Decision No. 327-R-2002

June 12, 2002

File No. R 8050/456-010.95A

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APPLICATION

On February 12, 2002, St. Catharines Hydro Utility Services Inc. (hereinafter St. Catharines Hydro) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title.

ENVIRONMENTAL ISSUES

Pursuant to subsection 18(1) of the Canadian Environmental Assessment Act, S.C., 1992, c. 37 (hereinafter the CEAA), the project has been screened and a screening report has been prepared.

The Agency is of the opinion that public participation in the screening of the project under subsection 18(3) of the CEAA is not required in the circumstances.

After taking into consideration the screening report, the Agency has determined that the project is not likely to cause significant adverse environmental effects.

POSITIONS OF THE PARTIES

The existing utility crossing consists of cables crossing the right-of-way of the Canadian National Railway Company (hereinafter CN) and stopping short of crossing the tracks. This utility crossing is already covered by an agreement between St. Catharines Hydro and CN, namely the Wire Crossing Agreement No. G3-10.95 dated February 12, 1982. The crossing will however be modified by extending the cables across and over the tracks and, in doing so, St. Catharines Hydro wishes to amend technical portions of the agreement.

St. Catharines Hydro states that it objects to the payment of any fee requested by UMA Engineering Ltd., a company contracted by CN to review and approve the application. St. Catharines Hydro finds that the fee is unreasonably high even though CN is senior at the subject crossing. It also opposes the payment of annual fees. In support of its position, St. Catharines Hydro refers to Agency Decision No. 335-R-2000 dated May 12, 2000.

By letter dated February 26, 2002, St. Catharines Hydro advised the Agency that the installed power lines will be owned and maintained by St. Catharines Hydro and that they will be a permanent addition to its system.

CN argues that it has been its practice to either review applications in-house or contract out all work associated with utility crossings. It adds that it is incumbent upon the individual responsible for that review to inspect all aspects of the proposed work and to conduct an engineering review of the plans submitted to ensure compliance with the Wire Crossings and Proximities Regulations, General Order No. E-11, C.R.C., c. 1195 (hereinafter General Order No. E-11) and the applicable Canadian Standards Association standards. The review is also conducted to ensure that the proposed installation will not interfere with any existing railway facilities. Should this review reveal that a potential problem exists, the project is further contracted out to an expert in the field to assess the extent of the problem and to recommend remedial action.

Further, CN indicates that it incurs significant costs associated with the inspection of the proposed project to ensure safety of railway operations by confirming that these types of crossings in no way jeopardize its signal system. It further adds that it derives no benefits from the installation and should not be required to incur the costs associated with the safety inspection or review of the project.

It is therefore CN's opinion that the money requested in this case does not represent "annual or documentation fees", nor is it a "processing fee". In fact, it represents fees, as envisaged by subsection 7(2) of General Order No. E-11, for wages for work performed by contractors to review plans and to ensure that safe railway operations are protected. As such, CN is of the view that it is entitled to a reimbursement.

ANALYSIS AND FINDINGS

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

The Agency notes that St. Catharines Hydro and CN have been unsuccessful in negotiating certain terms of the existing wire crossing agreement and the costs associated with the review of plans. However, the parties agree to reconstruct and maintain the utility crossing.

In light of the foregoing, the Agency is of the opinion that St. Catharines Hydro should be authorized to construct the utility crossing as shown on Drawing No. 1-E-98 dated January 16, 2002.

The Agency has reviewed the positions of the parties and has determined that, in this case, compensation in the form of annual or documentation fees or consulting or contracting fees for documentation review are not warranted as no real or appreciable damage to the lands of the railway company has been demonstrated.

With respect to subsection 7(2) of General Order No. E-11, the Agency points out that this regulation was adopted pursuant to section 326 of the Railway Act, R.S.C., 1985, c. R-3, which was repealed with the passage of the Canada Transportation Act (hereinafter the CTA). However, pursuant to section 196 of the CTA, regulations made or issued by the National Transportation Agency that were in force immediately before the coming into force of this provision and that are not inconsistent with the CTA or any other Act of Parliament continue in force as if they were regulations made or issued by the Agency. An assessment of the inconsistencies between General Order No. E-11 and the CTA or any other Acts of Parliament is therefore necessary.

Pursuant to section 101 of the CTA, if the parties are unsuccessful in negotiating an agreement relating to the construction, maintenance or apportionment of the costs of a crossing, the Agency may, on application, authorize the construction of the crossing and specify who shall maintain the crossing. Further, in the case of cost apportionment, subsection 101(4) of the CTA directs the Agency to apply section 16 of the Railway Safety Act, R.S.C., 1985, c. 32 (4^th Supp.). This provision sets out the criteria that the Agency shall take into consideration when proceeding to the apportionment of costs.

The Agency considers that there are provisions of General Order No. E-11 that are inconsistent with section 101 of the CTA or section 16 of the Railway Safety Act because they deal with matters that are now open for agreement between the parties involved or that can be decided by the Agency. This is the case in subsection 7(2) of General Order No. E-11 which provides for the responsibility of a party to pay the wages and expenses of an inspector appointed by another party to supervise the work to be performed at the crossing. This is also the case in section 9 of General Order No. E-11 which provides that the line party shall indemnify the railway company against all loss caused by the construction, maintenance or operation of the line.

As a result, the Agency concludes that subsection 7(2) and section 9 of General Order No. E-11 did not continue in force when section 326 of the Railway Act was repealed.

Nevertheless, under the CTA, the Agency has the power to apply principles it deems appropriate in making its findings. The Agency is of the opinion that the railway company should be entitled, when required, to appoint an inspector to supervise the work, and the wages and expenses of such an inspector should be paid by St. Catharines Hydro upon receipt of a statement showing in reasonable detail the particulars of such wages and expenses. Should the parties be unable to agree on the necessity of the work of the inspector or on the particulars of the wages or expenses as detailed in the invoice, an application may be made to the Agency for a determination on the matter.

CONCLUSION

Accordingly, pursuant to subsection 101(3) of the CTA, St. Catharines Hydro is authorized to reconstruct and maintain the utility crossing as shown on Drawing No. 1-E-98 dated January 16, 2002.

In addition, St. Catharines Hydro shall at all times indemnify CN across or along whose railway the utility crossing is constructed, from and against all loss, cost, damage, injury and expense to which that railway company may be put by reason of any injury to persons or damage to property caused by the construction, maintenance or operation of the utility crossing as well as against any damage or injury resulting from the imprudence, neglect or want of skill of the employees or agents of St. Catharines Hydro in connection with the construction, maintenance or operation of the utility crossing, unless the cause of such loss, cost, damage, injury or expense can be traced elsewhere.

The Agency hereby concludes that neither the fee requested for the review and approval of this application nor the annual fees are warranted in this case.