Decision No. 195-R-2004

April 15, 2004

File No. R8050/708-179.49

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BACKGROUND

[1] By Decision No. 593-R-1998 dated December 3, 1998, the Canadian Transportation Agency (hereinafter the Agency) determined that the actual costs of the installation of an automatic warning system, consisting of flashing lights and bell, short arm gates and constant warning devices, remaining after the application of the federal grant, and the associated maintenance costs would be paid entirely by the Canadian National Railway Company (hereinafter CN).

[2] CN, pursuant to section 40 of the Canada Transportation Act, S.C., 1996, c. 10, petitioned the Governor in Council for relief from Decision No. 593-R-1998.

[3] The Governor in Council, by Privy Council Order No. P.C. 2001-1114 dated June 14, 2001, rescinded Decision No. 593-R-1998 and requested the Agency to reconsider its decision on the cost apportionment of the installation and maintenance of an automatic warning system based on the determination that the said installation is required for safety reasons.

[4] By Decision No. LET-R-235-2003 dated November 24, 2003, the Agency invited submissions on the reconsideration of its Decision from CN and the Rural Municipality of Corman Park No. 344 (hereinafter the Municipality).

[5] On December 19, 2003, CN filed its submission and given the impending holiday season requested that the Agency extend the date to respond to the Municipality's submission until January 16, 2004.

[6] On January 5, 2004, the Municipality requested an extension until January 15, 2004 to file its comments.

[7] On January 9, 2004, CN objected to the granting of the Municipality's request for an extension on procedural grounds. However, by Decision No. LET-R-5-2004 dated January 13, 2004, the Agency granted both requested extensions until January 20, 2004 and asked both parties to reply to each other's submission no later than February 2, 2004.

[8] On January 20, 2004, the Municipality filed its submission and on February 2, 2004, CN filed its reply. The Municipality did not file a reply to CN's submission with the Agency.

ISSUES

[9] The issues to be determined are what percentage of costs is to be borne by CN and the Municipality with respect to the installation and maintenance of an automatic warning system and what date such an apportionment should take effect.

FACTS

[10] There is one main line track at this location with train speeds of 60 miles per hour for freight trains and 80 miles per hour for passenger trains. In 1998, the train count was 35 per day and the traffic count for the two-lane road at the crossing was 180 vehicles per day. The vehicular speed limit is 80 kilometres per hour.

[11] Transport Canada concluded, in its letter of February 17, 1997, that as a result of high cross product as well as vehicle and train speeds, the installation of automatic warning devices would be an improvement to safety at the crossing and therefore on March 24, 1998, CN received the Minister of Transport's approval for funding of 80 percent of the cost of the work pursuant to section 12 of the Railway Safety Act, R.S.C, 1985, c. 32 (4th Supp.) (hereinafter the RSA).

POSITIONS OF THE PARTIES

[12] CN states that Transport Canada is the recognized authority in rail safety matters and refers to the Order in Council that requests that the cost apportionment of the installation of an automated warning system be based on the determination that the installation is required for safety reasons.

[13] CN refers to its original arguments and submits that, in making its decision, the Agency should give consideration to which party created the need for the project and which party stands to derive the greatest benefit. In this respect, CN refers to subsections 16(1) and 16(4) of the RSA and submits that both parties have a responsibility for safety at the crossing and both parties should share in the cost according to the benefits derived. CN considers that the installation of an automatic warning system consisting of two gates and bell with constant warning devices is primarily for the benefit of the road authority, its citizens and the travelling public. Although CN is willing to assume a share in the responsibility for safety, it maintains that it is the road authority and its citizens that will be the primary beneficiaries of the proposed work.

[14] CN submits that the proposed railway work will improve the safety of the crossing and adds that this was acknowledged at a site meeting with Transport Canada. This was also affirmed in Transport Canada's letter dated February 17, 1997 and the subsequent confirmation of funding under section 12 of the RSA.

[15] CN states that cost sharing between the railway company and the road authority for crossing protection upgrades has traditionally been set at 7.5 percent for the railway company, and 12.5 percent for the road authority of the total cost in cases where federal funding is 80 percent. CN refers to the recommendations of the Board of Transport Commissioners for Canada in its report entitled Railway - Highway Crossing Problem in Canada dated May 10, 1954, and submits that the current standard of 12.5 versus 7.5, given federal funding of 80 percent, is an equivalent ratio to that set out in that report.

[16] CN indicates that due to the circumstances of this crossing improvement, the Municipality must assume the additional financial burden created by the absence of provincial funding. It would not be equitable or reasonable, having regard to the history of benefits derived by motorists at crossings, to require CN to make up for the absence of provincial funding.

[17] In closing, CN requests that the Agency's determination on the apportionment of the costs be made retroactive to December 3, 1998.

[18] The Municipality supports the original decision of the Agency because it is of the opinion that the significance of the safety factor at the crossing in question was properly addressed by the Agency. Referring to a letter sent to the Agency on September 22, 1998, the Municipality submits that the crossing does not constitute a greater danger to the motorists than any other crossing in the municipality as the site distance is adequate and stop signs are in place.

