Docket: A-127-14
Citation:
2015 FCA 180
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CORAM:
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DAWSON J.A.
STRATAS J.A.
SCOTT J.A.
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BETWEEN:
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CANADIAN
NATIONAL RAILWAY COMPANY
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Appellant
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and
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RICHARDSON
INTERNATIONAL LIMITED and CANADIAN TRANSPORTATION AGENCY
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Respondents
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REASONS
FOR JUDGMENT
DAWSON J.A.
[1]
Richardson International Limited operates a
grain elevator at Letellier, Manitoba. The elevator is approximately 20 km
north of the Canada-United States border and is located on a railway line owned
by the Canadian National Railway Company. Richardson applied to the Canadian
Transportation Agency for an order requiring CN to interswitch Richardson’s
rail traffic with the American carrier BNSF Railway Company. The Agency allowed
the application (Decision No. 466-R-2013).
[2]
The effect of the Decision is that CN is now
required to pick up empty railcars delivered to Emerson, Manitoba by BNSF and
move them to Richardson’s elevator at Letellier; after the railcars are loaded
CN must then return them to Emerson so they may be picked up by BNSF to be
moved to destinations in the United States (Richardson’s memorandum of fact and
law at paragraph 3). The services are to be performed at prescribed
interswitching rates.
[3]
This is an appeal of the Decision.
I.
Applicable Legislation
[4]
Interswitching is governed by section 127 of the
Canada Transportation Act, S.C. 1996, c. 10 (Act). Of relevance to this
appeal are subsections 127(1) and (3):
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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.
[…]
(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.
[Emphasis added.]
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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.
[. . .]
(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.
[Je souligne.]
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[5]
Section 111 defines
“interchange” and “interswitch”:
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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;
“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.
[Emphasis added.]
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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.
« 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.
[Je souligne.]
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[6]
The effect of the legislation is that three
criteria must be met in order for an application to interswitch to succeed:
i)
a railway line of one railway company must
connect with a railway line of another railway company;
ii)
there must be a place where loaded or empty
railcars may be stored; and,
iii) the interchange must be located within the prescribed geographic
radius.
II.
The Decision
[7]
The Agency found that all three criteria were
met. On this appeal, CN puts in issue only the Agency’s finding that BNSF had a
line of railway that connects with CN’s line of railway.
[8]
The Agency found BNSF had a “line of railway” in Canada for the purpose of
interswitching, for three distinct reasons.
[9]
First, the Agency found that under what the
Agency referred to as the “1912 Agreement” BNSF
had acquired sufficient rights in respect of the CN owned trackage in Emerson
that it had a line of railway at this location for the purpose of
interswitching.
[10]
Second, because of the physical characteristics
of a connection between two railway lines, BNSF’s physical trackage extended
beyond the “thin membrane” of the Canada-United
States border.
[11]
Third, the Agency found the parties had a
long-standing practice of interchanging railcars both at Emerson and at Noyes,
Minnesota.
[12]
The Agency then found that the requisite “connection” between two railway lines existed for
two distinct reasons.
[13]
First, the Agency found that the physical
connection between the two railway lines occurs over a physical distance that
exceeds the width of an international boundary so that there was a connection
in Canada between the two railway lines.
[14]
Second, the Agency found that BNSF’s rights in
the CN owned trackage in Manitoba “effectively permit
BNSF to connect at points along the entire railway line”.
III.
The Issues
[15]
CN frames the issues raised on this appeal to be:
- Did the Agency err by finding BNSF has a “line of railway” in Canada within the meaning
of section 127 of the Act? More specifically:
a)
Did the Agency err in its interpretation of the
1912 Agreement?
b)
Did the Agency err by excluding evidence about BNSF’s
conduct?
c)
Did the Agency err by finding that BNSF had the
right to interchange traffic with CN in Emerson, Manitoba?
d) Did the Agency err by amending the terms of the 1912 Agreement?
- Did the Agency err by finding there is a “connection” in Canada between the CN line and
the BNSF line within the meaning of section 127 of the Act? More
specifically:
a)
Did the Agency err by concluding that the BNSF
line physically extends across the Canada-United States border?
b)
Did the Agency deny CN natural justice and
procedural fairness by relying on ex parte evidence from another
proceeding?
c)
Did the Agency exceed its jurisdiction by
applying the Act beyond the Canadian border?
d) Did the Agency err by finding a connection between the two railway
lines based upon the 1912 Agreement?
