A-168-77
In re a decision or order of the Railway Transport
Committee of the Canadian Transport Commis
sion made October 18, 1976 against Canadian
Pacific Limited in respect of rail barge service on
Kootenay Lake
Court of Appeal, Pratte, Ryan and Le Dain JJ.—
Vancouver, September 26, 27 and 30, 1977.
Jurisdiction — Rail barge service linking spurs with rail
system discontinued by CP without approval — Service
ordered reinstated by Railway Transport Committee of
Canadian Transport Commission — Whether or not rail barge
service a line of railway and therefore within jurisdiction of
Railway Transport Committee — National Transportation
Act, R.S.C. 1970, c. N-17, ss. 21, 45, 64(2) — Railway Act,
R.S.C. 1970, c. R-2, ss. 2, 106, 252, 253(2), 254(1), 304 —
Transport Act, R.S.C. 1970, c. T-14, ss. 3, 12(4)(a).
Canadian Pacific discontinued, without Canadian Transport
Commission's approval, operation of its rail barge service on
Kootenay Lake and now disputes the decision of the Commis
sion's Railway Transport Committee holding this service to be
within its jurisdiction and ordering its reinstatement. The ser
vice involved â barge, equipped with rails, to transport railway
cars from its system to spurs in towns along Kootenay Lake.
The issue is whether or not the operation of the rail barge
service, although involving a form of water transport, is the
operation of a railway line, and therefore within the Commit
tee's jurisdiction.
Held, the appeal is allowed. The mode of conveyance in the
rail barge service is the barge and not the railway cars. The
railway cars serve as containers on the barge and only operate
as a means of conveyance at the voyage's terminal points, and
then only in the loading and unloading operations. The rail
barge service, therefore, is not the operation of a railway line
and does not fall within the abandonment provisions of the
Railway Act. Provisions respecting the approval of location,
construction and commencement of operation of railway lines
do not contemplate and could not have practical application to
a line of railway crossing a body of water by means of a vessel
between various points.
Canadian Pacific Railway Co. v. Attorney-General for
British Columbia and Attorney-General for Canada
[1950] A.C. 122, applied.
APPEAL.
COUNSEL:
N. D. Mullins, Q.C., for Canadian Pacific
Limited.
Harry Wruck for Attorney General of
Canada.
Melvin H. Smith for Attorney General of
British Columbia.
Gilbert W. Nadeau for Canadian Transport
Commission.
Robert H. Brisco representing Federal Con
stituency of Kootenay West.
SOLICITORS:
Law Department, Canadian Pacific Limited,
Vancouver, for Canadian Pacific Limited.
Deputy Attorney General of Canada for
Attorney General of Canada.
Attorney General of British Columbia for
Attorney General of British Columbia.
Law Department, Canadian Transport Com
mission, Ottawa, for Canadian Transport
Commission.
Federal Constituency of Kootenay West
represented by Robert H. Brisco, M.P.
The following are the reasons for judgment
delivered orally in English by
LE DAIN J.: Canadian Pacific Limited (herein-
after referred to as "CP") attacks a decision of the
Railway Transport Committee of the Canadian
Transport Commission by way of appeal pursuant
to subsection 64(2) of the National Transporta
tion Act, R.S.C. 1970, c. N-17. In its decision,
made on October 18, 1976, the Committee held
that it had jurisdiction with respect to the aban
donment of a rail barge service operated by CP on
Kootenay Lake, British Columbia, and ordered CP
to reinstate and resume the service. The Commit
tee's decision concludes as follows:
The Committee concludes that it has full jurisdiction to deal
with the question of whether or not the rail barge service
operated by the CPR on Kootenay Lake should be abandoned,
WHEREAS the Committee has found that the rail barge
operation in question on Kootenay Lake falls under the defini
tion of "branch line" as defined in section 252 of the Railway
Act;
WHEREAS the company may not abandon the operation of a
branch line except in accordance with the provisions of the
Railway Act, particularly subsections 253(2) and (3) thereof;
and
WHEREAS Canadian Pacific Ltd. is not providing the service
that it is by law required to provide;
NOW therefore the Committee pursuant to the power vested
in it by the National Transportation Act, particularly section
45 thereof orders Canadian Pacific Ltd. to reinstate and
resume, within 90 days from the date of this decision, the
operation of its rail barge service between Procter, Kaslo and
Lardeau on Kootenay Lake, Province of British Columbia,
which it has discontinued effective July 31, 1975.
