Decision No. 379-R-2015

APPLICATION

[1] The Canadian National Railway Company (CN) filed an application with the Canadian Transportation Agency (Agency) pursuant to subsection 98(2) of the Canada Transportation Act (CTA) for an approval to construct a spur originating at mileage 82.7 of CN’s existing Lampman Subdivision, to serve Lehigh Cement’s (Lehigh) proposed fly ash facility.

ISSUE

[2] Is the location of the spur (railway 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?

LEGISLATIVE REFERENCES

[3] Subsections 98(1) and (2) of the CTA state:

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.

LOCATION OF THE RAILWAY LINE

[4] CN proposes to construct approximately 820 meters (2690 feet) of railway line to connect to CN’s existing Lampman Subdivision at mileage 82.7. The railway line will run perpendicular to the CN main line.

[5] The CN main line at this location runs in a north-south direction roughly parallel to Highway 605 and is located approximately 3.2 kilometers northeast of the town of Bienfait, in the rural municipality of Coalfields No. 4 (Coalfields), Saskatchewan, as shown on Plan and Profile No. 334362-004 dated May 29, 2015 (Plan and Profile). The main line connects southern Saskatchewan to Regina and Brandon, Manitoba and then to the remainder of CN’s network.

[6] The proposed railway line is located in a remote area with few residences in proximity to the project. CN owns the property where the railway line will be located and will lease the southeast portion of its property to Lehigh for its proposed fly ash facility. According to CN, the proposed railway line will enable CN to meet the service requirements requested by Lehigh.

[7] The location of the proposed railway line has been selected given its proximity to CN’s existing main line. CN states that construction of the railway line will allow for loading of rail cars and shipment to CN’s nearby yard in Bienfait, where the cars will be placed onto trains heading east to Brandon and beyond to markets in Canada and the United States. According to CN, this location provides the most efficient configuration to allow CN to serve its customers.

[8] CN submits that the location of the railway line is the preferred location as it would offer strategic access to the customer’s facility, take advantage of proximity to existing rail infrastructure, and provide a simple track configuration with a reduced footprint and an efficient operation.

REQUIREMENT FOR RAILWAY OPERATIONS AND SERVICES

[9] CN’s proposed railway line will serve its client, Lehigh, a local manufacturer and supplier of cement, aggregates, ready mix concrete and concrete pipe to the western Canadian provinces (Manitoba, Saskatchewan, Alberta, and British Columbia). Lehigh uses fly ash as a cement replacement in other facilities and has manufacturing and distribution facilities in the state of Washington.

[10] Lehigh is proposing to transport fly ash by truck to the project site from the existing SaskPower Boundary Dam coal fire Power Station. SaskPower operates the Boundary Dam Power Station near Estevan, and Lehigh has a long-term agreement to distribute, and market fly ash produced at the Power Station. Fly ash is a byproduct of coal-fired power stations and is extensively used by the ready-mix concrete industry as a cement replacement, which improves concrete durability and reduces the greenhouse gas intensity of concrete. Fly ash disposal is a necessary step to coal‑fired power generation and its use in the concrete industry is an efficient and functional way to dispose of this byproduct. Lehigh intends to store the fly ash in the proposed facility for eventual load-out and transportation by rail for shipment to markets in Canada and the United States.

[11] CN submits that the current railway operations consist of one train per day (two locomotives and ten rail cars) that travels from Brandon to an existing CN yard in Bienfait. The train then departs from Bienfait the following day.

[12] According to CN, it intends to provide service on the proposed railway line based on Lehigh’s demand. Initially, it is expected that ten empty rail cars will be delivered to Lehigh’s facility via the Lampman Subdivision three times a week. The empty cars will be loaded by Lehigh and will be picked up and depart the facility via the railway line and the Lampman Subdivision.

