[1] This is an action [Action] brought by the Plaintiff, Louis Dreyfus Company [LDC], against the Defendant, Canadian National Railway Company [CN], for failure to meet its service obligations to LDC pursuant to section 116(5) of the Canada Transportation Act, SC 1996, c 10 [the Act].

[2 ] In a decision rendered on October 3, 2014, the Canadian Transportation Agency [Agency] determined that CN failed to fulfil the statutory service obligations it owed to LDC for weeks 13‑35 of the 2013‑2014 crop year [Agency Decision]. This Court must now determine what, if any, damages LDC incurred as a result of CN’s breach of its statutory level of service obligations to LDC [Breach].

[3] In this Action, LDC claimed damages in the amount of (1) CAD $21,641,943 for lost profit or opportunity, (2) USD $3,715,726.60 and CAD $335,978.90 for vessel demurrage charges, and (3) CAD $3,500,000 for reputational harm. After considering the extensive documentary evidence tendered and witness testimony heard from seven fact witnesses and two experts, as well as each party’s submissions, I have determined the quantum of damages owed by CN to LDC for its service failure to be CAD $21,641,943 for lost profit, and USD $1,857,863.30 and CAD $167,893.90 for vessel demurrage charges, due to CN’s service failure.

[4] On the third ground of damages for reputational harm, I find a lack of compelling evidence that LDC suffered any loss due to CN’s service failure. Instead, the systemic issues, which occurred during weeks 13‑35 of the 2013‑2014 crop year, namely between the weeks of October 27, 2013, and April 5, 2014 [the Relevant Period], affected the entire industry and were not specific to LDC. The evidence does not support their claim for reputational loss.

II. Facts

A. The Companies

[5] Louis Dreyfus Company Canada ULC is a privately held company headquartered in Calgary, Alberta. During the Relevant Period, LDC was in the business of buying and selling grain and operated a total of ten grain elevators located across Western Canada.

[6] Six of LDC’s grain elevators were located on CN’s rail network in British Columbia (Dawson Creek); Alberta (Rycroft, Joffre and Lyalta); and Saskatchewan (Aberdeen and Kegworth, also referred to as “Glenavon”). The remaining four LDC grain elevators were located on the Canadian Pacific Railway Company [CP] network in Saskatchewan (Wilkie and Tisdale), and in Manitoba (Virden and Rathwell). In addition, LDC operated a canola crushing plant in Yorkton, Saskatchewan. The LDC grain serviced through the elevators at issue in this Action namely Joffre, Lyalta, Aberdeen, and Kegworth [the Four Elevators] went to export terminals via the CN network, ultimately destined to world markets. LDC was the handler and shipper of grain at each of these Four Elevators.

[7] CN is a Canadian Class 1, publicly traded railway company headquartered in Montréal, Quebec. CN transports not only bulk commodities, including grain, fertilizer, and coal, but also industrial products (such as forest products, petroleum, chemicals, and minerals), as well as finished goods, throughout North America. CN uses its equipment and resources – tracks, yards, locomotives, railcars, and crews – to serve all its customers across many different industries. It is the largest railway company in Canada, both in terms of the size of its network and its revenues.

B. Legislation

[8] A railway company owes a statutory level of service obligations to shippers as stipulated in subsection 113(1) of the Act (and I note that all of the Act’s provisions referenced, are reproduced in full at Annex “A” to these Reasons). Due to this statute, CN was under an obligation to supply railcars to LDC, and to transport its goods without delay.

[9] The Act also provides that shippers can enter into private contracts that further specify the railway’s obligations under subsection 113(4) of the Act. Similarly, paragraph 126(1)(d) of the Act states that shippers and railway companies can agree that such a private contract sets out the manner in which the railway company is to fulfil its statutory service obligations.

[10] Under section 116 of the Act, the Agency investigates and makes determinations on complaints related to service obligations by shippers. When a private contract is executed, as was the case for LDC and CN, the terms of the contract are binding on the Agency in any determination it must make as to whether a railway has fulfilled its service obligations pursuant to subsection 116(2) of the Act. Under subsection 116(5), impacted shippers may file an action for damages in the Federal Court.

[11] The 2013‑2014 crop year was the largest crop in Canadian history, with grain being harvested in abundance. CN asserts that two factors led to the service breach: the (i) unprecedented demand due to the record harvest; and (ii) extremely harsh Winter.

[12] On the first factor, CN notes that the unprecedented 2013‑2014 crop year strained the entire grain handling and transportation system. When CN recognized that the yearly crop would be significantly larger than had been previously forecasted, it pre-positioned railcars at elevator facilities, including LDC’s, to prepare for the predicted large harvest. CN reported that it performed at a record pace in late September through November 2013 when demand spiked, having “spotted” (meaning, delivered) over 5,000 cars a week. Nonetheless, its capacity did not satisfy the large demand surge.

[13] As to the second factor, CN asserts that the Prairies experienced the worst Winter in decades during the 2013‑2014 crop year, which it stated had a “devastating impact” on its operations. In the second trimester, CN emphasizes that the extremely cold weather in the Prairies slowed down the performance of CN’s network, causing an inability to spot all of the planned 4,000 weekly cars for January, February, and March. In its slowest month of February, CN spotted approximately 2,700 cars weekly, explaining that in extreme cold weather, operational constraints that occurred included corridor restrictions, speed limitations, infrastructure and switch failures, and train length reductions, which collectively resulted in fewer empty cars than planned for spotting at shippers, including grain transportation companies.

C. The Business Background to this Action

[14] Sole use of the CN network was a condition of a confidential contract between LDC and CN executed on March 25, 1999 [Contract]. The Contract established the terms under which LDC was to construct and operate the Four Elevators. It also provided service obligations to be provided by CN to LDC. The Contract had a term of 15 years from the date LDC started using CN rail service at the Four Elevators.

[15] LDC had agreed to the construction of the Four Elevators on CN’s rail line in the Contract, at locations where no competitive alternative would be available to LDC. This commitment was dependent on CN providing LDC with a sufficient supply of railcars. When a shipper is entirely reliant on a single railway company, as is the case with LDC vis-à-vis CN at the Four Elevators, the elevators are said to be “captive” to the railway company.

[16] In exchange for this exclusivity, LDC was to receive one weekly “service unit” per elevator, defined in section 7.1A of the Contract. As the Agency noted in its decision, the Contract did not specify a number of cars to be provided in a service unit, except as it related to the minimum thresholds set out in section 7.1C. It is worthwhile to reproduce this, and other key clauses of the Contract. First, section 7 sets out the service requirements and standards:

7.0 SERVICE REQUIREMENTS

7.1 LDC shall be entitled to such service and carriage by CN as are provided by Section 113-116 of the Canada Transportation Act (CTA). It is not the intent of the parties that this 7.0 constitute an agreement, within the meaning of Section 113(4) of the CTA, to replace LDC’s rights under those sections of the CTA with rights arising under this Agreement. In addition to such service and carriage as LDC is entitled to by Sections 113-116 of the CTA, CN shall provide train service for placement of empty cars for loading and pick-up of loaded cars at each Elevator Facility as provided within this Section 7.0.

A. For purposes of this Section 7.0, a Service Unit shall be defined as the placement of empty cars for loading and the pickup of such cars when loaded, regardless of whether the placement and pickup occur on the same or separate days.

B. The parties recognize that grain car allocation by CN is presently subject to industry agreements, policies and practices, including CN’s Base Service Plan and Forecasted Railway Action Plans (collectively herein referred to as “Car Allocation Policies”), and it is intended by the parties that CN continue to observe the current Car Allocation Policies to the extent and so long as required by law or industry agreement or to the extent not inconsistent with the provisions of this Agreement.

C. At any Elevator Facility which can accommodate at least 100 cars, CN shall provide a minimum of one Service Unit per Service Week, provided that LDC has finalized weekly car orders and at any Elevator Facility which can accommodate fewer than 100 cars, CN shall provide a minimum of 45 Service Units per 12 month crop year, provided that LDC has finalized car orders. In any event, CN will provide two service units service week at Aberdeen if LDC has 75 or more finalized car orders for placement within one week. CN shall have no obligation to place fewer than 25 cars per Service Unit at Red Deer, Calgary East or Aberdeen or fewer than 30 cars per collective Service Unit at Glenavon and Regina East. CN shall not utilize its 45 Service Units per year as described herein to deprive any Elevator Facility of rail service for more than two consecutive Service Weeks without the prior consent of LDC.

[17] Section 8.1 of the Contract proceeds to set out the remedies that the parties can seek, which include regulatory relief:

8.1 In the event that a party violates any duty owed under this Agreement, the other party may pursue (a) civil remedies to recover damages, (b) injunctive relief in any appropriate court, (c) arbitration as provided in this Agreement, or (d) regulatory relief to the extent consistent with and allowed by the CTA. For the purposes of determining whether a remedy is available under the CTA, it is the intent of the parties that this Agreement be construed strictly and that no matter shall be deemed governed by the Agreement unless, and only to the extent, it is expressly addressed herein. An election by a party to pursue any remedy available to it shall not be deemed a waiver of its right to pursue any other remedy otherwise available to it at law or pursuant to this agreement.

