Decision No. 381-R-2014

APPLICATION

[1] On April 2, 2014, the Sept-Îles Port Authority (applicant) filed an application pursuant to subsection 140(2) of the Canada Transportation Act (CTA) with the Canadian Transportation Agency (Agency). The applicant requests a determination related to the nature of certain railway trackage. The application identified Chemin de fer Arnaud, Wabush Iron Co Limited and Wabush Resources Inc. as the respondents. Interventions were filed by New Millennium Iron Corp., Labrador Iron Mines Holdings Limited, Développement Économique Sept-Îles, Mine Arnaud, Government of Newfoundland and Labrador and Tata Steel Minerals Canada Ltd.

[2] During its review of the pleadings in this case, the Agency determined two issues that needed to be addressed prior to proceeding with its consideration of the application. In Decision No. LET‑R-49-2014 dated July 30, 2014, the Agency directed the parties to make submissions with respect to the following legal questions:

1. Can a finding of fact pursuant to subsection 140(2) of the CTA serve another purpose than those outlined in Division V?
2. Does the applicant have the necessary standing to file an application pursuant to subsection 140(2) of the CTA?

ISSUE 1: CAN A FINDING OF FACT PURSUANT TO SUBSECTION 140(2) OF THE CTA SERVE ANOTHER PURPOSE THAN THOSE OUTLINED IN DIVISION V?

Positions of the parties

Applicant

[3] The applicant seeks a determination as to whether the trackage at issue is subject to the transfer and discontinuance process. The finding of fact will relate to the nature of the existing trackage.

[4] The applicant argues that the question of whether a finding of fact could serve another purpose need not be addressed at this time. The applicant contends that if this question has to be debated, it “would have to be in the context of an application before the Agency by a proper party.”

[5] The applicant submits that it will be able to plan its own railway system once the Agency makes a determination regarding the railway lines. In this regard, the applicant asserts that knowing whether the lines could disappear without the transfer and discontinuance process being applied is particularly important for the applicant’s future development.

[6] According to the applicant, the question of whether a finding of fact could serve another purpose than those in Division V is a moot question at this time as the conclusion sought by the applicant is a determination that the Agency has the jurisdiction and obligation to issue.

[7] The applicant considers that section 140 of the CTA does not specify that an application for transfer or discontinuance is required for the Agency to make a determination under that section.

Respondents

[8] The respondents assert that the Agency’s power to make a finding of fact pursuant to subsection 140(2) of the CTA relates to the exclusions from the definition of a “railway line” in subsection 140(1).

[9] In particular, the respondents submit that:

• A finding of fact pursuant to subsection 140(2) of the CTA cannot serve another purpose than those outlined in Division V of Part III of the CTA;
• The application has no basis in the CTA;
• The issues raised by the applicant are not properly resolved pursuant to subsection 140(2) of the CTA; and
• The application is moot.

The respondents submit that section 140 provides that the Agency may “determine as a question of fact” whether trackage falls within the definition of railway line for the purposes of Division V. However, the respondents assert that section 140 does not grant to the Agency the jurisdiction to issue a stand-alone determination.

Analysis and findings

[10] Section 140 of the CTA states:

1. In this Division, “railway line” includes a portion of a railway line, but does not include a yard track, siding or spur; or other track auxiliary to a railway line.
2. The Agency may determine as a question of fact what constitutes a yard track, siding, spur or other track auxiliary to a railway line.

[11] Subsection 140(2) is set out under Part III, Division V of the CTA which provides the general scheme for transferring and discontinuing the operations of railway lines.

[12] The applicant asserts that the Agency has the jurisdiction to make the requested determination regardless of whether there is an issue or potential issue under Division V.

[13] The thrust of the respondents’ arguments is that subsection 140(2) of the CTA was not meant to serve as a stand‑alone provision that applies with no connection to the discontinuance process.

[14] As noted in Sullivan and Driedger on the Construction of Statutes, 4^th ed., (Markham, Ont.: Butterworths, 2002), at pp. 281 and 284:

Each provision or part of a provision must be read both in its immediate context and in the context of the Act as a whole. When words are read in their immediate context, the reader forms an impression of their meaning. This meaning may be vague or precise, clear or ambiguous. Any impressions based on the immediate context must be supplemented by considering the rest of the Act, including both other provisions of the Act and its various structural components.

. . .

When analysing the scheme of an Act, the court tries to discover how the provision or parts of the Act work together to give effect to a plausible and coherent plan. It then considers how the provision to be interpreted can be understood in terms of the plan.

[15] The transfer and discontinuance process under sections 141 to 146 of the CTA applies to all railway lines under the legislative authority of Parliament. Under this process, a federal railway company must take steps before transferring or discontinuing operations:

1. provide notice in the company’s three-year plan for at least 12 months of its intention to discontinue operating the line;
2. publicly advertise the railway line’s availability or any operating interest that the railway company has in the line;
3. negotiate with interested parties;
4. offer to transfer all of its interest in the railway line to the applicable federal provincial and municipal governments and urban transit authorities; and
5. notify the Agency if the line will be discontinued.

[16] Upon application, the Agency can assist by:

• determining whether a particular trackage is subject to the transfer and discontinuance process;
• ensuring compliance with the transfer and discontinuance process; and
• ensuring that the railway company and an interested party negotiate in good faith.

[17] Subsection 140(1) of the CTA stipulates that a railway line excludes yard tracks, sidings, spurs or other track auxiliary to a railway line. Such trackage may therefore be discontinued without following the prescribed process.

[18] Parliament enacted Division V as part of its overall objective of providing a streamlined rail rationalization process for abandonment procedures. In Canadian National Railway Company and Canadian Pacific Railway Company v. Canadian Transportation Agency, A‑355‑07, Noel J.A. wrote at paragraph 48:

Indeed, Division V is a complete code which operates in accordance with a definite time line. It is couched in mandatory terms and the detailed steps which must be followed leave no doubt about when the process begins and when it ends. Amongst those steps is the railway’s obligation to offer the line for sale to the relevant public bodies for its net salvage value if no agreement is reached within the six month period (subsection 145(2)).

[19] The Agency is of the opinion that subsection 140(2) of the CTA is not a stand-alone provision but rather must be read in conjunction with sections 141 to 146 in the context of the prescribed discontinuance process. This is not to say that a determination under subsection 140(2) of the CTA necessarily implies that a discontinuance process must have been engaged to attract the jurisdiction of the Agency. However, it is nonetheless indispensable that an applicant establish sufficient connection with the discontinuance process.

[20] Previous Agency determinations pursuant to subsection 140(2) of the CTA have been either in relation to an application by a railway company concerning the nature of a particular trackage owned by the railway company or to an alleged failure of a railway company to comply with the discontinuance process.

[21] In this application, however, the Agency has not found the evidence in the pleadings to demonstrate a link or a connection with the discontinuance process that Division V is meant to address. In any event, there is no evidence of any intent on the part of the respondents to transfer or discontinue the trackage at issue.

[22] In light of the above, the Agency finds that the applicant failed to establish sufficient connection between its application and the discontinuance process outlined in Division V of Part III of the CTA. This is to say that the finding of fact pursuant to subsection 140(2) of the CTA cannot serve another purpose than those outlined in Division V.

[23] Consequently, the Agency dismisses the application based on Issue 1. As the application is dismissed on this basis, the Agency need not address Issue 2.

CONCLUSION

[24] For the reasons stated above, the Agency dismisses the application.