[13] The rail cars will be brought to CN’s existing yard in the southern part of Bienfait where they will be added to current railway operations consisting in one daily train. The rail cars will be ultimately destined for CN’s Symington Yard in Winnipeg, Manitoba where they will be further classified for destinations east and west.

Findings related to the requirements for railway operations and services

[14] As per the Memorandum of Understanding between Transport Canada and the Agency, Transport Canada was notified of CN’s application for the approval to construct the proposed railway line. Transport Canada states that based on the information it received, it has no safety concerns as long as CN meets all legislative requirements, including the installation of physical securement measures or mechanisms that would prevent equipment that has been left standing on the spur track to obstruct the main track, if there is any possibility that such equipment move by gravity.

[15] The Agency has considered CN’s submissions with respect to the requirements for railway operations and services.

[16] Based on the submissions, the Agency accepts that this location provides the most efficient configuration to allow CN to serve its customers, therefore limiting the project footprint. The Agency also accepts that the proposed railway line is located in a remote area with few residences in proximity to the proposed railway line.

[17] The Agency notes that CN will have to meet the requirements imposed by or under the Railway Safety Act and any other applicable statute during the construction and the operation of the railway line.

[18] Further, the Agency finds that the location allows CN to provide service and respond to the needs of Lehigh. The Agency also finds that the location of the railway line is reasonable taking into consideration the requirements for railway operations and services.

INTERESTS OF THE LOCALITIES

Public consultations

[19] CN provided the following information with respect to public consultations.

[20] On January 10, 2014, CN and Lehigh mailed a direct notice to nearby landowners, which provided project details and contact information as well as an invitation to attend an open house in Bienfait on January 30, 2014 to discuss the proposed railway line and fly ash facility. Additionally, CN placed a notice in the local newspaper, the Estevan Lifestyles, on January 16 and January 23, 2014, inviting residents and other stakeholders to attend the open house.

Open house poster board information

[21] CN states that several poster boards were used during the open house to describe the proposed project and facility. CN filed a copy of these poster boards with the Agency.

[22] One poster board reflects that:

• CN’s current railway operation is one train per day (two locomotives and ten cars) which arrives in Bienfait and departs the following day;
• the railway service is expected to be three times per week or based on Lehigh’s demand;
• CN expects that the ten empty cars will be delivered and the ten loaded cars will be picked up;
• the service will likely occur between 7:00 a.m. and 10:00 p.m.; however, trains could operate 24 hours a day, 7 days a week;
• railway coupling sounds will occur upon train arrival and departure.

[23] One poster board reflects that:

• a review of the aquatic conditions on CN’s project site was conducted to determine potential impacts on aquatic resources;
• there are no streams or creeks within the project site; however, the CN railway line will cross one Class 1 ephemeral wetland (which includes water smartweed, common cattail, fowl bluegrass and quackgrass);
• the northern leopard frog is a federal species of special concern;
• there is a moderate potential for this type of species to be found at the project site. However, pre-construction surveys will be conducted and, if located, adult frogs will be relocated.

[24] One poster board reflects that:

• a study of the vegetation and wildlife was conducted to determine any potential impacts as a result of CN’s project;
• the project is located on modified grassland currently used for hay production;
• no federally or provincially listed/plant species were identified in the study as potentially impacted at the project site;
• white-tailed deer and northern pocket gopher mounds were found at the project site;
• nine species of birds were observed or heard, however, no federally listed or provincially tracked wildlife species were identified.

[25] The vegetation and wildlife study was not filed with the Agency.

[26] One poster board reflects that:

• a noise study was conducted by Golder Associates to measure the noise levels from the proposed railway line;
• based on current noise levels in the vicinity of the proposed rail line, the study calculated baseline noise levels of 45 dB during the day and of 35 dB in the evening;
• the study took into consideration natural noise (e.g., birds, insects and wind), existing railways (CN and CP) and roadways (Highway 18);
• according to the specific noise modeling software used, results from the study predict an increase of 0.4 dB or a 0.1 percent change during the day (no change in evenings);
• the predicted change in noise level is well below Health Canada’s suggested threshold of a 6.5 percent change when compared to baseline estimates.