CP attacks the decision of the Committee on the
ground that the Canadian Transport Commission
lacks jurisdiction with respect to the abandonment
of the rail barge service.
Counsel for the Canadian Transport Commis
sion, the Attorney General of Canada, and the
Government of British Columbia, and Mr. R. H.
Brisco, M.P., appeared and made submissions in
support of the Committee's decision.
The Railway Act, R.S.C. 1970, c. R-2, contains
provisions governing the abandonment of the oper
ation of a line of railway. They are to be found in
section 106 and sections 252 and following. The
federal legislation respecting transport by water,
the Transport Act, R.S.C. 1970, c. T-14, does not
contain provisions respecting the abandonment of
a water transport service. There would, therefore,
appear to be a fundamental difference of legisla
tive policy with respect to the abandonment of rail
and water transport services. It should be noted,
however, that by paragraph 12(4)(a) of the
Transport Act Part II thereof respecting the li
censing of water transport does not apply to ships
engaged in the transport of goods or passengers
between ports or places in British Columbia.
Section 106 of the Railway Act provides as
follows:
106. The company may abandon the operation of any line of
railway with the approval of the Commission, and no company
shall abandon the operation of any line of railway without such
approval.
Sections 253 and following of the Act make
detailed provision for the abandonment, with the
approval of the Commission, of the operation of a
branch line of railway that has become uneconom
ic. They spell out in considerable detail the con
siderations that shall govern the Commission's
decision as to whether or not to approve a pro
posed abandonment.
Section 252 of the Act defines "branch line" as
follows:
"branch line" means a line of railway in Canada of a railway
company that is subject to the jurisdiction of Parliament
that, relative to a main line within the company's railway
system in Canada of which it forms a part, is a subsidiary,
secondary, local or feeder line of railway, and includes a part
of any such subsidiary, secondary, local or feeder line of
railway.
It is not necessary for present purposes to quote
the whole of the provisions governing the abandon
ment of the operation of a branch line but the
following subsections give a sufficient indication of
the approval required from the Commission.
Subsection 253(2) provides:
253... .
(2) If a company desires to abandon the operation of a
branch line, the company shall file an application to abandon
the operation of that line with the Commission in accordance
with any rules that may have been made by the Commission
pursuant to subsection (1); and the Commission shall cause
such public notice of the application to be given in the area
served by the branch line as the Commission deems reasonable.
Subsection 254(1) provides:
254. (1) If the Commission finds that in its opinion the
company, in the operation of the branch line with respect to
which an application for the abandonment of its operation was
made, has incurred actual loss in one or more of the prescribed
accounting years including the last year thereof, the Commis
sion shall, after such hearings, if any, as are required in its
opinion to enable all persons who wish to do so to present their
views on the abandonment of the branch line and having regard
to all matters that to it appear relevant, determine whether the
branch line is uneconomic and is likely to continue to be
uneconomic and whether the line should be abandoned; but if
the Commission finds that in its opinion the company has
incurred no actual loss in the operation of such line in the last
year of the prescribed accounting years, it shall reject the
application for the abandonment of the operation of the line
without prejudice to any application that may subsequently be
made for abandonment of the operation of that line.
The decision of the Railway Transport Commit
tee was not a decision on an application for aban
donment pursuant to these provisions. There was
no application before it. CP had discontinued the
operation of the rail barge service effective July
31, 1975 without seeking the Commission's
approval. Upon complaint by various interested
parties the Committee considered whether it had
jurisdiction with respect to the abandonment, and
after initially adopting the position that it did not
have jurisdiction, came to the conclusion upon
reconsideration that it did have jurisdiction. The
matter was disposed of by the Committee without
an oral hearing upon the basis of documentary
material. The decision of the Committee was that
by virtue of section 106 and sections 252 and
following of the Railway Act CP did not have the
right to abandon the operation of the rail barge
service without the Commission's approval and
therefore had an obligation under the Act to con
tinue to operate it. Exercising the author
ity of the Commission under section 45 of the
National Transportation Act to order compliance
with the provisions of the Railway Act, the Com
mittee ordered CP to reinstate and resume the
service.
