Decision No. 355-R-2016

INTRODUCTION

[1] On February 26, 2016, CP filed an application pursuant to subsection 101(3) of the CTA for authority to construct and maintain six utility crossings of the Belle Plaine Spur, where CP will construct its railway line.

[2] CP will cross the SaskEnergy Incorporated’s (SaskEnergy) pipelines at mileages 0.74, 3.14, 5.97, and 10.21 of the Belle Plaine Spur.

[3] CP will cross the TransGas Limited’s (TransGas) pipelines at mileages 3.28 and 6.39 of the Belle Plaine Spur.

[4] Together SaskEnergy and TransGas are referred to as the Utilities.

[5] The utility crossings are identified on Railway Project Drawing No. 304888-SK-25 rev 1.

BACKGROUND

[6] In Decision No. 118-R-2015, pursuant to subsection 98(2) of the CTA, the Agency authorized the construction of the Belle Plaine Spur to service the K+S Potash Canada GP Legacy Mine north of Belle Plaine, to the Kallium Spur at mileage 0.9, and to CP’s Indian Head Subdivision north of Belle Plaine, Saskatchewan. Part of the Belle Plaine Spur construction involves the crossing of the Utilities’ existing pipelines.

[7] CP and the Utilities have executed an agreement related to the construction of the crossings; however, they have not been able to reach an agreement on the terms of the crossings. Private negotiations between the parties respecting crossing agreements were unsuccessful, as was Agency-led mediation to resolve the dispute. As such, CP applied for an order setting out the terms of the agreements to apply to the crossings.

[8] In accordance with the Memorandum of Understanding (MOU) on coordination of efforts related to utility and private crossings between the Agency and Transport Canada (TC), the Agency provided a copy of the application to TC seeking comments respecting any safety concerns it may have with the proposed crossings as shown on the drawing provided with the application. TC submitted its comments on May 4, 2016.

[9] CP owns, in fee simple, the land at the location of the crossings; however, six easements against the title of the land are held by the Utilities as follows:

• SaskEnergy holds four statute-created unregistered easements pursuant to section 33 of the provincial SaskEnergy Act (SEA), precluding excavation or construction over the utility’s line without consent. These are not registered on title.
• TransGas holds two easements contained in registered documents, which include a term requiring the land owner (CP) to obtain the utility’s consent prior to allowing any excavating, drilling, installing, or erecting of any pit, well, foundation, pavement, building or other structure or installation within the easement. These registrations are binding on the registered owner of the title to the land, and have priority over and are binding on all subsequent persons obtaining an interest in the land.

ISSUES

1. Should the Agency authorize the construction of the utility crossings?
2. If the Agency authorizes the construction of the utility crossings, what terms and conditions, if any, should be included?
   
   1. Should the land interest held by the Utilities at the crossings be “read down”?

THE LAW

[10] Subsection 101(3) of the CTA states:

If a person is unsuccessful in negotiating an agreement or amendment mentioned in subsection (1), the Agency may, on application, authorize the construction of a suitable road crossing, utility crossing or related work, or specifying who shall maintain the crossing.

[11] In this case, the parties have been unsuccessful in negotiating an agreement pursuant to section 101 of the CTA and thus, CP has applied to the Agency for authority to construct and maintain the proposed utility crossings.

ISSUE 1: SHOULD THE AGENCY AUTHORIZE THE CONSTRUCTION OF THE UTILITY CROSSINGS?

CP’s position

[12] CP states that the construction of the Belle Plaine Spur, which includes the crossings, is a federal undertaking and constitutes a work for the general advantage of Canada, being essential for the continued operation and growth of K+S Potash Canada GP’s Legacy Mine. The purpose of the Belle Plaine Spur is to connect the K+S Potash Canada GP’s Legacy Mine to CP’s network, thereby providing access to North American markets, as well as to distant and growing markets in Asia and South America. CP submits that rail transportation is critical for potash producers to reach their markets, which also includes the necessity to access ports.

[13] According to CP, the Agency’s construction approval (Decision No. 118-R-2015) pursuant to section 98 of the CTA implicitly provided for the crossings required to complete the Belle Plaine Spur. CP states that the location of the pipelines and the crossings are not matters in dispute. CP further states that all that remain to be decided are the terms of the crossing agreements, including each parties’ respective rights and obligations in connection with their ongoing operations at the crossings.

The Utilities’ position

[14] The Utilities submit that negotiations commenced in 2014 when CP provided them with a standard form of crossing agreement, utilized by the railway company in circumstances where a utility is the applicant. In response, the Utilities provided an alternate form of agreement. This alternate form of agreement was used as a basis for a temporary crossing agreement, which allowed construction activities to commence as the matter was being heard by the Agency.

[15] The Utilities state that there is no opposition to the crossing itself, and pipeline alteration work needed to accommodate CP is currently in progress.

Transport Canada’s comments

[16] CP’s application did not include plans for the six crossings.

[17] On April 12, 2016, the Agency directed CP to file the missing plans, stating that the Agency requires the plans “in order to address specific issues raised in the application by the parties such as safety, easement/land rights, access, standards relating to crossings under railway and in order to provide Transport Canada with the proper documentation.”

[18] On April 13, CP filed plans with the Agency (April 13 plans). On April 18, 2016, the Utilities filed their response to the April 13 plans.

[19] On April 14, 2016, TC was provided with the April 13 plans and the Utilities’ answer to CP’s application, which had been provided to TC on March 29, 2016. On April 18, 2016, TC was provided with the Utilities’ response to the April 13 plans.

