Docket: A-310-13
Citation:
2015 FCA 1
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CORAM:
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NADON J.A.
PELLETIER J.A.
TRUDEL J.A.
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BETWEEN:
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CANADIAN PACIFIC RAILWAY COMPANY
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Appellant
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and
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CANADIAN TRANSPORTATION AGENCY AND PARRISH & HEIMBECKER,
LIMITED
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Respondents
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REASONS
FOR JUDGMENT
PELLETIER J.A.
I.
Introduction
[1]
Canadian Pacific Railway Company (CP) and
Parrish & Heimbecker (P&H) were unable to agree on a price for the
transportation of P&H’s grain cars from the latter’s terminal at Milk River, Alberta to the Burlington Northern and Santa Fe Railway (BNSF) at the
Canada-United States (US) border at Coutts, Alberta. In light of this impasse,
P&H applied to the Canadian Transportation Agency (the Agency) for an
interswitching order which, if granted, would require CP to haul P&H’s cars
from Milk River to Coutts for the statutory rate of $315 per car instead of
CP’s commercial rate of $1,373 per car, a substantial difference.
[2]
The Agency considered the matter and, in
Decision No. 165-R-2013 (the Decision), made the interswitching order. CP was
given leave to appeal the Agency’s decision to this Court pursuant to section
41 of the Canada Transportation Act, S.C. 1996, c.10 (the Act), which
limits appeals to questions of law and jurisdiction.
[3]
CP argued that the Agency erred in making an
interswitching order because one of the conditions for the making of such an
order, the presence of an interchange, was not satisfied. CP argued that there
was no interchange at Coutts, Alberta because BNSF did not have a line of
railway there which connected with CP’s railway in Canada so as to be subject
to the Agency’s jurisdiction.
[4]
For the reasons which follow, I would dismiss
the appeal with costs to P&H.
II.
The background
[5]
P&H has a terminal at Milk River, Alberta, from which it exports grains to the US. Its terminal is served by a siding which
connects (at mileage 12.61) to CP’s Montana Subdivision. A subdivision, in this
context, simply refers to a portion of a rail line. For example, the Montana
Subdivision runs north from the US border to a point southeast of Lethbridge, Alberta where it connects with CP’s Taber Subdivision (Decision at paragraph
5).
[6]
CP’s Montana Subdivision connects with BNSF’s track
at the US border. The nature of that connection is in issue in these
proceedings.
[7]
Each railway company has storage tracks on its
side of the border. CP operates three storage tracks (the Coutts Yard), which
connect with the Montana subdivision approximately 350 yards from the border .
BNSF’s storage tracks are known as the Sweet Grass Yard.
[8]
CP and BNSF have exchanged traffic at this
location for many years. In 2012, they exchanged 90,945 cars. The mechanics of
this transfer of traffic were described by the Agency as follows:
-Northbound traffic destined for Canada is parked in the Sweet Grass Yard for pick up by CP. CP enters into the United States, hooks onto the northbound rail cars and brings them across the international boundary
into the Coutts Yard for delivery.
-Southbound traffic destined for the United States is parked on a CP track in the Coutts Yard for pick up by BNSF. BNSF enters
into Canada, hooks onto the southbound rail cars and brings them across the
international boundary into the Sweet Grass Yard for delivery.
(Decision at paragraph 9).
[9]
The conduct of business between CP and BNSF at
this location has been governed by agreement since 1928. The original agreement
was revised in 2005 and is now known as the Interchange Agreement, the material
portions of which provide as follows:
[BNSF has] the right to use, for purposes
contemplated within this Agreement, subject to CPR’s safety and operating
rules, regulations and supervision the CPR Lead tracks identified between
points “A” and “C” on Exhibit #1 [...] In addition to the CPR Lead, CPR grants
to BNSF the right to place and pull Interchange Cars at locations designated
from time to time by local CPR operating officers at CPR’s Coutts Yard,
collectively referred to as CPR owned trackage.
…
The parties when conducting contemplated
interchange shall operate over trackage owned by CPR (CPR Lead) between
BNSF/CPR connection at the international border and the CPR connection with
their yard located in Coutts, Alberta [...]
