Does the fact that FVHRS is in Canada make a difference? Are the Canadian versions of FCC regulations close or identical to US requirements?

I don't know about the Canadian radio requirements, as I have never dealt with anything like that outside the US.
Does this operation interchange with another railroad? If you are an operation like Georgetown loop, you probably don't need to worry about using railroad frequencies, etc. So, you can use most anything including UHF radios....as long as you don't interfere with local police and fire, etc.
I did a little checking....if you wanted HT 1000's, that were narrow bandable. I'm reasonably sure I can get them for around $200/ea. At that price you're getting a reconditioned radio, new battery, charger, and shoulder mike/speaker. This includes estimated costs for programming and shipping.
Some other points to make note of:
The HT 1000's range is still only 1-1.5 miles depending on terrain and conditions
If you have a base unit that is 5 miles straight-line from you, you'll hear them, but they won't hear your hand held radios.
Depending on your locomotive radio, you can probably talk to a base unit that far from you, so you may not need to invest in things like a repeater, unless you want everyone to be able to talk to the station at anytime.

Radio technicians can adjust modulation level of many radios to comply with the new narrow band regulations. However the receiving section may not be able to separate new narrow band signals when they come on the air in the future.

WHAT IS IMPORTANT IS THAT THE RADIO IS TYPE ACCEPTED FOR OPERATION IN THE UNITED STATES BY THE FCC. All old approvals expired when narrow band operation was required. The radio manufacturer can supply the FCC type acceptance number.

Some radios are sold, for amateur radio for example, that will operate on licensed frequencies but do NOT have type acceptance. You cannot use these radios legally on licensed AAR or land mobile frequencies.

Another thought: The antennas on portable radios are VERY inefficient. Magnetic mount external antennas are not extremely expensive. If overhead clearances allow, an antenna attached to the top of a coach will give you much longer range. Plug it into your portable radio. It should cover your entire railroad as described. You must adjust the length of an external whip antenna for your frequency. What is called a 5/8 wavelength antenna will give better performance than a shorter 1/4 wavelength antenna.

Larsen is the brand I prefer although several other manufacturers make them. Any good amateur radio supply house should have them in stock.