[20] In a letter dated May 4, 2016, TC provided safety-related comments on the proposed crossings, stating that:

Our review is now complete. While we do not have safety concerns at this time, based on the information provided, it should be noted that the utility crossings must conform to:

1. Transport Canada Standards Respecting Pipeline Crossings under Railways;
2. The Canadian Standards Association (CSA) Standard Z662-99 and subsequent revisions;
3. The American Railway Engineering and Maintenance-of-Way Association (AREMA) Manual; and
4. Any other applicable federal regulations, orders or standards applicable to the construction of the utility crossing works, the crossing area or the utility line.

Furthermore, should protective measures to address threats or interferences with safe railway operations be necessary, agreement must be reached between both parties before any work takes place, as specified in section 3.2 of the Standards Respecting Pipeline Crossings under Railways.”

[21] On July 29, 2016, the Agency, in Decision No. LET-R-38-2016, addressing a request from CP having regards to the April 13 plans, concluded that:

[…] TC was in possession of the April 13 plans and the Utility Companies’ answer when it provided its railway safety advice and information related to CP’s application. As such, the Agency is of the opinion that the April 13 plans were sufficient for TC to provide its safety-related comments. Therefore, the Agency finds that the April 13 plans are sufficient for the Agency’s deliberations in this case.

ANALYSIS AND FINDINGS

[22] The Agency notes that the parties are in agreement with both the location and the construction of the crossings. Further, in Decision No. 118-R-2015, the Agency authorized the construction of the Belle Plaine Spur, which necessarily involved the crossing of the Utilities’ pipelines.

[23] The Agency further notes that construction activities have commenced at the crossings. Accordingly, the Agency, pursuant to subsection 101(3), authorizes the construction of six utility crossings located at:

• mileages 0.74, 3.14, 5.97, and 10.21 of the Belle Plaine Spur crossing SaskEnergy’s pipelines; and,
• mileages 3.28 and 6.39 of the Belle Plaine Spur crossing TransGas’s pipelines.

[24] The Agency must next consider whether terms and conditions should be included with the Agency’s authorization.

ISSUE 2: IF THE AGENCY AUTHORIZES THE CONSTRUCTION OF THE UTILITY CROSSINGS, WHAT TERMS AND CONDITIONS, IF ANY, SHOULD BE INCLUDED?

[25] With respect to the terms and conditions of the crossings, the Agency notes that both parties (i.e. the Utilities and CP) presented arguments and evidence regarding issues associated with ground disturbance of land surrounding the location of utility facilities, as well as best practices. The Agency considers these matters to be in relation to safety and therefore within Transport Canada’s purview. As such, the Agency will not consider those issues.

CP’s position

[26] According to CP, it provided a sample form of a utility crossing agreement (sample draft agreement) that appropriately considers the risk associated with rail-on-pipe operations. CP contends that it has not received from the Utilities a “marked up” copy of CP’s proposed agreements identifying what specific changes or additions, including draft language, that would be necessary to address the Utilities’ concerns. CP states that instead, the Utilities provided several pieces of correspondence that broadly identify their concerns and general issues without actually providing specific wording to be included in the agreements.

[27] CP also submits that each utility crossing must be addressed on its own technical merits in light of the unique circumstances that may arise at each crossing location.

[28] CP is of the view that the Utilities wish to put in place as the framework of the agreements, something used by the Canadian Association of Petroleum Producers (CAPP), which CP deems to be inappropriate under the circumstances. CP submits that CAPP informed CP’s counsel that CAPP’s facility crossing agreement is out of date, and the majority of CAPP members utilize their own facility crossing agreements. CP argues that it is a railway company and not a member of CAPP, and that CP’s operations are fundamentally different from the operations of typical CAPP producers and associate members. CP argues that its unique issues and concerns, as an operating railway company and in connection with rail-over-pipe utility crossings, are not considered or addressed in the CAPP facility crossing agreement.

[29] According to CP, if implemented, the CAPP form of facility crossing agreement could prevent CP from accessing its own lands, and so CP could potentially be in violation of its statutory service obligations. Hence, the CAPP form of facility crossing agreement is inappropriate for the crossings in question, or any rail-on-pipe crossings.

The Utilities’ Position

[30] In regard to the “standard” agreement approach to pipeline crossings applied by CP, the Utilities submit that CP’s agreement is arguably effective at protecting CP’s interests, but does a poor job of protecting the interests of pipeline companies. From 1999 to 2015, the Utilities have submitted at least 74 letters of protest to CP objecting to CP’s “standard” crossing agreement and requesting that the parties enter into serious discussions to resolve the matter.

[31] The Utilities argue that the existence and prevalent use of “standard” crossing agreements, both by the railway companies and the Utilities, are firm evidence that every aspect of a crossing is not unique. There are best practices of general application, such as utility line locating, that can and should be agreed upon for all crossings.

[32] The Utilities state that although the pipeline owner obligations in CP’s “standard” utility crossing agreements have been an ongoing irritant, CP’s apparent refusal to accept, as applicable to it, commonly accepted best practices and legal requirements of general application concerning work performed above pipelines has been raised in these proceedings. The Utilities further state that the crossing agreement is more than a document that determines the legal and “real estate” rights of the parties; it is a communication and accountability tool for the application of best practices and safe operational requirements.

[33] The Utilities submit that the temporary crossing agreements that were concluded between the parties to allow for the construction of the railway line were based on “agreement templates” developed by CAPP. The Utilities add that contrary to the one-sided terms and conditions that CP seeks in this application, the terms and conditions in the temporary agreement attempt to address the needs of both parties respecting the crossing area and the delineation of the things that each party may do within the crossing area while protecting the safety of both parties’ facilities.

[34] According to the Utilities, their preference is for mutual indemnities, and they have no objection to any indemnity that treats both parties equally.

Duration

[35] CP requests that the Utilities abandon their pipelines upon the Utilities’ discontinuance of operations of the pipelines in question.

[36] CP submits that once executed, the agreements shall be filed with the Agency pursuant to subsection 101(2) of the CTA. In so doing, the agreements become orders of the Agency and remain valid for so long as they remain orders of the Agency, or until they are replaced by a subsequent order of the Agency.