CPR grants to BNSF the right to use, for
purposes contemplated within this Agreement, subject to CPR’s safety and
operating rules, regulations and supervision the CPR Lead tracks [...] In
addition to the CPR Lead, CPR grants to BNSF the right to place and pull
Interchange Cars at locations designated from time to time by local CPR
operating officers at CPR’s Coutts Yard, collectively referred to as CPR owned
trackage.
(Decision at paragraphs 13-14).
[10]
In an earlier decision, Decision No. 35-R-2009, the
Agency explained that interswitching of rail traffic between railway companies
has existed in Canada since the early 1900s. Interswitching was introduced to
limit the proliferation of railway lines in urban areas serving manufacturing-based
industries where each railway constructed its own lines to its own customer’s
door. These customers then became captives of that railway, which created an
opportunity for monopolistic service and rate situations.
[11]
Parliament introduced a number of measures to
deal with these issues, including interswitching (s. 127 of the Act),
competitive line rates (s. 129) and orders granting running rights (s. 138).
All of these measures were intended to provide shippers with access to
competitive alternatives.
[12]
Interswitching is defined at section 111 of the
Act:
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“interswitch” means
to transfer traffic from the lines of one railway company to the lines of
another railway company in accordance with regulations made under section
128;
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« interconnexion »
Le transfert du trafic des lignes d’une compagnie de chemin de fer à celles
d’une autre compagnie de chemin de fer conformément aux règlements
d’application de l’article 128.
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[13]
Section 128 authorizes the Agency to make
regulations with respect to interswitching.
[14]
The Agency’s power to make interswitching orders
is found in section 127 of the Act:
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127. (1) If a
railway line of one railway company connects with a railway line of another
railway company, an application for an interswitching order may be made to
the Agency by either company, by a municipal government or by any other
interested person.
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127. (1) Si une
ligne d’une compagnie de chemin de fer est raccordée à la ligne d’une autre
compagnie de chemin de fer, l’une ou l’autre de ces compagnies, une
administration municipale ou tout intéressé peut demander à l’Office
d’ordonner l’interconnexion.
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(2) The Agency may
order the railway companies to provide reasonable facilities for the
convenient interswitching of traffic in both directions at an interchange
between the lines of either railway and those of other railway companies
connecting with them.
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(2) L’Office peut
ordonner aux compagnies de fournir les installations convenables pour
permettre l’interconnexion, d’une manière commode et dans les deux
directions, à un lieu de correspondance, du trafic, entre les lignes de l’un
ou l’autre chemin de fer et celles des autres compagnies de chemins de fer
qui y sont raccordées.
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(3) If the point of
origin or destination of a continuous movement of traffic is within a radius
of 30 km, or a prescribed greater distance, of an interchange, a railway
company shall not transfer the traffic at the interchange except in
accordance with the regulations.
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(3) Si le point
d’origine ou de destination d’un transport continu est situé dans un rayon de
30 kilomètres d’un lieu de correspondance, ou à la distance supérieure prévue
par règlement, le transfert de trafic par une compagnie de chemin de fer à ce
lieu de correspondance est subordonné au respect des règlements.
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[15]
As set out in subsections 127(2) and (3), the existence
of an interchange is an important factor in the interswitching scheme. An
interchange is defined at section 111 of the Act:
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“interchange” means
a place where the line of one railway company connects with the line of
another railway company and where loaded or empty cars may be stored until
delivered or received by the other railway company;
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« lieu de
correspondance » Lieu où la ligne d’une compagnie de chemin de fer est
raccordée avec celle d’une autre compagnie de chemin de fer et où des wagons
chargés ou vides peuvent être garés jusqu’à livraison ou réception par cette
autre compagnie.
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[16]
To summarize, interswitching involves the transfer of
traffic from one line of railway to another which requires that there be two
lines of railway which connect with the each other. In addition, that
connection must include an interchange, that is a place where the cars of one
railway company can be stored until they are picked up by the other railway
company. Finally, if the point of origin (or destination) of a continuous
movement of traffic is within the prescribed distance from an interchange, a railway
shall not exchange traffic at that interchange except at the prescribed rates.
[17]
Since Milk River is within the prescribed distance from
the Coutts Yard, the only issue before the Agency and now, before this Court,
is whether the configuration at the Canada-US border is an interchange.
