Little Prairie was incorporated as a waterworks district on 8 October 1957; within the span of a few year a rail line, natural gas pipeline, and telephone line were built along the highway from Prince George. Provincial Minister of Railways Ralph L.T. Chetwynd (who also directed the Pacific Great Eastern Railway) headed the rail line project. The rail line continued eastward to Dawson Creek which was the western-most terminus of Northern Alberta Railways. In early 1958, the first train ceremoniously arrived in Little Prairie from Vancouver. Its load included pipe to symbolize natural gas development, steel railway track for the extension of the rail line, box cars for grain and lumber, and a truck representing freight hauling along the Alaska Highway. The railway station in Little Prairie was completed in 1959 and named after Chetwynd, who had died two years earlier. Soon afterwards the post office adopted this name. Chetwynd became the community's official name on 1 July 1959. In 1960 the Chetwynd Waterworks District expanded its mandate to include garbage disposal, fire protection, and street lighting. Led by its Chamber of Commerce, the community incorporated as a municipality on 25 September 1962.
Growth continued in the 1960s when the town served as the rail-to-truck transshipment point for delivering workers and supplies to the construction site of the W.A.C. Bennett Dam, in nearby Hudson's Hope. Canfor and West Fraser Timber bought sawmills in 1964 and 1971, respectively, and eventually became two of the town's largest employers. The development of its forestry sector led to the town being declared the Canadian Forest Service's 1992 Forestry Capital of Canada. The community opened a rodeo ground and curling rink in 1963, a library in 1967, a new fire hall in 1968, an airport in 1970 and a hospital in 1971.
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