[37] The Utilities submit that the duration of a utility crossing agreement should be for the life of the facility, for so long as the parties require the crossing in order to serve their customers. Should any party require a change, that party must negotiate that change with the other party. The Utilities further submit that this is consistent with the Agency precedent that “A decision issued by the Agency authorizing the construction of a utility crossing at a specific location remains in effect until such time as the decision is amended or rescinded by the Agency or it successor.”

[38] In its reply, CP submits that the Utilities have accepted these terms and asks the Agency to make an order confirming that this issue is no longer in contention.

[39] As concluded in numerous precedents, the Agency is of the opinion that a decision issued by the Agency authorizing the construction of a utility crossing at a specific location remains in effect until such time as the decision is amended or rescinded by the Agency or its successor. As such, the Agency will not impose any terms and conditions respecting the duration of the utility crossing agreements.

Liability/Indemnity

[40] CP proposes that the agreements include a mutual indemnity provision.

[41] The Utilities are of the view that historical agreements and CP’s sample draft agreement contain one-sided liability and indemnity provisions in favour of CP, and submit that these provisions are inconsistent with current Agency precedents. Changes are proposed to clauses 9(b) and (c) of the sample draft agreement.

[42] CP states, in its reply, that it accepts the Utilities’ proposed changes to clauses 9(b) and (c) of the sample draft agreement. CP asks the Agency to make an order confirming the same.

[43] The Agency therefore finds it appropriate to impose the following provision on indemnity:

Indemnity

(a) The Railway shall save, indemnify, defend and hold harmless the Utility, its officers, directors, employees and invitees from and against all claims, losses, damages, costs (including legal costs on a solicitor-client basis) expenses and liabilities in respect of:

(i) bodily injury, including death of any personnel of the Utility working in the crossing area;

(ii) loss of or damage to property of the Utility whether owned, hired, or leased; where such liability arises from the railway company’s: (A) use of the crossing area; (B) gross negligence or willful misconduct in connection with the performance of any work on or affecting the crossing area; (C) release of a hazardous substance in the crossing area; or (D) a material breach of the railway company’s obligations under this Decision which is not cured within 30 days of notice regarding such material breach.

(b) The Utility shall save, indemnify, defend and hold harmless the railway company, its officers, directors, employees and invitees from and against all claims, losses, damages, costs (including legal costs on a solicitor-client basis) expenses and liabilities in respect of:

(i) bodily injury, including death of any railway company personnel working in the crossing area;

(ii) loss of or damage to railway company’s property whether owned, hired or leased; where such liability arises from the Utility’s: (A) use of the crossing area; (B), gross negligence or willful misconduct in connection with the performance of any work on or affecting the crossing area; (C) release of a hazardous substance in the crossing area; or (D) a material breach of the Utility obligations under this Decision which is not cured within 30 days of notice regarding such material breach.

Consequential Loss

[44] Notwithstanding anything to the contrary contained in this Decision, neither party shall be liable to the other, or anyone claiming through or under them, whether by way of indemnification, breach of contract, tort or equity for special, punitive, indirect, economic or consequential loss or damage, or any loss of revenue, loss of profit or loss of anticipated profit.

Insurance

[45] CP proposes the insurance provisions found in clause 11 of the sample draft agreement.

[46] The Utilities argue that CP proposes more onerous terms in regards to insurance than the obligations that it assumes. They add that if CP is permitted to self-insure, so should the Utilities.

[47] With respect to self-insurance, CP submits that the proposed insurance terms contained in the sample draft agreement do not prevent the Utilities from self-insuring. CP also asks the Agency to make an order confirming same.

[48] In light of the evidence presented, the Agency is of the opinion that there is no need to set terms in relation to insurance.

Assignment of Railway Crossing Obligations

[49] In its application, CP submits that it anticipates that the Utilities will suggest that an assignment provision be included in the agreements. CP is not prepared to include such a provision.

[50] The Utilities state that most of CP’s standard utility agreements contain terms that effectively allowed CP to assign, as of right, its agreements to other railway companies or others. In the past, the Utilities have had issues when crossing agreements are assigned from a federally regulated railway company to a provincially regulated shortline.

[51] The Utilities state that CP’s latest proposal contained in the sample draft agreement addresses this issue by prohibiting assignment without consent of the other party, as found in clause 17. The Utilities, however, request the Agency to condition its order such that it will expire upon transfer of the line to a provincially regulated railway company or when the line is discontinued.

[52] According to CP, the Utilities have accepted the terms that CP proposed in clause 17. As such, CP considers that this issue is no longer in contention and asks the Agency to make an order confirming the same.

[53] Although the parties are requesting that the Agency address this issue, the Agency is of the opinion that once a railway line is discontinued or transferred pursuant to the Part III, Division V process of the CTA, as a discontinued railway line or as a line transferred to a provincial railway company, the line is no longer covered by the CTA, and the parties will have to abide by other applicable laws.

[54] Accordingly, the Agency will not impose terms with respect to assignment of railway crossing obligations.

Construction and Future Costs

[55] In its application, CP submits that the Utilities will question the use of the “Guide to Railway Charges for Crossings Maintenance and Construction”.

[56] The Utilities state that the cost of constructing the crossings is already addressed in the previous agreements.

[57] The Utilities argue that future costs can be allocated to the party requiring the work. In response to CP’s clause 5 of the sample draft agreement, the Utilities are of the view that this clause should be mutual and reciprocal.

[58] In its reply, CP accepts the Utilities’ suggestion that future costs be allocated to the party requiring the work, and revised the wording of the clause. The issue is no longer in contention.