III.
The decision under appeal
[18]
After disposing of a preliminary question, the
Agency examined the question of whether BNSF had a line of railway at Coutts. The
Agency decided that it did, for two reasons. The first of these reasons had to
do with the nature of the connection between CP’s and BNSF’s lines at the
international border. CP’s position was that it owned all the land on the
Canadian side of the border so that it, and not BNSF, owned any installation on
that land. Beyond that, CP characterized the connection itself as a simple end
to end connection of its track with BNSF’s track at the international border so
that there was simply a single continuous track running from the Canadian side
of the border to the American side.
[19]
The Agency dealt with this issue in five short
paragraphs. It focused on the nature of a railway track’s physical connection.
It quoted a passage from an earlier decision (Decision No. 35-R-2009) in which
it noted an intervener’s description of a railway line connection:
The actual connection point of rail lines
occurs in a two to four metre space and it is unreasonable to interpret Section
111 to literally define the interchange as having to occur within these actual
two to four metres.
(Decision at paragraph 61).
[20]
The Agency then held that “connecting
railway lines do not abut; each railway track joins together with the other
track to form a continuous line” (Decision paragraph 62). This led the
Agency to conclude that:
…the physical connection of the lines of
railway of BNSF and CP is wider than, and extends beyond, the international
boundary into Canada at Coutts. Therefore, BNSF has a line of railway which
extends beyond the international boundary into Canada. The Agency therefore
finds that BNSF has a line of railway for the purpose of the interswitching
provision of the CTA.
(Decision at paragraph 63).
[21]
The Agency then turned to its second reason for
holding that BNSF has a line of railway in Canada, namely that its rights under
its Interchange Agreement with CP give it a sufficient interest in CP’s tracks
at the Coutts Yard for BNSF to have a line of railway in Canada.
[22]
The Agency noted that the Interchange Agreement
authorized BNSF to use CP’s infrastructure for the specific purpose of
interchange activities between the two. The rights conferred by the Interchange
Agreement include the right to use CP’s tracks and to “place
and pull rail cars interchanged with CP” (Decision at paragraph 65).
Furthermore, the Interchange Agreement provides that terminal management
decisions must be made in a non-discriminatory manner so that “... BNSF and CP have equal status with respect to the
dispatching of traffic interchanged on CP’s premises at Coutts” (Decision
at paragraph 66).
[23]
The Agency found that the rights acquired by
BNSF pursuant to the Interchange Agreement were more than running rights which
would simply enable the latter to travel over CP’s tracks. BNSF’s contractual
rights allowed it to perform all necessary operations in order to interchange
traffic with CP (Decision at paragraph 69).
[24]
As a result, the Agency concluded that BNSF had
a sufficient rights ;in CP’s tracks at the Coutts Yard for BNSF to have a
railway line within the meaning of the Act in relation to those tracks.
[25]
The Agency then considered whether the Coutts
Yard was a place “where loaded or empty cars may be
stored until delivered or received by the other railway company” within
the meaning of section 111 of the Act. The Agency observed that since it had
already concluded that the CP’s and BNSF’s lines of railway connected, the only
element left to be satisfied in the definition of an interchange was the issue
of storage tracks.
[26]
The Agency reviewed the evidence which showed
that the Coutts Yard was a place where CP could place cars until they were
picked up by BNSF. The fact that facilities for the interswitching of traffic
in the other direction existed on the other side of the international boundary
did not remove the Coutts Yard from the definition of an interchange.
[27]
The Agency concluded that, in this case, the “place” referred to in the definition of interchange “includes the entire area from the railway line connection to
the end of the Coutts Yard storage tracks to which BNSF has access under the
Interchange Agreement, all of which is entirely in Canada” (Decision at
paragraph 82). This last comment was directed to CP’s argument that the Agency
was giving the Act extra-territorial application.
[28]
Finally, the Agency concluded that the Milk
River Siding, the point of origin of P&H’s southbound traffic, was within
the statutory radius for interswitching at statutory rates since it was 20
kilometres from the Coutts Yard. It will be recalled that subsection 127(3) of
the Act imposes mandatory interswitching at statutory rates where the point of
origin of the traffic is within 30 kilometres (or prescribed greater distance)
of an interchange.
