Decision No. 331-R-2010

Introduction

Complaint

[1] On December 14, 2009, Mr. Goff filed with the Canadian Transportation Agency (Agency) a level of service complaint under sections 113 to 116 of the Canada Transportation Act (CTA). His complaint relates to 53 producer car loading sites in western Canada that the Canadian National Railway Company (CN) planned to delist. Mr. Goff states that thousands of farmers will lose rail access and the ability to order, load and transport their production to market. Mr. Goff suggests that the lack of service by the delisting of producer car sites will deny farmers the ability to save well over a thousand dollars per rail car.

Preliminary matters

Moratorium

[2] Mr. Goff requested that a moratorium be placed on any further delisting until his level of service complaint had been heard. In Decision No. LET-R-192-2009, the Agency informed Mr. Goff that it would treat his request for a moratorium as a request for interim injunctive relief. The Agency subsequently requested submissions from the parties in accordance with the three part test for interim relief established by the Supreme Court of Canada in RJR Macdonald Inc. v. Canada (Attorney General), 1994 1 S.C.R. 311.

[3] In his submissions, Mr. Goff expressed his concern that CN's past and future delisting of producer car loading sites will make it more difficult for western grain farmers to access affordable rail transportation. In Decision No. LET-R-3-2010, the Agency informed the parties that, given Mr. Goff's failure to provide confirmation that he had representational authority to act on behalf of those who may be affected by the delisting of the producer car loading sites, the Agency would only consider his request for interim injunctive relief with respect to the specific sites Mr. Goff listed as being used by him in his submission of December 29, 2009, namely Allan and Hanley, Saskatchewan.

[4] In Decision No. LET-R-17-2010, the Agency denied Mr. Goff's request for interim injunctive relief.

Scope of complaint

[5] The Agency notes that CN has not delisted the producer car loading site at Hanley. Further, Mr. Goff has raised no allegations in his complaint regarding the level of service provided to him by CN at Hanley. In addition, Mr. Goff has not raised any issue with respect to the level of service provided to him by CN at Allan for the period up to the date of the delisting of that site.

[6] With respect to Mr. Goff's complaint about CN delisting 53 producer car loading sites, which includes the site he uses at Allan, there is no evidence that CN did not follow all the procedures for delisting as set out in subsection 151.1(3) of the CTA. That means Mr. Goff's complaint with respect to the delisting of the 53 sites must be restricted to a consideration of the application of section 116 of the CTA to the delisting of those sites. The Agency is of the opinion that a complaint filed pursuant to section 116 of the CTA can only be assessed in the context of the factual level of service provided by a railway company to a specific site and the legal representations made with respect to those facts for that site against the tests applied by the Agency in determining whether there has been a breach of level of service by the railway company. With respect to the 53 producer car loading sites referred to by Mr. Goff in his complaint, no complaints have been pursued, nor evidence submitted, by any specific users of any such sites, other than by Mr. Goff with respect to his use of Allan.

[7] Accordingly, in assessing Mr. Goff's level of service complaint, the Agency will only consider the impact of the delisting of the producer loading site at Allan on the level of service provided by CN to Mr. Goff.

Issue

[8] Has CN breached its level of service obligations under sections 113 to 115 of the CTA to provide reasonable service to Mr. Goff at the producer car loading site in Allan?

Conclusion

[9] The Agency finds that CN has not breached its level of service obligations to Mr. Goff. Accordingly, the Agency dismisses the complaint.

The law

[10] For all legislative references refer to the Appendix at the end of this decision.

Background

[11] Railway companies are required under section 151.1 of the CTA to keep current and publish on their Internet sites, a list of available sidings in the Western Division where rail cars that are allocated by the Canadian Grain Commission (CGC) can be loaded by individual producers. A railway company may only remove a siding from its list sixty days after giving notice of its intention to do so.

[12] In September 2009, the Agency received a number of letters from parties concerned about CN's plan to delist 53 producer car loading sites and asking the Agency to stop this action. However, as CN was following the process and notice requirements provided for in the CTA, the Agency did not have the authority to prevent CN from delisting its sidings.