The question of jurisdiction on the appeal
resolves itself into the question whether the opera
tion of the rail barge service is the operation of a
line of railway.
The findings of fact by the Committee with
respect to the origin and operation of the rail barge
service on Kootenay Lake are to be found in the
following passages of its decision:
Many of CPR's lines of railway in British Columbia are
composed of smaller lines of railway which other railway
companies leased to CPR for varying terms of either 99 or 999
years.
One of such smaller lines was operated by the Columbia and
Kootenay Railway and Navigation Company, a company which
was incorporated in 1889 by an Act of the Legislature of
British Columbia (52 Victoria, c. 35). This company was
authorized to operate a railway "from the outlet of Kootenay
Lake, in British Columbia, through the Selkirk Range of
mountains, to a point on the Columbia River as near as
practicable to the junction of the Kootenay with the Columbia
River". As well, the company was authorized to "acquire,
build, equip and maintain a line of steamers and other vessels,
for the purpose of carrying freight and passengers to and fro
from that point on Kootenay River where the southern bound
ary of British Columbia intersects the said river, thence down
the said river to Kootenay Lake, and through and throughout
the said lake and its navigable tributaries" (S. 9). The works of
this company as described in its Act of incorporation were then
declared by Act of Parliament (1890 53 Victoria, c. 87) to be
works for the general advantage of Canada. By Order-in-Coun
cil P.C. 1997, August 20, 1890, the lease of the company's
works to CPR for 999 years was approved by the Government
of Canada.
The Kootenay and Arrowhead Railway Company was incor
porated in 1901 by Act of Parliament (1 Edw. VII, c. 70),
which Act authorized the company to build a railway from
Lardeau to Duncan and then to Arrowhead. The only portion
which was finally completed was between Lardeau and Ger-
rard. In 1903, the company leased its properties to CPR for a
term of 999 years from August 15, 1901. This lease was
approved by Order-in-Council P.C. 1056, June 29, 1903.
The line from Kaslo to Sandon was built by the Kaslo and
Slocan Railway Company, which was incorporated in 1892 by
an Act of the Legislature of British Columbia (55 Victoria, c.
52). In "1917, the works of the company were declared to be for
the general advantage of Canada by an Act of Parliament (7-8
Geo. V, c. 54). The properties of the company were later leased
to CPR, and such lease was approved by Order-in-Council P.C.
1486, May 5, 1921.
The line from Procter to Nelson was built by the British
Columbia Southern Railway Company whose line between the
eastern boundary of the Province and Nelson was leased to
CPR in 1898. The lease was approved by Order-in-Council
P.C. 2007, August 18, 1898, in perpetuity.
It is this network of lines which led to and from Kootenay
Lake to connect with the Kootenay Lake barge operation with
which we are presently concerned in this decision.
It appears that the first steamer service to operate on Koote-
nay Lake came into being upon completion of the Lardeau to
Gerrard line. This service was operated from Lardeau down
Kootenay Lake to various points along the lake, including
Kaslo and Procter. CPR, by virtue of the fact that it acquired
in its lease all the rights and obligations of the Columbia and
Kootenay Railway and Navigation Company, acquired the
right to operate a barge service on Kootenay Lake. By July 31,
1975, CPR was operating solely a barge service on Kootenay
Lake. The extent of this service originally was that it made it
possible to load railway cars onto CPR barges at each of the
stops on the lake and transport them to other locations on the
lake where they could be unloaded from the barges and sent on
to their final points of destination. With the abandonment of
the lines from Lardeau to Gerrard and from Kaslo to Roseber-
ry, by July 1975 the railway cars, once unloaded from the
barge, were themselves unloaded and remained at the site until
reloaded and ready for a barge trip to other points on the lake.
