The Liberal government, facing a $16-billion deficit this year, said Friday it will sell off the northern train service's assets and cancel the train that runs between Toronto and Cochrane, replacing it with enhanced bus service.
It will also consolidate the ferry service between Moosonee and Moose Factory with other provincial ferry services, and divest commercially valuable assets such as rail freight and rail refurbishment.
There was no immediate word about the impact the selloff will have on the nearly 1,000 people employed by Ontario Northland.
"Clearly, it’s too early in the process for us to provide details about how many jobs will be lost or gained or in what ways," Minister of Northern Development Rick Bartolucci said in a conference call from his Sudbury riding.
Some losses, he added, will be mitigated by the number of workers eligible for early retirement, which he pegs at about 130 people.
"It’s also reasonable to expect that many jobs can be maintained under new operators, and the possibility of new jobs being created is not out of the question."
The Polar Bear Express passenger and freight services between Cochrane and Moosonee, he added, will continue to operate.
But the move is needed because while funding has increased for the commission, demand for its services has stagnated, Bartolucci said.
New Democrat Taras Natyshak said the sale of Ontario Northland will be "absolutely devastating," especially at a time when the north is on the brink of developing much-needed economic activity with the Ring of Fire mining project.
"It's going to hamper the development, it's going to hamper the opportunities for First Nations, and we think it actually kneecaps our ability to benefit from that development as a whole," Natyshak said.
The government also said Friday it plans to sell eight government buildings in a bid to save up to $500 million and almost $300 million more over the next 30 years.
Infrastructure Minister Bob Chiarelli said the buildings will be sold to the private sector, which will manage the office space and rent it back to the government.
"We have too much inefficient, underutilized, empty space," he said.
"In keeping with the recommendations of the Drummond Commission and the auditor general, we're going to inject private sector discipline to the public sector."
The assets include buildings in Toronto, Oshawa, Guelph, Peterborough, St. Catharines, North Bay, Sudbury and Thunder Bay.
Chiarelli says it will reduce the government's real estate holdings by the equivalent of about 93,000 square metres.