The term “short line railways” is used to describe small railways that may vary from a few kilometres to several hundred kilometres in length. The larger short lines are sometimes called regional railways. Many small railway companies built the railway network in Saskatchewan in the early part of the 20th century; gradually, these amalgamated into the two national carriers, Canadian National Railway and Canadian Pacific Railway. The rail network in Saskatchewan remained in the hands of these two companies until the late 1980s. In 1987, the federal government passed a new National Transportation Act (NTA), which allowed for monies to be taken from the Crow Benefit transportation subsidy for the purpose of funding grain transportation on branch lines abandoned by the federal railways. The Act also required the federal railways to offer for sale any lines that they wished to discontinue. The offer was to be made first to the general public, and then to the three levels of government; if the sale was to a federal, provincial or municipal government, the price was to be set at net salvage value.
In 1989, the government of Saskatchewan passed the Saskatchewan Railway Act, which paved the way for the creation of common carrier short line railways in the province. The first such short line appeared that same year: Southern Rails Co-operative (SRC) was a farmer-owned short line comprised of two branch lines in southern Saskatchewan. Initially, SRC received funding from the Crow Benefit under an agreement negotiated with the federal government. Following the successful creation of SRC, the federal railways ceased abandoning branch lines in the province until 1995. At that time, the federal government initiated the Robson Committee to decide the fate of 535 miles (860 km) of high-cost branch lines. The committee having recommended the abandonment of each of these lines, the federal government exempted the railways from the provision to offer these lines for sale to the public and to governments.
Several other short lines sprang up in Saskatchewan in the following years, taking in much of the grain-dependent branch line network. In addition to common carrier short lines—those that offer transportation services to the general public—the province has a number of private short line railways that serve specific industries. These are found at coal mines, forest products facilities, and large grain elevators; they too are regulated under the Saskatchewan Railway Act.