Adam Waterous built Strathcona Resources Ltd. from nothing into one of Canada’s major oil producers during a period of slumping energy prices, sour investor sentiment on the sector and the panic of the Covid-19 pandemic.
But the billionaire says another of his pursuits — building a rail line from Calgary to the mountain paradise of Banff for as much as C$2 billion ($1.5 billion) — is turning out to be the more difficult undertaking.
Nine years later and tens of millions of dollars invested, the only tangible signs of progress are a refurbished station and a parking lot that generates no revenue.
Many residents, as well as Banff’s mayor and town council, herald Waterous’ plan. They’re convinced it will cut emissions around a hallowed natural wonder — Canada’s most popular national park — and increase convenience for locals and tourists alike.
Still, Waterous has faced criticism that he’s seeking to use public resources to benefit his private interests, including the ski resort that he owns on the edge of town. And some environmentalists see the railway stressing an important ecosystem that can’t handle any more disturbances.
Whether Waterous, 63, is able to will the railroad into reality will depend on how successful he is at spurring various levels of government to take action, and whether he’s able to keep public opinion on his side. The fate of a place he treasures — and his own legacy — hang in the balance.
“There are lots of great ideas around that are super-obvious, but are not done because they’re very difficult,” Waterous said in an interview. “That’s what I have found in my career is the opportunity.”
‘Passion Project’
Over the years, traffic has increasingly jammed the streets of Banff’s quaint downtown of shops and restaurants. Parking lots near the park’s major attractions — its turquoise glacial lakes, rocky waterfalls and snowcapped peaks — regularly overflow, sending cars spilling along the roads from the trailheads.
The Canadian government’s VIA Rail served the park until the 1990s, when financial difficulties shut down the service. Even that had been underused: passenger trains on the single track running into town were often delayed for hours after getting stuck behind the freight locomotives that took priority.
When Waterous and his wife Jan bought the train station, they set about trying to revive service — this time with a second, dedicated track that would ensure on-time arrivals. He also sought to build free parking lots near the station where the remaining drivers could stash their cars.
With no government agency ideally suited to tackle the problem, the Waterouses decided to spearhead the effort themselves. With trains that would run on hydrogen, not diesel, and serve to take some cars off the road, they have sought support by casting it as an environment-friendly initiative that would help slash emissions in their adopted hometown.
“For Jan and I, this is a life’s work, passion project,” Waterous said. “This would be a great legacy that Jan and I and our family could be proud of.”
To some, the pursuit by the owner of the Mt. Norquay ski resort that looms over the city doesn’t seem so noble.
“No aspect of what they’re proposing serves the public interest of the park — it only serves their private interest,” said Harvey Locke, a conservationist who lives in Banff. “This is a very sophisticated businessman who’s used to structuring deals that are favorable to himself, and he’s trying something new.”
And for Locke and his allies, the focus on emissions reduction rings hollow from a fossil-fuel industry executive who has said Canada has a “moral obligation” to double its oil and gas production.
New Directions
Waterous is no stranger to striking out in new directions. After starting his career in consulting and investment banking, he co-founded a mergers-and-acquisitions advisory firm in Calgary, Canada’s oil capital, in 1991. The firm was later bought by Bank of Nova Scotia and co-branded as Scotia Waterous.
He moved to Banff — a town he fell in love with during a hitchhiking trip between high school and university — in the late 1990s and later bought the nearby ski resort.
After a little over a decade at the bank, he left to start a private equity fund that assembled Strathcona through a blizzard of deals over the course of about seven years. He’s still Strathcona’s chairman, with the railroad effort serving as something of a very demanding side gig.
Redevelopment Plan
While Banff’s town council in June approved a redevelopment plan needed for the project to move ahead, the governments of Canada and the province of Alberta also have roles to play.
Waterous has already secured financial support from the government-owned Canada Infrastructure Bank and Plenary Americas, an infrastructure developer owned by Quebec’s pension fund manager. The venture they’ve formed would, with a combination of equity and borrowed money, pay the upfront capital costs of twinning the existing Canadian Pacific Railway line that leads from downtown Calgary into Banff.
