Island Rail Corridor

The Island Corridor, previously the Esquimalt & Nanaimo Railway (E&N Railway), is a railway operation on Vancouver Island. It is owned by the Island Corridor Foundation, a registered charity. The railway line is 225 kilometres (140 mi) in length from Victoria to Courtenay, known as the Victoria Subdivision, with a branch line from Parksville to Port Alberni, known as the Port Alberni Subdivision, of 64 kilometres (40 mi), for a total 289 kilometres (180 mi) of mainline track. In 2006, the Island Corridor Foundation acquired the railway's ownership from RailAmerica and Canadian Pacific Railway.

Passenger service has been "temporarily suspended" since 2011 due to poor infrastructure condition that resulted from deferred maintenance.

The history of an island railway and a functioning island railway in perpetuity started with the colony of Vancouver Island joining British Columbia in 1866, Canadian Confederation in 1867, and the incorporation of British Columbia (BC) into Canada in 1871. The terms of union required that, within two years, the federal government was to start the construction of a railway from the "seaboard of British Columbia", joining the new province and Victoria with the railway system of Canada. On its part, British Columbia was to grant a band of public land of up to 32 kilometres (20 mi) in width along either side of the railway line to the federal government for it to use in furtherance of the construction of the railway. The Pacific terminus of the railway was not specified, but the proposed plan would have the railway cross the Rockies by the Yellowhead Pass and reach the BC coast at Bute Inlet. It would cross Sonora Island and Quadra Island and reach Vancouver Island by a bridge across Seymour Narrows. Through the influence of then BC Premier Amor de Cosmos, this plan was adopted by Order in Council by the federal government on 7 June 1873. Two shipments of rail were even delivered to Victoria from the United Kingdom. In 1873, Prime Minister of Canada John A. Macdonald had stated that Esquimalt, the site of a naval base, would be the terminus of the "Pacific Railway". However, both the federal government and the Canadian Pacific Railway placed a low priority on construction of an island railway, as it had low traffic potential and would duplicate an existing steamer service.

In 1874, British Columbia threatened to withdraw from Confederation, and BC premier Walkem petitioned Queen Victoria for relief from these delays. Prime Minister Alexander Mackenzie and Walkem agreed to accept arbitration of the dispute by the Earl of Carnarvon, the colonial secretary. His award, given 17 November 1874, gave an extension of time for the construction and required that a railway be built from Esquimalt to Nanaimo. Despite the promises of both parties to be bound by his ruling, the federal government bill approving the award failed in the Canadian Senate. British Columbians were indignant, and withdrawal from Confederation was raised again.

John A. Macdonald gave a speech in 1881 in the House of Commons on the CPR and criticized Alexander Mackenzie for tinkering with the preconditions of British Columbia and Vancouver Island uniting with Canada. MacDonald said, "Both the Government of which I was the head and the Government of which he was the head were bound by the original resolutions." He continued, "It was admitted that it was a sacred obligation; it was admitted that there was a treaty made with British Columbia, with the people and the Government of British Columbia, and not only was it an agreement and a solemn bargain made between Canada and British Columbia, but it was formally sanctioned by Her Majesty's Government. It was a matter of Colonial policy and Imperial policy in England that the road should be constructed."

Robert Dunsmuir, the Nanaimo coal baron and a member of the provincial legislature, was interested in owning the railway project and in the province's coal reserves. The fact that Dunsmuir was a member of the provincial government making the deal aroused some suspicion about corruption. Dunsmuir and three partners (Charles Crocker, Collis P. Huntington and Leland Stanford of California) incorporated the Esquimalt & Nanaimo Railway (less formally the E&N Railway), with Dunsmuir president and owner of one half of the shares. The company estimated that it would cost $1.5 million to construct. Dunsmuir planned to integrate the railway with the systems being built in Washington and Oregon, with a train ferry link from Victoria.

MacDonald gave British Columbia the choice of Dunsmuir or Lewis M. Clement of San Francisco, chief engineer of the Western Division of the Atlantic and Pacific Railroad, for the contract. Dunsmuir travelled to Ottawa in 1882 with letters of introduction from John Hamilton Gray, one of the Fathers of Confederation, and Joseph Trutch, the first lieutenant governor of British Columbia, both men in favour with Macdonald. After a visit to Ottawa to present himself directly for this project, Dunsmuir went off to Scotland. While in Scotland, Dunsmuir received the news that the provincial government had chosen the Vancouver Land and Railway Company controlled by Clement for the job. Dunsmuir was surprised that Clement would take the contract without a cash grant in addition to the land and commit to building the railway to Seymour Narrows, near Campbell River. When Clement and his company failed to come up with the necessary financial security, Macdonald quickly moved to accept Dunsmuir's terms.

The court ruled that this grant did not entitle the railway to dispossess existing settlers. The company applied for compensation and received a further grant of 35,112 hectares (86,763 acres) between Crown Mountain and Seymour Narrows. In 1883, the British Columbia government signed a contract with Dunsmuir to build a railway between Esquimalt and Nanaimo in exchange for the same grant of land that Clement had negotiated, amounting to 323,749 hectares (800,000 acres), plus a cash grant of $750,000 from the federal government. Based on an average value of $10 per acre for the land the E&N received, it cost the government $626,660 per mile to build the railway, which when complete was in private hands. The railway was given a massive amount of old-growth forest. Proceeds from the land grants helped build Craigdarroch Castle. The grant amounted to almost 10 percent of Vancouver Island and included mineral rights and all known coal deposits. The land grants to the E&N railway from 1884 to 1925 amounted to 20 percent of Vancouver Island. The company was to receive a grant with the following boundaries (Muir Creek is about 6 km (4 mi) west of Sooke):