- Did the Agency err by permitting interswitching when Richardson
had access to two competitive carriers?
[16]
I will comment below on the way CN frames the
issues in the context of the standard of review.
IV.
Standard of Review
[17]
The parties agree that the general rule is that
the Agency’s interpretation of the Act is to be reviewed on the standard of
reasonableness.
[18]
In my view, the parties’ agreement is consistent
with the jurisprudence of this Court. See, for example, Canadian Pacific
Railway Company v. Canada (Canadian Transportation Agency), 2015 FCA 1,
[2015] F.C.J. No. 9, at paragraph 31 (Parrish & Heimbecker) and the
authorities cited therein.
[19]
While CN did not press the point, in oral
argument it submitted that one issue should arguably be reviewed on the
standard of correctness: the issue of the extraterritorial application of the
Act by the Agency.
[20]
This argument was addressed and rejected by this
Court in Parrish & Heimbecker at paragraph 33. As in that case,
there is no issue of extra-territoriality in this case. The Agency’s decision
requires CN, not BNSF, to interswitch Richardson’s railcars at the prescribed
rates. To the extent the Agency asserts any jurisdiction over BNSF, it does so
on the basis of its operations in Canada.
[21]
Having determined that the issues raised by CN
all go to the reasonableness of the Agency’s decision, it follows that in every
case the proper inquiry is not whether the Agency erred. This inquiry is
whether the Agency’s findings are unreasonable. Below, I will reframe the
issues accordingly.
[22]
Before addressing CN’s arguments, it is
important to consider the context in which the Agency made its decision. This
is so because the Supreme Court has emphasized that, while reasonableness is a
single standard, it “takes its colour from the context”
(Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1
S.C.R. 339, at paragraph 59.
[23]
As Justices Rothstein and Moldaver explained in Communications,
Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper,
Ltd., 2013 SCC 34, [2013] 2 S.C.R. 458, at paragraph 74, the “factual and legal context in which a decision is made is
critical to assessing its reasonableness for the simple reason that ‘[r]easonableness
is not a quality that exists in isolation’ [citation omitted].”
Therefore, the context “shapes” the range of reasonable outcomes.
[24]
In the present case, the context is informed by
the nature of the decision: the Agency decided that BNSF had a line of railway
in Canada that connects with CN’s line of railway. To state the issue is to
recognize that the nature of the decision was highly fact-based, drawing
significantly on the expertise of the Agency.
[25]
Flowing directly from this is the margin of
appreciation to be afforded to the Agency in rendering its decision. Put
another way, the required inquiry is whether the Agency’s decision falls within
a range of possible, acceptable outcomes which are defensible in respect of the
facts and the law (Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1
S.C.R. 190, at paragraph 47).
[26]
Here, a number of factors point to the Agency
having a wide margin of appreciation.
[27]
To begin, the Agency’s decision is protected by
a privative clause. An appeal may be brought in this Court only with leave and
only in respect of “a question of law or a question of
jurisdiction” (section 41 of the Act).
[28]
The question is fact-based, and the Agency’s
appreciation of the evidence must be seen in the context of a tribunal with
specialized expertise in the railway industry including specialized knowledge
about railway practices and operations, railway engineering, the pricing of
railway services, the economics of rail operations, the history of rail
operations, and industry contracts and nomenclature. Its assessment of these
things is also informed by its understanding of transportation policy.
[29]
As will be seen below, in the course of deciding
this matter, the Agency had to interpret an agreement among railway companies.
Such an agreement, to be properly understood and applied, must be seen within
its specific industrial, historical, economic and regulatory contexts. These
contexts lie at the heart of the specialized jurisdiction that Parliament has
given to this expert tribunal.
[30]
Finally, as explained above, interswitching is
governed by section 127 of the Act. Tribunals sometimes receive a wide margin
of appreciation when interpreting their home statute. In this case, granting
the Agency a wide margin of appreciation is most appropriate. The word “connects” in subsection 127(1) is a word of
imprecise definition, with a potentially broad range of acceptable and
defensible meanings. Settling upon its meaning and applying that meaning in a
particular case draws heavily upon the expertise and specialization of the
Agency, specifically its technical knowledge, its knowledge of the railway
industry and its economics, how it has handled other cases where
interconnection has been sought, and its appreciation of the purposes underlying
interconnection and, more broadly, the purposes of the Act. Thus, whether a
railway line in a particular place “connects”
with another within the meaning of this Act is the sort of matter that it
outside of the expertise of the courts and justifies a broader margin of
appreciation being granted: see, for example, Boogaard v. Canada (Attorney
General), 2015 FCA 150, [2015] F.C.J. No. 775 at paragraph 62.