[29]
As a result, P&H was successful in
its application and CP was required to interswitch P&H’s grain cars at the
statutory rate. CP now seeks to set this decision aside.
IV.
The issues
[30]
The following issues are raised by this
appeal:
A.
The standard of review of the Agency’s
decision;
B.
Whether the Agency erred in law or
exceeded its jurisdiction in finding that BNSF’s line of railway extended into Canada?
C.
Whether the Agency erred in law in finding
that BNSF had a sufficient interest in CP’s Coutts Yard for it to be treated as
part of BNSF’s line of railway?
A.
The standard of review of the Agency’s decision
[31]
Both parties are agreed that the general
rule is that the Agency’s interpretation of the Act, its home statute, is to be
reviewed on a standard of reasonableness: Canadian National Railway Company
v. Canadian Transportation Agency, 2010 FCA 65, [2011] 3 F.C.R. 264, at
paragraphs 27-29, Canadian National Railway Company v. Transportation Agency,
2010 FCA 166, [2010] F.C.J. No. 815 [Fort Rouge], at paragraphs 19-21.
[32]
CP argues, however, that the Agency’s
determination that BNSF has a line of railway which extends into Canada such that the Agency has authority over BNSF is a true question of jurisdiction, in
respect of which the standard of review is correctness. Putting the argument
another way, CP says that the Agency has no jurisdiction to apply the Act
extra-territorially.
[33]
There is no issue of
extra-territoriality in this case. The Agency’s order requires CP, not BNSF, to
interswitch P&H’s cars at the regulated rate. The question of whether BNSF
required a certificate of fitness for its operations in Alberta, the
preliminary issue referred to earlier was deferred to another decision. To the
extent that the Agency asserts jurisdiction over BNSF, it does so with respect
to its operations at the Coutts Yard.
[34]
As a result, there is no question of
jurisdiction to which the correctness standard could apply.
B.
Whether the Agency erred unreasonably in law or
exceeded its jurisdiction in finding that BNSF’s line of railway extended into Canada?
[35]
CP attacked the Agency’s finding that a
connection between railway lines cannot take place on an international boundary
which was described as an “impossibly thin membrane,
phenomenal in length and height but with no width” (Decision at
paragraph 60). As a result, the Agency found that BNSF’s line of railway
necessarily extended into Canada at the point of connection.
[36]
CP pointed out that it owned all the land on the
Canadian side of the international boundary so that if anything supplied by
BNSF extended beyond the boundary, it would be CP’s property as opposed to
BNSF’s.
[37]
Furthermore, all the material provided to the
Agency by CP showed the railway line at the point where it crossed the
international boundary as a “single and seamless line of
track” (CP’s Memorandum of Fact and Law at paragraph 65).
[38]
Finally, CP was particularly critical of the
Agency’s apparent reliance on a passage taken from an intervener’s brief in
another proceeding, which I quoted earlier in these reasons, describing the
intervener’s view of a connection between railway lines.
[39]
Since this passage is immediately followed by
the Agency’s affirmation that “connecting railway lines
do not abut”, CP infers that the citation is the evidentiary foundation
for the Agency’s statement. CP alleges that this is factually incorrect and an
error in law to the extent that it purports to describe all railway line
connections.
[40]
The Agency’s conclusion on this point is a
finding of fact. It is a finding as to the physical layout of the tracks, a
pure question of fact. The wide berth which this Court must give to such
findings is illustrated by subsections 41(1) and (3) of the Act:
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41 (1) An appeal
lies from the Agency to the Federal Court of Appeal on a question of law
or a question of jurisdiction on leave to appeal being obtained from that
Court ….
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41 (1) Tout acte —
décision, arrêté, règle ou règlement — de l’Office est susceptible d’appel
devant la Cour d’appel fédérale sur une question de droit ou de compétence,
avec l’autorisation de la cour…
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…
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[…]
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3) An appeal shall
be heard as quickly as is practicable and, on the hearing of the appeal, the
Court may draw any inferences that are not inconsistent with the facts
expressly found by the Agency and that are necessary for determining the
question of law or jurisdiction, as the case may be.