[18] Section 12.2 of the Contract states that the Contract is a “confidential contract” within the meaning of section 126 of the Act:

12.2 For the purposes of the Canada Transportation Act, this agreement shall be deemed a Confidential Contract within the meaning of Section 126.

[19] Finally, section 14 of the Contract discusses the instances in which a breach of service obligations by CN may be justified by force majeure:

14.0 FORCE MAJEURE

14.1 A party to this Agreement shall be excused temporarily from its contractual obligations if it is prevented or delayed in such performance by any event which is unavoidable or beyond its reasonable control including, without limitation, act of God, act of public enemies, flood, rockslides, landslides, snowslides, washouts, drought, avalanches, storm, earthquake,, [sic] expropriation, fire or explosion, sabotage, riot, insurrection, derailment, labour shortages, power or fuel shortages, or the act or failure to act of any government or regulatory body. Lack of funds shall not be considered an event of force majeure.

D. The Grain Business and the 2013‑2014 Crop Year

[20] The grain business is organized according to a 52-week “crop year”. The crop year runs from the beginning of August until the end of the following July. It is undisputed that the 2013‑2014 crop year produced record levels of grain. After the bountiful 2013 fall harvest, as CN emphasized, Western Canada experienced an inordinately harsh Winter, with extreme conditions and record cold temperatures. As a result, companies relying on rail services to transport their products across the country encountered unprecedented delays and unanticipated disruptions to their operations.

[21] Recognizing the gravity of the situation, the federal government issued an Order in Council on March 7, 2014, requiring both CN and CP to move specified minimum volumes of grain in Western Canada (Order Imposing Measures to Address the Extraordinary Disruption to the National Transportation System in Relation to Grain Movement, SOR/2014‑55 [OIC]).

[22] The dispute underlying this matter involves CN’s transportation of grain from the Four Elevators LDC located in the two Prairie provinces of Saskatchewan (Kegworth or Glenavon, and Aberdeen) and Alberta (Joffre and Lyalta). These Four Elevators were “captive to” – or limited to using – the CN rail network because of their location. As its fact witnesses would testify, this was a conscious part of LDC’s bargain when it entered into the Contract with CN.

E. Grain Handling Transportation System

[23] The Canadian grain industry relies on the transportation services of the two major railway companies, CN and CP. CN’s extensive railway runs across Canada. It consists of one main line and has various branch lines to provide access between different locations. CP operates a similar railway system primarily along a more southern route in the west of Canada, where the bulk of the current dispute arose. There are some connecting points between the CN and CP railways.

[24] CN uses its railcars to transport a wide range of commodities. In this case, we are concerned with CN’s hopper cars, which were used to transport grain from LDC’s Four Elevators in the Prairies to the West Coast port terminal elevators. These elevators temporarily stored grain and then moved it onto vessels for shipment.

[25] During the Relevant Period, five large port terminal elevators, all owned by large grain companies, were located in the Vancouver area. Three were on the South Shore of Burrard Inlet, namely (i) Viterra (Pacific), (ii) Viterra and Richardson (Cascadia), and (iii) a joint venture between Paterson Grain, Parrish & Heimbecker, and North West Terminal (Alliance Grain Terminal). Two elevators were located on the North Shore, owned by Cargill and Richardson. These terminal elevators had an aggregate licensed storage capacity of approximately 900,000 metric tonnes [MTs].

[26] In addition to these facilities, Kinder Morgan’s North Shore Terminal had a licensed storage capacity of 25,000 MTs. In contrast, Parrish & Heimbecker’s facility on the Fraser River in Surrey had a 15,000 MT capacity. Further north, Prince Rupert’s Grain Terminal (jointly owned by Viterra, Richardson, and Cargill) had a storage capacity of about 210,000 MTs. Thunder Bay had five port terminal elevators – two owned by Richardson, one by Viterra, one by Cargill and Parrish & Heimbecker, and one by the Canadian Wheat Board, with an aggregate licensed storage capacity of around 1,200,00 MTs. Omnitrax owned one port terminal elevator in Churchill, Manitoba, and was also the operator of the shortline railway serving the town of Churchill.

[27] CN pointed out that LDC was the only one of the six large grain companies that did not own its port terminal. However, LDC emphasized that it had an exclusive contract with Kinder Morgan to use their North Shore Terminal.

[28] For grain to get to terminals to complete sales, LDC had to use CN’s fleet of grain hopper cars, and so did other grain shippers in Western Canada. Grain shippers would order railcars from CN every week. CN would then unilaterally decide how many railcars it would deliver to each elevator.

[29] Railways allocated their cars among shippers at certain times of the year. CN developed a grain car ordering system through its online customer portal. During the Relevant Period, shippers had to place their orders before the noon cut-off on Tuesday of the week before the desired usage or “want” date. When placing an order, shippers had to specify items, including the origin loading and destination unloading facilities, number of railcars required, commodity, and desired “want date”. Shippers also required “terminal authorization” from the destination unload facility, indicating they would unload the railcars upon arrival.

[30] After the order cut-off time, CN constructed its service plan for the following week, which culminated each Friday with the publication of CN’s “Planned Service Report”, notifying shippers of the number and dates of empty railcars to be supplied the following week. Subsequent changes could be published as well. CN would then “spot” the empty railcars to the shipper’s facility for loading. The shipper would then load and “release” the full railcars back to CN using the railway’s online customer portal, providing the origin, destination, number of railcars, and commodity. Releasing a railcar would generate a “waybill”, or bill of lading, for that shipment.

[31] CN would then “lift” (pick up) the loaded railcars and deliver them to the destination to be unloaded. The empty cars would thereafter be released back to CN. The rate at which cars were unloaded and released back to CN ultimately determined the number of empty cars that would be available for spotting in a given week. CN would return the empty railcars “to the country” (i.e. rural/farm areas) to be spotted at another shipper’s facility, and the cycle would start again. Railway capacity is limited by several factors, one of which is the number of cars that can be moved through the grain transportation system (or “pipeline”). During the Relevant Period, CN reached its maximum capacity, with approximately 5,000 to 5,500 railcars per week.

[32] Railway performance is also greatly impacted by weather. During periods of extreme cold, railway companies are more likely to face operational constraints. Those constraints can take the form of corridor restrictions, speed limitations and train length reductions, which, in turn, increase car cycle times and reduce the overall velocity of the grain handling and transportation system. It therefore takes longer for empty railcars to return to the pipeline after being unloaded at a terminal, so that they can be used again in another cycle. The resulting impact of extreme weather is that it inevitably leads to fewer empty railcars being available to spot at grain elevators.

[33] Capacity and demand for grain handling and transportation services fluctuate significantly in any given crop year. A crop year is typically divided into three trimesters. The first trimester – August through November – has the annual harvest and thus the greatest demand for railcars. All ports and rail corridors are open at that time, although Churchill typically shuts down by the end of October due to weather – in particular, winter ice in that very northern port on Hudson Bay.

[34] From December through March, during the second trimester of the crop year, much of the system is closed beyond Churchill. Shipping to Thunder Bay slows. The West Coast volume also slows, in part due to significant amounts of rainfall. Generally, vessels cannot load in the rain due to the risk of spoilage. Winter conditions can also slow the system down due to mechanical issues, including problems with locomotives.

[35] The third trimester, from April through July, also presents its own issues, primarily arising from the spring thaw. Weight restrictions can limit the movement of trucks. Farmers also do most of their seeding during this trimester. CN typically has less railcar capacity in the third trimester due to maintenance work on the tracks. The elevator facilities tend to also have less capacity at that time. CN begins parking and storing railcars for the latter half of the third trimester. There is always some carry-over stock into the next crop year, which sustains the industry until the new crop arrives.

III. Witnesses at Trial

[36] Seven fact witnesses were called (four by LDC and three by CN), along with two experts. I will provide a brief overview of these witnesses.

A. LDC’s Fact Witnesses

[37] LDC called four fact witnesses to testify: Brian Conn, Tracy Lussier, Craig Toews and Kara Hawryluk.

(1) Brian Conn

[38] At the time of the trial, Brian Conn was the President of LDC. He had worked for LDC since 1991. In the 2013‑2014 crop year, he was LDC’s Head of Canadian Oilseeds.

(2) Tracy Lussier

[39] In 2013‑2014, Tracy Lussier was employed by LDC, serving as Manager of Canola Trading, the role he continued to hold at the time of the trial.

(3) Craig Toews

[40] In 2013‑2014, Craig Toews was LDC’s Manager of Logistics and Transportation. In that role, he oversaw transportation for all of LDC’s Canadian assets, including the Four Elevators at issue in this case. At the time of the trial, Mr. Toews was LDC’s Director of Transportation.

