A-679-81
CSP Foods Ltd. and Canbra Foods Ltd.
(Appellants)
v.
Canadian Transport Commission, Canadian Pacif
ic Limited and Canadian National Railway Com
pany (Respondents)
Court of Appeal, Urie, Le Dain JJ. and Lalande
D.J.—Winnipeg, March 11; Ottawa, April 28,
1982.
Railways — Appeal pursuant to s. 64(2) of National Trans
portation Act against Order No. R-32581 of Canadian Trans
port Commission — Order purporting to give effect to Order in
Council 1976-894 whereby rates for movement of freight are
to be established annually at minimum compensatory levels
Order No. R-32581 made less than 12 months after Order No.
R-31868 to same effect — Whether Order No. 32581 contrary
to Order in Council — Order No. R-32581 invalid — Order in
Council legislative in nature — Word "annually" not to be
ignored — "Annually" meaning "once a year" — "Year"
referring to calendar year — Rates to be established once a
year, i.e. once during calendar year — Appeal allowed
National Transportation Act, R.S.C. 1970, c. N-17, ss. 3, 64
— Railway Act, R.S.C. 1970, c. R-2, s. 276 — Federal Court
Rule 1312.
This is an appeal brought pursuant to subsection 64(2) of the
National Transportation Act from Order No. R-32581 of the
Railway Transport Committee of the Canadian Transport
Commission. The Order purported to give effect to Order in
Council 1976-894 which provided that rates for the movement
of rapeseed meal and oil be established annually at minimum
compensatory levels. Order No. R-32581 was issued less than a
year after Order No. R-31868 which prescribed rates for the
movement of the freight referred to. The question is whether
the issuance of two rate Orders within the same calendar year
contravenes Order in Council 1976-894. Appellants argue that
the rates must be established once a year and that the year to
which the word "annually" applies is the calendar year.
Respondents contend that the word "annually" must be read in
conjunction with section 276 of the Railway Act and that the
rates must be set whenever they become non-compensatory.
The Order in Council should thus read as if the words "provid-
ed the rates in any annual period continue to be compensatory"
were included in it. Respondents also submit that the Commis
sion, in establishing, by its Order No. R-31868, rates based on
the railways' 1980 variable costs and by its Order No.
R-32581, rates based on the railways' 1981 variable cost pro
jections, did not contravene the Order in Council.
Held, the appeal is allowed and Order No. R-32581 is
invalid. The Order in Council is legislative in nature and is
subject to construction by the courts in the same manner as any
other legislative enactment. The presence of the word "annual-
ly" is not to be ignored. The Commission is not deprived of its
ability to ensure that the freight rates are compensatory. Its
inclusion merely prescribes the frequency of the calculation of
the minimum compensatory rates. Considering the various
dictionary definitions of the word "annually", it can be said
that the rates are to be established once a year, in accordance
with the Order in Council. And that year, in the absence of
provisions in the said Order in Council or in the Railway Act
showing that rates should be established during a year com
mencing on a date other than January 1, is the calendar year.
Respondents' second submission is without merit. Relating
rates established by a Commission Order in a given year to
variable costs established for another year cannot validate an
Order which is otherwise invalid because it is the second such
Order made by the Commission in a calendar year.
APPEAL.
COUNSEL:
M. E. Rothstein, Q.C. and M. Monnin for
appellants.
K. M. Bloodworth for respondent, Canadian
Transport Commission.
G. Nerbas and P. Antymniuk for respondent,
Canadian National Railway Company.
T. J. Moloney and A. Ludkiewicz for
respondent, Canadian Pacific Limited.
SOLICITORS:
Aikins, MacAulay & Thorvaldson, Win-
nipeg, for appellants.
K. M. Bloodworth, Hull, for respondent,
Canadian Transport Commission.
G. Nerbas, Winnipeg, for respondent, Canadi-
an National Railway Company.
T. J. Moloney, Montreal, for respondent,
Canadian Pacific Limited.
