Decision No. 371-R-2011

Application

[1] The Canadian National Railway Company (CN) filed an application with the Canadian Transportation Agency (Agency) for approval of the proposed construction of a new railway line, originating at mileage 204.49 of the Watrous Subdivision, in the rural municipality of Vanscoy, in the province of Saskatchewan, as shown on Drawing No. 01-CT0001 dated May 6, 2011 (Drawing).

Environmental assessment

[2] The application included an environmental assessment of the project prepared in accordance with the requirements of the Canadian Environmental Assessment Act, S.C., 1992, c. 37 (CEAA). Pursuant to paragraph 5(1)(d) of the CEAA, an environmental assessment of the project is required before the Agency can exercise its discretion under section 98 of the Canada Transportation Act (CTA). As part of its responsibility under the CEAA, the Agency, along with any other responsible authorities, must ensure that an environmental screening is conducted prior to making any irrevocable decision on the project.

[3] In Decision No. LET-R-99-2011, the Agency determined, pursuant to paragraph 20(1)(a) of the CEAA, that the proposed railway line is not likely to cause significant adverse environmental effects taking into account the implementation of the mitigation measures proposed by CN and accepted by the Agency. Further, the Agency advised CN that should it approve the construction project under section 98 of the CTA, conditions pertaining to the environmental assessment determination made in Decision No. LET-R-99-2011 would be included in the Agency’s approval under the CTA.

[4] For the purpose of its application under subsection 98(2) of the CTA and the environmental assessment under the CEAA, CN published a notice in The StarPhoenix on May 12, 2011 and in l’Eau vive on May 19, 2011. Interveners were provided with 30 days to file any comments they may have in respect of CN’s application. No comments were received.

Aboriginal consultation

[5] On March 7, 2011, CN sent a letter and a copy of the Project Description to the Chief and Council of the Whitecap Dakota First Nation for their review and comments. CN advised that no comments were received.

[6] The Agency has considered the record and is satisfied that CN’s consultation with the aboriginal group has been adequate.

Legislative Reference

[7] Section 98 of the CTA states:

1. A railway company shall not construct a railway line without the approval of the Agency.
2. The Agency may, on application by the railway company, grant the approval if it considers that the location of the railway line is reasonable, taking into consideration requirements for railway operations and services and the interests of the localities that will be affected by the line.
3. No approval is needed for the construction of a railway line within the right of way of an existing railway line; or within 100 m of the centre line of an existing railway line for a distance of no more than 3 km.

Issue

[8] Is the location of the line reasonable taking into consideration the requirements for railway operations and services, and the interests of the localities that will be affected by the line?

Location of the Line

[9] CN proposes to build a new railway line which will be approximately 11.5 km in length and, as such, has applied under subsection 98(2) of the CTA for Agency approval.

[10] The proposed spur line will be located near the community of Vanscoy in central Saskatchewan and within the territory of the rural municipality of Vanscoy. The spur will originate from the CN Watrous Subdivision at mileage 204.49, just south of Highway 14, and will travel in a southward direction to the Agrium Inc. Vanscoy Potash mine (Agrium) property limit.

[11] The new railway line will be constructed to join the mine from CN’s main line to the limits of the Agrium property. The line will travel south for approximately 4.61 miles, then extend west for approximately 1.36 miles. At this point, the line will turn south for approximately 0.4 mile to connect to the Agrium property limit.

[12] The proposed spur line will cross at grade a proposed private road and three municipal public roads. The spur will also cross one municipal road allowance, one underground electrical utility and one high-pressure gas pipeline. The spur will run parallel to the existing Canadian Pacific Railway Company (CP) line for its entire length, with the exception of a short wye portion.

[13] According to CN, the proposed track location has been selected as it will provide strategic access to the Agrium facility, it is the most efficient and least disruptive track configuration on the surrounding environment and the land required for this project is located in a rural area with a limited number of adjacent owners.

[14] CN owns the proposed right of way which will serve as the lands required for the location of the spur line, including the additional parcel of land required for the proposed construction of the wye structure at the northern limit of the project and at the junction with the Watrous Subdivision.

[15] CN considered various options for the alignment of the wye structure. These included placing the wye east of the proposed location or west of the public road and existing CP line as well as the construction of two 6,000 foot capacity tracks within the station ground property east of the existing diamond.