(4) Kara Hawryluk

[41] Kara Hawryluk was LDC’s Operational Controller for Canada in 2013‑2014, and she continued to hold this role during the trial.

B. CN’s Fact Witnesses

[42] CN called three fact witnesses: Hedley Auld, Greg Keon and Gene Morales.

(1) Hedley Auld

[43] Mr. Auld was employed by CN and held various positions until his retirement in 2016 as Senior Manager responsible for Canadian grain, a position he had served in for approximately a decade.

(2) Greg Keon

[44] Mr. Keon was also employed by CN and held various positions, including as the manager responsible for the car ordering, allocation and rationing, a role he held from 2000 until his retirement around 2016.

(3) Gene Morales

[45] CN employed Mr. Morales as a Market Manager at the time of the trial. He was hired in 2012 as a Market Analyst to assist Mr. Keon in managing and collecting data. He is an Excel specialist, a platform which assists CN in its analytics, and which was used to generate numerous documents produced for trial.

C. Expert Witnesses

(1) Mr. John De Pape

[46] Mr. De Pape was qualified as an expert at trial. He is knowledgeable in the grain industry, with over 40 years of experience as a trader, commodity exchange administrator, agribusiness consultant, and risk management specialist. He has extensive experience in the pricing, handling, transportation and merchandising of grain. Mr. De Pape was asked to estimate the profit lost by LDC due to the service failures by CN, as found by the Agency. Mr. De Pape estimated the lost margins at about $21.6 million. He testified that this was a conservative analysis. Mr. De Pape provided two reports, dated December 2021 [De Pape Report] and September 2022 [De Pape Reply Report].

(2) Mr. Dean Das

[47] Mr. Das was also qualified as an expert in this trial. He is a loss valuation expert and provided a critique of the De Pape Report on May 30, 2022 [Das Critique]. Mr. Das states that the Critique must be read in “conjunction with” the De Pape Report, which Mr. Das discredits due to what he claims was a lack of business loss methodology used by Mr. De Pape.

D. Overall Impressions of the Witnesses

[48] I found both experts to be even-handed and impartial in their approach to the evidence, albeit firmly anchored in their own positions. While Mr. Das provided some reasons as to why he disagreed with Mr. De Pape, and while there were undoubtedly other ways that losses could have been approached and quantified, I do not agree with Mr. Das that Mr. De Pape’s chosen methodology was fundamentally flawed, or that – as CN suggested – Mr. De Pape’s opinion ought to be given no weight.

[49] Rather, I found Mr. De Pape’s experience in grain processing, merchandising, transportation, policy and pricing to be extensive and highly persuasive. I was also struck by Mr. De Pape’s unwavering testimony with respect to his fundamental position that the losses caused by the service breach were not recoverable later in the 2013‑2014 crop year, even with the resumption of cars spotted to LDC pursuant to the Interim Order and Agency Decision.

[50] As for the fact witnesses for both parties, they individually and collectively held a deep knowledge of the Canadian grain transportation and handling business. They certainly had a compelling understanding of their businesses and their roles. They all provided credible and consistent testimony, particularly given that the Relevant Period dated back over a decade. Within the testimony given, the witnesses provided a very complete picture of the grain elevator and terminal landscape in the West, which I will summarize next.

E. Testimony regarding the Four Elevators

[51] Messrs. Conn, Lussier and Toews testified that LDC’s business and practices were well established by the 2013‑2014 crop year. LDC’s primary activity was to (i) buy grain – mainly wheat and canola – from farmers in the Prairies, (ii) process that grain at its grain elevators located in the Prairies, including at the Four Elevators, and (iii) sell the grain to buyers internationally and locally – with the vast majority of LDC’s sales being destined for export.

[52] LDC had multiple ways of selling export-bound grain, as explained at trial by Mr. Conn:

For “FOB” (free on board) sales, LDC sold grain to an overseas customer, which it then loaded to the customer supplied vessel. For any FOB sale, LDC was responsible for moving the grain to the ocean vessel, and the buyer took title to the grain once it had been loaded onto its vessel. To facilitate such a sale, LDC required access to an ocean vessel terminal, namely a port facility that unloaded the grain from railcars and moved it into ocean vessels.
Vessel terminals also had on-site grain storage facilities. LDC sometimes sold grain to overseas customers on terms wherein the buyer took title to the grain when it reached the grain storage facilities – a type of sale referred to as an “in-store sale”. When making an in-store sale, LDC moved the grain into the vessel terminal’s storage facilities, but the buyer paid the vessel terminal fee for loading the grain onto the vessel.
The third sale method, “track sales”, required LDC to move the grain to the railway track of a vessel terminal. In general, track sales were made to other grain companies (i.e., LDC’s competitors) when they required grain to fulfil existing orders or meet their own obligations. In such cases, the destination vessel terminal was generally owned by the purchasing grain company, which was responsible for loading the grain onto the vessel and for all associated costs. These types of sales could typically be executed faster than the first two methods of FOB and in-store sales.

F. Testimony regarding LDC’s Main West Coast Terminals (Kinder Morgan, Cargill, Prince Rupert)

[53] For any of these three types of sales – FOB, in store or track – LDC had to transport grain. The only practical way to transport large quantities of grain was by train. As mentioned above, CN was the only railway serving the Four Elevators. Most of the grain from the Four Elevators was then sent on to Canada’s West Coast, to vessel terminals in Vancouver and Prince Rupert in British Columbia, with smaller quantities being transported to Thunder Bay, Ontario, and Churchill, Manitoba.

[54] When LDC made FOB and in-store sales, it worked directly with vessel terminals to unload railcars. In the 2013‑2014 crop year, LDC dealt primarily with three vessel terminals on the West Coast:

Kinder Morgan Terminal in North Vancouver, British Columbia;
Cargill Terminal in North Vancouver, British Columbia; and
Prince Rupert Grain Terminal in Prince Rupert, British Columbia.

[55 ] CN served each of these three vessel terminals directly, as explained at trial by Mr. Toews and Mr. Auld.

(1) Kinder Morgan Terminal

[56] Messrs. Conn and Toews testified that during the Relevant Period, LDC had exclusive access to the agricultural facilities at the Kinder Morgan Terminal, which was equipped with a loop track that permitted highly efficient rail operations. The Kinder Morgan Terminal generally operated seven days a week, with two shifts per day (i.e., a day shift and a night shift).

[57] LDC entered into an agreement with Kinder Morgan in September 2013 for a term of three years, which required Kinder Morgan to accept up to 2,500,000 MTs of grain at its terminal over the three-year term. There was no requirement that the tonnes delivered be evenly spread out over the contract term. Messrs. Conn, Lussier and Toews all testified that LDC effectively controlled whether it had terminal authorization (which is a confirmation by the terminal that it could receive and unload the railcars upon receipt at their facility). LDC would ship grain to the Kinder Morgan Terminal as the exclusive user of the terminal’s grain facilities. Additionally, LDC could also schedule a third or “graveyard” (overnight) shift to accommodate periods of increased traffic at the facility.

(2) Cargill Terminal

[58] In 2009, LDC entered into a diversion agreement with Cargill, which was in force through the 2013‑2014 crop year [Diversion Agreement]. Mr. Toews explained at trial that the Diversion Agreement gave LDC the right to send wheat, canola and other grains through the Cargill Terminal. However, during the Relevant Period, LDC only handled canola at this terminal. The Diversion Agreement allowed LDC to store 15,000 MTs of grain at the Cargill Terminal. LDC also secured 23,000 MTs of unloading capacity per month at the Cargill Terminal during the 2013‑2014 crop year. Mr. Conn explained at trial that these were minimum amounts, such that when the Cargill Terminal was underutilized, Cargill would grant LDC more capacity.

(3) Prince Rupert Grain Terminal

[59] In the 2013‑2014 crop year, the Prince Rupert Grain Terminal allocated capacity to grain shippers (including non-owners like LDC) through a tendering process. Messrs. Conn and Toews explained that when the terminal had additional capacity available, LDC was not limited by the capacity that it booked, but could utilize more. Prince Rupert Grain Terminal’s goal was to maximize utilization of its terminal, and penalties were in place for grain shippers who booked but failed to use the terminal.

[60] Ms. Hawryluk testified that LDC’s variable cost of moving both wheat and canola through the Kinder Morgan Terminal for LDC was $7.67/MT, as opposed to Cargill’s $14.30/$23.27 and Prince Rupert’s $14.47/$16.62 wheat/canola costs per MT respectively. Clearly, apart from the fact that LDC had a formal agreement with Kinder Morgan for use of their terminal, its costs also made it more attractive than the other Vancouver port options.

G. Testimony Regarding Buying Grain

[61] Grain harvest typically occurs during the months of September and October, following which grain shippers export significant volumes of product until early in the next Spring. Export volumes then typically decline until the following harvest, corresponding to the end of the crop year.