The following are the reasons for judgment
rendered in English by
URIE J.: The appellants, with leave of the Court
granted pursuant to subsection 64(2) of the Na
tional Transportation Act, R.S.C. 1970, c. N-17,
appeal Order No. R-32581 of the Railway Trans
port Committee of the Canadian Transport Com
mission (hereinafter called "the Commission").
Subsection 64(2)' provides for an appeal on a
question of law or a question of jurisdiction.
Order No. R-32581, dated August 27, 1981 was
issued purportedly in compliance with Order in
Council P.C. 1976-894 dated April 13, 1976. That
Order in Council was issued as a result of a
petition filed by the appellants herein, or their
corporate predecessors, to the Governor in Council
pursuant to subsection 64(1) of the National
Transportation Act. 2 The petition sought to vary
tariffs of tolls filed by the railway companies as
directed by Commission Order No. R-16824 dated
July 27, 1973 and as approved by Commission
Order No. R-17016 dated August 2, 1973.
Order in Council P.C. 1976-894, as recited in
Order No. R-32581, reads as follows:
WHEREAS Order-in-Council P.C. 1976-894, dated April 13,
1976, provides for the establishment of rates on rapeseed meal
and rapeseed oil, as follows:
"that the following rates or portions of rates for domestic and
export movement of rapeseed meal and rapeseed oil from the
four rapeseed crushing plants at Altona, Nipawin, Saskatoon
and Lethbridge be established annually at minimum compen
satory levels:
(i) rates for rapeseed meal and rapeseed oil moving west;
(ii) rates for rapeseed oil moving east; and
64....
(2) An appeal lies from the Commission to the Federal Court
of Appeal upon a question of law, or a question of jurisdiction,
upon leave therefor being obtained from that Court upon
application made within one month after the making of the
order, decision, rule or regulation sought to be appealed from or
within such further time as a judge of that Court under special
circumstances allows, and upon notice to the parties and the
Commission, and upon hearing such of them as appear and
desire to be heard; and the costs of such application are in the
discretion of that Court.
z 64. (1) The Governor in Council may at any time, in his
discretion, either upon petition of any party, person or company
interested, or of his own motion, and without any petition or
application, vary or rescind any order, decision, rule or regula
tion of the Commission, whether such order or decision is made
inter partes or otherwise, and whether such regulation is gener
al or limited in its scope and application; and any order that the
Governor in Council may make with respect thereto is binding
upon the Commission and upon all parties.
(iii) the portions of rates pertaining to the movement of
rapeseed meal east of Thunder Bay or Armstrong,
Ontario."
The Railway Transport Committee ("the Com
mittee") by Order No. R-23976 dated November
26, 1976 and by subsequent Orders up to and
including Order No. R-32581 here under appeal,
purported to give effect to the directive contained
in the foregoing Order in Council. It should be
pointed out that earlier in 1981, namely on Febru-
ary 11, the Committee had issued Order No.
R-31868 prescribing rates for the movement of
rapeseed meal and rapeseed oil.
Order No. R-23976 aforesaid was the subject of
an appeal to this Court by the same appellants as
those bringing this appeal, wherein it was held,
inter alia, that the Order in Council left to the
Commission the discretion to determine the "mini-
mum compensatory levels" which the public inter
est requires. 3
The issues in this appeal differ from those in the
earlier one and have been defined by the appel
lants in their memorandum of points of argument
as follows:
(a) The Railway Transport Committee acted without juris
diction or exceeded its jurisdiction in issuing Order R-32581
on August 27, 1981 establishing minimum compensatory
rates more than annually contrary to Order in Council P.C.
1976-894 which provides that minimum compensatory rates
are to be established annually.
(b) The Railway Transport Committee erred in law in
interpreting the term "annually" in Order in Council P.C.
1976-894.