[59] Considering that the parties agree that for instances where work is required by CP, the costs will be borne by CP and where work is required by the Utilities, the costs will be borne by the Utilities, the Agency finds that this cost allocation is reasonable and adopts it as part of this Decision.

[60] In the event of a disagreement between the parties with regard to apportionment of costs, either party may file an application with the Agency pursuant to subsection 101(4) of the CTA.

Removal/Alteration/Ordered Changes

[61] In its application, CP anticipates that the Utilities will request that they be given a reasonable and first opportunity to perform any necessary repairs or maintenance on their pipelines. CP is in agreement with such requests. However, CP submits that should the Utilities fail to maintain their pipelines, CP, as the land owner and operator of a railway overtop of such pipelines, requires the ability to have the work performed at the Utilities’ costs.

[62] In regard to ordered changes, the Utilities submit that clause 12 of the sample draft agreement provides that the Utilities shall be responsible, at their own expense, to perform work to alter the crossings ordered by the Agency, TC, or other authority having jurisdiction. The Utilities argue that work required for the operation of the railway should be paid for by CP, and work required for the operation of the pipeline should be paid for by the Utilities.

[63] According to CP, in their answer, the Utilities have not clarified their specific concerns with regard to the ordered changes and as such, section 12 of the sample draft agreement is no longer in contention between the parties in respect of the crossings. CP asks the Agency to make an order confirming same.

[64] Notwithstanding the parties’ arguments in respect of repair obligations and ordered changes, the Agency has consistently held that a decision of the Agency authorizing the construction of a utility crossing is final and binding on the parties.

[65] The Agency, therefore, does not need to depart from this position. Furthermore, in the event of a disagreement between the parties with regard to apportionment of costs, either party may file an application with the Agency pursuant to subsection 101(4) of the CTA or section 16 of the Railway Safety Act, R.S.C., 1985, c.32 (4^th Supp.) [RSA].

[66] Consequently, the Agency will not impose terms with regard to removal/alteration/ordered changes.

Routine Access

[67] CP addresses safety at railway crossings in many ways, including limiting access to the site. For routine access, CP finds it reasonable to require the Utilities to provide 5 business days’ notice prior to accessing the crossing areas to perform routine maintenance on the pipelines. CP understands that the Utilities’ maintenance of the pipelines at the crossings is infrequent and scheduled well in advance.

[68] According to CP, it is willing to work with the Utilities regarding access. CP refers to clause 3 of the sample draft agreement.

[69] The Utilities submit that they should be provided access to the surface or subsurface of the crossing area to maintain, inspect, or repair their pipeline on reasonable notice to CP, and accordingly, that CP may impose reasonable conditions to safety in respect to this access.

[70] The Utilities require that CP request and obtain line locates, as well as consent from the Utilities before performing any work on or under the crossing area.

[71] CP states in its reply that the Utilities have not specifically objected to clause 3 of the sample draft agreement, and that CP does not believe that this issue is contentious. CP also asks the Agency to make an order confirming the same.

[72] The Agency notes that the Utilities do not specifically address the issue of routine access to the crossings. In the past, the Agency has held that it is reasonable for either party to have prior notice of any work to be performed by the other party that may affect the integrity or safety of its facility and operation. It appears that the parties are not disagreeing on the issue of access for routine maintenance. While CP refers to a notice period of 5 business days, the Utilities indicate “reasonable notice”, thus, the Agency considers that a five-day notice would not be excessive.

[73] The Agency therefore deems it appropriate to adopt the wording of clause 3 of the sample draft agreement as part of this Decision. Clause 3 states:

(a) Access to the Crossing Area by the Utility, its employees, agents, representatives or contractors shall be subject to the following:

(i) in the event the Utility requires access to the surface or subsurface of the Crossing Area to maintain or repair its Pipeline, such access shall be coordinated with the Railway in accordance with the Railway’s access protocols which can be initiated by contacting the Railway’s operations centre at 1-800-795-7851;

(ii) the Utility shall provide the Railway with not less than five (5) business days’ notice prior to any request to access the surface or subsurface of the Crossing Area;

(iii) the Utility’s access to the Crossing Area may be subject to the supervision of a representative of the Railway, whose instructions shall be strictly followed at all times;

(iv) the Utility shall only seek access to the Crossing Area at such times as may be necessary for the purpose of the maintenance, inspection, repair or removal of its Pipeline;

(v) all employees, agents, representatives or contractors of the Utility entering the Crossing Area shall assume all risks of, and the Railway shall not be liable for, any injury (including injury resulting in death) loss, damage or expense to such person or his property while on the Crossing Area or lands of the Railway, and the Utility shall indemnify and save harmless the Railway against all claims and demands arising or resulting from any injury (including injury resulting in death) loss, damage or expense in connection therewith; and

(vi) access shall be subject to and in conformity with any rules or regulations now or hereafter in force governing the Utility, the Railway, the railway lands, or the operation of railways.

[74] In this case, the Agency further considers appropriate to add a corresponding obligation on CP. As such, the Agency directs CP that in the event that CP requires access to the surface or subsurface crossing area, such access will be coordinated with the Utility by contacting the Utility in advance.

Emergency Access

[75] CP refers to clause 6 of the sample draft agreement: “In the event the Utility requires emergency access to the surface or subsurface of the Crossing Area, the Utility shall first contact the CP Police […] to arrange for emergency access.”

[76] The Utilities state that CP’s proposal for emergency access by the Utilities is acceptable; however, CP’s sample draft agreement does not provide for the reciprocal obligation on CP to arrange emergency access to the crossing in the event that it should have an emergency.

[77] According to CP, it is obligated to comply with the legislative and regulatory safety framework to ensure safe operations along its railway. CP publishes and complies with its Community Emergency Response Guide, which, among other things, addresses pipeline notification obligations in the event of a railway emergency. CP also adds that clauses 6 and 8 of the draft crossing agreement contain relevant obligations on CP in respect of its emergency response.