Effective July 31, 1975, CPR abandoned the operation of its
barge service between Procter, Kaslo and Lardeau, on Koote-
nay Lake, B.C.
The barges were first operated to connect various towns
situated on Kootenay Lake and the line of railway which ran
out of these towns. These barges were an integral part of CPR's
undertaking in this area, and as such formed an integral part of
CPR's railway system. The barges were built uniquely to
accommodate rail traffic. There are rails on each barge which
link up with rails on the wharves of each point of origin and of
destination, thereby enabling railway cars to be transported
from one point on Kootenay Lake to another without them
selves being loaded and unloaded.
The barges were never a separate operation from the operation
of the railway lines which serve the Kootenay Lake area. They
were built with actual rails on them so as to be able to connect
directly with the lines of railway at Procter, Kaslo and Lar-
deau. Without the barges, there would have been no connected
and continuous railway system to serve these areas. They were
operated, as mentioned above, in place of a railway line along
the shore because it was considered to be a more efficient
method of transporting rail traffic from one town on the lake to
another town on the lake....
The rail barges were towed by Kootenay Lake
Towing Ltd. A letter dated December 10, 1975
from this company to the Committee describes the
operation of the barges in part as follows:
On the Kootenay Lake operation, locomotive engines were
transported at one time, but it was found to be more economi
cal for the locomotive engine to load the barge at Procter. In
Kaslo and Lardeau, a specially designed rubber tired machine
pulls the cars to their destination thus saving the rail company
the expense of transporting locomotive engine, caboose, train
crews, etc., which in turn leaves more room for cars of revenue
on the barges.
CP does not challenge this account of the facts
concerning the origin and operation of the rail
barge service.
The Committee held, first, that the rail barge
service was an integral part of CP's railway system
or undertaking, and as such fell within federal
legislative jurisdiction. It held further that the rail
barge came within the definition of "railway" in
section 2 of the Railway Act, which reads as
follows:
"railway" means any railway that the company has au
thority to construct or operate, and includes all branches,
extensions, sidings, stations, depots, wharfs, rolling stock,
equipment, stores, property real or personal and works con
nected therewith, and also any railway bridge, tunnel or
other structure that the company is authorized to construct;
and, except where the context is inapplicable, includes street
railway and tramway.
The Committee's reasoning on this point is re
flected in the following passages of its decision:
... the barge operation forms part of the railway system and,
as such, falls within the scope of the definition of "railway"
found at Section 2 of the Railway Act. Although the definition
does not mention the word "barges" or any other word related
to transport by water, it does include all "equipment" and all
"property real or personal and works connected therewith". It
cannot be disputed that the rails of the company are part of the
company's equipment and part of its property, and there is no
reason to say that rails found on a barge are any different in
nature from those found on the ground. Consequently, the
barge upon which the rails are located forms part of the "works
connected therewith".
There can, therefore, be no doubt, in the Committee's opin
ion, that the operation of the barges by CPR, such barges being
an integral link in the railway system, must fall within the
scope of the definition of "railway" found at Section 2 of the
Railway Act. It might be different if there were no rails on the
barge and the goods were unloaded from the railway cars to be
transported across the lake, but this particular system of barge
transport with connecting rails on each shore is in effect only a
moveable railway bridge which moves rail traffic over water to
connect with railway lines on the other side.
Finally, the Committee held that the rail barge
service constituted a branch line of railway. Its
reasoning on this point is reflected in the following
passage of its decision:
Having decided that a barge service falls within the definition
of railway, there is no problem in concluding that as such it can
be a branch line, and in the present case, the barge service
between Procter, Kaslo and Lardeau (including the railway
track located at Kaslo and Lardeau) is just that. It is a feeder
line which feeds CPR's railway line south of Procter, B.C.
CP does not challenge the Committee's holding
that the rail barge service forms an integral part of
CP's railway system or undertaking, and as such
falls within federal legislative jurisdiction. CP con
tends, however, that this conclusion is not enough
by itself to bring the rail barge service within the
abandonment provisions of the Railway Act. I
agree with this contention.