[13] In December 2009, the Agency received Mr. Goff's level of service complaint, along with one other similar complaint. The complainants stated that their future ability to access local rail service would be harmed if the sites were closed, resulting in an unacceptable and inadequate level of rail service. The complainants requested that the Agency put a moratorium on the further delisting of any sites and on the removal of infrastructure from already delisted sites to allow time for the matter to be examined by the Agency, as well as the Rail Service Review Panel which was created by the Minister of Transport, Infrastructure and Communities to develop recommendations aimed at improving the efficiency and effectiveness of the rail based logistics transport system in Canada. As noted above, the request for a moratorium was dismissed. The Agency subsequently closed the file for the other complaint as the complainant failed to submit requested pleadings with the Agency, leaving Mr. Goff's complaint as the only one to be considered by the Agency.

[14] The Agency also received four requests for intervention from the National Farmers Union (NFU), the Canadian Wheat Board (CWB), Hudson Bay Route Association (HBRA) and Producer Car Shippers of Canada (PCSC), all of which supported Mr. Goff's complaint.

[15] The interveners predominantly mirrored Mr. Goff's arguments concerning the money saved by farmers using producer cars, and provided information suggesting growing use of producer cars in western Canada. Some interveners also stated that producer car loading sites are a legislated right.

Submissions of the parties

Complainant

[16] Mr. Goff states that farmers have a right "enshrined" in legislation to load producer cars and that "this legislation is meaningless, however, unless there is a public loading site available within a reasonable distance." Mr. Goff and the interveners argue that the overarching right to load producer cars was established in King v. Benoit, Territories Law Reports, Vol V, 442 (Sintaluta), a decision of the Supreme Court of the Northwest Territories, and is provided for in the Canada Grain Act (CGA).

[17] Mr. Goff argues further that by focussing on narrow procedural issues, the Agency is disregarding the legislated right of farmers to load producer cars guaranteed under the CGA.

[18] Mr. Goff indicates that the closure of the producer car loading sites will deny farmers the ability to save well over a thousand dollars per rail car and further states that as the railway company continues to delist public producer car loading sites, it will continue to erode the service that farmers receive.

[19] Mr. Goff asserts that if the site in Allan is delisted, it will cut him off from the CWB Churchill Storage Program for grain. Mr. Goff contends that the closure of the Allan site will deny any future opportunity for him to load producer cars intended for the CWB Churchill Storage Program. He also states that he uses the Hanley site out of personal preference while business decisions dictate the use of the Allan site.

[20] In response to CN's assertion that there are other shipping points within a reasonable distance from Allan, Mr. Goff submits that "Our main farm and grain storage site is located between Hanley (twenty km) and Allan (twenty-five km), and Hanley is our preferred location because facilities at hand make the work easier. Saskatoon is seventy-five km over gravel and pavement, plus a drive through the city with a loaded grain truck. Hanley is roughly one hour fifteen minutes roundtrip, Allan one hour thirty minutes roundtrip, and Saskatoon would be well over three hours."

CN

[21] On February 16, 2010, CN sent interrogatories to Mr. Goff, requesting, among other things, information concerning the number of producer cars he had shipped in the past five years from the Allan site, the type of grain that was shipped and the number of cars that were shipped for the CWB Churchill Storage Program. In response to the interrogatories, Mr. Goff indicated that he had ordered three cars to ship select barley from the Allan site since 2005-2006. Mr. Goff adds that closing the producer car loading site in Allan would cut him and other producers off from loading cars for the CWB Churchill Storage Program and that he had not loaded cars for the Churchill Storage Program in the past, but was pointing out the long-term consequence that such an action would have.

[22] CN states, in response to Mr. Goff's response, that select barley is not eligible for the CWB Churchill Storage Program.

