Canadian Pacific buys Detroit River Rail Tunnel file photo. (photo by Adelle Loiselle.)

Canadian Pacific is buying the Detroit River Rail Tunnel from the pension plan for all municipal employees in Ontario in an agreement worth $312 million U.S.

Before the agreement, Canadian Pacific owned a 16.5 per cent stake in partnership with OMERS.

CP will acquire full ownership of the tunnel from OMERS.

Buying the tunnel that links rail traffic from Windsor to Detroit is expected to reduce the railway’s operating costs. The transaction is expected to close by the end of the year and is subject to regulatory approvals and closing conditions.

“We can better operate the asset to the benefit of our customers and the North American supply chain,” claimed CP President and CEO Keith Creel. He said it “will further integrate the eastern part of our network and create value for our shareholders.”

OMERS first invested in the Detroit River Tunnel Partnership in 2001.

“Our work with CP represents a strong example of our global investment approach in action,” said Michael Ryder, the senior managing director and head of Americas for OMERS Infrastructure.