[62] Mr. Conn explained at trial that LDC acquired grain directly from producers (farmers). LDC would buy that grain on a “delivered basis”, meaning that farmers were responsible for trucking the grain to the elevators to be processed or stored. During the Relevant Period, LDC posted bid prices for grain on its website, indicating prices that LDC was willing to pay for wheat and canola on a given day. At that time, Mr. De Pape was collecting the prices that LDC – and many other grain companies – posted online, given his interest in the industry.

[63] Messrs. Conn and Toews explained that, unlike many competitors, LDC generally cleaned the grain to export standards at its elevators, including the Four Elevators, rather than at the port facilities. However, LDC could ship grain to the West Coast before cleaning, and have it cleaned to export standards at those West Coast terminals. In the 2013‑2014 crop year, it took approximately 24 hours to load a 104-railcar unit train [Unit Train] at each of the Four Elevators, according to Mr. Conn. Each elevator could handle a Unit Train per week when shipping clean grain, and two Unit Trains per week when shipping unclean grain. Ms. Hawryluk testified at trial that the variable cost of processing grain at the Four Elevators was modest: between about $1.50 and $2 per MT, depending on the elevator.

[64] CN acknowledges that LDC’s witnesses made general statements that each of the elevators could handle one Unit Train per week, but contrasts this testimony with contemporaneous records from the elevator managers who expressed doubt about their ability to handle a train per week for sustained periods. CN points out that Mr. De Pape agreed on the stand that LDC could not make additional FOB sales unless it had sufficient terminal capacity.

H. Testimony Regarding Selling Grain

[65] During the Relevant Period, LDC made its profit by selling grain at a price calculated by setting the revenue against several costs associated with the grain trade. These included the costs of processing the grain at LDC’s elevators, freight rates to transport the grain for export, and fees paid to vessel terminals to load grain onto vessels.

[66] At trial, Mr. Conn testified that the vast majority of LDC’s wheat and canola sales during the 2013‑2014 crop year were done on a deferred shipment basis, and that sales were typically made between three and six months in advance of delivery. Mr. Conn also confirmed that due to CN’s service failures, LDC declined or delayed making additional deferred sales as the months progressed in 2013‑2014, fearing further issues with CN.

I. Divergent Positions of LDC and CN regarding the 2013‑2014 Crop Year

[67] LDC’s witnesses indicated at trial that the breakdown in CN’s service prevented LDC from purchasing more grain, since it did not have the required railcars to empty its Four Elevators to make room for new grain purchases. Messrs. Conn and Lussier noted that because of the continued issues with rail service, LDC refrained from contracting for future sales. These witnesses indicated that the problems led to an excess of grain being harvested and stored on farms, resulting in a significant decline in grain prices in the Prairies.

[68] LDC’s witnesses further testified at trial that its customers also felt the impact of the service failures early in the 2013‑2014 crop year. They noted that for several years leading up to the Relevant Period, Mitsui & Co. (Canada) Ltd. [Mitsui] was a key LDC wheat and canola customer. During the Relevant Period, Mitsui’s representatives had multiple exchanges with LDC’s representatives to inquire about the delays in LDC grain delivery. The LDC witnesses pointed to two letters signed by Mitsui’s Vice-President dated April 10 and September 11, 2014, in which Mitsui emphasized Japan’s reliance on Canada’s grain exports, and the resulting delays.

[69] CN offers a different perspective on the 2013‑2014 crop year and the Relevant Period within it, which contrasts with LDC’s view of the facts, as well as the legal outcomes that it asserts. Specifically, CN’s witnesses provided substantial testimony regarding the difficulties that the railway encountered due to the unprecedented circumstances that occurred during the period. These issues resulted from elements beyond the railway’s control, which is why they say that their major competitor, CP, faced similar issues. The delays resulted through no fault, negligence or willingness of CN. Rather, they arose from natural circumstances such as the bumper harvest and record cold Winter, neither of which they could control.

[70] Mr. Auld testified that as a result of the unpredictable and unprecedented circumstances, CN made significant efforts to supplement its hopper car fleet as soon as it was possible to do so. For instance, referring to CN’s Assistant Vice-President David Miller’s notes for his appearance at a hearing before the Parliamentary Standing Committee on Agriculture and Agri-Food [Committee] on February 12, 2014, Mr. Auld testified that CN took four steps to secure additional resources in response to the unprecedented situation:

in September of 2013, CN leased an additional 500 covered hopper cars from its US fleet, repositioning them in Canada almost immediately, which strained CN’s network;
in December 2013, CN leased another 500 covered hopper cars that were brought into service between April and June;
CN then introduced a further 775 cars, repositioned from its US fleet; and
CN introduced a “fleet integration program” whereby customers could add private railcars to the fleet for movement on commercial corridors to domestic markets. These customers still received their rationed allocation numbers over and above their private railcars.

[71] In addition to these four extra steps, which CN states that it implemented due to the unique challenges of the 2013‑2014 crop year, CN and its witnesses noted that another pressure on it was imposed externally in the form of the OIC of March 7, 2014 (see above at paragraph 21). The government issued the OIC pursuant to subsection 47(1) of the Act, directing CN and CP to increase their combined grain handling up to a minimum of 1,000,000 MTs/week. CN urged the Court to consider the Regulatory Impact Analysis Statement [RIAS], which was published along with the OIC. The RIAS states:

Throughout fall 2013, railway companies were moving efficiently; however, since December, extremely cold temperatures and winter conditions have affected normal railway operations (i.e. reduced train lengths by up to 30% and limited frequencies). As a consequence, railway companies have not been able to fulfill shippers’ car orders. In addition, Western Canada grain fa[r]mers have produced a record of 75.8 million metric tonnes of grain this year.

The inability of the railway company to move normal numbers of loaded hopper cars has created an extraordinary disruption to the effective and continued operation of the national transportation system, and compromising the ability of Canadian grain to access markets in Canada and beyond.

[72] CN acknowledges that despite its efforts to increase capacity through the four steps that it took, along with the requirements of the OIC, demand still exceeded railcar supply, and CN could not fulfill all orders. During times of high demand when the number of railcars could not match orders, the rationing of railcars would be required to ensure all shippers received a fair share of the available railcars. Due to the abundant harvest of the 2013‑2014 crop year, rationing lasted longer than in other “normal” crop years. CN based its rationing policy on market share during the post-harvest peak of the previous 2012‑2013 crop year, with the intent to treat all shippers fairly and consistently.

[73] CN argues that despite the significant challenges in the Relevant Period, it nonetheless provided exceptional performance over the course of the full 2013‑2014 crop year: CN set new records for grain movement, including record grain throughput levels during that year. For instance, in the third trimester of the 2013‑2014 crop year, CN had a fleet size of about 12,000 railcars, which allowed it to reach its forecast level of 5,000 cars per week, starting from April 2014. Mr. Auld testified that while CN strove to spot between 5,700 and 6,000 railcars per week thereafter to make up for lost ground, it ultimately could not achieve these numbers on a sustained basis due to the capacity of its rail network, along with its ongoing operations outside of Canada.

[74] CN contests LDC’s assertion that its railway performance remained poor throughout the Spring and Summer of 2014, referring to Quorum Corporation’s April‑June 2014 grain reports. Quorum monitored Canada’s Prairie grain handling and transportation system, publishing various reports, including most notably for these proceedings, their weekly Grain Monitoring Reports, with many of the 2013‑2014 Quorum reports having been entered as trial exhibits.

[75] To illustrate, CN references the April 2014 Quorum reports, which noted a steady climb to over 5,000 railcars and indicated that “continued good car spotting and loading in the country is reported” (Quorum Report, April 8, 2014, at page 2 [Exhibit 2016]; Quorum Report, April 15, 2014, at page 2 [Exhibit 704]). CN highlighted the Quorum reporting of 5,716 cars as being significantly higher than the prior year’s average of 3,793 cars (Quorum Report, June 10, 2014, page 3, [Exhibit 2024]).

[76] CN underlines that in addition to business profits, LDC achieved record performance in the 2013‑2014 crop year. CN noted that these profits contrasted with LDC’s outward complaints to CN regarding poor service. CN also pointed to internal LDC emails, in which senior employees, including Messrs. Toews and then-President Randles, referenced LDC’s strong performance. To illustrate this, CN provided the following charts indicating that LDC’s volumes shipped in 2013 and 2014 from the Four Elevators exceeded budgeted volumes, particularly in 2014:

Tonnage Shipped – 2013
Elevator	Budget (MT)	Actual (MT)	Difference (MT)	Inc. (%)
Aberdeen	144,925	160,852	15,927	10.99
Joffre	190,576	192,122	1,546	.81
Kegworth	116,781	95,219	(21,562)	(18.46)
Lyalta	198,002	207,158	9,156	4.62
Total	650,284	655,351	5,067	.78

Tonnage Shipped – 2014
Elevator	Budget (MT)	Actual (MT)	Difference (MT)	Inc. (%)
Aberdeen	196,400	266,665	70,265	35.78
Joffre	229,000	339,087	110,087	48.07
Kegworth	134,500	150,740	16,240	12.07
Lyalta	228,700	315,065	86,365	37.76
Total	788,600	1,071,557	282,957	35.88

Reproduced from CN’s Trial Brief at para 57, listing sources for the Chart as Exhibits 1159, 1160, 1161, 1162, 1166, 1167, 1168, 1169, 1733 and 1732.

