Rail service and nearly 150 miles of rail line are safely being preserved on Vancouver Island, British Columbia, after Canadian Pacific Railway donates the property to a non-profit group.

The donation valued at $236 million, is what the non-profit Island Corridor Foundation is calling a historic agreement. Canadian Pacific Railway has agreed to hand over its Island rail assets to the foundation, a partnership of First Nations and local governments along the E&N line.

CPR is donating its portion of the 234-kilometre E&N, which averages 15 feet in width between Victoria and Courtenay, to the foundation. That encompasses several hundred acres of land, six historic railway stations and a number of trestles. The company is also supplying $2.3-million in "seed money" to help the foundation continue its work.

"Transfer of title has been completed, the Island corridor is now Island-owned and it's connecting communities," said a jubilant Judith Sayers, chief of the Alberni Valley's Hupacasath First Nation and co-chair of the foundation. Sayers and her daughter, Alana, completed Monday's announcement of the deal at Capital Regional District headquarters with a traditional song of thanks to the CPR's Dave Craig.

Not included in the deal is a section between Nanaimo and Parksville, which is owned by RailAmerica. The foundation is negotiating to also take it over.

VIA Rail continues to operate a passenger service on the E&N line, but has tried to shut it down several times, saying it's not a profitable venture.

Monday's deal will help preserve rail service on Vancouver Island and keep the E&N corridor available for such things as power lines, pipelines and hiking trails, foundation officials said. The ownership change will also allow more flexibility to deal with local concerns.

Priorities include:

- Signing a deal to continue passenger rail service.

- Upgrading the line.

- Developing other proposals for the corridor, including a commuter rail service in the south.

The first section of the E&N line, between Esquimalt and Nanaimo, was built between 1884 and 1886. CPR bought it in 1905, and continued to operate on the Island until the late 1990s, when it decided that there wasn't enough business to continue. RailAmerica later took over part of the line for a freight service.

"For our company, we had to look at it as 'Did it make business sense to hold onto it any longer?' and it made more sense to work with the Island Corridor Foundation to come up with a community-based solution," said CPR spokesman Ed Greenberg.

He said CPR gets about one-sixth the value of the deal in a charitable tax credit, and that such deals are not uncommon for the company.

"We just sold a spur line to the City of Richmond and we donated a railway station to the community of Nelson recently," said Greenberg.

Also being discussed is the scope of rail service along the corridor and the establishment of a leasing arrangement with a company to run the service, said Lake Cowichan Mayor Jack Peake, the foundation's co-chair. A viable commuter rail service is one topic of discussion, he said.

He said the foundation wants to show what can be done with a grassroots rail service, and with the unique partnership that has been created among the five regional governments and 13 First Nations within the corridor area.

"I think one of the things [where] Canada is still lagging behind the rest of the world is recognizing the value that the railway corridors bring to this country that we live in," Peake said.