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(3) L’appel est mené aussi rapidement que possible; la cour peut
l’entendre en faisant toutes inférences non incompatibles avec les faits
formellement établis par l’Office et nécessaires pour décider de la
question de droit ou de compétence, selon le cas.
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[my emphasis.]
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[mon soulignement.]
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[41]
There is no right of appeal from a finding of
fact.
[42]
At the hearing of the appeal, the question was
asked whether a conclusion of fact for which there was no evidentiary basis was
an error of law. Such an error would necessarily be unreasonable - how could it
be reasonable to draw conclusions of fact on no evidence? - and therefore
reviewable. If the only evidence in support of the Agency’s conclusion was the
passage it quoted from Decision 35-R-2009, I would be inclined to the view that
there was no evidence to support its conclusion. The response from counsel for
P&H was that the Agency was entitled to rely on its institutional knowledge
in concluding as it did as to the nature of the connection between the two
railways.
[43]
It is true that the Supreme Court has upheld the
right of labour relations boards to rely on their expert knowledge of the field
of labour relations (see Royal Oak Mines Inc. v. Canada (Labour Relations
Board), [1996] 1 S.C.R. 369 at paragraph 57, International
Longshoremen's and Warehousemen's Union, Ship and Dock Foremen, Local 514 v.
Prince Rupert Grain Ltd., [1996] 2 S.C.R. 432, at paragraph 37. However, I
am unaware of any case in which the Supreme Court has held that a tribunal may
resolve disputed questions of fact solely on the basis of its institutional
knowledge of relevant facts.
[44]
Because of the view which I have of the
second ground on which the Agency relied in coming to the conclusion it did, it
is not necessary, in this case, to determine the extent to which an
administrative tribunal can rely on its own knowledge to resolve disputed
questions of fact if indeed that is what happened here. If such a right exists,
then one would expect a tribunal to exercise a certain reserve in invoking its
institutional knowledge to supply facts which are in dispute
between the parties and that, when it did invoke such knowledge, it would do so
in as transparent a way as possible.
C.
Whether the Agency erred in law in finding that
BNSF had a sufficient interest in CP’s Coutts Yard for it to be treated as part
of BNSF’s line of railway?
[45]
CP’s position is that the Agency departed from
its own jurisprudence and misinterpreted this Court’s decision in Fort Rouge
when it held that the mere contractual rights, including the right to “use the tracks of the other party and to deliver and to pull rail
cars from the other railway company” (see Decision at paragraph 66) gave
BNSF a sufficient interest in the Coutts Yard to allow it to treat the Coutts
Yard as part of its line of railway.
[46]
According to CP, in Decision No. 439-R-1989 [Celgar]
the Agency decided that mere running rights were an insufficient basis for one
railway company to treat another railway company’s tracks and facilities as
part of its line of railway. In that case, there was an agreement between CP
and another railway company, BN, which allowed BN to travel over CP’s track
from Troup Junction, the point at which the BN line connected with CP’s, to a
storage yard at Nelson, B.C., some 9 kilometres away, and to joint usage of CP’s
track and facilities at Nelson for interswitching traffic. The Agency found
that this was insufficient to support the contention that BN had a line of
railway at Nelson. CP relies on the following passage from Celgar:
In this case, the Agency finds that there is
only one railway line from Troup Junction to Nelson, that of CP. BN does not
have a "line of railway" at Nelson merely by virtue of its agreement
with CP. Therefore, Nelson does not meet the definition of an interchange as
described in the NTA, 1987.
Celgar, available
at https://www.otc-cta.gc.ca/eng/ruling/439-r-1989.
[47]
It is implicit in the Agency’s decision in Celgar
that it treated “having” a line of railway as meaning “owning” a line of
railway.
[48]
CP argues that the requirement that a railway
company own a line of railway was confirmed in a subsequent decision of the
Agency, Decision 798-R-1993 [Ottawa Valley Partnership]. In that case,
CN and CP consolidated rail services in the Ottawa valley into a single railway
line (the Partnership Line). A question arose as to whether the interchanges
which had existed at various points along the pre-existing line and which were
now integrated into the Partnership Line continued to be interchanges as there
was now only one line of railway into and out of those storage yards. The
Agency found that CN and CP each had a line of railway into the storage yards
even though there was only a single physical line of railway. It held that:
The Agency is satisfied that the ownership
interest that each Partner has in the Partnership Line is sufficient to
conclude that each Partner has a "line of railway" for the purposes
of the definition of "interchange".
