Ontario Northland Railway will feel the pinch when Tembec Inc. closes its Smooth Rock Falls pulp mill this summer.

The effect of losing a "significant" revenue stream within months didn't slide under the radar last week. "We're in the midst of evaluating the full impact of the closure and what means we take to mitigate the impact on our operations," said Beverly Martin, communication manager at the ONTC.

Martin would not confirm how much Tembec's Smooth Rock Falls account represented. "I can't disclose it," Martin said, citing confidentiality with clients and the need to keep contract pricing out of the hands of competitors.

However, a source in discussion with rail freight employees said as much as $3 million in revenue will soon be off the books. The loss comes at a time of stability and growth in other areas of business.

A new motor coach facility was recently built on Wallace Road and the GO Transit car refurbishment contract has put 90 new employees to work.

"It's looking really positive for the project," Martin said, referring to a contract worth as much as $81 million or up to 121 cars.

While initial progress on the cars was considered slow as the ONR competed for skilled workers, the delivery schedule was renegotiated several months ago. Martin said they are now "ramping up to full production."

The opening of a diamond mine northwest of Moosonee has proved beneficial to the rail division as well, she said. Movement of equipment and supplies to the staging area for the winter road to the mine site kept the ONR busy through the winter, Martin said.

"That was really great news," she added, noting the passenger service has also noticed more people riding between Toronto and Cochrane since switching to a day schedule.

"Traffic is up about 20 per cent," Martin said.