The construction of the Prince Edward Island Railway in 1871 created a transportation link across the island that stimulated employment, contributed to the social and cultural life of Islanders, and generated economic and commercial opportunities. Its construction led to a $3.25 million debt, which was staggering at the time and played a significant role in bringing Prince Edward Island into Confederation.

Prince Edward Island’s road to Confederation dates back to 1864 when Nova Scotia, New Brunswick, and Prince Edward Island agreed to meet in Charlottetown to discuss the possibility of union. They were joined by a contingent from the Province of Canada that wished to broaden the scope of discussions to include a union of all British North American colonies. PEI had a strong identity and a successful economy, and there were concerns that union would not bring any immediate benefits to the Island. Opponents argued that with Confederation, taxes would increase, local needs and concerns would not be addressed in a federal parliament, and the long-standing issue of absentee landownership on the Island would remain unresolved. PEI did not join in Confederation on 1 July 1867 and might well have remained independent if it had not decided to build a railway.

In 1871, PEI began construction on a railway which it hoped would improve the Island’s economy and increase tourism. The Prince Edward Island Railway (PEIR) was a narrow-gauge railway, built under the supervision of Chief Engineer John Edward Boyd, which ran from Tignish in the west to Elmira in the east. Poorly planned from the outset, the project quickly overspent its budget. The government failed to stipulate either the length or route of the railway and as a result, lobbyists attempted to bribe politicians to locate stations within their particular communities. The government had also agreed to pay a fixed cost per mile, but neglected to put a limit on the number of miles to be built. Consequently, the contractors – not the government – had full control over construction. By 1872, the railway had put the colony on the verge of full economic collapse. In need of help, PEI approached the Dominion government about joining Confederation. Canada assumed the Island’s railway debt as part of the negotiations, and Prince Edward Island joined Canada on 1 July 1873.

The railway was a major employer and further benefitted the province by cutting overland transportation costs, thus opening up the interior for development. It was an important link between communities, not only for locals but also for an increasing number of tourists. The PEIR was heavily utilized during the Second World War but then saw declining use as cars became more common, and passenger trains on the island ceased in 1968. Freight operations too gave way to trucks and in 1989, the system was abandoned. Equipment was removed and the infrastructure was dismantled in the early 1990s. In 1994, the railway lands were turned over to the province and, over the next decade, its Rails to Trails program resurrected the rail bed as a recreational pathway dubbed the Confederation Trail.