[78] The Agency is of the opinion that emergency access, like routine access, should have corresponding obligations on both parties. As such, the Agency adopts the wording of clause 6 of the draft crossing agreement in this Decision with the addition of a reciprocal obligation.

[79] The Emergency access terms provide that:

In the event the Utility requires emergency access to the surface or subsurface of the Crossing Area, the Utility shall first contact the CP Police at 1-800-716-9132 (or such other contact number the Railway may publish from time to time) to arrange for emergency access.

In the event that CP requires emergency access to the surface or subsurface of the Crossing Area, CP shall first contact the Utility at such contact number the Utility may publish from time to time to arrange for emergency access.

Repair Obligation

[80] In clause 7 of the sample draft agreement, CP provides that if at any time during the term of the Agreement, the Utility neglects to do any work of repair, maintenance or alteration, which in the opinion of the Railway, and in accordance with applicable laws, is necessary to ensure the safe and continued operation of the Pipeline, the Railway may seek any order or remedy which may be available at law; provided however, the Utility shall be afforded a first and reasonable opportunity to remedy any outstanding repair, maintenance or alteration work.

[81] According to the Utilities, clause 7 of the sample draft agreement provides only for the unilateral right of CP.

[82] In its reply, CP states that the Utilities have not clarified what their specific concern is in respect of this clause of the sample draft agreement. As such, CP submits that clause 7 is no longer in contention between the parties in respect to the crossings and asks the Agency to make an order confirming the same.

[83] The Agency notes that the repair obligation clause proposed by CP addresses neglected repairs solely from the perspective of CP without similar consideration of the Utilities’. However, the Agency is of the opinion that instances of repair obligation should be assessed on a case by case basis and that no specific clause regarding repair obligation should be ordered.

[84] As such, the Agency will not impose terms with regard to repair obligations.

Abandonment

[85] With respect to abandonment, CP’s sample draft agreement provides that upon the Utilities’ abandonment of their respective pipelines, the Utilities must address, to CP’s satisfaction, any potential issue connected to the settlement and restoration of CP’s property to its original state and condition.

[86] The Utilities are of the view that such a clause should be reciprocal.

[87] CP submits that any abandonment of its Belle Plaine Spur would be in accordance with applicable legislation. CP adds that the abandonment provisions contained in clause 14 of the sample draft agreement are consistent with the Utilities’ underlying easements, rights of way, and statutory easements.

[88] The Agency no longer has jurisdiction over a railway line once its operation has been discontinued pursuant to Part III, Division V of the CTA. The loss of jurisdiction extends to the removal, maintenance, restoration, disposition, or reconstruction of all assets associated with the abandoned line. Accordingly, any decisions of the Agency or its predecessors, which rely on a continuing jurisdiction, cease to have effect.

[89] Moreover, parties are to abide by the applicable governing laws and/or contract obligations when abandoning their assets.

[90] Therefore, the Agency finds it appropriate not to order terms in relation to the abandonment clause.

Environmental

[91] CP’s sample draft agreement sets out the procedure that the Utilities must follow in instances of environmental emergencies, specifically the Emergency Response Plan.

[92] In this regard, the Utilities state “Environmental obligations consistent with reciprocal allocations of liability which CP’s proposal does not accomplish.”

[93] In its reply, CP submits that the Utilities have not clarified their specific concern in relation to clause 8 of the sample draft agreement. CP also submits that the revised liability and indemnity provisions specifically address the release of a hazardous substance and the allocation of liability. CP states that clause 8 is no longer in contention between the parties and asks the Agency to make an order confirming the same.

[94] The Agency affirms CP’s statement that the revised liability and indemnity provisions encompass the release of a hazardous substance. The Agency, having imposed provisions on indemnity as outlined above, consequently finds that there is no need to impose specific terms.

Electrical induction

[95] CP’s proposed sample draft agreement contains a clause whereby in instances of electrical interference with the railway company’s equipment connected to the pipeline facilities, the Utilities shall participate in a joint electrical coordination study to implement technically viable and commercially reasonable measures to eliminate the interference. The Utilities shall be solely responsible for the implementation and the cost of such measures.

[96] The Utilities are of the view that the manner in which “Electrical interference” is addressed needs to be reciprocal, as such issues can arise with either party.

[97] CP submits that the terms of clause 16 of the sample draft agreement are sufficient and asks the Agency to make an order confirming same.

[98] In its May 4, 2016 letter, TC provided the following comment: …should protective measures to address threats or interference with safe railway operations be necessary, agreement must be reached between both parties before any work takes place, as specified in section 3.2 of the Standards Respecting Pipelines Crossings under Railways.”

[99] In light of TC’s comments, the Agency is of the opinion that should an issue of electrical interference arise, the parties have to reach an agreement on protective measures. In case of a disagreement, the parties can refer the matter to Transport Canada.

[100] With respect to the cost of the measures and related implementation, the Agency considers these costs comparable to costs incurred by the parties in maintaining and operating their infrastructure. Therefore, the Agency finds that future costs of the measures and their related implementation should be allocated to the party requiring the work.

ISSUE 2 A. SHOULD THE LAND INTEREST HELD BY THE UTILITIES AT THE CROSSINGS BE “READ DOWN”?

CP’s position

[101] CP explains that an easement granted by a landowner allows to a utility the right to access the surface of the land, including broad rights to perform work thereon. However, in Saskatchewan, provincial easements are granted pursuant to the Saskatchewan Land Titles Act (LTA), a provincial legislation. CP states that pursuant to the doctrine of federal paramountcy and interjurisdictional immunity, the Saskatchewan LTA is inapplicable to CP’s crossings. Firstly, the legislation conflicts with federal legislation (RSA) with respect to ensuring the safety and operational integrity of the railway, hence the federal legislation would be overriding, or, in other words, federal paramountcy applies. Secondly, the provincial legislation impairs the core federal undertaking, namely the safety and operational risk of the railway. CP further states that again, this engages the concept of federal paramountcy.

