On one hand maybe them merging would create a bigger "Goliath" for the province to go up against, but on the other maybe it would open up more tracks through the USA south of Toronto that freight could be sent through instead.
The merger has so many down sides to it, and such a long regulatory path forward, that I'm reluctant to take it seriously. In reality, NS should be buying CP, but Harrison and Ackman have done such an excellent job of pillaging CP's assets that they have a war chest of money saved up. Whereas, NS - a very well run property - has been properly capitalised and so doesn't have the same reserves. He with the most cash wins, I guess.
But yes, the traffic that CP hauls from Chicago to Montreal and then onwards to the US and to the Atlantic would most likely get rerouted to the south of the lakes.
It seems unlikely that CP would tear up much track in Ontario, but CP might use it much differently. So long as Toyota, CAMI, and Honda are producing autos in Ontario, the current route would be needed for at least one train per day. The trackage east of West Toronto to Montreal will be needed for transcontinental freight, although again the volume might fall as some proportion of this could move to a southern route.
The connecting line to Buffalo might gain traffic as the primary distribution path into Ontario, although NS and CSX are already pretty good at forcing traffic to route this way rather than through Detroit (so they get the biggest fraction of the linehaul). I could see CSX demanding greater access into the Ontario market, since traffic that CP turns over to CSX in Buffalo will be grabbed by NS. That bodes poorly for further GO expansion into Hunter Street in Hamilton.
If this happened, any additional trains coming out of Buffalo would turn east and come down the Galt Sub, creating additional conflict with GO, and making a bypass more attractive. The potentially alarming part is not GO but what happens if tonnage increases over the "mountain grade" (it is actually classified as such) between Hamilton and Campbellville. The grades are very steep and it's a difficult line operationally.
If CP traffic falls on the Galt and North Toronto lines, they would be more interested in sharing with GO especially if this leads to GO covering a greater share of the fixed costs. Moving to a bypass as a 'minority' player (with CN holding the control) is likely less attractive, so the shared use scenario seems more likely. The good news is, there would be less freight per day through the center of Toronto, and more room for GO.
Just a bunch of wild speculations.
- Paul
