway change or are discontinued

How to update your licence

To send an operational update to the Ministry of Transportation:

  1. Email csio@ontario.ca with your company name and the reason for the update. You can use the application form to indicate the update that needs to be made.
  2. Send the completed form along with supporting documents by email or by mail to the Registrar of Shortline Railways.

There is no fee to update a licence.

Safety requirements

The Ministry of Transportation regulates licensed shortline railways.

Provincially licensed shortline railways must meet the requirements in:

Transport Canada conducts regular railway safety inspections on behalf of the province for shortline railway licensees to ensure that safety requirements are being met. This includes Safety Management System audits.

The Canadian Transportation Agency (CTA) administers federal laws regarding railway crossings for shortline railways. Licensees must comply with any applicable decision, order, rule, regulation, direction, procedure and practice of the CTA with respect to crossings.

The Transportation Safety Board (TSB) conducts investigations into railway occurrences involving shortline railways. As a licensee, you must report all incidents to the TSB in accordance with the TSB reporting requirements.

Shortline railway operators that access federally regulated infrastructure (for example, Canadian Pacific Kansas City Limited tracks, Canadian National Railway tracks) require a Railway Operating Certificate from Transport Canada.

Read more about the rules, regulations and laws:

Compliance

If you fail to comply with one or more of the safety requirements, your shortline railway licence may be suspended, revoked or have additional conditions placed on it. The Registrar of Shortline Railways may also add, amend or revoke any condition on the licence at any time.

Ontario Shortline Railway Investment Tax Credit and Certification

The Ontario Shortline Railway Investment Tax Credit (OSRITC) is a 50% refundable corporate income tax credit for qualifying corporations. It applies to eligible capital and labour costs  incurred in the taxation year between May 15, 2025 and December 31, 2029.

Corporations can claim the  tax credit for up to $8,500 per track mile in Ontario that they own or lease at the start of their taxation year.

To get the credit, a corporation must first apply to the Ministry of Transportation (MTO) for a Certificate of Eligibility for the taxation year.

Learn more about the eligible requirements and conditions that must be met to claim the OSRITC.

How to apply for a Certificate of Eligibility

To start your application:

  1. Request a copy of the Application Form for Certificate of Eligibility by emailing csio@ontario.ca.
  2. Complete the form.
  3. Send the form and any supporting documentation back to csio@ontario.ca

Processing takes about 4 weeks, depending on the complexity of your submission.

The Certificate of Eligibility will certify that:

  • the corporation satisfies the criteria of a qualifying corporation under clause 97.3(3)(a) of the Taxation Act, 2007 (Ontario) , and
  • the track miles the corporation owns or leases in Ontario at the start of its taxation year

To claim the credit, you must include the required details from the Certificate of Eligibility when filing your corporate tax return for the taxation year with the Canada Revenue Agency (CRA).

MTO may exchange taxpayer information with the CRA as defined in subsection 146(6) of the Taxation Act, 2007 (Ontario)  to administer the OSRITC.

For general tax questions about the OSRITC, refer to the OSRITC Guidelines or contact the CRA:

Contact us

Registrar of Shortline Railways
Ministry of Transportation
Commercial Safety and Compliance Branch
301 St. Paul Street, 3rd floor
St. Catharines, Ontario
L2R 7R4
Email: csio@ontario.ca       
Telephone: Tel: 416-246-7166       
Toll-free: Tel: 1-800-387-7736 (within Ontario)