The Utilities’ position

[102] According to the Utilities, the proper location of pipeline infrastructure, supervision of work near pipelines, and the use of proper excavation techniques designed to minimize the risk of inadvertent damage to the facilities have been enshrined in the SEA and the Pipelines Act, 1998 (Saskatchewan) (PLA), and in the registered and statutory easements that the Utilities have over the crossing areas.

[103] The Utilities submit that the PLA governs ground disturbance, among other things, while the SEA deals with, among other things, Emergency Right of Access.

[104] The Utilities also submit that an independent requirement for consent exists within the land rights held by them. The land acquired by CP for its rail corridor at the location of the six crossings is subject to the interests in land in favour of SaskEnergy and TransGas which pre‑dates CP’s acquisition.

[105] The Utilities refer to the Standards Respecting Pipeline Crossings under Railways (TC E-10). These standards were developed by the Railway Association of Canada and approved by TC for use by its members under the RSA. Once approved, these standards had the same force and effect as if they were a regulation made by Transport Canada. TC E-10 includes Appendix “A” which, among other provisions, provides the following statement: “Where laws or orders of public authority prescribe a higher degree of protection than specified herein, then the higher degree of protection so prescribed shall be deemed as part of this Standard.” The Utilities state that “the laws of Saskatchewan described herein constitute a higher degree of protection than specified in TC E-10 and that they should be deemed a part of it.”

[106] To the Utilities, CP’s sample draft agreement makes it clear that CP is only prepared to concede that new facilities in the crossing area or material alterations of its Belle Plaine Spur shall comply with applicable laws but, at the same time, CP argues that the laws of Saskatchewan governing what a landowner may do over a pipeline and the Utilities’ easements do not apply.

[107] The Utilities submit that the doctrines of federal paramountcy and of interjurisdictional immunity have no application to this case and that consequently, they cannot properly be invoked by CP to invalidate the Utilities’ easements. According to the Utilities, the easement rights granted by the LTA, 2000 and the rights granted federally pursuant to the RSA can, and do, co‑exist with respect to crossings.

[108] In support of its argument, the Utilities refer to A. Demers, Laprairie v. Grand Trunk Railway Co., (1920), 31 C.R.C. 297, on page 299 (Demers), as cited by the Agency in Decision Nos. 85‑R-2016 and 76-R-2016, that railway companies, as proprietors of land, have been found to be bound to suffer all easements arising from the nature of things and the laying of the land such as arise from drainage, new road crossings, pipes for water or sewage, electrical installations etc.

[109] The Utilities argue that CP has not provided evidence that there is a conflict between the provisions of the LTA, 2000 and those of the RSA. Proof of any conflict, to have a constitutional effect, must be substantiated and CP has not done so.

[110] The Utilities state that while the RSA’s core may pertain to railway safety and security, the establishment of provincial easement rights is in no way part of the core federal responsibility. The LTA, 2000 is a provincial law of general application. The granting of provincial easement rights is not an integral part of jurisdiction over railways, nor have they ever been.

[111] In the Utilities’ view, the easements that they hold pursuant to the LTA, 2000 do not interfere with CP’s ability to build its railway, nor can they be said to interfere with Parliament’s exclusive jurisdiction over railway safety and security. The LTA, 2000 and the RSA can and do co-exist without issue.

[112] In respect of the applicability of the interjurisdictional immunity, the Utilities submit that CP has not provided proof to substantiate its invocation of the doctrine of interjurisdictional immunity. The Utilities argue that even if CP had attempted to set a proper case, it would necessarily fall short of the requisite criteria for the application of the interjurisdictional immunity doctrine.

[113] According to the Utilities, the Agency has no jurisdiction under the CTA to extinguish an interest in land duly created by the Province of Saskatchewan under its constitutional authority over property and civil rights.

[114] With regards to the federal paramountcy doctrine, the Utilities submit that the doctrine is only relevant where there is conflicting federal and provincial legislation. The doctrine dictates that where there is an inconsistency between validly enacted, but overlapping, provincial and federal legislation, the provincial legislation is inoperative to the extent of the inconsistency.

[115] The Utilities state that CP has submitted no evidence to establish that a federal purpose regarding railway safety and security is frustrated by the LTA, 2000. CP has not set out a proper case to support its allegation of federal paramountcy and has not properly demonstrated the incompatibility of the LTA, 2000 with the purpose of the RSA. The Utilities submit that the LTA, 2000 cannot be found to be constitutionally inoperative under the doctrine of federal paramountcy, having regard to the RSA and its regulations.

CP’s reply

[116] In its reply, CP notes that it does not refuse to acknowledge or adhere to any essential and/or accepted safety practices. CP will adhere to the safety practices set out by the Parliament of Canada, which are in effect throughout Canada at thousands of crossings, including the six crossings to this application. Parliament’s safety regime has created a wholly satisfactory state of affairs, with railway-utility crossings such as the crossings to this application, operating safely and effectively throughout the country. CP cannot accept the utilities’ overreaching demands, which are not grounded in the legislative and regulatory framework governing the intersection of railways and pipelines in Canada.

[117] CP refers to the RSA, particularly the objectives set out at section 3. CP also refers to the Agency and TC as having the exclusive jurisdiction to ensure safe and efficient railway operations, in particular to subsection 101(3) and 101(4) of the CTA.

[118] CP further refers to section 26.1 of the RSA that provides that no person shall, without lawful excuse, enter on land on which a line work is situated. CP highlights that TC E-10 exists to address the specific circumstances of a railway and pipeline crossing.