[23] CN contends that "Complying with section 151.1 of the CTA cannot constitute any prima facie evidence of a breach of level of service obligations. The burden rests on [Mr. Goff] to convince the Agency of a breach of sections 113 to 115 by providing independent evidence from the fact that a railway company has complied with the process found in section 151.1 of the CTA. Otherwise put, [Mr. Goff] cannot attempt to do indirectly, under the guise of a level of service complaint, what he cannot do directly under section 151.1 of the CTA."

[24] CN argues further that, in keeping with A. L. Patchett & Sons Ltd. V. Pacific Great Eastern Railway Co. [1959] SCR 271 (Patchett), "level [of] service obligations do not require a railway company to provide service to all demand. When low demand exists, maintaining the requested service in place must be assessed against alternatives available to a shipper."

[25] CN argues that "The reasonableness of the level of service obligations statutorily imposed on railway companies cannot be determined on the basis of the personal preferences of [Mr. Goff] to potentially ship from Allan, especially when [Mr. Goff] has never done so for the purpose of the CWB [Churchill Storage] program." CN argues further that "the assessment must be made in light of the alternatives available to the specific service required."

[26] CN contends that "The delisting of Allan does not prevent [Mr. Goff] from participating in the CWB [Churchill Storage] Program." CN argues further that "by delisting the Allan siding, CN is not refusing service to [Mr. Goff who] can continue benefitting from the CWB [Churchill Storage] program by trucking his grain to the nearest station in Saskatoon."

Analysis and findings

[27] Mr. Goff and the interveners have all made reference to "the right to load a producer car." They have referred to the Sintaluta decision as supporting this proposition. They have also referred generally to the CGA as creating this "right", but have not identified which sections of the CGA they believe establish such a right. However, the reference would presumably be to section 87 of the CGA, which is concerned with "Producer Car Loadings" and requires, in subsection 87(2), the CGC to allocate available railway cars to producers of grain, in the order in which the applications are received.

[28] Neither the CGA nor the Sintaluta decision appear to impose a positive duty on railway companies to provide specific sites at which producer cars may be loaded. The Agency finds that both the Sintaluta decision and the provisions of the CGA have to be interpreted in light of the current legislation set out in the CTA and the principles applicable to railway company level of service as enunciated by the Supreme Court of Canada in the Patchett decision.

[29] Sections 113 to 115 of the CTA set out the statutory service obligations of federally-regulated railway companies. Section 116 of the CTA confers upon the Agency the authority to investigate a level of service complaint and requires the Agency to determine whether the railway company is fulfilling any of its level of service obligations. In considering a complaint, the Agency must assess the specific facts presented by a complainant concerning the level of service being provided by a railway company. If a railway company is found not to have fulfilled its level of service obligations, the Agency may order remedies that are relevant to the nature of the breach that has been identified, such as the acquisition of property and "[...] any specified steps, systems or methods be taken or followed by the company."

[30] Subsection 151.1(1) of the CTA requires prescribed railway companies to maintain a list of sidings that it "makes available" in the Western Division where rail cars that are allocated by the CGC under subsection 87(2) of the CGA can be loaded. Subsection 151.1(3) of the CTA describes the process that a railway company must follow to remove a siding from the aforementioned list. A railway company is permitted to remove a siding from the list "only after the expiry of 60 days after the publication of a notice of its intention to do so in a newspaper of general circulation in the area where the siding is located." In effect, the process of "delisting" producer loading sites is that such sites are no longer "made available" by the railway company for allocation of rail cars by CGC for loading by producers of grain.

[31] The Agency finds that while CN may have properly followed the procedure for delisting producer car loading site in accordance with subsection 151.1(3) of the CTA, the fact that it has done so in no manner limits the application of sections 113 to 116 of the CTA. Whether or not the delisting of a specific producer car loading site or sites constitutes a breach of a railway company's level of service obligations will be assessed by the Agency in light of the facts of the case and the impact that the delisting will have on the complainant.

[32] To that end, it is well established that the leading case on the determination of the adequacy of level of service provided by a railway company is Patchett, which stands for the general proposition that the duty of a railway company to fulfil its service obligations is "permeated with reasonableness in all aspects of what is undertaken".