As each Partner has a "line of
railway", it is the opinion of the Agency that interchanges will exist
wherever a storage facility for cars exists on the Partnership Line. Even
though there is physically only one line of railway, it is the ownership interest
which, in the Agency's view, is determinative of the existence of an
interchange in this case. The present application is different from that
related to the Celgar Pulp Company in which the second railway company had only
joint trackage usage and running rights over a line of railway and not an
ownership interest in the line of railway.
Ottawa Valley Partnership, available at https://www.otc-cta.gc.ca/eng/ruling/798-r-1993.
[49]
CP argues, on the basis of this
jurisprudence that the Agency misinterpreted this Court’s decision in Fort
Rouge as establishing a new test for determining when a railway company has
a line of railway for the purposes of the definition of an interchange.
[50]
The facts in Fort Rouge are somewhat
convoluted but can be summarized for the purposes of this appeal as follows. CN
and BNSF (or their predecessors) have exchanged traffic at CN’s F Yard since
1913 pursuant to an agreement whose material terms were set out in this Court’s
decision in Fort Rouge and which I reproduce below for ease of
reference.
…the Agreement contemplated the construction of
two lines of track at CN's F Yard, one for the delivery of CN traffic to BNSF,
and one for the delivery of BNSF traffic to CN. The Agreement provides that,
upon completion of construction of the two tracks, BNSF would pay CN one half
the cost of construction. BNSF also agreed to reimburse CN for one half the
cost of the maintenance of the two lines. In addition, BNSF agreed to pay CN
annually a sum equal to one half of the rental value of the land on which the
tracks were constructed. Upon the termination of the Agreement, BNSF was
entitled to one half of the material used in the construction of the tracks or
to an amount equal to the depreciated value of those materials.
The Agreement also provided that CN could, at
any time, change or alter the location or construction of the transfer tracks
providing it did so at its own expense and that the new facilities were equally
convenient for BNSF.
(Fort Rouge at paragraphs 10-11).
[51]
In 2003, CN reconfigured its tracks in the Winnipeg area and relocated the joint facilities which had previously been located at the F
Yard to the new Fort Rouge Yard. This raised a number of issues but, for the
purposes of this appeal, the relevant issue was whether there was
interswitching at the Fort Rouge Yard since all the track at that location was
owned by CN. As a result, there could be no transfer of traffic from one line
of railway to another at that location and therefore no interswitching.
[52]
The Agency examined the contract between CN and
BNSF and, in light of BNSF’s rights and obligations under that agreement,
concluded that “BNSF has a sufficient ownership interest
in the transfer track at Fort Rouge Yard to have a line of railway for the
purposes of the interswitching provisions of the CTA” (Decision No.
35-R-2009). The Agency supported its decision by reference to the prominence
given to ownership of property in the Ottawa Valley Partnership
decision.
[53]
On appeal, this Court upheld the Agency’s
decision. In doing so, it restated the issue to be decided by the Agency in the
following terms:
The CTA did not have to decide the status of
those rights [under the 1913 Agreement] under Manitoba's land law so that its
use of the expression ownership interest is perhaps gratuitous. What the CTA
did have to decide was whether BNSF's rights with respect to the F Yard and, by
extension, the Fort Rouge Yard pursuant to the Transfer Track Agreement were
such as to allow it to treat portions of those yards as part of BNSF's line of
railway.
(Fort Rouge at paragraph 28).
[54]
After referring to the passages from the
Ottawa Valley Partnership on which the Agency relied, this Court articulated
the substance of the Agency’s decision as follows:
In this case, the Transfer Track Agreement
clearly gave BNSF something more than running rights on CN's track. It had a
right to the use of certain facilities for the purpose of transferring traffic
back and forth with CN. That right was not bound to a particular piece of land
but it was bound to BNSF's convenience in doing business with CN. The CTA found
that these rights were sufficient to find that BNSF had a line of railway in
the Fort Rouge Yard.
(Fort Rouge at paragraph 30).
