Decision No. 40-R-1999

January 29, 1999

File No. R 8050/451-198.80

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Cross Canada Land Services Ltd., on behalf of Alliance Pipeline Ltd. (hereinafter Alliance), filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title. The application was received on August 31, 1998 and was complete and ready for processing on September 2, 1998.

Pursuant to subsection 18(1) of the Canadian Environmental Assessment Act, S.C., 1992, c. 37 (hereinafter the CEAA), the project has been screened and a screening report has been prepared.

The Agency is of the opinion that public participation in the screening of the project under subsection 18(3) of the CEAA is not required in the circumstances.

After taking into consideration the screening report, the Agency determines that the project is not likely to cause significant adverse environmental effects.

The Agency notes that Alliance and CN have been unsuccessful in negotiating an agreement with respect to some terms of the proposed utility crossing agreement.

Alliance states that it objects to the payment of application, processing and annual administrative fees.

In that regard, CN states that it has been required to contract out the work associated with utility crossings. CN refers to paragraph 5(e) of General Order No. E-10 of the Board of Transport Commissioners for Canada entitled Standard Regulations Regarding Pipe Crossings Under Railways which reads, in part, as follows:

The amount of wages and expenses of such Inspector, as well as all other costs actually incurred by the Railway consequent upon and directly attributable to the laying, renewing, operating or removing of the said pipe, shall be paid by the party owning the pipe or pipes upon receipt from the Railway Company of a statement showing in reasonable detail the particulars of such wages, expenses and said other costs, if any, except that in the case of a Municipal Corporation desiring to lay a pipe under the railway on a highway which is senior to the railway, the cost of such inspection and other expenses of the Railway shall be borne by the Railway.

Alliance maintains that it is incumbent upon it to ensure the safety and integrity of its pipeline by reviewing all proposed crossings. Consistent with the practices of the utility industry, Alliance will assume the costs of such reviews and the subsequent field supervision as a cost of doing business. Consequently, it suggests that CN's responsibility to protect the safety and integrity of its infrastructure is an integral part of the operation of a privatized public company and is a cost of doing business.

Alliance submits that it objects to the indemnification as specified in clause 11 of CN's Master Utility Crossing Agreement.

On the other hand, CN submits that the liability clause contained in its proposed master agreement does not impose any greater liability than that set out in General Order No. E-10.

In addition, Alliance requests that it be able to register its interest on the railway property to identify its pipeline to anyone searching the land title and its interest would be carried forward in the event of a sale of the railway right of way.

Alliance also requests CN to grant it an easement or right of way agreement in the event the railway right of way is abandoned or sold.

Alliance advises that it also requires leave to cross in perpetuity or until relocation or removal is ordered by the Agency or its successors. Alliance objects to the clauses referring to removal and alterations of the pipeline. Portions of the agreement indicate notification periods of 90 days or less should it become necessary for the pipeline to be relocated or altered and specifies that the relocation and alterations of the pipeline would be at Alliance's cost. Alliance would need a minimum of one year's notice prior to any relocation or alteration; in fact, two years notice is recommended. Alliance does not agree to accept the sole cost of any future relocation or alteration that is required. It is of the opinion that the issue of costs should be settled if and when relocations or alterations are deemed necessary. In Alliance's opinion, with the inclusion of these clauses, the Master Utility Crossing Agreement does not provide a permanent right to cross the railway right of way.

CN advises that it may offer an easement in perpetuity upon the sale of a line of its railway when the sale is made to someone who does not wish to continue the operation of a railway. Sales agreements with shortline operators provide for the assignment of existing agreements. CN is looking at the possibility of perhaps broadening this feature in the future; however, should Alliance and/or its agent, Cross Canada Land Services Ltd., decide to negotiate an agreement with CN, this could be one of the clauses to be determined.

The Agency has reviewed the positions of the parties and has determined that compensation in the form of either annual or documentation fees to CN is not warranted as no real or appreciable damage to the lands of the railway company has been demonstrated.

With respect to paragraph 5(e) of General Order No. E-10 of the Board of Transport Commissioners for Canada, the Agency, under the Canada Transportation Act (hereinafter the CTA), has the power to apply principles it deems appropriate in making its findings. The Agency is of the opinion that CN should be entitled, when required, to appoint an inspector to supervise the work as it relates to the railway, and the wages and expenses of such an inspector should be paid by Alliance upon receipt of a statement showing in reasonable detail the particulars of such wages and expenses. Should the parties be unable to agree on the necessity and the work of the inspector or on the particulars of the wages or expenses as detailed in the invoice, an application may be made to the Agency for a determination on the matter.

With respect to liability, the Agency is of the opinion that the provisions of the Pipe Crossings Under Railways Regulations, General Order No. E-10, C.R.C., c. 1187, as they existed on June 30, 1996, should apply.

With respect to Alliance's request to be able to register the interest in the utility crossing approval at the Northern Alberta Land Titles Office, the Agency's jurisdiction in this matter is to render a decision that authorizes the utility crossing across the railway right of way at the specific location. The registration of an interest in the utility crossing approval is a matter to be addressed to the Northern Alberta Land Titles Office.

With respect to the issue related to the duration of the crossing, 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.

With respect to Alliance's request that a provision be made by the Agency in its decision regarding the granting of an easement or right of way in the event the railway right of way is abandoned or sold and that compensation based on market value at the time of the pipeline installation be allowed, the Agency's jurisdiction over the railway line once the operation of a line of railway has been abandoned or discontinued is lost. This loss of jurisdiction extends to the removal, maintenance, restoration, disposition or reconstruction of all assets (track infrastructure, bridges, crossings, right of way property) associated with the abandoned line. Accordingly any decisions of the Agency or its predecessors, which rely on a continuing jurisdiction, cease to have effect.

In light of the foregoing, the Agency is of the opinion that Alliance should be authorized to construct the utility crossing as shown on the Plan. Any authority granted by the Agency does not relieve the applicant and/or the railway company of their obligations under the Railway Safety Act, R.S.C., 1985, c. 32 (4th Supp.).

Accordingly, pursuant to subsection 101(3) of the CTA, Alliance is authorized to construct and maintain, at its own expense, the utility crossing as shown on the Plan.

In addition, Alliance shall at all times indemnify CN across whose railway the utility crossing is constructed, from and against all loss, cost, damage, injury and expense to which that railway company may be put by reason of any injury to persons or damage to property caused by the construction, maintenance or operation of the utility crossing as well as against any damage or injury resulting from the imprudence, neglect or want of skill of the employees or agents of Alliance in connection with the construction, maintenance or operation of the utility crossing unless the cause of such loss, cost, damage, injury or expense can be traced elsewhere.