TORONTO -- Northern Development Minister Michael Gravelle says Ontario is keeping the transportation division of Ontario Northland Transportation Commission as a government-owned company.

However, Gravelle says Ontera, the Ontario Northland's telecommunications division, is being sold to Bell Alliant for $6 million in cash and an estimated $10 million in long-term revenue.

Gravelle says planned investments in ONTC infrastructure include more than $23 million over three years to purchase new motor coaches for its bus line and to refurbish rail coaches for the Polar Bear Express.

New Democrat critic John Vanthof says the announcement fails to address the long-term future of the ONTC, adding that the Liberals are selling off Ontario Northland one piece at a time.

ONTC buses carried 240,000 passengers last year and the government says ridership has been increasing. The Polar Bear Express carries about 64,000 passengers per year.

North Bay Mayor Al McDonald calls the announcement good news for his city after two years of great uncertainty for Ontario Northland employees.

"My number one priority all along was to save jobs and bring certainty to the future of the ONTC," McDonald said.

Vanthof said funding for refurbishing the Polar Bear Express was previously announced in 2011, and the new motor coach purchases reinstate previously cancelled plans.

"This is a feel-good Liberal announcement that won't provide long-term stability to northern transportation, or the thousands of people who depend on the ONTC for their livelihoods," he said.

Late last year, auditor general Bonnie Lysyk said selling off the Ontario Northland could cost as much as $820 million, rather than saving hundreds of millions as the governing Liberals claimed.

Lysyk added that figure could climb even higher because not all the costs are known, such as the environmental cleanup of ONTC properties and consultations with First Nations.

ONTC provides freight transportation to industries in northeastern Ontario and northwestern Quebec along its 1,100-kilometre rail system.