[27] The CN Bienfait Rail Spur Noise and Vibration Impact Assessment Final Report (Final Report), dated April 2014, was filed and reviewed by the Agency.

Public comments at the open house

[28] CN states that the January 30, 2014 open house was attended by approximately 15 residents and landowners from Bienfait. CN and Lehigh stated that, during the open house, they received verbal comments from local landowners and residents in support of the expected boost to the local economy from the proposed fly ash facility and railway line. CN submits that CN and Lehigh discussed and addressed specific concerns regarding rail operations, noise, vegetation and wildlife, and aquatic resources at the open house.

[29] Specifically, CN received five comment forms from local residents during the open house which were filed with the Agency. Concerns were raised with respect to disturbance of local wildlife, dust emissions from the Lehigh operations, as well as increased truck traffic and the anticipated trucking routes, and noise from both Lehigh and CN activities. CN states that the majority of the concerns originated from two families residing in proximity to the proposed railway line.

[30] In response to the comments received, CN and Lehigh held two separate follow-up meetings on February 24, 2014 with two families of residents who had expressed concerns. CN points out that the meeting included representatives from CN, Coalfields and Lehigh. Additional information was provided to the two families with respect to the location, design, and activities of the proposed Lehigh facility, truck traffic through Bienfait, the process for storage and loading and unloading of the product at the Lehigh facility and the impacts to wildlife at the project site.

Local wildlife

[31] CN states that the proposed project will be located on lands that have been modified for agricultural activities and are used primarily for hay production. As a result, areas to be impacted by the project represent low quality habitat with limited potential for rare plant species presences. It was also noted that there were no occurrences of federally or provincially listed plant species in the project study area during desktop or field-based surveys. Based on the results and the land cover in the project area, rare or endangered species are not likely to be impacted by the project.

[32] According to CN, the wetlands beyond the project footprint may provide habitat for northern leopard frogs. Although these wetlands will not be directly impacted, CN is committed to completing additional field surveys prior to construction to determine if northern leopard frogs are present and to developing appropriate mitigation in consultations with the Saskatchewan Ministry of Environment (Environment) if any are located.

[33] In addition, CN states that in a Technical Project Report dated March 17, 2014, the Environment determined that Lehigh’s proposed fly ash terminal is not a development project that is required to undergo an environmental impact assessment or to obtain ministerial approval under provincial legislation. The Technical Project Report was not filed with the Agency.

Dust emissions from the truck unloading, loading and movement of rail cars

[34] CN notes that the fly ash would be loaded onto rail cars and moved to CN’s yard located in Bienfait. CN will use covered hoppers which will be part of CN’s current railway operations consisting of one daily train.

[35] CN submits that dust emissions at this location will be addressed in the context of the local or provincial application process relating to the operation of the proposed fly ash facility by Lehigh. CN states that the proposed fly ash terminal was designed to be approximately 120 feet in height and it will be set back from the road. The design of the fly ash terminal includes dust collectors to vent and collect all fugitive dust emissions from truck unloading and rail car loading. It was noted that the dust collector system would also be installed on the storage building and at all transfer points. The trucks will enter an enclosed terminal unloading station and discharge the fly ash into a receiving hopper. The fly ash will be transported by conveyor to an enclosed load out system for direct loading to rail cars, or to the storage facility through steel pipe silos for future load out. Each silo will be equipped with high level detectors which are interlocked to automatically shut down the filling system to prevent overfilling.

[36] Furthermore, real-time monitoring of the differential pressure inside each dust collector allows Lehigh to detect the bag conditions and any potential for plugging. Visual monitoring of the dust collector vents during loading and unloading are also part of Lehigh’s operating procedures. Lehigh will also conduct and document dust collector maintenance inspections to ensure that all systems are kept in good working condition.

