Canada's freight and commuter rail companies could face more, and increasingly expensive, service delays and accidents if they don't find ways to better share tracks, according to a report released.

Passenger traffic on Canada's rail corridors has surged in the past two decades due to a growing population and urban sprawl, a Conference Board of Canada report said.

At the same time, freight volumes, which often run on the same tracks, have shot up for Canada's two big rail companies, Canadian National Railway Co and Canadian Pacific Railway Ltd , partly because of massive growth in trade with Asia.

"Transportation congestion is often thought of as a problem for roads and highways," said Gilles Rheaume, vice-president of public policy at the independent think tank.

"However, the increase in commuter rail services over the past decade and the pre-recession boom in rail freight created bottlenecks on Canadian railways as well," Rheaume said in a statement.

Railways are an important transportation mode in the world's second biggest country where industry relies heavily on them to move goods as diverse as coal, potash and consumer goods.

Rail freight revenue in Canada totaled C$9.96 billion ($9.67 billion) in 2008, the report said. Passenger revenue for the same year was C$661 million.

One option to ease rail snarl-ups is for passenger operators to buy existing lines from CN and CP, which own most of the tracks, so that they can better control and direct their traffic, the report said.

An example of this was two track purchases by Toronto region transit authority Metrolinx last year. Metrolinx expects to own about 90 percent of the rail lines it uses in five years.

Both CN Rail and CP Rail also have major operations in the United States and an option for them there might be to buy regional U.S. railways, which would allow them to shift their freight off busy urban tracks, the report said.

An example of such a purchase was CN's acquisition last year of Elgin, Joliet & Eastern Railway around Chicago so it could move its trains out of the city core. (Reuters)