[119] In light of the CTA, RSA, and associated regulations and standards governing railway-utility crossings, CP submits that certain provincial legislation conflict with this federal legislative framework, as well as CP’s core federal undertaking. CP further submits that contrary to the Utilities’ submission that provincial enactments grant the Utilities certain access and consent entitlements at the six crossings, this cannot be so. These provincial enactments conflict with and infringe upon the federal framework and CP’s core federal undertaking and therefore, based on the doctrines of paramountcy and interjurisdictional immunity, these provincial entitlements must be “read down”.

[120] However, CP recognizes the need for communication between the parties with respect to the six crossings, and therefore, it is prepared to accept terms and conditions that guarantee communication between the parties without impairing CP’s ability to perform its operations.

[121] CP identifies the operation and maintenance of railways for the transportation of goods that is for the general advantage of Canada as its core federal undertaking. Section 95 of the CTA further facilitates CP’s core federal undertaking by empowering a railway company to do things necessary for the construction or operation of the railway.

[122] In CP’s view, the constitutional doctrines of interjurisdictional immunity and paramountcy apply in this situation so as to “read down” the provincial enactment cited by the Utilities.

[123] CP states that the provincial enactments create entitlements/obligations that fall into two broad categories: access and consent. By access, the Utilities are entitled to enter the crossing without any notice to the railway company (arising from subsection 18(1)(b) of the LTA and 33(2) of the SEA). By consent, the Utilities decide when and whether a railway company can perform any construction or excavation work on the crossing (arising from section 20 of the PLA and subsection 33(5) of the SEA). Each of these provincial entitlements conflicts with the federal framework or impairs the core federal undertaking and therefore must be deemed inapplicable and/or inoperable.

[124] CP argues that the Utilities’ right to access their pipelines conflicts with section 26 of the RSA and section 3.2 of TC E-10, and indirectly impairs the core function of CP’s federal undertaking. Subsection 18(1)(b) of the LTA and subsection 33(2) of the SEA grant an unfettered access right to the Utilities to their pipelines at the crossings in order to perform repairs and maintenance.

[125] CP states that an unfettered right to access, that is without notice or consent from CP, directly conflicts with CP’s ability to operate its railway, and also abide by its legislative duty to operate its railway in a safe manner. CP adds that it is plain to see that someone or something entering into the right of way without CP’s knowledge gives rise to dangerous circumstances.

[126] Furthermore, CP states that this access right also comes in direct conflict with section 26.1 of the RSA, and infringes on section 3.2 of TC E-10, which mandates that “no person shall commence the repair, maintenance or removal of any pipe under a railway without obtaining a written approval from the railway company that owns, operates, or has control of a railway.”

[127] With regard to the consent requirement, CP submits that pursuant to subsection 20(3) of the PLA and subsection 33(5) of the SEA, the railway company must obtain consent from the Utilities to undertake any work at the crossing that involves ground disturbance or excavation/construction on the right of way. According to CP, this consent requirement impairs CP’s ability to perform its core undertaking of operating its trains in the delivery of goods. The interjurisdictional immunity doctrine applies to render the PLA and subsection 33(5) of the SEA inoperable.

[128] CP argues that these provisions conflict with CP’s legislative right under subsection 95(1) of the CTA, which allows a railway company to exercise any powers for the purpose of constructing embankments, drains, fences across or along a railway; making drains through or under land adjoining a railway; diverting a gas pipe along the railway; or doing anything else necessary for the operation of the railway. CP adds that requiring it to obtain consent from the Utilities presents an obstacle to CP in the performance of its powers under section 95(1) of the CTA. CP cannot freely exercise its section 95 powers while at the same time being required to defer to the Utilities’ consent.

[129] CP submits that the consent requirement also impairs CP’s core federal undertaking by causing a barrier to CP’s operations and to running trains on its railway line. By requiring the Utilities’ consent, a situation is created whereby the Utilities have the power to prevent construction, maintenance, and/or related excavation necessary for the operation and running of CP’s trains.

[130] According to CP, this consent requirement bears directly on the federal subjects of the railway company by imposing additional regulatory requirements not contemplated by Parliament.

[131] However, CP submits that it understands and acknowledges the Utilities’ need to access their facilities and the need to ensure that any excavation work performed overtop of, or in proximity to, the Utilities’ pipelines occurs in a safe and prudent manner.

Analysis and findings

[132] The Agency notes that, as indicated by the Utilities, there are approximately 787 active CP utility crossings over the Utilities’ pipelines in Saskatchewan.

[133] The Agency further notes the parties’ arguments with regard to the compatibility (or lack thereof) of the different legislative and regulatory requirements. The Agency acknowledges that the regimes governing the Utilities as well as CP’s undertaking may not be, in all aspects, necessarily compatible. However, the issue is whether they can co-exist at crossings.

[134] The Agency is of the opinion that for reasons of safety to both parties’ infrastructure, access to the crossing area is essential. Lack of access, impaired access, or even access under too restrictive conditions may cause serious consequences to both parties.

[135] As such, the Agency refers to Demers, wherein it is stated that:

In going through the territory of any village, town or city railways should not be an obstacle to the expansion of the residential districts on either side of the track, because such an expansion is to everybody’s advantage, railway companies included. The crossing over and under railway tracks of wires and pipes needed for the ever-increasing forward movement, should be facilitated as far as possible.

It is true that the railway companies are the owners of their right of way; but if they have certain rights as proprietors, there are also certain duties incumbent upon them as such. For instance, they are bound to suffer all easements arising from the nature of things and the laying of the land such as arise from drainage, new road crossings, pipes for water or sewage, electrical installations, etc.

[136] While the Agency assesses each case on its own merits and on a case by case basis, the current instance is comparable to the Agency’s finding in Decision No. 85-R-2016 that addresses an issue of “Routine and Emergency Maintenance Access”. In that case, the Agency found that, as the proponent of the crossing construction, CP recognized that the responsibility of both parties to co-exist at the crossing, and CP’s proposal with regard to ensuring access for emergency work, were reasonable.

