Decision No. 414-R-2014

On April 16, 2014, Knob Lake & Timmins Railway Company Inc. (KLTR) applied to the Canadian Transportation Agency (Agency) for a certificate of fitness to operate a railway over the lines of other railway companies by virtue of consensual running rights. KLTR proposes to operate over the railway lines of Labrador Iron Mines Railway, Kérail Inc., and Tata Iron Mines Railway from mileages 0.00 to 15.497 of the Timmins Subdivision, located in the provinces of Quebec and Newfoundland and Labrador.

Subsection 90(1) of the Canada Transportation Act (CTA) provides that no person shall construct or operate a railway without a certificate of fitness. Section 87 of the CTA defines a “railway”, in part, as a railway within the legislative authority of Parliament.

Therefore, in order to obtain a certificate of fitness, an applicant must first demonstrate that the certificate for which it applied relates to a railway that is within the legislative authority of Parliament, making it fall under federal jurisdiction.

In this case, the Agency notes that KLTR proposes to operate a railway in the provinces of Newfoundland and Labrador and Quebec. The Agency finds that KLTR is subject to federal jurisdiction by virtue of paragraph 92(10)(a) of the Constitution Act, 1867 as its proposal includes the operation of a railway that connects, or crosses the borders of a province.

Pursuant to subsection 91(2) of the CTA, if a person proposes to operate in Canada primarily on the railway of another railway company, the application must indicate the termini and route of every line of railway proposed to be operated. Pursuant to subsection 92(2) of the CTA, a certificate of fitness issued pursuant to an application mentioned in subsection 91(2) must specify the termini and route of every railway line to be operated.

The Agency finds that KLTR has indicated the termini and route of every line of railway that it proposes to operate, namely:

1. Over the line of Labrador Iron Mines Railway from Knob Lake Junction to the border with the province of Quebec, at mileages 0.00 to 5.525 of the Timmins Subdivision, in the province of Newfoundland and Labrador.
2. Over the line of Kérail Inc. from the border between the provinces of Newfoundland and Labrador and Quebec at mileages 5.525 to 15.40 of the Timmins Subdivision, in the province of Quebec; and
3. Over the line of Tata Iron Mines Railway from the border between the provinces of Quebec and Newfoundland and Labrador, at mileages 15.40 to 15.497 of the Timmins Subdivision, in the province of Newfoundland and Labrador.

Subsection 92(1) of the CTA provides that the Agency shall issue a certificate of fitness for the proposed construction or operation of a railway if the Agency is satisfied that there will be adequate liability insurance coverage for the proposed construction or operation as determined in accordance with the Railway Third Party Liability Insurance Coverage Regulations, SOR/96-337.

With respect to the adequacy of the insurance coverage, the Agency has reviewed the material on file and is satisfied that there will be adequate third party liability insurance coverage, including self‑insurance, for the operation of a railway by KLTR.

KLTR is a wholly-owned subsidiary of Genesee & Wyoming Canada Inc., which in turn is a wholly-owned subsidiary of Genesee & Wyoming Inc. (GWI). The Agency’s review of KLTR’s financial capability to pay for the amount of the self-insured retention portion was based on the detailed review of financial statements of GWI and the indemnity agreement between GWI and KLTR in respect of the amount of self-insurance.

Pursuant to subsections 92(1) and 92(2) of the CTA, the Agency issues a certificate of fitness to KLTR permitting it, by virtue of consensual running rights, to operate a railway over the railway lines of Labrador Iron Mines Railway, Kérail Inc., and Tata Iron Mines Railway, from mileages 0.00 to 15.497 of the Timmins Subdivision, located in the provinces of Quebec and Newfoundland and Labrador, and specifically as follows:

1. Over the line of Labrador Iron Mines Railway from Knob Lake Junction to the border with the province of Quebec, at mileages 0.00 to 5.525 of the Timmins Subdivision, in the province of Newfoundland and Labrador;
2. Over the line of Kérail Inc. from the border between the provinces of Newfoundland and Labrador and Quebec, at mileages 5.525 to 15.40 of the Timmins Subdivision, in the province of Quebec; and,
3. Over the line of Tata Iron Mines Railway from the border between the provinces of Quebec and Newfoundland and Labrador, at mileages 15.40 to 15.497 of the Timmins Subdivision, in the province of Newfoundland and Labrador.

This Decision takes effect as of October 29, 2014, the date on which it was communicated to KLTR.