[31]
For all these reasons, in applying the
reasonableness standard, the Agency should be given a broad margin of
appreciation over matters drawing upon its expertise, specialization, policy
appreciation and fact-finding.
[32]
I now apply this standard to the Decision.
V.
Was it unreasonable for the Agency to find that BNSF
has a “line of railway” in Canada within the
meaning of section 127 of the Act?
A.
Was the Agency’s interpretation of the 1912
Agreement unreasonable?
[33]
In 1912, the Canadian Northern Railway Company,
a predecessor of CN, entered into an agreement with the Midland Railway Company
of Manitoba, a predecessor of a wholly-owned subsidiary of BNSF [Decision at
paragraph 18]. The parties dispute the nature of the rights conferred on BNSF
under this agreement.
[34]
CN argued that the 1912 Agreement did not grant
a sufficient interest in the CN line between the Canada-United States border
and Emerson for BNSF to have a line of railway in Canada. The Agency rejected
CN’s argument for reasons set out at paragraphs 44 to 68 of the Decision.
[35]
Briefly, relying on the decision of this Court
in Canadian National Railway Co. v. Canada (Transportation Agency), 2010
FCA 166, 405 N.R. 240, the Agency reasoned that a railway company may have a
line of railway in relation to a line that it owns, or in relation to a line
owned by another railway company over which it has sufficient rights to operate
traffic and perform interchange activities. The Agency then considered the
nature of the rights conferred by the 1912 Agreement to determine whether BNSF
was entitled to more than mere running rights as CN argued.
[36]
Based upon its examination of the agreement, the
Agency found that:
•
the wording of the 1912 Agreement clearly
demonstrates that much more is conferred than mere running rights;
- while CN has “general control, management and administration of the
Joint Section” the 1912 Agreement allows BNSF “full joint and equal possession and use” of the
Joint Section;
- the agreement
requires CN’s agents and employees to transact the business of BNSF
without discrimination,
- BNSF’s full
possession and use apply to the operation of the trains and the use of
telegraph and telephone lines and provide BNSF with the right to make and
maintain connections near Emerson, West Lynn and Portage Junction. In full,
the 1912 Agreement refers to granting Midland the right to make and “maintain connections between the tracks of said Joint
Section and the tracks of the Great Northern Railway Company and of the
Northern Pacific Railway Company near” the three specified
locations; and,
- BNSF may also
perform, with its own employees and equipment, all business of a Railway
Company and a common carrier, with the exception of “local business”.
[37]
The Agency went on to refer to an additional
provision of the agreement that provided that if, under an order of the Board
of Railway Commissioners, or with the consent of CN, or otherwise, the BNSF
shall transact any such local business it shall account for and pay CN 80% of
all gross receipts therefrom. The Agency found this provision “clearly” allows BNSF to choose to transact any local
business by order of the Agency, or with the permission of CN, or otherwise.
The Agency interpreted the phrase “or otherwise”
to mean that this business may be transacted by BNSF without any order or
permission.
[38]
The Agency rejected CN’s submission that because
BNSF had not transacted local business on the line for more than 100 years,
this equated to a mutual understanding prohibiting the activity. In the Board’s
view, the right to conduct local traffic was not extinguished solely because it
was not exercised. Put another way, the fact that BNSF has not availed itself
of the option did not negate the existence of the right.
[39]
The Agency went on to note that in referring to
BNSF’s conduct CN was offering extrinsic evidence to interpret the 1912
Agreement. The Agency found it unnecessary to consider extrinsic evidence
because it found no ambiguity in the language used in the 1912 Agreement.
[40]
CN argues that the Agency’s interpretation of
the 1912 Agreement was flawed. In its submission:
- the Agency ignored the preamble of the agreement which set out
the purpose of the agreement: Midland “desired to
obtain running rights” over the CN line from the international
boundary to the Portage Junction;
- “running rights” was and remains
a well-known concept in the context of railway rights and the Agency’s
interpretation was contrary to that concept; and,
- in the 1912 Agreement
the parties restricted the breadth of the rights conferred on BNSF because
the agreement stated “Midland shall not do or
transact any local business”. Notwithstanding, the Agency turned
the penalty provision in the agreement “on its
head” in order to conclude that Midland was expressly allowed to
transact local business.
