In 1995, a right-of-way along the south shore of False Creek from Granville Island to Main Street was purchased by the City from the Canadian Pacific Railway (CPR). The City has developed this right-of-way into a demonstration streetcar line. Operating since 1998, the Downtown Historic Railway has enjoyed strong support from the public and numerous stakeholders.

As downtown develops to the edges of False Creek and Burrard Inlet, the resulting high-density areas need to be served with transit. In 1999, Council approved a concept plan for a Downtown Streetcar system. The primary purpose of the Downtown Streetcar is to link a number of activity centres in the downtown that are beyond comfortable walking distance for many. The system is intended as an expansion of the demonstration line in False Creek South, but using the latest technology of modern low floor electric streetcars.
Phases 1 and 2 of the Downtown Streetcar were approved by Council and will link major residential developments, significant employment centres, and major tourist destinations on the periphery of the downtown and south shore of False Creek.
Phase 1 of the Downtown Streetcar will serve major downtown destinations -- Canada Place , Waterfront Station, Gastown, Chinatown , Science World/SkyTrain and Granville Island -- and the downtown neighbourhoods of the Downtown Eastside, Strathcona, Mount Pleasant , Fairview , Southeast East False Creek, and False Creek South. A western extension of Phase 1 from Waterfront Station to Stanley Park would also serve the Vancouver Convention and Exhibition Centre and Coal Harbour community.
Phase 2 of the Downtown Streetcar would extend west from Science World along Pacific Boulevard connecting BC Place, GM Place , and Yaletown, to Granville Street via Drake Street .
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