A trainee has been promoted from executive director of a major railway to head the company’s board of directors.
The nomination comes as Canada’s largest passenger rail company faces a financial squeeze as it struggles to balance its books.
But the news also comes as it faces mounting criticism over its management of a $1.9-billion (U.S.) expansion project that’s not going as planned and a spate of deadly train accidents in which dozens of passengers have died.
On Monday, Canadian Pacific Railway, which operates the Pacific NorthWest and Pacific Railways, said it had been “promoted” from executive chairman to board director, the first time a person has been elevated to such a position in the company since it was founded in 1984.
The announcement came as Canadian Pacific was grappling with mounting financial pressure as it prepares to complete the expansion of its existing tracks, which include more than 1,500 kilometres of track.
“Canadian Pacific Railway is pleased to confirm that we have promoted the nomination of David J. Roussel, CEO of Canadian Pacific, as executive director,” the company said in a statement.
The board will meet next week to discuss the next steps in the transition, which is expected to last for six months.
The decision was welcomed by Canadian Pacific employees.
“We’re all excited to have a board with David as CEO,” said Jeffery DeBenedetti, a former president of the railroad’s board.
“He has proven himself to be a very effective and trusted leader.
We’re all looking forward to his leadership as a leader on the board.”
The nomination was not announced publicly until the end of last month.
But some of Canada’s top railway executives have publicly expressed concern about Roussell’s leadership.
He has faced criticism over the train derailment in January that killed eight people and injured hundreds more, and the railway’s decision to run trains without the required safety equipment.
In May, he apologized to employees for the derailment and said he would fix it.
He’s also been dogged by criticism over his role in the deaths of two Canadians, including a passenger who died after being struck by a train in April.
In October, he was forced to resign as CEO after the railway said he was not responsible for the fatal derailment.
On Wednesday, Canadian Transpo CEO David Thomson told reporters the board was working with Roussels leadership team to help “develop a new and improved leadership style” for the company.
“David is a leader who has been very successful on this issue,” Thomson said.
The appointment of a board member comes as the railway faces mounting pressure as the economy shrinks.
A government report released this week said the number of Canadians travelling by train fell by more than 30 per cent last year, and passenger growth slowed.
A further report this week by the Conference Board of Canada found that the economy has been suffering from “significant” weakness in the manufacturing sector and the job market, as well as from “a significant increase in the number and intensity of incidents.”
The report also said Canada’s economy is expected grow at a rate of 1.6 per cent in the next 12 months, compared to 2.2 per cent growth in the previous year.
While the numbers are a drag on growth, the report warned that job growth is expected at a modest 1.3 per cent over the next year.
In recent months, Canadian governments have been trying to balance the budget by spending more to keep its rail service running and to make up for the lost revenue from a $3.3-billion train derailer overhaul program.
The government said it is investing $50 million over the coming years to ensure the company is operating safely and efficiently.
“As we look to the future, we know that we need to maintain our existing train routes and continue to ensure that our railway network is a safe and reliable source of service,” Transport Minister Chris Ballard said in an emailed statement.
“This means investing in infrastructure that meets the needs of our customers, and is efficient and efficient.”
The railway has also faced criticism from environmentalists, who say it has missed its targets for making significant improvements to train safety.
A new train is scheduled to enter service this summer on tracks that had been designated as a “safety zone” by the railway.
The rail company said it will work with Environment Canada to determine the best way to implement these designated safety zones.