(c) The Railway Transport Committee issued Order
R-32581 without allowing the Appellants an opportunity to
be heard and thereby denied them natural justice and thus
exceeded its jurisdiction.
(d) The Railway Transport Committee failed in its duty to
act fairly by issuing Order R-32581 without allowing the
Appellants an opportunity to be heard and thus exceeded its
jurisdiction.
The respondents do not contest this definition of
the issues.
It is convenient to deal with issues (a) and (b)
together since both turn on whether or not issuing
two rate Orders within a period of slightly over six
months of one another, in the same calendar year,
contravenes the directive in Order in Council P.C.
3 [1979] 1 F.C. 3.
1976-894 that rates "be established annually
at minimum compensatory levels". (Emphasis
added.)
The appellants contend that in the context of
Order in Council P.C. 1976-894 the use of the
word "annually" must mean that the rates to be
established at minimum compensatory levels are tc
be established once a year. Moreover, they say,
when interpreting the word "annually", it is neces
sary to define the commencement and termination
of the year to which the word applies. In their
view, in the absence of words showing intention to
the contrary, the year to which the word "annual-
ly" applies should be the calendar year.
The respondents say, on the other hand, that the
word "annually", as it appears in the Order in
Council, must be read in its complete context and
in conjunction with section 276 of the Railway
Act, R.S.C. 1970, c. R-2 4 . That section deems any
freight rate to be compensatory when it exceeds
the variable cost of the movement of the traffic
concerned as determined by the Commission.
Therefore, in the respondents' submission, the
statutory imperative is that the rates be compensa
tory and that imperative cannot be affected by the
inclusion of the word "annually" in the Order in
Council. In other words, counsel said, the Order in
Council must be subservient to the policy state
ments in section 3 of the National Transportation
Act as implemented in the Railway Act. In coun
sel's view the Order in Council should be read as
though the words "provided the rates in any
° 276. (1) Except as otherwise provided by this Act all freight
rates shall be compensatory; and the Commission may require
the company issuing a freight tariff to furnish to the Commis
sion at the time of filing the tariff or at any time, any
information required by the Commission to establish that the
rates contained in the tariff are compensatory.
(2) A freight rate shall be deemed to be compensatory when
it exceeds the variable cost of the movement of the traffic
concerned as determined by the Commission.
(3) In determining for the purposes of this section and
section 277 the variable cost of any movement of traffic, the
Commission shall
(a) have regard to all items and factors prescribed by
regulations of the Commission as being relevant in the
determination of variable costs; and
(b) compute the costs of capital in all cases by using the costs
of capital approved by the Commission as proper for the
Canadian Pacific Railway Company.
annual period continue to be compensatory" were
included in the Order in Council. This is the only
way to reconcile the two instruments, it was said.
I am unable to agree with the respondents'
submissions based upon this interpretation of the
effect of the Order in Council since effectively it
involves deletion of the word "annually" from that
Order or, as was suggested, the addition thereto of
words of the nature above referred to. In my view,
Order in Council P.C. 1976-894 is legislative in
nature and is subject to construction by the courts
in the same manner as any other legislative enact
ment. It is to be read in conjunction with the
Railway Act, construed in a manner consistent
therewith and giving effect to all of the words in
each. The presence of the word "annually" in the
Order in Council cannot be ignored and its pres
ence does not, in my opinion, deprive the Commis
sion of the ability to ensure that the freight rates
in issue are compensatory. All that its inclusion
does is to prescribe the frequency of the calcula
tion or establishment of the minimum compensato
ry rates. The question thus becomes one of deter
mining when the rates are to be established which,
in turn, necessitates the ascertainment of the
meaning of the word "annually" in the context in
which it is used.
The Oxford English Dictionary, Sixth Edition,
1980, Vol. I, defines "annually" as:
In annual order or succession, yearly, every year, year by year.
Black's Law Dictionary, Fifth Edition, defines
the word as:
In annual order or succession; yearly, every year, year by year.
At the end of each and every year during a period of time.