[33] Taking into account Patchett, it is clear that the CTA's level of service provisions do not create an obligation on railway companies to maintain and operate all existing or requested producer car loading sites. To find otherwise would also render meaningless the procedure provided in subsection 151.1(3) of the CTA by which a railway company may delist a siding.

[34] According to section 113 of the CTA, a railway company shall, according to its powers, in respect of railway owned and operated by it, furnish adequate and suitable accommodation for, inter alia, the receiving, loading, carrying, unloading of all traffic offered for carriage "[...] at the point of origin, at the point of junction of the railway with another railway, and at all points of stopping established for that purpose [...]"

[35] In normal course, delisting by a railway company of a producer car loading site, or "point of stopping", will in fact eliminate any service that was enjoyed by a shipper up to the effective date of the delisting, including the shipper's right to have its "[...] traffic taken, carried to and from, and delivered [...]" to such a point. However, in its assessment of a complaint with respect to the delisting, the Agency will take into account the availability of other producer car loading sites and the specific facts related to the complaint, to determine the impact that the delisting will have on the complainant. In its assessment, the Agency will strike a reasonable balance between the interests of the railway company and of the shipper.

[36] In this respect, the evidence indicates that Mr. Goff will continue to have access to the Hanley site which is, according to the evidence, Mr. Goff's preferred loading site. The complaint contained no allegation that CN had not fulfilled its level of service obligations at the Hanley site in any way. Furthermore, the evidence indicates that Mr. Goff has used the producer car loading site at Allan only three times since 2005-2006 and that this use of the Allan site was not intended for the CWB Churchill Storage Program. The Agency notes that future traffic offered by Mr. Goff at the Allan site is not certain and not likely to be in sufficient volume for the Agency to reasonably require CN to maintain service at that location. In its Decision No. 442-R-2008, Trackside Holdings Ltd. vs. CN, the Agency stated:

With respect to traffic "offered for carriage", the term is not defined in the CTA but has been interpreted to mean actual traffic as opposed to potential traffic through various decisions issued by the Agency and its predecessors.

[...]

The Agency finds that while Trackside has offered potential traffic for carriage, it has not provided any specific evidence of actual traffic to be offered for carriage to CN. Actual traffic need not be "immediately available", but it needs to be more than "proposed". At best, the Agency finds that Trackside is providing speculative traffic volumes [...]

[37] Mr. Goff's primary interest in maintaining the Allan site appears to be based on his interest in maintaining convenient access to the CWB Churchill Storage Program, for which shipments from Allan are eligible, but shipments from Hanley are not. The Agency does not view Mr. Goff's eligibility for the Churchill Storage Program to be a key consideration in determining whether CN has fulfilled its level of service obligations to him given that the administration of that program is within the purview of the CWB. Moreover, Mr. Goff will continue to have access to the CWB Churchill Storage Program at Saskatoon. While acknowledging that the producer car loading site at Allan is more convenient for Mr. Goff than the one at Saskatoon, the Agency finds the Saskatoon site to be a reasonable alternative to Allan for this purpose, particularly in light of the limited historical use he has made of the Allan site.

Conclusion

[38] The Agency finds that delisting the producer car loading site at Allan by CN does not constitute a breach of its level of service obligations to Mr. Goff.

The Agency therefore dismisses Mr. Goff's complaint.

Members

• Raymon J. Kaduck
• John Scott

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Canada Transportation Act

Accommodation for traffic

113. (1) A railway company shall, according to its powers, in respect of a railway owned or operated by it,

1. furnish, at the point of origin, at the point of junction of the railway with another railway, and at all points of stopping established for that purpose, adequate and suitable accommodation for the receiving and loading of all traffic offered for carriage on the railway;
2. furnish adequate and suitable accommodation for the carriage, unloading and delivering of the traffic;
3. without delay, and with due care and diligence, receive, carry and deliver the traffic;
4. furnish and use all proper appliances, accommodation and means necessary for receiving, loading, carrying, unloading and delivering the traffic; and
5. furnish any other service incidental to transportation that is customary or usual in connection with the business of a railway company.