[77] CN also emphasizes that LDC grew its net profit by nearly 400% from 2013 to 2014 – namely from $25M to $126M:

LDC Financial Statement Summary
Blank	2012	2013	2014	Growth 2013 to 2014 (%)
Revenue	1,199,257,000	1,475,351,000	1,575,073,000	6.76
Income	33,914,000	25,710,000	126,891,000	393.55

Reproduced from CN’s Trial Brief at para 57, listing the source for the Chart as Exhibit 1967

IV. Procedural History of this Action

[78] I now move from a summary of the factual history of this matter to the legal complaint and proceedings that led to the trial at hand.

A. Initial Agency Complaint

[79] In April 2014, LDC filed a level of service complaint with the Agency under subsection 116(1) of the Act [Complaint] claiming that CN had breached its service obligations, including its obligations arising from the Contract. Under subsection 116(1) of the Act, the Agency has jurisdiction to determine whether a railway company has breached the statutory service obligations owed to a shipper if a complaint is lodged.

[80] The Agency rendered an interim order on May 2, 2014 [Interim Order], which granted the interim relief LDC requested. The Interim Order stipulated that CN was to supply up to 100 railcars per week at each of the Four Elevators until the Agency made its final decision on the Complaint.

B. The Agency Decision

[81] On October 3, 2014, the Agency issued its final decision on the Complaint, confirming that CN had breached its level of service obligations to LDC. The Agency indicated in the Agency Decision that it was bound by the Contract, pursuant to subsection 113(4) of the Act. The Agency Decision answered the three questions:

Was the shipper’s request for service reasonable?
Did the railway company fulfil this request?
If not, are there reasons that could justify the service failure?

[82] In total, the Agency found a shortfall of 3,376 railcars that LDC was supposed to receive during the Relevant Period, and which CN did not provide. More specifically, the Agency determined that CN failed to provide 786 railcars to the Aberdeen elevator, 736 railcars to the Joffre elevator, 811 railcars to the Lyalta elevator, and 1,043 railcars to the Glenavon elevator, adding up to the total shortfall of 3,376 railcars to the Four Elevators.

[83] CN sought and was granted leave to appeal this Agency Decision to the Federal Court of Appeal [FCA], which upheld its decision in Canadian National Railway Company v Louis Dreyfus Commodities Canada LTD and Canadian Transportation Agency, 2016 FCA 232 [CN FCA]. Of particular note, the FCA wrote in CN FCA at paragraph 9 that “[t]o the extent that a railway company has agreed to provide a certain level of service, […] it did not need to determine the reasonableness of any request for service within the limits imposed by such agreement”.

[84] CN also argued before the FCA that the Contract was not a contract contemplated by subsection 113(4) of the Act. Rather, the FCA found that the Agency Decision was a matter of contractual interpretation, involving mixed fact and law, and therefore was not appealable under the Act, which provides that appeals may only be brought in relation to a question of law or jurisdiction under subsection 41(1) of the Act (CN FCA at paras 29-30).

[85] Meanwhile, LDC brought the current Action under subsection 116(5) of the Act against CN to obtain damages for the Breach determined by the Agency, having filed its Statement of Claim with the Federal Court on July 31, 2015.

[86] CN then contested this Court’s jurisdiction to hear LDC’s action under subsection 116(5) of the Act, including because it contended that any rights to damages arose from the contract rather than the statutory obligations contained within the Act. CN raised its jurisdictional challenge through a motion for summary judgment.

[87] Justice Roy confirmed this Court’s jurisdiction to hear the matter and determine the damages in Louis Dreyfus Commodities Canada Ltd v Canadian National Railway Company, 2017 FC 783 [LDC FC]. In that decision, this Court disagreed with CN, finding that the Contract is a “confidential contract” under subsection 113(4) of the Act, which established how CN would fulfill its statutory service obligations. Justice Roy emphasized that the Agency Decision and CN FCA both recognized the confidential contract as binding in regulatory decisions (at para 61 of LDC FC), and as a result, the Court had the jurisdiction to hear LDC’s damages claim under subsection 116(5) of the Act.

[88] CN appealed the decision in LDC FC, and the FCA subsequently upheld Justice Roy’s decision in Canadian National Railway Company v Louis Dreyfus Commodities Canada Ltd., 2019 FCA 9 [LDC FCA], confirming that the Contract was found to be a “confidential contract” under the Act. In particular, Justice Rennie, writing for the FCA, reproduced the key findings of Justice Roy in considering CN’s argument that LDC’s claim was for a breach of contract, contained at paragraphs 86‑87 of his LDC FC decision (cited within paragraph 14 of LDC FCA):

[86] As is plain from a reading of the statement of claim, LDC is seeking damages pursuant to subsection 116(5) of the Act because the level of service obligations has been found to be lacking by the agency specialized in the matter. That determination by the CTA has been completed by the regulator as a matter of federal law. That is the essential nature of the claim damages [sic] following a determination that the level of services obligations under federal legislation has not been met. …

[87] CN’s argument is that LDC’s claim is a claim for breach of contract. That is not so. The effect of the contract has already been decided by the CTA. The regulator is tasked by Parliament to make a determination whether a railway company has fulfilled its service obligations once a complaint has been made. That determination must include the agreement of the parties on the manner in which the service obligations are to be fulfilled. Thus, the claim under subsection 116(5) is not for breach of contract. It is for damages following the determination by the regulator that the level of service obligations, including the manner in which those obligations are to be fulfilled provided for by a confidential contract, have not been met. The source of LDC’s right is not so much the contract as it is the determination that the service obligations have not been fulfilled, which has already been made by the regulator and left undisturbed on appeal. All that needs to be done is figure out the damages.

[89] The FCA affirmed that LDC’s damages claim arose from the statutory regime, rather than from a breach of contract: subsection 116(5) of the Act provides a statutory claim for damages following an Agency finding of a service failure under the legislation (LDC FCA at paras 1, 4, 18, 24, 27). Justice Rennie added that CN’s appeal was a collateral attack on the Agency Decision (LDC FCA at para 18).

[90] LDC FCA further noted that the mechanisms for appellate review of an Agency decision are set out in sections 40 and 41 of the Act, and found that “this Court previously determined that, as no extricable question of law was identified, the Agency’s conclusion that the Contract was a confidential contract could not be challenged on an appeal under section 41” (LDC FCA at paras 9‑21).

[91] The FCA found that any question in this regard had been determinatively answered in Canadian National Railway Company v Scott, 2018 FCA 148 [Scott], which was decided only after Justice Roy’s decision in LDC FC. In particular, Justice Rennie reiterated Scott’s holding that questions of fact were not appealable to the FCA under section 41 of the Act. He also pointed to three other FCA decisions to underline that Agency determinations concerning confidential contracts – which had been a primary issue argued on appeal from LDC FC – could be challenged on appeal to the FCA, provided a question of law could be identified (citing Canadian National Railway Company v Viterra Inc., 2017 FCA 6 [Viterra] at para 58, 410 D.L.R. (4th) 128, Canadian National Railway Company v Emerson Milling Inc, 2017 FCA 79 at para 26 and Canadian National Railway Company v Emerson Milling Inc, 2017 FCA 86 at para 17 [Emerson Milling]).

[92] I note that in addition to the substantial commentary contained in the various decisions on the matter at hand, LDC filed two other complaints with the Agency regarding the service it received in the period around the challenging 2013-2014 crop year. CN argues that it is important to consider these two other complaints, which will be briefly reviewed next.

C. Other LDC Complaints, and Agency Decisions #2 and #3

[93] On October 17, 2014, LDC filed a second level of service complaint with the Agency, alleging that CN failed to fulfill its level of service obligations with respect to LDC’s elevator facilities in Rycroft, Alberta, and Dawson Creek, British Columbia, in weeks 1 to 52 of the 2013‑2014 crop year, and weeks 1 to 10 of the 2014‑2015 crop year [LDC Complaint #2, Exhibit 1888]. CN serviced both of these LDC facilities. In this subsequent complaint, LDC claimed CN’s alleged service failure resulted in $9,980,819.00 in lost opportunity costs, $7,877,265.85 in vessel demurrage costs, and reputational harm.

[94] The Agency dismissed LDC’s request for interim relief in LDC Complaint #2 in a decision dated June 18, 2015 [LDC Decision #2, Exhibit 1896]. The Agency did not consider the merit of LDC’s claim as it related to the Rycroft facility and dismissed LDC Complaint #2 on jurisdictional grounds in a motion brought by CN before the Agency (Interim Agency Decision dated January 20, 2015, at para 57). Specifically, the Agency found that the contract governing the service to be provided at the Rycroft elevator contained a mandatory arbitration clause.

