The return of rail to Vancouver Island is moving full steam ahead.

As Capital Regional District directors finalize their 2013 budget, the biggest piece of new spending is intended to get passenger rail service back up and running between Victoria and Courtenay.

"I really think it's important we restore rail, not only for intercity transport, but also for commuter rail," said Victoria Coun. Ben Isitt, who sits on the CRD's finance committee that recommended the funding boost last fall.

The Island Corridor Foundation will receive $1.2 million from the CRD and a total of $5.4 million from the five Island regional districts to make necessary bridge and trestle upgrades, with the hope of restoring VIA Rail service between Victoria, Courtenay and Nanaimo, said ICF director Graham Bruce.

"We're right in the middle of the train service agreement right now," he said, adding the trains could have early morning service to Victoria.

The federal and provincial governments have also promised $14 million for necessary rail tie replacements and track work.

"If all goes well, work could probably start sometime in May," Bruce said.

CRD staff are recommending the funding be split into two annual payments of $600,000 to keep 2013 costs contained.

The foundation is open to working with all the regional districts on the best funding model, but conversations will continue to "make sure that works well for us, too," Bruce said.

The CRD's 2013 preliminary budget calls for a 2.5-per-cent increase in spending this year. That doesn't include costs associated with the region's $783-million secondary sewage treatment project, which will be presented separately to the wastewater committee in the coming weeks.

"I think most people around the board table realize there's not a lot of appetite for new spending, and that overall, we should be looking to provide good, cost-effective government and not (be) embarking in new areas," Isitt said.

Rail is a largely considered an appropriate exception because of its importance in economic development and population growth in the region.

Passenger rail service is only the first step to a revived rail industry on the Island, Bruce said.

"It's not the end game, it's the beginning game. If there are demand increases and if we find other opportunities, then we'd operate to suit those as well."

CRD directors have until March 31 to approve the 2013 budget.

dpalmer@vicnews.com