West of Crowsnest Lake at the summit of the pass the railway makes an abrupt swing to the south to follow the south fork of Michel Creek for about two miles (3.25 km) to ease the gradient on the tracks down the western slopes of the mountains. The tracks then turn sharply back north and run along the west side of the valley to once again head west towards Fernie. By swinging the right-of-way up Michel Creek, the railway engineers were able to build the tracks to descend 200 feet (61 m) in elevation. The loops and the CPR station were named for Donald McGillivray, an engineer and contractor who worked on this section of line and on many other projects in British Columbia.

At the beginning of the loop, masonry retaining walls are still part of the railway. Originally, wooden structures were used to support the trackage but these were soon replaced by the enduring masonry works. During the railway's construction, a tunnel was planned at the beginning (upper end) of the loop. However, the materials removed were so unstable that a diversion was built around the mountain ridge so that the further construction and opening of the railway would not be delayed. This detour route required four high timber trestles and nearly half a mile (3/4 km) of track. In 1901, work began once again on a tunnel, 900 feet (275 m) in length. The material was 'a huge heap of loose gravel, the drift of some great glacier. The material is so loose that it can only be compared to grain in a bin,' noted The Railway and Shipping World in July 1901.

The engineers drove a timber lining horizontally into the hillside and then excavated the loose materials from the inside of the lining to form the tunnel. As materials were removed, a heavy timber lining, made of one-foot (.3 m) square mountain fir timbers, spaced just three inches (7.6 cm) apart, was installed to support the roof of the tunnel under the heavy pressure of the overburden. Coal and some rock was encountered and because of the unstable conditions, no explosives could be used. The men worked by candle light as they dug through the mountain ridge. Pay was 35 cents an hour. C. E. Cantlee was the engineer in charge and Olaf Olsen was the contractor.

The tunnel was an expensive structure to maintain and was bypassed by the railway in 1948 when a cut was made through the ridge to permit the tracks to be rerouted.