[95] For Dawson Creek, while the Agency found LDC had a reasonable request for service and that CN had failed to fulfill some of its requests, the Agency nonetheless dismissed LDC Complaint #2, finding CN’s service failures were reasonably justified in light of: (i) the size of the 2013‑2014 crop; (ii) CN’s efforts to acquire additional railcars; (iii) the significant increase in LDC’s railcar orders; (iv) the harsh winter weather conditions; (v) the railcar allocation policy implemented by CN; and (vi) the lack of lead time available to CN to plan to meet these increased demands.

[96] CN also emphasized the Agency findings at paragraphs 72 and 78 of LDC Decision #2:

[72] The Agency recognizes that during periods of extreme cold weather, railway companies are faced with operational constraints, such as corridor restrictions, speed limitations and train length reductions which increase car cycle times and reduce railway companies’ ability to maintain operations at normal levels. In addition, the Agency accepts CN’s claims that infrastructure failures, including rail breakage, switch failures and bad order cars are demonstrably higher in sustained extreme cold conditions. In the particular circumstances of the 2013-2014 crop year, harsh conditions persisted for a long period and those operational constraints also were significantly greater, and lasted significantly longer, than average.

…

[78] The Agency finds that, on a balance, when considered together, the factors constitute a reasonable explanation as to why CN provided only 83 percent of the cars requested by LDC for its Dawson Creek facility during the complaint period. The crop was of extraordinary size and the winter was exceptionally harsh. These two factors were outside the railway company’s direct control and were difficult to predict. The first should have been a boon to both the shipper and the railway company, and might have been managed better except for the weather, which was a hindrance to both.

[97] LDC, in response to CN’s observation on LDC Complaint #2, notes that Dawson Creek (i) was not a party to a confidential contract, and (ii) received more than 80% of the railcars ordered at that location during the relevant period (being weeks 1 to 52 of the 2013‑2014 crop year, and weeks 1 to 10 of the 2014‑2015 crop year, and thus distinct from the Relevant Period in these proceedings). LDC contends that this made the context for that elevator significantly different at the Four Elevators, and thus distinct from the matter at hand.

[98] Next, on November 3, 2014, LDC filed a third level of service complaint with the Agency [LDC Complaint #3, Exhibit 1897], alleging that CN’s railcar allocation policy was contrary to (i) the Act and would inevitably result in CN breaching its level of service obligations to LDC, and (ii) the Agency Decision. LDC requested an order prohibiting CN from applying the railcar allocation policy to LDC’s six CN-served facilities.

[99] The Agency dismissed LDC Complaint #3 for not disclosing a reasonable cause of action [LDC Decision #3, Exhibit 1902]. The Agency concluded it had no jurisdiction to grant the relief sought because it related to an anticipated service breach rather than one that had already occurred. The Agency noted that contrary to LDC’s allegations, the Agency Decision did not prevent CN from applying a railcar allocation policy to the Four Elevators during the term of the Contract, provided that the policy was not inconsistent with CN’s level of service obligations to other shippers.

[100] Ultimately, CN has not persuaded me to place weight on the Agency’s findings in LDC’s unsuccessful second and third complaints. While LDC Complaints #2 and #3 arose out of similar temporal, geographical and business circumstances, they raised different issues, which produced different outcomes before the Agency.

[101] In the current dispute, as described above, the Agency Decision was challenged and upheld by the FCA (in CN FCA), and this Action was then challenged on jurisdictional grounds, which Justice Roy of this Court rejected in LDC FC, as did the FCA in LDC FCA. The upshot of the decisions on this matter to date, which have determined CN is liable for breaching its service standards under the Act, has left me with only one task to complete with the aide of the evidence elicited at trial: to determine damages. I will now proceed with that assessment.

D. Preliminary Matters arising from the Trial

[102] Numerous objections were raised by both parties over the course of the trial. I ruled on most of those objections from the bench. There remain four unresolved objections, which I advised the parties would be addressed in my decision.

(1) CN’s Opening Statement: LDC’s Objection to its Content

[103] LDC made its opening submissions on the first day of trial. CN raised no objections to these opening submissions. After LDC called their witnesses and closed the evidence portion of their case, CN provided its opening submissions. During CN’s counsel’s opening submissions, LDC objected twice, arguing it was an inappropriate opening, which more resembled a closing statement because it was overly argumentative. According to LDC, rather than CN having followed the appropriate trial procedure by presenting an overview of its witnesses and testimony to come, CN improperly summarized LDC’s evidence, argued its weaknesses, and ultimately asked the Court to come to legal conclusions prior to presenting any of its evidence by way of its opening submissions.

[104] I do not agree with LDC. Rather, CN’s legal team provided a helpful outline of their position, which assisted the Court by providing an overview of the case that they would be presenting at trial. Given the extensive background of this Action and the large amount of evidence it entailed, CN’s opening proved helpful to the Court and did not prejudice the Plaintiff.

(2) LDC’s Written Submissions: CN’s Objection to Appendix II

[105] The second objection to be resolved occurred on the first day of closing submissions, when counsel for CN objected to Appendix II of LDC’s closing submissions, arguing that it consisted of a new expert opinion by Mr. De Pape, and therefore was not admissible.

[106] LDC, on the other hand, argued that Appendix II was based entirely on evidence that had already been adduced at trial and contained no new theory or basis of damages. Rather, LDC asserted that Appendix II was simply an additional aid to assist the Court in comprehending the different scenarios discussed at trial by the experts.

[107] Appendix II comprises nine analyses of LDC’s lost profits that employ different LDC margin assumptions. While LDC presents this as a summary of evidence meant to help the Court by grouping disparate evidence into one table, CN argues it is an effort to rehabilitate the De Pape Report, in what amounts to a supplemental report. This, CN argues, is highly improper and should be disregarded. CN contends that Mr. De Pape has provided these nine new analyses based on a series of entirely different instructed assumptions, including: the timing of additional purchases and sales; trading schedules; and the type of sale. According to CN, these constitute new “alternate margin calculations”.

[108] CN maintains that LDC has known since at least May 2022, when CN filed the Das Critique, and certainly since August 2023, when the parties exchanged pre-trial briefs, that CN was taking the position that opinions and conclusions expressed in Mr. De Pape’s reports were fundamentally flawed. CN says this is new expert opinion evidence that is not found in either of Mr. De Pape’s existing reports, and was specifically included after-the-fact in closing submissions to address the frailties that came out of Mr. De Pape’s cross-examination. CN argues that LDC should have requested leave to file a supplemental expert report to address the issues raised in Appendix II, or to prepare a supplemental report. CN contends that this is an attempt to “shoehorn” in the same supplemental expert evidence that I already prevented in sustaining CN’s objection when LDC attempted to introduce other inadmissible evidence during trial.

[109] I am not persuaded that Appendix II is inadmissible evidence. Rather, I agree with LDC that it is simply an Excel version of evidence that is already properly before the Court through marked exhibits. Like the ruling regarding CN’s opening statement in Objection (1) of this section, I find that the Appendix assists the Court in understanding the evidence. It does so by reorganizing the underlying evidence into simple, chart format. That underlying evidence was presented and properly introduced at trial, including CN’s interpretation of LDC data and alternate margin calculations. Simply put, Mr. De Pape summarized and illustrated numbers and calculations already properly before me, in a more digestible format.

(3) No adverse inference in not calling Messrs. Randles and Petras of LDC

[110] CN asked me to draw an adverse inference because LDC failed to call its former President, Brant Randles, and former Head of Wheat Trading, Barry Petras, to testify at trial.

[111] LDC pointed out that extensive document disclosure took place, including communications to and from LDC’s wheat desk. This evidence included emails to and from Messrs. Randles and Petras, none of which suggested these two senior company representatives would have commented differently than Messrs. Conn and Lussier did with respect to the railcar situation during the Relevant Period, and its impact on LDC’s wheat sales.

[112] I agree that the expansive scope of discovery conducted in this Action obviated the necessity or justification for adverse inferences resulting from any failure to call witnesses (see, for instance, Amtim Capital Inc v Appliance Recycling Centers of America, 2022 ONSC 6877 at paras 91‑92 citing Bishop-Gittens v Lim, 2015 ONSC 3971 (SCJ) at para 20). In short, the Defendant could have called or subpoenaed these individuals should CN have thought it appropriate to do so (Woods v Jackiewicz, 2020 ONCA 458 at para 27 as cited in Sea Tow Services International, Inc v C-Tow Marine Assistance Ltd, 2025 FC 27, and Wiche v Ontario, 2001 CanLII 28413 (ONSC) at paras 127‑128, aff’d Wiche v Ontario, [2003] OJ No 221 (ONCA)). I draw no adverse inference from the failure to call Messrs. Randles and Petras.