[137] Further, the Agency notes that in the evidence provided, CP acknowledged the fact that the parties can co-exist at the crossings by allowing reciprocal obligations to the Utilities to form part of the sample draft agreement. The fact that CP revised its indemnity/liability clause in the sample draft agreement is a good example of parties co-existing at crossings.

[138] The Agency also notes that both parties are of the view that communication between the parties is essential for the parties to access their infrastructure and ensure that any work performed at the crossings occurs in a safe and prudent manner.

[139] In light of the above, and consistent with the principle used in Demers, the Agency concludes that parties have to co-exist at crossings.

[140] Despite both parties having concurrent legislation and regulations in place, the Agency finds it reasonable to consider that the federal legislation (RSA and TC E-10) and the provincial legislation (TLA, SEA and PLA) can co-exist at the crossings.

[141] Based on the evidence and legal precedent, the Agency contends that the fact the parties can co‑exist at the crossings amounts to a compatibility between the legislation and regulations currently in place. On the one hand, the Agency is of the opinion that even though the provincial legislation provides the Utilities with the right to access, and an ability to maintain their pipelines, the provincial legislation also acknowledges that CP has to be given notice before the Utilities can do so. On the other hand, the Agency concludes that despite CP having more powers with regards to accessing the crossings, there is no obligation on CP to enforce these powers. Accordingly, the Utilities still have a valid access right under certain circumstances, such as for maintenance activities or emergency access. The Agency therefore finds that both parties are maintaining their rights.

[142] As such, the Agency will not need to address the doctrines of interjurisdictional immunity and federal paramountcy.

[143] Further, as the Agency has already found that parties can co-exist at the crossings, the Agency finds that there is no need to read down the land interests held by SaksEnergy and TransGas at the crossings.

OTHER MATTERS

[144] In addition to the issues concerning the Agency’s authorization of the crossings that are the subject of this application, the Utilities request that the Agency address certain “forward looking issues of public interest and public safety”. Specifically, the Utilities request the Agency to:

1. Address the lack of protection of pipeline companies’ interest in the “standard” agreement approach to pipeline crossings applied to CP;
2. Exercise its power under section 101 of the CTA to impose conditions on the Agency’s order which protect the Utilities’ interests to the same degree as CP’s;
3. Require CP to follow safety accepted practices when carrying out work on its right of way near the pipelines within the crossing area;
4. Resolve CP’s one-sided approach to pipeline crossing administration by making findings in principle that will assist the parties in achieving a standardized approach that balances the interests of both parties;
5. Provide definitions of the terms “crossing areas” and “ground disturbance” for the purpose of the order; and,
6. Encourage the parties to negotiate based on principles set out in the Agency’s ruling establishing a model (advisory) agreement, with a view to achieving a master agreement or template agreement on terms and conditions that are common and necessary for utility crossings.

[145] With respect to the Utilities’ requests identified in a), b), d), and f), the Agency encourages the parties to negotiate their own crossing agreements.

[146] As stated above, when seized with a matter, the Agency considers each application on its own merits and on a case by case basis.

[147] To support this argument, in Decision No. 65-R-2008, the Agency concluded that “A case will be hypothetical in nature if it raises merely possible or abstract questions coupled with hopes and expectations which render it impossible to make a determination with regard to them.”

[148] For the current requests, no specific facts and circumstances are provided having regard to the Utilities’ interests.

[149] Further, in Decision No. 56-R-1994, the Agency stated the following:

However, it is the opinion of the Agency that the Agency may not go beyond a specific order to approve the proposed Master Agreement to serve as an Agency sanctioned standard form agreement to be used by Bell Canada for all crossings of the rights-of-way of railway companies within the jurisdiction of the Agency. This would not be a proper exercise of the Agency’s quasi‑judicial powers. The request by Bell Canada is therefore denied.

[150] That is, the Agency does not have jurisdiction to determine terms and conditions without the particulars of a case.

[151] In light of the above, the Agency reiterates that the parties are encouraged to negotiate their own agreements. If the parties are unsuccessful in negotiating an agreement or an amendment to an agreement, the parties may come to the Agency for an authorization for the construction of a suitable road crossing, utility crossing or related work or that would specify who shall maintain the crossing.

[152] With respect to the Utilities’ request as identified in c), the National Transportation Policy requires the Agency to consider public interest and public safety, that said, the Agency considers the wording of section 101(3) to not include such a consideration; the requirement is for the Agency to authorize a suitable crossing, that is a crossing for the purposes for which it is intended.

[153] With regard to request e), the Agency does not have powers to define those terms. The Agency’s jurisdiction in relation to utility crossings is limited to sections 100 and 101 of the CTA. The Agency is of the opinion that the definitions sought by the Utilities are technical in nature, and the Agency does not have the technical expertise required to provide such definitions.

[154] In light of the reasons provided above, the Agency dismisses all of the Utilities’ requests identified in this section.

CONCLUSION

[155] Based on the foregoing, the Agency, pursuant to subsection 101(3) of the CTA, authorizes the construction and maintenance of the six utility crossings:

• located at mileages 0.74, 3.14, 5.97, and 10.21 of the CP Belle Plaine Spur crossing SaskEnergy Incorporated’s pipelines; and,

• located at mileages 3.28 and 6.39 of the CP Belle Plaine Spur crossing TransGas Limited’s pipelines.

[156] The crossings will be as shown in the engineering drawings submitted with the application. Such authorization does not relieve CP from meeting the requirements of the RSA and other relevant standards.

[157] With respect to costs, liability/indemnity, construction and future costs, routine access, emergency access and electrical induction, the parties must comply with the terms as described in the relevant sections above.