POLITICS
09/30/2011 07:45 EDT | Updated 11/30/2011 05:12 EST

Minister says Cape Breton rail line vital as talks continue to extend subsidy

SYDNEY, N.S. - The Nova Scotia government is extending its $2-million annual subsidy for Cape Breton and Central Nova Scotia Railway.

Premier Darrell Dexter made the announcement today in Sydney.

He says the funding for capital and maintenance costs will continue for another three years.

Dexter says the rail line is vital for keeping shipping costs low and helping Cape Breton businesses remain competitive.

John Giles, CEO of RailAmerica — the railway's U.S.-based parent — says without this investment, the rail line would be too expensive to operate.

The province's economic and rural development minister, Percy Paris, says a rail line in Cape Breton needs to be available in case future port developments in Sydney and the Strait of Canso create new traffic.