(4) Browne v Dunn: No Failure to Put Assertions to Witnesses

[113] In replying to CN’s arguments, LDC contended that CN did not put specific assertions to LDC witnesses, failing a basic tenet of trial fairness, given that those witnesses were unable to respond to alleged contradictory evidence (citing Browne v Dunn, (1893), 6 R. 67 (H.L.), 1893 CanLII 65 (FOREP); see also Takeda Canada Inc v Apotex Inc, 2024 FC 106 at para 252). LDC argued that where this occurred, CN’s assertions should be given no weight.

[114] Specifically, LDC objected that CN provided alternate versions of Ms. Hawryluk’s variable and demurrage cost calculations for the Four Elevators. Similarly, LDC objected to CN failing to put contrasting purchase and sales calculations to Mr. De Pape or LDC’s other witnesses, which CN only provided in an Annex to their Trial Brief after having closed the evidence phase of the trial. I am mindful of LDC’s concerns but need not rule on the issue because I have not relied on this CN evidence that LDC contests, in coming to my conclusions.

V. Joint Issues raised in this Action

[115] The Parties jointly submit that the issues to be resolved for this damages trial are as follows:

For the first head of damages – LDC’s lost profit and opportunity – whether:

LDC suffered any lost profit or opportunity as a result of the Breach determined by the Agency in its Decision, and, if so, how to quantify that loss;
the minimum performance principle applies to the quantification of damages for lost profit or opportunity in this case and, if so, whether and to what extent the minimum performance principle affects the quantification of the damages for lost profit or opportunity; and,
LDC mitigated some or all of its lost profit or opportunity during the period from May 2, 2014, to October 3, 2014, the period covered by the Interim Order.

For LDC’s second head of damages – vessel demurrage – whether the demurrage charges claimed by LDC (USD $3,715,726.60 and CAD $335,978.90) were incurred as a result of the Breach identified by the Agency in its Decision.
For LDC’s third and final head of damages – reputational harm:

whether LDC suffered any reputational harm; and
if so, was it incurred as a result of the Breach found by the Agency in its Decision; and

iii. if so, how to quantify that loss.

[116] The key evaluation that must take place is the quantification of damages, if any, under each of the three heads of damages identified in the joint issues raised by the parties.

VI. First Head of Damages: What Losses Resulted from the Breach?

[117] Before proceeding to any quantification of losses, the parties disagree on how to approach losses under the first head of damages – namely, whether they should be approached under a tort or contract law assessment.

A. Parties’ Positions on Tort vs. Contract Approach to the Assessment of Losses

[118] The parties view the approach to the quantification of damages, and indeed the kind of case this is, from very different vantage points.

[119] In short, LDC contends that this is akin to a tort action given the statutory regime, and specifically section 116 of the Act, upon which the Agency based its finding that CN breached its statutory level of service obligations. LDC therefore asserts that the Court should not assess damages from the perspective of a breach of contract, but rather from a negligence perspective, and a tort law approach that contemplates a hypothetical, “but for” world: but for the service breach, what profits would they have made?

[120] LDC argues that in their hypothetical “but for” world, it is more likely than not that they suffered significant lost profits on a balance of probabilities. LDC argues that had it received the shortfall of 3,376 railcars, it would have moved an additional 309,000 MTs of grain to the West Coast and would have earned additional profits as a result. LDC notes that these “but for” sales are in excess of – and are not diminished by – the volumes it sold later in the 2013‑2014 crop year, including the contracts that it eventually fulfilled.

[121] CN, by contrast, asserts that this is a purely contractual case because the breach at issue is one of contract, and thus any damages must necessarily flow from that breach. Therefore, CN asserts that the assessment of damages must be based on its obligations to LDC under the Contract, as interpreted by the Agency. CN argues that to claim damages for the Breach identified by the Agency, LDC has the onus of proving, on a balance of probabilities, that: (a) LDC sustained the alleged losses; and (b) the Breach identified in the Agency Decision was the dominant or effective cause of those losses.

[122] CN notes that where a claimant sustains a loss as a result of a breach of contract, damages are to place the plaintiff in the position they would have occupied had the contract been performed (SM Waddams, Law of Damages, (Toronto: Thomson Reuters Canada, 2022) at § 5:1 [Waddams]; and Fidler v Sun Life Assurance Co of Canada, 2006 SCC 30 at para 27 [Fidler]).

[123] Claimants typically can only recover damages for losses where the breach of contract was the effective or dominant cause (Hi-Alta Capital Inc v Montreal Trust Co of Canada, 2004 ABQB 687 at paras 41‑43, citing Chitty on Contracts, (London: Sweet & Maxwell, 1999) at para 27–024 and Martel Building Ltd v R, 2000 SCC 60, [2000] 2 S.C.R. 860 at para 102). CN emphasizes that losses are limited to the ordinary consequences which would follow from the breach (Fidler at para 27 citing Hadley v Baxendale (1854), 9 Exch 341, 156 ER 145 (Eng Ex Div) at 151).

[124] The 2004 Supreme Court of Canada decision in Hamilton v Open Window Bakery Ltd, 2004 SCC 9 [Open Window], encapsulated the distinction between a damages assessment under tort as opposed to a contract law approach to damages. In a key part of Open Window’s explanation, Justice Arbour wrote for the Court, at paras 15‑16:

[…] The failure to perform certain promised positive contractual obligations in contract law is conceptually distinct from the breach of unpromised negative obligations to not harm another’s interests in tort law:  see G. H. L. Fridman, The Law of Torts in Canada (2nd ed. 2002), at p. 11.

In a successful tort claim for damages, unliquidated damages are awarded to a plaintiff on the basis that the plaintiff has suffered a loss through some wrongful interference by the defendant. The plaintiff in such cases has legally protected interests that have been found by a court to be unduly compromised. In tort cases, it is widely recognized that the inquiry into what would have been but for the tort is appropriate, since the plaintiff’s interest is in being restored to (or at least awarded compensation in respect of) the position the plaintiff would otherwise be in. See Fridman, supra, at p. 2; A. M. Linden, Canadian Tort Law (7th ed. 2001), at p. 4, (“[f]irst and foremost, tort law is a compensator”); J. G. Fleming, The Law of Torts (9th ed. 1998), at p. 5; and R. F. V. Heuston and R. A. Buckley, Salmond and Heuston on the Law of Torts (21st ed. 1996), at pp. 8-9.

[125] Here, section 116(5) of the Act requires this Court to undertake a quantification assessment of the damages that ensued from CN’s service failures in the 2013‑2014 crop year.

B. A Tort Approach Applies

[126] There are three essential points that have led me to the conclusion that the statutory scheme set out in section 116 requires the Court to take a tort approach to the analysis of damages, rather than a contract law approach.

(1) Past Decisions in this matter

[127] First, the Courts that previously examined the jurisdictional aspects of this litigation were clear on the point, including LDC FCA that upheld this Court in LDC FC. The Agency Decision, upheld by CN FCA, found CN breached its level of service obligations. Justice Roy later emphasized that LDC’s Complaint did not claim breach of contract, and indeed, such proceedings are not for breach of contract, but rather for the damages flowing from the breach of service obligations, which can include looking at the confidential contract in LDC FC at paras 79 and 85‑87.

[128] On the latter point, I note that these decisions have confirmed that the Contract is a confidential contract for the purposes of section 113(4) as was originally found by the Agency (CN FCA at paras 30‑31, LDC FC at paras 65‑79, and LDC FCA at paras 21‑25, 28‑29). I will therefore approach quantification of damages such that it includes consideration of that confidential contract, but within the framework of the statutory scheme.

(2) The Meaning of Subsection 116(5)

[129] Second, I find that a tort approach best accords with a plain reading of the wording of subsection 116(5) of the Act. The meaning of the words contained in subsection 116(5) must be guided by the current approach to statutory interpretation. The Supreme Court of Canada most recently articulated the current approach to statutory interpretation in Piekut v Canada (National Revenue), 2025 SCC 13 [Piekut] at paras 44‑45:

The modern principle reflects “the common law evolution of statutory interpretation over many centuries” (R. Sullivan, The Construction of Statutes (7th ed. 2022), at § 2.01[4]; see also S. Beaulac and P.-A. Côté, “Driedger’s ‘Modern Principle’ at the Supreme Court of Canada: Interpretation, Justification, Legitimization” (2006), 40 R.J.T. 131, at pp. 141-42). It recognizes that statutory interpretation “cannot be founded on the wording of the legislation alone” (Rizzo, at para. 21) because “words, like people, take their colour from their surroundings” (Bell ExpressVu, at para. 27, quoting J. Willis, “Statute Interpretation in a Nutshell” (1938), 16 Can. Bar Rev. 1, at p. 6). As this Court has noted, “[w]ords that appear clear and unambiguous may in fact prove to be ambiguous once placed in their context. The possibility of the context revealing a latent ambiguity such as this is a logical result of the modern approach to interpretation” (Montréal (City) v. 2952-1366 Québec Inc., 2005 SCC 62, [2005] 3 S.C.R. 141, at para. 10; see also R. v. Alex, 2017 SCC 37, [2017] 1 S.C.R. 967, at para. 31; La Presse inc. v. Quebec, 2023 SCC 22, at para. 23).