[16] The proposed wye alignment was selected by CN as other options would have required construction within wetlands, the construction of an additional diamond or other additional construction and closure of a public crossing. For these reasons, the proposed alignment is the least disruptive and most efficient option.

[17] The status quo alternative was also considered; specifically, the continuation of CN’s current running rights arrangement over CP’s existing track. It was determined, however, that as a result of planned expansion of the mine, and to effectively serve Agrium and provide competitive access to transportation, the CN spur is required. Further, other potash mines in Saskatchewan are served by two railway companies. According to CN, the construction of a spur at this location would therefore be consistent with industry practice.

Requirements for Railway Operations and Services

[18] CN identified a need to construct approximately 11.5 km of rail spur track to connect the Agrium mine to CN’s existing main line to efficiently serve Agrium.

[19] Agrium ships potash to North America and world markets, and CN indicates that it has been serving the mine since 1992 through a running rights agreement with CP. According to CN, the proposed spur track construction will allow CN to serve Agrium’s needs of transporting its product through direct transportation and improved service. This will support the expansion of the mine, will respond to competitive markets and will increase service efficiencies to the mine.

Interests of the Localities

Nature of the operations

[20] Canada is the world’s leading producer of potash, and the most significant reserve of Canada’s potash is located in the province of Saskatchewan. Although most potash mines in Saskatchewan are directly served by two railway companies, the Agrium mine is currently served only by CP’s line and CN operates on the line through a running rights agreement with CP. The construction of a rail spur would allow CN to more effectively serve Agrium and would provide it with the level of service required to compete with other mines in Saskatchewan.

[21] Once constructed, the Agrium Vanscoy spur and wye will allow CN to provide rail services directly to Agrium. While rail traffic will not increase as a result of the project, a portion of the traffic will be shifted from CP’s line to CN’s spur. The construction of this spur line, in itself, will not lead to an increase in train traffic volumes. However, as train traffic volumes at this location are entirely dependent on customer needs, there remains the possibility that with the planned expansion by Agrium, train operations could increase to effectively meet new demand.

[22] Currently, CN serves the Agrium mine three times per week. Initially, the average number of trains on the track is expected to remain at two each day that CN serves the facility. Service to the mine begins in the morning and runs through to the afternoon. Currently, no trains are expected during the overnight hours. Each train is expected to be powered by two locomotives and consist of up to 105 cars. Under the current design, train speed will be posted at a maximum of 10 mph.

Localities

[23] As set out above, CN published notices of its application on May 12 and 19, 2011. No comments were received.

[24] Further, in support of the project, CN submitted a letter from Agrium which states that the selection of the site for the spur was strongly influenced by the fact that with the construction of the spur, CN will have direct rail access to the Agrium mine.

[25] Agrium is a major retail supplier of agricultural products and services in both North and South America. Agrium produces and markets three primary groups of nutrients. Twelve major production facilities in North America, including the potash mine near Vanscoy, can produce, market and distribute approximately ten million tonnes of fertilizer products annually. To distribute these products from the mine in Vanscoy, Agrium relies on service from both Canadian Class 1 carriers to provide it with broad access to its North American destinations as well as offering the obvious benefits of transportation competition at its site.

[26] The Agrium mine will therefore join the other potash mines located in Saskatchewan which are currently served by two Class 1 railway companies.

Agency Finding

[27] The Agency accepts Agrium’s position that CN’s railway line is an integral part of the current growth and economic future of the region and agrees with Agrium that the proposed construction of the railway line will be of benefit to Agrium by giving it access to two Class 1 railway companies.

[28] The Agency also considers comments received through the public consultation process. In this regard, no comments have been filed with the Agency.

[29] In light of the above, the Agency finds that the proposed location of CN’s railway line is reasonable taking into consideration the requirements for railway operations and services, and the interests of the localities that will be affected by the line.

[30] Accordingly, the Agency, pursuant to subsection 98(2) of the CTA and subject to the following conditions, approves the construction of an 11.5 km railway line to serve Agrium. The track will extend to the limit of the Agrium property line at mileage 204.49 of the Watrous Subdivision, as shown on the Drawing.

Conditions

[31] CN shall:

1. implement the mitigative measures, practices and procedures for the protection of the environment, as set out in the environmental assessment and related filings; and,
2. cause no variation in those mitigative measures, practices and procedures without the prior approval of the Agency.