[41]
In oral argument CN agreed that the Agency’s
interpretation of the 1912 Agreement was reviewable on the standard of
reasonableness.
[42]
Without doubt that is correct. This said, in
substance CN’s submissions invites us to review the Agency’s interpretation on
the standard of correctness.
[43]
It is important to remember that contractual
interpretation requires that regard be had for the circumstance surrounding the
contract. The Agency was required to “read the contract
as a whole, giving the words used their ordinary and grammatical meaning,
consistent with the surrounding circumstances known to the parties at the time
of formation of the contract.” (Sattva Capital Corp. v. Creston Moly
Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paragraph 47).
[44]
The Agency was well-situated with its particular
expertise and specialization to interpret the 1912 Agreement.
[45]
I am satisfied the Agency did not ignore CN’s
reliance on the wording of the preamble as it referred to the preamble in its
reasons. However, the Agency was required to look to the operative terms of the
agreement in order to assess the nature of the rights conferred on BNSF, as it
did.
[46]
CN did not argue before the Agency that the term “running rights” was a term of art denoting a
well-known concept that equates to mere transit rights. I accept Richardson’s
submission that no evidence was provided of any industry accepted usage of the
phrase. Moreover, the Agency is familiar with transportation nomenclature. In
any event, the Agency cannot be faulted when this argument was not addressed to
it.
[47]
In my view, it is not necessary to consider
whether the Agency’s conclusion that BNSF had a right to transact local
business was unreasonable because this conclusion was not material to its
decision. The Agency had already concluded that the 1912 Agreement conferred
more than mere running rights for the reasons set out at paragraph 36 above.
[48]
As explained in more detail above, the Agency is
an expert tribunal, possessing expert and specialized knowledge of such things
as railway operations and railway agreements. CN has failed to show that the
Agency’s interpretation of the nature of the rights conferred on BNSF in the
1912 Agreement was unreasonable.
B.
Was it unreasonable for the Agency to exclude evidence
about BNSF’s conduct?
[49]
As explained above, the Agency declined to
accept extrinsic evidence to establish BNSF had not exercised any right to
transact local business. Given my conclusion that the Agency’s finding that
BNSF was entitled to transact local business was not material to its decision,
nothing flows from its refusal to accept extrinsic evidence about BNSF’s
apparent practice of not conducting local traffic.
[50]
In any event, I do not find the Agency’s
conclusion on this point to be unreasonable for the following reasons. First,
the Agency proceeded on the basis that BNSF had not availed itself of the right
to conduct local traffic. Evidence was unnecessary. Second, the Agency
concluded that the failure to exercise a right did not negate the existence of
the right. This conclusion has not been shown to be unreasonable and it too
rendered extrinsic evidence irrelevant.
C.
Was it unreasonable for the Agency to find that BNSF
had the right to interchange traffic with CN in Emerson, Manitoba?
[51]
It is not necessary to consider this issue: the
Agency’s finding that the 1912 Agreement conferred sufficient rights to operate
traffic and perform interchange activities in the Joint Section is sufficient
to support its finding that BNSF had a line of railway in Canada. I will,
however, consider this issue in the event I am wrong with respect to the reasonableness
of the Agency’s interpretation of the 1912 Agreement.
[52]
In Richardson’s application for interswitching,
it asserted that, in practice, “interchange operations
between CN and BNSF at Emerson-Noyes have generally involved both railways
crossing the Canada-US border” as described in more detail in the
application. Richardson also asserted that because of limited track capacity in
Noyes “unit train traffic has typically been
interchanged on CN’s tracks at Emerson”. Appended to its submission was
an excerpt from the OPSL 6000-AH. OPSL is the Official Railroad Station List.
It shows BNSF to interchange with CN at both Emerson and Noyes.
[53]
In its response, CN did not deny that rail
traffic was exchanged at Emerson. Instead, it relied on the terms of the 1977
Interchange Agreement between it and BNSF, which provides that the parties can
undertake interchange activities in Noyes. The 1977 Interchange Agreement is
silent with respect to any interchange activity in Emerson. CN also argued that
Emerson was listed in the OPSL in error.