[37] CN states that the Environment determined, as of March 17, 2014, that the enclosed system proposed by Lehigh during the loading of rail cars will minimize the potential for dust generation; air emissions and fugitive dust will be managed using design and construction controls which meet applicable industry standards; and Lehigh will require a permit under provincial legislation.

[38] Lehigh did not include ambient air monitoring in its submission to the Environment and did not have plans to conduct ambient air monitoring as it did not expect any off-site impacts. Lehigh stated that, if the Environment felt that a monitoring was warranted, Lehigh would comply with their request.

Increasing truck traffic and anticipated truck routes

[39] CN states that it had discussed increased truck traffic and anticipated truck routes with Coalfields and that CN is committed to address these concerns. CN reports that there will be approximately 8 to 12 truckloads per day. These trucks will be enclosed and will depart from the Boundary Dam facility in nearby Estevan, Saskatchewan, and travel on highways to the Lehigh facility. CN and Lehigh further advised that, as part of the project, the road (Highway 605 between Highway 18 and the entrance to the facility) would be upgraded to accommodate the heavier trucks.

[40] CN communicated with the Saskatchewan Ministry of Highways (Highways) regarding the process for the construction of the bypass lane. In June of 2015, the Highways confirmed that the design was acceptable and that it had no concerns. CN has since discussed with the Highways to obtain formal approval of the design.

Railway noise and vibration

[41] CN filed with the Agency the CN Final Report dated April 2014. With respect to the increase noise from the proposed rail expansion, the Final Report concluded that the change in noise levels associated with the operation of the railway line is anticipated to meet Health Canada guidance, and therefore mitigation measures are not required.

[42] CN states that the proposed hours of operation are 24 hours a day, 7 days a week in nature. CN adds that train service for the Lehigh facility is expected to be three times per week and largely during daytime hours but could be at any time based on demand.

[43] In addition, Lehigh advised that the dust collector fans are low horsepower and would function only while the facility was operating. According to Lehigh, noise from truck traffic entering and leaving the proposed fly ash facility is expected to be insignificant. As such, it is expected that the change in noise levels would be negligible.

Notice of Proposed Railway Works

[44] CN states that on March 19, 2014, it served a Notice of Proposed Railway Works pursuant to section 8 of the Railway Safety Act. According to CN, the notice was served directly on applicable parties, with a copy to Transport Canada. The notice set out a 60-day period during which objections may be filed. This 60-day period has expired and no objections were filed. The Notice of Proposed Railway Works was not filed with the Agency.

Public notice

[45] On April 3, 2014, CN placed a notice in the local French newspaper, L’Eau Vive, and the local English newspaper, Estevan Lifestyles, inviting residents and other stakeholders to provide comments on the proposed project. According to CN, no comments were received.

Letters of support

[46] On April 8, 2014, CN received a letter of support from Lehigh, which states that the railway line is required to provide rail service to Lehigh’s fly ash facility.

[47] CN also received a letter of support from SaskPower dated September 15, 2014. SaskPower supports the proposed railway line that will provide rail service to Lehigh’s fly ash facility.

[48] On June 4, 2015, CN received a letter of support from Coalfields for the project. Coalfields states that it has entered into a confidential agreement with the CN and Lehigh regarding the proposed Lehigh facility and the associated railway line. CN states that this confidential agreement will address Coalfield’s concerns associated with the impact of increased truck traffic generated by the Lehigh facility on the roadways. The agreement was not filed with the Agency.

[49] On August 21, 2015, CN also received a letter of support from the Town of Bienfait. The letter supports the construction of a Lehigh Fly Ash Transload Terminal and railway line on CN’s property located approximately 3.2 km northeast of Bienfait.

Findings related to interests of the localities

[50] The Agency has considered CN’s submissions with respect to the interests of the localities, as well as the comments of landowners and other local residents. The Agency notes that CN consulted with municipal authorities and that CN received support from Lehigh, SaskPower, Coalfields, and the Town of Bienfait.

