The federal-provincial partnership has been established to support national interests in Northern Manitoba.
Arctic Gateway owns and operates the Hudson Bay Railway, which allows both passenger and freight trains to access several northern Manitoba communities.
This rail line is crucial for supply chains and local food security, as well as regional connectivity.
The Canadian Government will provide additional funding of up to $46.6m ($60m) to the Arctic Gateway to support the rail line, while the Manitoba government will contribute up to $57.3m ($73.8m).
The investments, which will be provided in two years, will be used for a programme of significant upgrades, operation, and maintenance of the Hudson Bay Railway.
Manitoba Premier Heather Stefanson said: “The Hudson Bay Railway is an engine for economic development, job growth, and tourism opportunities, and our government is proud to support this vital transportation network connecting people and businesses in northern Manitoba with the goods and supplies they need to live, work and invest in their communities.
“This historic investment and partnership represents a new and exciting chapter for northern Manitoba and today’s announcement demonstrates what we can accomplish when we work together to advance shared opportunities in the spirit of reconciliation and collaboration.”