[55]
CP cites both of these passages in
support of its position that, for the purposes of the interswitching provisions
of the Act, a railway company has a line of railway when it has an ownership
interest in that line. It finds support for its position in this Court’s
assertion that the question to be decided in the Fort Rouge case was
whether BNSF’s rights with respect to the F Yard, and by extension, the Fort
Rouge Yard, were such as to allow BNSF to treat portions of those yards as part
of its own line of railway.
[56]
With respect, this is a misreading of this
Court’s position. The question before the Agency was whether BNSF’s rights
under the Transfer Track Agreement were such as to allow the Agency to treat
portions of those yards as parts of BNSF’s line of railway.
[57]
In this case, the Agency explicitly
adopted the reasoning which flowed from this Court’s decision in Fort Rouge.
[58]
CP, not unreasonably, points out the
differences in BNSF’s rights and obligations under the Transfer Track Agreement
with respect to the Fort Rouge Yards and its rights and obligations under the
Interchange Agreement with respect to the Coutts Yard. BNSF has no financial
obligations under the Interchange Agreement. It says that this distinguishes
the Interchange Agreement from the Transfer Track Agreement. CP says that
BNSF’s rights under the Interchange Agreement are more like BN’s rights under
the agreement in issue in Celgar. CP also points out that BN had more
than “mere” running rights under that
agreement. It had the right, in perpetuity, to run its trains over the rail
line from Troup Junction to Nelson and the right to joint usage of the trackage
and facilities at Nelson. CP argues that if these rights were not sufficient to
support a finding that BN had a line of railway in Celgar, then they
should not be sufficient to support the conclusion that BNSF has a line of
railway in this case.
[59]
It is true that it is difficult to reconcile the
Agency’s decision in Celgar with its decision in this case. While the
doctrine of stare decisis
does not apply to tribunal decisions (see Weber v. Ontario Hydro, [1995]
2 S.C.R. 929, at paragraph 14), the Supreme Court has recently held “that arbitral precedents in previous cases shape the contours
of what qualifies as a reasonable decision in this case”: see Communication,
Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp and Paper,
[2013] 2 S.C.R. 458 at paragraph 75 [emphasis in the original]. The dissenting
judges in that case (MacLachlan CJC, Rothstein and Moldaver JJ.) did not
disagree on this point and held that where an arbitration panel departs from
prior arbitral jurisprudence, it must set out a reasonable basis for doing so
(see paragraph 75). For present purposes, there is no distinction between
arbitration panels and administrative tribunals.
[60]
The reasonable basis, in this case, was the
Agency’s reliance on this Court’s decision in Fort Rouge. In that case,
the Agency cast its decision in the same terms as it had implied in Celgar
and used in Ottawa Valley Partnership, namely a property interest. This
Court recognized that while the factors referred to by the Agency fell short of
creating an ownership interest, they were nonetheless capable of supporting the
Agency’s conclusion that BNSF had a sufficient interest in the Fort Rouge Yard
to justify the Agency in treating those Yards as part of BNSF’s line of
railway.
[61]
In the present case, the Agency recognized that
the critical factor was the right “to perform all
necessary operations in order to interchange traffic” (see Decision at
paragraph 69), a position consistent with this Court’s decision in Fort Rouge. The rights which it identified allowed the Agency to consider
that BNSF had a sufficient interest in the Coutts Yard for it to be treated as
part of BNSF’s line of railway. The Agency has thus refined its view of when a
railway company “has” a line of railway, moving away from a strictly ownership
position, as in Celgar, to a more nuanced position based on functional
integration. This refinement is in keeping with the Canada’s national
transportation policy which favours competition and market forces, and
discourages rates and conditions which are an undue obstacle to the movement of
traffic. It is entirely within the Agency’s mandate to refine its approach to
the issue of what constitutes an interchange.
[62]
As a result, I find that the Agency’s decision
on this issue is reasonable. Once the Agency concluded that BNSF had a line of
railway at the Coutts Yard, then the issues of the existence of an interchange
and the availability of interswitching resolved themselves in P&H’s favour.
V.
Conclusion
[63]
For the reasons set out above, I would dismiss
the appeal with costs to P&H.
“J.D. Denis Pelletier”
“I agree
M. Nadon J.A.”
“I agree
Johanne Trudel
J.A.”
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