Decision No. 376-R-2016
Canada Limited, which is a wholly-owned, federally-incorporated subsidiary of G3 Canada Limited (G3), owns an approximately 5.4 mile-long freight railway, known as the McNeill Subdivision, between Burstall and McNeill.
G3 acquired 6970184 Canada Ltd. (6970184), a federal railway company operating under Certificate of Fitness Number 09001, in July 2015 and amalgamated 6970184 into G3 in January 2016. In November 2016, G3 transferred the operation and ownership of the railway assets, properties and rights, along with the related liabilities and obligations, to Canada Limited.
The Canadian Transportation Agency (Agency) notes that there have been no changes with respect to routes, termini or operation of the railway as a result of the changes in ownership and control. Great Sandhills Railway Ltd., a provincial short‑line railway operator and a partially‑owned subsidiary of G3, will conduct all of the rail operations for Canada Limited pursuant a Trackage Rights, Track Maintenance and Agency Agreement.
The Agency further notes that this railway continues to cross the provincial boundary between Saskatchewan and Alberta, and therefore continues to fall within the legislative authority of Parliament.
Paragraph 92(1)(b) of the CTA provides that the Agency shall issue a certificate of fitness for the proposed operation of a railway that does not relate to a passenger rail service if the Agency is satisfied that there will be, for the proposed operation, the applicable minimum liability insurance coverage, which includes any self-insurance, as set out in Schedule IV of the CTA.
The liability insurance requirement is an ongoing requirement and the Agency must be satisfied that a company operating a freight railway under federal jurisdiction continues to have the required minimum amount of liability insurance coverage, including self-insurance.
To this end, the Agency has examined the submissions made by Canada Limited to demonstrate that it has the minimum liability insurance coverage required for the operation of the railway, in accordance with Schedule IV of the CTA.
The Agency’s review of Canada Limited’s financial capability to self-insure for the amount of self-insured retention was based on the financial statements of its parent company, G3, and the indemnity agreement between Canada Limited and G3 in respect of the amount of self-insurance.
The Agency is satisfied that Canada Limited has met the liability insurance requirements.
Accordingly, the Agency, pursuant to paragraph 92(1)(b) of the CTA, will issue a certificate of fitness to Canada Limited, which will permit it to operate a freight railway between Burstall and McNeill, on the 5.4 mile-long railway line known as the McNeill Subdivision.
Further to this, Certificate of Fitness No. 09001, previously issued to the now defunct 6970184 Canada Ltd., is cancelled.