[54]
The Agency dealt with this issue at paragraph 70
of its reasons:
Whether interchange activities are strictly
performed pursuant to the Interchange Agreement or whether the practice has
arisen based on pragmatic operational considerations, the Agency notes that
there is an uncontested history of interchanging between CN and BNSF with
interchange activities occurring on both sides of the Canada-United States
border. As a result, the Agency finds that BNSF has sufficient rights to CN’s
trackage from the border into Emerson to allow that trackage to be treated as
part of BNSF’s line of railway for the purpose of performing interchange
activities at Emerson. The Agency also notes that both Emerson and Noyes
are listed in the OPSL, despite CN’s assertion that this is an error. Even if
Emerson were not listed in the OPSL, it would not change the fact that
interchanging activities occur at Emerson. [Emphasis added.]
[55]
CN argues that there was no basis to determine
that BNSF has the right to interchange traffic with CN in Emerson. It says that
just because it has permitted BNSF to interchange traffic in Emerson this does
not mean that BNSF is entitled to do so. CN therefore submits that the Agency
erred by finding that interchange activities in Emerson gave BNSF rights to the
CN line.
[56]
Again, in my view CN invites review on the correctness
standard, without affording the Agency the broad margin of appreciation to
which it is entitled.
[57]
Given that CN did not dispute Richardson’s
statement that interchange activities have and do occur on both sides of the
border, and given that CN did not adduce evidence as to why that takes place or
evidence that it had withdrawn any permission for BNSF to use its trackage, it
was not unreasonable for the Agency to infer that BNSF was authorized to
conduct interchange activity in Emerson. In turn, it was not unreasonable for
the Agency to find that this was sufficient to give BNSF a line of railway in
Canada.
D.
Did the Agency amend the terms of the 1912
Agreement?
[58]
The 1912 Agreement contained a term that
provided that it did not create any right in any third party:
Nothing herein contained shall be taken as
creating or increasing any right in any third person to recover by way of
damages or otherwise against any of the parties hereto.
[59]
CN argues that the effect of the Agency’s
decision was to confer rights on Richardson, a third party, contrary to the
express terms of the agreement. CN further argues that the Agency lacked any
authority to amend a private commercial agreement.
[60]
The Agency rejected this argument at paragraph
66 of its reasons, stating that it was well within its powers to examine the
1912 Agreement in order to determine the extent of the rights it conferred. This
is unquestionably so. There is nothing unreasonable in this aspect of the
Agency’s decision.
VI.
Was it unreasonable for the Agency to find that there
is a “connection” in Canada between the CN line
and the BNSF line within the meaning of section 127 of the Act?
A.
Was it unreasonable for the Agency to find that
the BNSF line physically extends across the Canada-United States border?
[61]
CN argues that it presented uncontradicted
evidence that the line owned by BNSF does not cross the international border
into Canada. Specifically, it adduced evidence that:
•
the CN railway line stops at the international
border;
- at the
international border, the CN line touches and connects with the BNSF line;
- the BNSF line
does not cross into Canada;
- the part of the
rails and other track material that is on the northern side of the
international border is maintained by CN in accordance with CN and
Canadian standards; and,
- CN is not
authorized to perform any construction or maintenance work in the United
States and the United States border patrol immediately intervenes should
CN crews cross the international border in error.
[62]
CN further argues that the Agency acknowledged
that the BNSF line was not on the Canadian side of the border and that it
touches and connects with the CN line at the border. Thus, it was unreasonable
for the Agency to conclude that the BNSF line extends across the international
border.
[63]
The Agency was well aware of CN’s evidence and
its position that the two railway lines meet at the border without either one
crossing the border (Decision at paragraphs 81-87). The Agency’s analysis and
findings on this point are found at paragraphs 88 to 91 of its reasons. The ratio
of its decision is found at paragraphs 90 and 91:
While each case must be considered on its
own merits, the Agency is of the opinion that the situation in this case is
comparable to the situation in the case that led to Decision No. 165-R-2013, in
the sense that the Canada-United States border is being crossed by a single
railway line owned by two different railway companies on each side of the
Canada-United States border. The Agency considers that the same principle that
was used in Decision No. 165-R-2013 should apply, that is, the physical
characteristics of a railway company’s track connection at an international
border.
As noted above, in Decision No. 165-R-2013,
more specifically in paragraph 62, the Agency indicated that while it can be
said that two countries’ territories touch or abut an international border
without overlapping, the same cannot be said of connecting railway lines.
Connecting railway lines do not abut; each railway track joins together with
the other track to form a continuous line. They are physically linked together.
This means that it is impossible that a railway line’s connecting point be a
thin membrane as would be the case of an international border. The physical
connection of two railway lines necessarily happens over a physical distance
which exceeds the width of an international border.
