Decision No. 330-R-2014

INTRODUCTION

[1] 

On April 17, 2014, Ferroequus Railway Company Limited (Ferroequus) applied to the Canadian Transportation Agency (Agency) to transfer Certificate of Fitness No. 99001 to 6793649 Canada Inc.

[2] 

Certificate of Fitness No. 99001 permits Ferroequus to operate non-revenue moves related to the testing of a proposed federal railway operation on the Caso Subdivision of the Canada Southern Railway Company, from mileage 112.0 to mileage 112.5 in St. Thomas, Ontario and, through a commercial agreement, on the lines of the Canadian National Railway Company between St. Thomas and Québec, Quebec.

[3] 

In Order No. 2005-R-49 dated February 3, 2005, the Agency, pursuant to subsection 94(2) of the Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA), suspended Certificate of Fitness No. 99001.

[4] 

In the current application before the Agency, Ferroequus requests that the Agency transfer to 6793649 Canada Inc. suspended Certificate of Fitness No. 99001. 6793649 Canada Inc. is the 100 percent shareholder and sole secured creditor of Ferroequus. Ferroequus has sold all of its tangible railway assets and undertakings to 6793649 Canada Inc.

ISSUE

[5] 

Can Certificate of Fitness No. 99001 be transferred to 6793649 Canada Inc.?

POSITION OF FERROEQUUS

[6] 

Ferroequus contends that considerations related to whether 6793649 Canada Inc.: is a bona fide railway company that has operations within Canada; falls within the jurisdiction of Parliament; and has third party liability insurance, are relevant to a new application – not a transfer. Ferroequus acknowledges that these considerations may be relevant in the future if and when 6793649 Canada Inc. resumes operations under Certificate of Fitness No. 99001. Ferroequus maintains that the only consideration to this transfer at law is whether 6793649 Canada Inc. is a person eligible to hold a certificate of fitness under the CTA. Ferroequus refers to subsection 91(1) of the CTA, and states that the words are plain and simple that a person who controls a railway is entitled to hold a certificate of fitness. As 6793649 Canada Inc. controls Ferroequus, the railway company described in Certificate of Fitness No. 99001, as 100 percent shareholder, 6793649 Canada Inc. is eligible to hold a certificate.

[7] 

Ferroequus refers to advice allegedly received from Agency staff in 2005 and 2007 on the transferring of equipment and the Certificate of Fitness to another party which Ferroequus contends it relied upon in transferring its assets to 6793649 Canada Inc.

ANALYSIS AND FINDINGS

[8] 

The Agency finds that the only actions contemplated by Parliament with respect to a certificate of fitness that has been suspended pursuant to subsection 94(2) of the CTA are either cancellation, or upon demonstrating adequate liability insurance coverage, reactivation. As Ferroequus has not supplied any evidence of adequate liability insurance coverage, its Certificate of Fitness cannot be reactivated.

[9] 

Furthermore, in this case, the transfer that Ferroequus is seeking essentially amounts to the issuance of a suspended certificate of fitness by the Agency to 6793649 Canada Inc. However, a suspended certificate of fitness is of no effect: it does not authorize the construction or operation of a railway. Such authorization is the sole purpose of a certificate of fitness. Accordingly, no purpose is served by the Agency essentially issuing a suspended certificate of fitness, as such a certificate does not fulfill the sole role that certificates of fitness have in the statutory scheme crafted by Parliament.

[10] 

Finally, with respect to Ferroequus’s allegation regarding Agency staff advice, no evidence has been submitted as to exactly what the advice was. Accordingly, it is impossible for the Agency to comment on its possible impact, if any, other than to remind Ferroequus that the Agency cannot be bound by staff advice. As an administrative tribunal, the Agency must properly apply the CTA above all else. In addition, as Ferroequus is well aware, Agency staff do not make decisions on behalf of the Agency. Only a duly-constituted panel of Agency Members has that power.

CONCLUSION

[11] 

In light of the above, the Agency finds that the CTA does not allow for the transfer of suspended Certificate of Fitness No. 99001 to 6793649 Canada Inc.

[12] 

However, 6793649 Canada Inc. may apply for its own certificate of fitness, pursuant to subsection 92(1) of the CTA. A certificate of fitness will be issued to 6793649 Canada Inc. in its own name, if and when it demonstrates that it has adequate liability insurance coverage for the operation, under subsection 92(1) of the CTA and the Railway Third Party Liability Insurance Coverage Regulations, SOR/96-337.

Accordingly, the Agency denies the application by Ferroequus to transfer Certificate of Fitness No. 99001 from Ferroequus to 6793649 Canada Inc.