While the precise cost of the line hasn’t been disclosed, a previous version of the proposal that included a segment from Calgary’s airport to its downtown pegged it at C$2.6 billion. Since then, the province has expressed interest in building the leg between downtown Calgary and the airport on its own. A recent, revised plan for the Calgary-to-Banff segment is less than the previous figure, though still between C$1 billion and C$2 billion, Waterous says.
Alberta wouldn’t need to contribute any funds to build or operate the Calgary-to-Banff rail line under the new proposal, but it would have to provide track access for three of the venture’s trains per hour on the airport-to-downtown segment. An earlier offer included provisions that would give the province ownership of the system after 50 years and allow it buy out the group at any time before that. The venture hasn’t disclosed whether those measures are included in the updated proposal.
The bet for Waterous is that the system will generate enough profit to cover the venture’s share of the debt repayment, plus a return on their investment.
The Banff line has some support from Alberta’s two major political parties, though voters in the affected communities still have questions about how the system would affect their lives, said Sarah Elmeligi, a member of the provincial legislature whose district includes Banff.
"It's always nice to talk about large emissions-reduction plans or large infrastructure projects, but residents really want to see that these projects are not just about serving tourists," Elmeligi said.
The federal government poses more challenges. Prime Minister Justin Trudeau’s opponent in an election that’s set for 2025 — a conservative who’s currently leading in the polls — has suggested he’d scrap the Canada Infrastructure Bank, which is providing half of the venture’s financing.
“This whole financial model that we’re talking about is really at risk,” Jan Waterous said. “We’re really on a clock right now.”
Wildlife Fatalities
There’s also the problem of convincing the federal government that the train wouldn’t impede conservation efforts. The main sticking point is that more wildlife in Banff National Park are killed by trains than by cars, with 316 railway fatalities over the past decade versus 235 for cars, according to Parks Canada figures.
Banff has a robust system of overpasses allowing animals to cross the highway, while no such system exists for the railway, said Adam Linnard, landscape protection manager for Yellowstone to Yukon, a conservation project devoted to protecting wildlife in western Canada.
A second rail line also would take up ecologically precious land, said Linnard, who sees zero-emissions buses as a better solution.
“This is a highly compromised valley,” Linnard said in an interview. “Everything we add at this point is to the significant detriment of wildlife.”
Waterous, for his part, says it’s a no-brainer that taking cars off the road would result in lower wildlife fatalities and that the railway has many options to reduce risks to animals.
He also emphasizes the potential emissions impact. A study funded by Waterous and conducted by the Transition Accelerator sustainability group found that about 60% of the park’s emissions are related to transportation, with 25% tied to getting to the park. The group he formed to push the plan is called Banff National Park Net Zero 2035.
Still, he hasn’t always seemed the most obvious proponent for that kind of goal. Though he regularly says that climate change is a problem and recently announced a C$2 billion carbon capture system for his company, he says that energy poverty — the lack of access to adequate or clean fuels for heating and cooking — is an emergency.
No matter the motives, a train from Calgary to Banff is popular. Some 90% of Banff residents and 82% of Albertans support it, according to a poll conducted by Joe Pavelka, a professor who studies parks and tourism at Calgary’s Mount Royal University.
“This is not just about being more environmentally conscious,” Pavelka said in an interview. “If I can sit on a train and have a glass of Chianti on the way to Banff, that’s a better experience.”
Waterous’ persistence on the project in part reflects a reverence for rail pioneers of the past. He admits to idolizing Donald Smith, widely known as Lord Strathcona, who co-founded the Canadian Pacific Railway among his many ventures. Waterous named his oil company after Strathcona, and the lobby of its head office features a large photo of him driving in the last spike of the transcontinental railroad in 1885.
While that railway was beset by the technical challenges of blasting through the Rocky Mountains and barely skirted financial insolvency, it's credited with unifying Canada as a nation and it put many of the men involved — including Waterous' personal hero — into the history books.
Similarly, Waterous sees the potential for the Banff project and its economic model to jumpstart the building of new rail lines around the country, offering convenience and cutting the country's emissions.
“I don't want to say, ‘Oh, we're changing the world,’ but we do figure this is going to be very helpful,” Waterous said. “We don't want to sound too presumptuous, but that's how we think about it.”