[64]
This is a finding that touches the core
expertise of the Agency: its knowledge of railway operations and railway
engineering. I am unable to find that its characterization of the nature of
connecting railway lines was unreasonable.
B.
Did the Agency deny CN natural justice and
procedural fairness by relying upon ex parte evidence from another proceeding?
[65]
As seen above, in arriving at its conclusion
that the BNSF line extended over a physical distance that exceeded the width of
the international border, the Agency relied upon its prior Decision No. 165-R-2013.
[66]
In this decision, at paragraph 61, the Agency in
turn referred to its analysis in Decision No. 35-R-2009:
The Agency considers
that this may very well be an accurate description of the characteristics of an
international boundary, but it does not necessarily reflect the characteristics
of a railway track’s physical connection. In its analysis in the Decision No.
35-R-2009, the Agency noted the 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.
[67]
CN argues that in relying upon this description
of the connection supplied by an intervener in another case the Agency breached
natural justice or procedural fairness because:
- the Agency did
not disclose the description of the connection by the intervener, or any
of its details to the parties in the present case;
- the Agency did
not permit the parties to make submissions in connection with the
description of the intervener; and,
- the Agency did
not advise the parties that it was considering relying upon the
intervener’s description.
[68]
CN submits that in essence the Agency ignored
the evidence before it in favour of evidence unknown to CN.
[69]
In my view, CN’s submission must fail for the
following reasons.
[70]
CN was well aware of Richardson’s reliance upon
Decision No. 165-R-2013. Richardson relied upon this decision at paragraph 46
of its application to the Agency where it quoted paragraphs 60 to 63 of the
decision. CN did not object to Richardson’s reliance on these passages. Rather,
it argued that the intervener’s submission on the earlier case was only an
opinion: “an interested opinion proffered by a party
with no special knowledge of railway operations or railway engineering matters,
but by a party who was to benefit from the application of regulated
interswitching”. Further, CN was well aware of the nature of the
intervener in Decision No. 35-R-2009, because CN was the applicant in that
proceeding.
[71]
Contrary to CN’s submissions, there was nothing
unfair in the Agency’s reliance upon a principle it articulated in Decision No.
165-R-2013.
C.
Did the Agency exceed its jurisdiction by
applying the Act beyond the Canadian border?
[72]
As noted above, CN argues that applying the Act
to a railway line outside Canada for the purpose of making interswitching
available improperly requires the Act to be given extra-territorial effect. I
disagree for the reasons set out at paragraphs 19 and 20 above.
D.
Was it unreasonable for the Agency to find a
connection between two railway lines based upon the 1912 Agreement?
[73]
At paragraphs 92 to 95 of the Decision, the
Agency gave an alternate basis for its conclusion that there was a connection
between two railways: the rights conferred by the 1912 Agreement which “effectively permit BNSF to connect at points along the
entire railway line”. For the reasons given above, CN has not satisfied
me that the Agency’s construction of the 1912 Agreement was unreasonable.
VII.
Was it unreasonable for the Agency to order interswitching
when Richardson had access to two competitive carriers?
[74]
In oral argument CN argued that the effect of
the Agency’s decision was to superimpose a line of railway owned by BNSF upon
CN’s line. The result is that two carriers operate on the same line such that
there is perfect competition. In this circumstance, CN argues it was an error or
was unreasonable for the Agency to order that CN interswitch traffic because
interswitching presumes insufficient competition.
[75]
This was an argument previously rejected by the
Agency in Decision No. 35-R-2009, at paragraphs 115 to 119. This holding was
affirmed by this Court in Canadian National Railway Co. v. Canada
(Transportation Agency), 2010 FCA 166, [2010] F.C.J. No. 815, at paragraphs
32 to 33. CN has not shown any error in this Court’s analysis upholding the
reasonableness of the Agency’s decision.
[76]
To the reasons previously given by the Agency in
Decision No. 35-R-2009, I would only observe that when Parliament wishes to
limit a remedy to a captive shipper, or otherwise wishes to make competition a
relevant consideration, it does so expressly: see, for example sections 129 and
120.1 and subsections 164(2) and 169.37(g) of the Act. No similar
language is found in section 127 of the Act.
VIII.
Conclusion
[77]
For these reasons, I would dismiss the appeal
with costs.
“Eleanor R. Dawson”
“I
agree.
David
Stratas J.A.”
“I
agree.
A.F.
Scott J.A.”
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