Imposed once a year, computed by the year. Yearly or once a
year but does not in itself signify what time in year.
The word "yearly" is defined in The Shorter
Oxford English Dictionary, Third Edition, as:
Every year, once a year, annually.
It can thus be safely said that in so far as the
dictionary meaning of "annually" is concerned the
minimum compensatory rates must be established
in accordance with the directive provided by the
Order in Council once a year so that the respond
ents' argument that they must be set whenever the
rates become non-compensatory must fail. How
ever, nothing in the context of either the Order in
Council or of section 276 of the Railway Act
prescribes when during the year they must be
established or, perhaps more importantly, to what
year reference is made. There may be more pos
sibilities but four come immediately to mind:
(1) the calendar year;
(2) the year commencing on each anniversary date following
the date of the Order in Council, namely, April 13, 1976;
(3) the year commencing on each anniversary date following
the date of the first order establishing the rates in accordance
with the directive contained in the Order in Council, that is
Order No. R-23976 issued November 26, 1976; and
(4) the year commencing on the anniversary date of the next
preceding order so establishing the rates, that is, Order No.
R-31868, issued on February 11, 1981.
An examination of the record discloses that
except in 1976 when the first Order fixing the
rates, No. R-23976, was issued on November 26,
1976 by the Commission, the Commission did not
issue orders establishing rates in each calendar
year or before the anniversary dates of the Order
in Council, or of the first Order in the year 1976.
On April 3, 1978 it issued the second Order, No.
R-26600. The third Order was No. R-31155 and
was not issued until July 9, 1980 well over two
years following the issuance of the preceding
Order No. R-26600. Then followed Orders
number R-31868 issued February 11, 1981 and
R-32581, the Order in issue in this appeal, issued
on August 27, 1981. Plainly the practice of the
Commission lends no assistance in determining
what "year" was envisaged in the use of the word
"annually". By the same token there is nothing in
the context of either the Order in Council or of the
Railway Act that is in any way persuasive that
"annually" refers to any year other than the calen
dar year.
On the other hand there is in the record corre
spondence written on behalf of the respondent
railways from which an inference may be clearly
drawn that at least latterly, they envisaged the
fixation of rates by the Committee once during
each calendar year. In the absence of anything in
the Order in Council or the statute which would
lead to a conclusion that rates should be estab-
lished during a year commencing on a date other
than January 1 in each year, I am of the opinion
that it is the calendar year which should be the
year during which rates should be established pur
suant to the Order in Council. The time at which
they should be established in each calendar year is
a matter for the Commission which must bear in
mind that it should not permit the rates to vary
from minimum compensatory levels for periods
longer than reasonably necessary to establish
changed rates in each year.
In reaching this conclusion I have not over
looked the respondents' contention that the record
discloses that the Commission by Order No.
R-31868 established rates based on the railways'
1980 variable costs while by Order No. R-32581 it
established rates based on their 1981 variable cost
projections. That, in counsel's submission, demon
strated that Order No. R-32581 was not made in
contravention of the Order in Council. The short
answer to that submission is, it seems to me, that
the Order in Council does not direct that variable
costs be established annually but, rather, that rates
be so established at minimum compensatory levels.
Accordingly, relating rates established by a Com
mission Order in a given year to variable costs
established for another year cannot validate an
Order which otherwise would be invalid because it
was the second such Order made by the Commis
sion in a calendar year. In my opinion, those
circumstances do not affect the conclusion to
which I have come.
Having reached this conclusion it becomes un
necessary for the Court to consider the appeal
based on grounds (c) and (d), supra.
The appeal should be, therefore, allowed.
Accordingly, it should be certified to the Canadian
Transport Commission that in the opinion of the
Court, Order No. R-32581 is invalid and ought to
be set aside. Having regard to Rule 1312, there
ought not to be any costs to any party.
LE DAIN J.: I agree.
LALANDE D.J.: I agree.
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.