During the mid-1870s Henry Ketchum became interested in the scheme for which he is best known. The Chignecto Marine Transport Railway Company was formed in 1882 to construct a ship railway for transporting vessels across the Isthmus of Chignecto, thereby facilitating shipping between the Bay of Fundy and the Gulf of St. Lawrence. The proposed Chignecto Ship Railway would be 17 miles long in a straight line from Fort Lawrence on the Bay of Fundy to Tidnish on the Gulf of St. Lawrence, with a dock at each end. Ships would be raised by hydraulic lift from the water onto the railway, drawn by two locomotives across the isthmus, and then lowered into the water to resume their journey. Ketchum acted as managing director of the project.
Construction began in October 1888, but the Chignecto Ship Railway soon faced serious financial difficulties. The 1890 collapse of Baring Brothers and Company, the London bank backing the project, signalled the death of Ketchum's dream. In 1892 The Canadian Parliament refused to extend the time period for their contract with the Chignecto Marine Transport Railway Company, thereby destroying any possibility of the project being completed. Three-quarters of the work was completed at that point, including the docks at Fort Lawrence and Tidnish Bridge, 16 of the 17 miles of rail-bed, and 13 miles of track. Soon after, on 8 September 1896, Ketchum died unexpectedly in Amherst, Nova Scotia. He was buried at Tidnish within view of the ship railway terminus