Carriage on payment of rates

(2) Traffic must be taken, carried to and from, and delivered at the points referred to in paragraph (1) (a) on the payment of the lawfully payable rate.

Compensation for provision of rolling stock

(3) Where a shipper provides rolling stock for the carriage by the railway company of the shipper's traffic, the company shall, at the request of the shipper, establish specific reasonable compensation to the shipper in a tariff for the provision of the rolling stock.

Confidential contract between company and shipper

(4) A shipper and a railway company may, by means of a confidential contract or other written agreement, agree on the manner in which the obligations under this section are to be fulfilled by the company.

Facilities for traffic

114. (1) A railway company shall, according to its powers, afford to all persons and other companies all adequate and suitable accommodation for receiving, carrying and delivering traffic on and from its railway, for the transfer of traffic between its railway and other railways and for the return of rolling stock.

Through traffic

(2) For the purposes of subsection (1), adequate and suitable accommodation includes reasonable facilities for the receiving, carriage and delivery by the company

1. at the request of any other company, of through traffic and, in the case of goods shipped by carload, of the car with the goods shipped in it, to and from the railway of the other company, at a through rate; and
2. at the request of any person interested in through traffic, of such traffic at through rates.

Connecting railway to reasonable facilities

(3) Every railway company that has or operates a railway forming part of a continuous line of railway with or that intersects any other railway, or that has any terminus, station or wharf near to any terminus, station or wharf of another railway, shall afford all reasonable facilities for delivering to that other railway, or for receiving from or carrying by its railway, all the traffic arriving by that other railway without any unreasonable delay, so that

1. no obstruction is offered to the public desirous of using those railways as a continuous line of communication; and
2. all reasonable accommodation, by means of the railways of those companies, is at all times afforded to the public for that purpose.

Similar facilities for truckers

(4) If a railway company provides facilities for the transportation by rail of motor vehicles or trailers operated by any company under its control for the conveyance of goods for hire or reward,

1. the railway company shall offer to all companies operating motor vehicles or trailers for the conveyance of goods for hire or reward similar facilities at the same rates and on the same terms and conditions as those applicable to the motor vehicles or trailers operated by the company under its control; and
2. the Agency may disallow any rate or tariff that is not in compliance with this subsection and direct the company to substitute a rate or tariff that complies with this subsection.

Adequate and suitable accommodation

115. For the purposes of subsection 113(1) or 114(1), adequate and suitable accommodation includes reasonable facilities

1. for the junction of private sidings or private spurs with a railway owned or operated by a company referred to in that subsection; and
2. for receiving, carrying and delivering traffic on and from private sidings or private spurs and placing cars and moving them on and from those private sidings or private spurs.

Complaint and investigation concerning company's obligations

116. (1) On receipt of a complaint made by any person that a railway company is not fulfilling any of its service obligations, the Agency shall

1. conduct, as expeditiously as possible, an investigation of the complaint that, in its opinion, is warranted; and
2. within one hundred and twenty days after receipt of the complaint, determine whether the company is fulfilling that obligation.

Canada grain act

Application for railway cars

87. (1) One or more producers of grain, not exceeding the number designated by order of the Commission, having grain, in sufficient quantity to fill a railway car, that may be lawfully delivered to a railway company for carriage to a terminal elevator, transfer elevator or process elevator or to a consignee at a destination other than an elevator may apply in writing to the Commission, in prescribed form, for a railway car to receive and carry the grain to the elevator or other consignee.

Allocation of cars

(2) The Commission shall, in each week, allocate to applications made by producers of grain pursuant to subsection (1), in the order in which the applications are received, available railway cars that enter each shipping control area in that week up to such number or percentage of the available cars entering the area in that week and under such terms and conditions as the Commission may order.

R.S., 1985, c. G-10, s. 87; 1994, c. 45, s. 27(F); 1998, c. 22, s. 25(F).