[19] The Municipality states that in 1998, the vehicle count over the crossing was 180 per day while updated figures from 2000 indicate that the traffic has decreased to 170 vehicles per day, which is lower than any of the other four crossings towards which the Municipality contributes. The Municipality indicates that the traffic count at the four crossings are respectively 400, 250, 2150 and 305 vehicular movements per day. The Municipality submits that these traffic counts exceed the level of the subject crossing and in fact a number of uncontrolled crossings exceed the level of traffic at the subject crossing and may constitute a greater danger to the motorists than the subject crossing.

[20] On this issue, CN argues in its reply that the Agency must proceed with the cost apportionment on the basis of the determination that the installation of the warning system is required for safety reasons. CN submits that the Municipality's statement that the vehicular traffic has not increased since 1998 is irrelevant to the present case and that, if it is taken into account, the rail traffic has not increased since 1998. In 1998, the train count per day was 35, compared to 31 in 2001. Accordingly, CN submits that the Municipality has contributed towards the need of this installation and also benefits by it and should therefore be accountable for sharing the costs for the installation and future maintenance of the warning system.

[21] The Municipality submits that the greatest safety concern was, and still is, the elevation of the track at the crossing. During reconstruction, the track was elevated above the municipal road to the extent that if stop signs had not been erected, vehicles crossing at normal speeds "would become airborne". The Municipality maintains that construction of a gated crossing at this location will not diminish this safety hazard and that it will continue to be necessary to have stop signs.

[22] On this issue, CN indicates that it was unaware of the safety hazard presented by the elevated track above the municipal road and assumed that the erection of stop signs at the crossing was due to safety concerns of sightlines. CN is now aware of the problem that has been created and steps will be taken to remedy the situation.

[23] The Municipality also advises that due to reduced provincial funding, the cost is too great to incorporate into its current budget. Further, it still is the Municipality's position that it should not be required to contribute towards the cost of this project.

ANALYSIS AND FINDINGS

[24] In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings.

Apportionment of costs

[25] Pursuant to section 16 of the RSA, in cases where the parties involved cannot agree on the apportionment of the liability between them to meet the costs for the project and have no other recourse under other legislation to resolve the dispute, either party may refer the matter to the Agency for a determination.

[26] With respect to CN's reference to the report on Railway - Highway Crossing Problem in Canada dated May 10, 1954, the Agency points out that the cost-sharing formula referred to in the report existed at the time of the Railway Act, R.S.C., 1985, c. R-3, which is no longer in effect. Cost apportionment issues where there is no agreement between the railway company and the road authority are now subject to section 16 of the RSA. Further, the Agency assesses each case based on its own merits and the circumstances of a particular railway work, in this case the road crossing project, in the context of section 16 of the RSA.

[27] The Agency is of the opinion that both parties have a responsibility at this crossing to protect their respective traffic. Therefore, each party will benefit from the installation of flashing light signals and bell.

[28] With respect to the installation of constant warning devices and short arm gates, the Agency is of the opinion that given the volume of vehicular traffic at this crossing, these are mainly required to address the variation of train speeds between passenger and freight trains, i.e. 80 miles per hour and 60 miles per hour respectively. The Agency is therefore of the opinion that the installation of the warning system will mostly benefit CN. Accordingly, the Agency is of the opinion that CN should pay the larger share of the installation of the automatic warning system.

[29] In light of the above, the Agency finds that it is fair and reasonable that the cost of installation of the automatic warning system be shared in the proportion of 75 percent by CN and 25 percent by the Municipality, after the application of the federal grant.

[30] With respect to the maintenance costs, the Agency is of the opinion that any improvement at a crossing ultimately benefits all users of the crossing. Railway operations are protected and the risk to the motorists at the crossing is reduced. Therefore, in this case, both parties should contribute equally towards the maintenance of the automatic warning system.

Effective date

[31] CN also requested that the Order be made retroactive to December 3, 1998. In the present case, Privy Council Order No. P.C. 2001-1114 dated June 14, 2001 rescinded Decision No. 593-R-1998. The effect of such Order was that it placed the parties in the same position they were prior to the issuance of the impugned decision. That is, CN and the Municipality are unable to agree on the apportionment of costs for the installation and maintenance of an automatic warning system at the road crossing of Secondary Road 663 (Old Highway No. 11) and mileage 179.49 of the CN Watrous Subdivision. The Agency, in this Decision, apportioned the costs for the installation and maintenance of such an automatic warning system as required by the P.C. Order No. 2001-1114 and the Agency therefore grants CN's request.

CONCLUSION

[32] In light of the above, the Agency has determined that the actual costs of installation of the automatic warning system consisting of two gates, flashing light signals, and bell with constant warning devices, remaining after the application of the federal grant, shall be paid 75 percent by CN and 25 percent by the Municipality. The cost of maintaining the road crossing automatic warning system shall be shared equally by CN and the Municipality.