CP concedes that the definition of "railway" in
section 2 of the Railway Act may be broad enough
on its face to include the rail barge, but it contends
that when one looks at the Railway Act as a
whole, as well as the federal legislation respecting
the regulation of vessels and transport by water, it
is clear that it could not have been contemplated
that the rail barge service should be considered a
line of railway subject to the provisions of the
Railway Act respecting abandonment. Reference
was made to sections 107 and following of the Act
to show that the scheme of the Act contemplates
fixed lines the location of which can be shown on a
plan, profile and book of reference. It was argued
that these provisions concerning construction and
commencement of operations could not be applied
to a rail barge service. Since the Act does not
provide for approval of the establishment and com
mencement of such a service, it is not logical, runs
the argument, to conclude that it could be con
cerned with its abandonment.
CP emphasized the distinction between rail
transport and water transport, which is reflected in
certain provisions of the Railway Act and in the
existence of the Transport Act, providing for the
regulation of water transport, as well as the provi
sions of the Canada Shipping Act, R.S.C. 1970, c.
S-9, respecting the regulation of vessels. Reference
was made particularly to the definitions of "ship"
in these two statutes which make specific reference
to "barge" and to the definition of "goods" in
section 2 of the Railway Act which reads as
follows:
"goods" include personal property of every description that
may be conveyed upon the railway, or upon steam vessels or
other vessels connected with the railway.
Finally, reference was made to section 304 of
the Railway Act, the import of which was con
sidered by the Committee and which reads as
follows:
304. The provisions of this Act, in respect of tolls, tariffs and
joint tariffs, so far as deemed applicable by the Commission,
extend and apply to the traffic carried by any railway company
by sea or by inland water, between any ports or places in
Canada, if the company owns, charters, uses, maintains or
works, or is a party to any arrangement for using, maintaining
or working vessels for carrying traffic by sea or by inland water
between any such ports or places.
CP argued that this provision indicated the
extent to which the Railway Act was intended to
apply to the water transport operations of a rail
way company. I agree with the Committee that
one cannot conclude from this provision, which
applies to all forms of water transport operated by
a railway company, that other provisions of the
Act could not have been intended to have any
application to a rail barge operation.
The issue remains: is the operation of the rail
barge service, although it involves a form of water
transport, the operation of a line of railway?
The reasoning of the Committee may be sum
marized as follows: The rail barge service is an
integral part of CP's railway system; the operation
of the rail barge service is therefore the operation
of a part of the railway system; the operation of
this particular part of the railway system may be
assimilated to the operation of a part of a railway
line. I do not think this reasoning carries far
enough. The Act does not prohibit the abandon
ment, without permission, of any part of a railway
system, but the abandonment of the operation of a
line of railway. A "line of railway" is not defined
in the Railway Act, but I take it to be a particular
part of a railway system consisting of a length of
roadbed and track over which rolling stock is
moved. Cf. Canadian Pacific Ry. Co. v. Attorney-
General for British Columbia and Attorney-Gen
eral for Canada [1950] A.C. 122 per Lord Reid at
page 143.
The heart of the issue, as I see it, is reflected in
the following words of the Committee—"this par
ticular system of barge transport with connecting
rails on each shore is in effect only a moveable
railway bridge which moves rail traffic over water
to connect with railway lines on the other side."
The rail barge service is undoubtedly a connection
between various railway lines in the CP railway
system. It is also true to say that the rail barge
moves "rail traffic" between these various points—
that is, traffic contained in railway cars, capable of
being carried over railway lines. But it is necessary
to be able to conclude that in its passage from one
point to another on Kootenay Lake the rail barge
constitutes a line of railway, and that the operation
of the rail barge service constitutes the operation
of a line of railway. Undoubtedly there is a sense
in which the rail barge service can be said to
extend a rail service from Procter to Lardeau and
Kaslo, in that it extends the advantages of the
carriage of goods in railway cars to and from these
points. This may well be the essence of a rail
service from the point of view of shipper and
consignee—the particular advantages of loading
and unloading associated with railway cars, the
volume and kind of freight that can be carried by
them, the fact that they can move over the CP's
main line on the particular terms and conditions of
railway freight. But the criterion of the applicable
legislative provisions would not appear to be
whether or not one is losing what may be broadly
described as a rail service, but whether there is the
abandonment of the operation of a railway line.