[51] The Agency finds that CN has addressed the concerns related to disturbance of local wildlife, dust emissions, as well as concerns about increased truck traffic, the anticipated trucking routes, and noise through the different measures to which CN committed.

[52] The Agency notes that there is a confidential agreement between CN, Lehigh and Coalfields concerning the impact of increased truck traffic generated by the Lehigh facility on the roadways.

[53] With respect to noise and vibrations from the proposed railway line, the Agency notes that the predicted change in noise level is below Health Canada’s threshold. The Agency also notes that the Lehigh facility and its operations will require a permit under provincial legislation. The Agency is satisfied that CN’s consultations and the commitments made adequately address the concerns of the localities.

[54] In light of the above, the Agency is satisfied that the location of the railway line is reasonable taking into consideration the interests of the localities.

ABORIGINAL CONSULTATIONS

[55] Prior to issuing a subsection 98(2) authorization, the Agency must also be satisfied that the Aboriginal consultations undertaken have been adequate.

[56] CN submitted a record of its consultations with the White Bear First Nation, the Ocean Man First Nation and the Pheasant Rump Nakota First Nation (First Nations).

[57] On January 7, 2014, CN sent letters to the First Nations, inviting them to the open house to discuss the project and offering to clarify any questions they may have. CN states that it did not receive any question or comments from the First Nations.

[58] On May 15, 2015, CN sent follow-up letters and provided a 30-day period for the First Nations to raise questions or seek clarification regarding the proposed railway line.

[59] Following the follow-up letter, the General Counsel for the White Bear First Nation requested a copy of CN’s application. On June 17, 2015, CN provided a copy of the application and associated appendices to the White Bear First Nation.

[60] In an e-mail dated September 29, 2015, the General Counsel for the White Bear First Nation states that the project involved low to no impact on the White Bear First Nation members’ ability to exercise treaty harvesting rights and therefore it has no concerns and is satisfied with the information provided and the opportunity to provide comment.

[61] CN states that, on August 13, 2015, CN contacted the Chief of the Pheasant Rump Nakota First Nation by telephone. According to CN, the Chief indicated that she did not have any objections to the proposed project. CN states that the Chief did, however, request that any items of historical interest discovered at the site not be disturbed and be reported to the First Nation. CN committed to working with Pheasant Rump Nakota First Nation on this request.

[62] CN states that, on August 13, 2015, CN contacted a Councillor of the Ocean Man First Nation by telephone. According to CN, he expressed no immediate concerns with the project and stated that he would be speaking to the Band’s new Chief to determine whether there are any questions or issues regarding the project. CN adds that CN’s Manager of Aboriginal and Tribal Affairs followed up in writing and provided the Councillor with another copy of CN’s application. According to CN, on October 1, 2015, the Chief contacted CN’s Manager of Aboriginal and Tribal Affairs by telephone and advised that she has no objection to the project. CN also points out that the Chief thanked CN for engaging with her community. On October 2, 2015, CN’s Manager of Aboriginal and Tribal Affairs sent an e-mail to the Chief confirming their conversation.

[63] The Agency notes that CN’s record of consultations and documents filed with respect to Aboriginal consultations describe the consultation activities with each community.

[64] Based on the evidence, the Agency is satisfied that the Aboriginal consultations conducted by CN have been adequate.

CONCLUSION

[65] In light of the above, the Agency, pursuant to subsection 98(2) of the CTA and subject to the following conditions, approves the construction of the railway line located at mileage 82.7 of the Lampman Subdivision described in the Plan and Profile.

CONDITIONS

[66] CN shall during the construction and operation of the railway line:

1. Implement the commitments, mitigation measures, best practices, and procedures for the protection of the interest of the localities as set out in their application and additional filings; and,
2. Cause no variation in those commitments, mitigation measures, best practices and procedures without prior approval from the Agency.