Judgments

Decision Information

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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.
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