A railway is a mode of conveyance. A vessel is
another mode of conveyance. What is really
involved in the operation of a railway line is a
particular mode of conveyance. In the rail barge
service, the mode of conveyance is the barge and
not the railway cars. When the barge is acting as
the mode of conveyance across Kootenay Lake the
railway cars are serving the function of containers.
At the terminal points of the voyage of the rail
barge the railway cars are moved over track. They
are at that point acting as rolling stock and a
means of conveyance, but it is in the operations of
loading and unloading. The conveyance from one
point to another on Kootenay Lake is by means of
the rail barge, a vessel engaged in a form of water
transport—the transport of railway cars as the
containers of freight. The operation of the rail
barge service is, therefore, not in my opinion the
operation of a line of railway and does not fall
within the abandonment provisions of the Railway
Act. To hold otherwise, would be to conclude that
the rail barge service is the operation of a move
able line of railway that by connection from time
to time forms part of the CP's main line. Apart
from the fact that it is the barge and not the
railway that is the means of conveyance, there is
the practical problem in this conception of identi
fying the line of railway represented by the barge
service. The provisions of the Railway Act respect
ing the approval of location, construction and com
mencement of operation of railway lines would not
appear to contemplate and could not have practi
cal application to a notional line of railway cross
ing a body of water by means of a vessel between
various points.
I come to this conclusion reluctantly because of
the long history of the rail barge service as a part
of CP's operations and the dependence of the
region on it. There may be very sound reasons of
policy arising from these circumstances for con
cluding that the abandonment of the rail barge
service should be subject to the requirement of
approval by the Commission. But the legislation as
presently drawn, viewed in the context of federal
legislation generally governing transportation, does
not in my opinion permit this extension by judicial
construction. Counsel who appeared and argued in
support of the Committee's decision laid particular
stress on section 21 of the National Transporta
tion Act (as well as the similar provision in section
3 of the Transport Act) which directs the Commis
sion to perform the functions vested in it under the
applicable statutes governing transportation "with
the object of coordinating and harmonizing the
operations of all carriers engaged in transport by
railways, water, aircraft, extraprovincial motor
vehicle transport and commodity pipelines". I do
not think this provision is of assistance to the
Court in the construction of the abandonment
provisions of the Railway Act. What is in issue
here is not how the Commission should exercise its
function under those provisions but. whether it has
such a function in respect of the rail barge service.
Before concluding, reference must be made to
an additional basis, quite separate from the aban-
donment provisions of the Railway Act, which the
Committee invoked in support of its decision.
Citing subsection 262(1) of the Railway Act,
which requires a railway company to "furnish, at
the place of starting, and at the junction of the
railway with other railways, and at all stopping
places established for such purpose, adequate and
suitable accommodation for the receiving and
loading of all traffic offered for carriage upon the
railway", the Committee held that "By virtue of
this section, CPR has an obligation to provide
accommodation for all traffic offered for carriage
upon its lines of railway in the Kootenay Lake
area, and this necessarily includes traffic which is
offered from Procter to Kaslo or Lardeau." This
reasoning, which was not pressed in argument by
those appearing in support of the Committee's
decision, is in my opinion without merit. It con
strues subsection 262(1) as imposing on a railway
company an obligation not only to provide ade
quate and suitable accommodation for traffic
offered at the various points on its line, but an
obligation, not supported by the language of the
subsection, to extend its rail service beyond the end
of its line.
For the foregoing reasons I am of the opinion
that the Railway Transport Committee of the
Canadian Transport Commission was without
jurisdiction to order CP to reinstate and resume
the rail barge service on Kootenay Lake, and that
accordingly the appeal should be allowed.
* * *
PRATTE J. concurred.
* * *
RYAN J. concurred.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.