As a result, “plain meaning alone is not determinative and a statutory interpretation analysis is incomplete without considering the context, purpose and relevant legal norms” (Alex, at para. 31; see also La Presse, at para. 23; Vavilov, at para. 118). At the same time, “just as the text must be considered in light of the context and object, the object of a statute and that of a provision must be considered with close attention always being paid to the text of the statute, which remains the anchor of the interpretative exercise” (Quebec (Commission des droits de la personne et des droits de la jeunesse) v. Directrice de la protection de la jeunesse du CISSS A, 2024 SCC 43, at para. 24).

[130] Here, the plain reading of the words of subsection 116(5), read in conjunction with the context, purpose, and relevant legal norms, leads to the conclusion that a tort approach should be adopted in my application of the law to the facts that arose in this case.

[131] Subsection 116(5) stipulates that every person aggrieved by a railway company’s “neglect or refusal” to fulfil its service obligations – which in these circumstances was CN’s failure to supply railcars – has an action for the neglect or refusal against the company (subject to certain exceptions not present here).

[132] Under this key provision, and indeed in light of the broader regime set out in sections 113‑116 of the Act, parties can bring an action regardless of whether the shipper has a contract with the railway company, as contemplated in subsection 113(4) of the Act, as LDC did with CN. The only prerequisite to suing under subsection 116(5) is a finding by the Agency that the railway company has breached its statutory level of service obligations owed to a party. That party may then file a level of service complaint, and if successful, an action for damages, if that complaint is based on neglect or refusal to fulfill statutory obligations.

[133] I do not find that the statutory regime set out in sections 113‑116 of the Act supports a contract law approach to a damages assessment. Rather, applying the basic principles of statutory interpretation of text, context and purpose, a plain reading of the provision invokes a tort rather than a contract approach (Piekut at para 44; Quebec (Commission des droits de la personne et des droits de la jeunesse) v Directrice de la protection de la jeunesse du CISSS A, 2024 SCC 43, at para 24; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 [Rizzo], at para 21).

[134] Indeed, I find that the past decisions in this case, as outlined in paragraphs 127‑128 above, align with a focus on the neglect and its fallout, and specifically (a) the upshot of LDC’s section 116 Complaint was that the Agency found a breach of the statute, rather than a breach of the Contract (Agency Decision at paras 27‑28); (b) which Agency finding was upheld by the FCA in CN FCA; and (c) later formed a basis of Justice Roy’s decision in in LDC FC (at para 87), that was once again upheld in LDC FCA.

[135] Under a contractual approach, the compensatory – or “expectancy” – principle requires that one consider what the plaintiff’s position would be if the contract had been performed (see McCamus, The Law of Contracts, 3rd ed (Toronto: Irwin Law, 2020) at p 973). The analysis under a contractual approach is distinct from the assessment that must be undertaken for a tort claim, where the key question is what the plaintiff’s position would have been had the tort not been committed. It is at that point that we enter the hypothetical, “but for” world that we will shortly enter for the examination of damages quantification.

[136] While damages assessments arising under tort as opposed to breach of contract claims may converge, conceptual chasms between the two approaches impact how this Court will analyse the damages. A contract law approach focuses on the bargains and what the parties intended at the time of contract formation. It includes consideration of minimum performance. A tort approach does not, focusing on the hypothetical world that would have existed “but for” the breach of the service standards.

[137] The 2004 Supreme Court of Canada decision in Open Window encapsulated the distinction between a damages assessment under tort as opposed to a contract law approach to damages, as has been reviewed above at paragraph 124.

[138] Any reliance on the common law of damages is subject to, and must align with, the purpose and policies underlying the statutory scheme (The Owners, Strata Plan LMS 3851 v Homer Street Developments Limited Partnership, 2016 BCCA 371 at para 83, citing South Australia Asset Management Corporation v York Montague Ltd, [1996] 3 All ER 365 (HL)). To interfere with policies embodied in legislation – including by importing common law damages mechanisms into the statutory regime – will interfere with the legislation’s purposes (see Sullivan, The Construction of Statutes, 7th ed (LexisNexis Canada Inc: 2022) at § 17.01, Part 2[3] and § 17.01[3]).

(3) The consequences of captivity

[139] Third, and related to the interpretation of subsection 116(5) vis-à-vis the context and purpose of the statute, LDC was captive to CN, which its witnesses established was a decision inextricably tied to the Contract, as it led directly to LDC’s decision to construct its Four Elevators. In Emerson Milling, the FCA confirmed that shippers may be “captive” due to their relationship with railway companies. The Court observed that “[t]he level of service provisions exist to ensure suitable and adequate conditions for shippers, especially those who are captive or do not have other viable economic alternatives due to the volumes and distances involved” (Emerson Milling at para 42).

[140] The Courts have been clear that the Act has an essential role as a check on the significant market power that railway companies hold. For instance, Justice de Montigny (as he then was) wrote for the majority in Canadian Pacific Railway Company v Univar Canada Ltd, 2019 FCA 24 [Univar] at para 32:

[…] The common carrier obligations set out in sections 113 to 115 of the Act impose high service standards on railways because they are meant to remedy the imbalance in negotiating positions between shippers and railways, and to establish a level playing field despite the monopoly or near monopoly power that a railway company may exert. As stated by the Agency in Louis Dreyfus Commodities Canada Ltd. v. Canadian National Railway Company, October 3, 2014, Letter Decision No. 2014-10-03, Case No. 14-02100 (Dreyfus CTA), upheld by this Court in Dreyfus:

[10] …the provisions [sections 113 to 116] are intended to ensure that the level of service is not established solely on the basis of a railway company’s interests and preferences, especially where railway companies can exercise monopoly power over captive shippers. When interpreting these provisions, it is necessary to give them the fair, large and liberal construction and interpretation that best ensures the attainment of their objectives. This means that an overly restrictive interpretation that does not attain its objectives must be rejected.

(Dreyfus CTA at para. 10, cited with approval in Canadian National Railway Company v. Emerson Milling Inc., 2017 FCA 86 at para. 41, leave to appeal to the S.C.C. refused, 37645 (February 22, 2018).)

[Emphasis added]

[141] The FCA has further commented on the importance of the underlying objectives of the grain transportation statutory scheme in other cases arising from the 2013‑2014 crop year (Canadian National Railway Company v Canada (Transportation Agency), 2021 FCA 173 at para 75; LDC FCA at para 64; CN FCA at para 26). As pointed out in the Agency Decision, sections 113‑115 of the Act counterbalance the railway company’s market power, including through the high service standard obligations with which railways must comply (see Agency Decision at paras 70‑71, as well as subsections 116(1.2) and 116(2) of the Act).

[142] Under the statutory scheme, the Agency decides whether a railway company has breached the statutory service obligations. If the Agency finds a breach, this Court then assesses for any damages. This division of responsibility has been the subject of significant jurisprudential commentary, given the various interests and policy considerations that the Agency must consider in applying the level of service standard, and determining whether there has been a breach (see, for instance, Kiist v Canadian Pacific Railway Co, [1981] FCJ No 119 (CA) at paras 29, 31; Canadian National Railway Company v Northgate Terminals Ltd, 2010 FCA 147, [2011] 4 FCR at para 28; and LDC FCA at paras 27‑28).

[143] In sum, these three considerations all point to adopting a tort approach to assessing damages rather than a contract law approach. Apart from the plain words of the statute, this interpretation is supported by the earlier discussion of this Court’s decision in LDC FC in these Reasons, which was upheld in LDC FCA. This is because the assessment of damages under subsection 116(5) is based on the particular “neglect or refusal” found by the Agency. Here, that neglect or refusal was CN’s service Breach of failing to provide a total of 3,376 additional railcars during the Relevant Period.

C. The Assessment of Damages

[144] There is little precedent to guide this Court about how to assess damages under the jurisprudence that considers section 116 of the Act, and indeed, the parties both acknowledge that the jurisprudence on the assessment of damages for sections 113‑116 of the Act is scant.

[145] Specifically, LDC has pointed to a 1911 decision in Canadian Northern Railway v Robinson, 1911 CarswellMan 172 (JCPC) 43 SCR 387 [Northern Railway], as well as a decision from the following year in Meagher v Canadian Pacific Railway Company, 1912 CanLII 985 (NBCA), 42 NBR 46 [Meagher]. LDC also relies on McCain Produce Co v Canadian National Railway, 1980 CarswellNB 37 (CA), [McCain Produce], aff’d, [1981] 2 S.C.R. 219.

[146] Meagher and McCain Produce make clear that (i) damages are recoverable under subsection 116(5) based on what the shipper reasonably expected to transport “but for” the railway company’s breach, and (ii) where a breach has been found, damages must be assessed by this Court despite potential imprecision.

[147] Regarding principle (i), the minority opinion in Meagher, commenting on a predecessor provision to subsection 116(5) – section 284 of the Railway Act, RSC 1906, c 37 – employed a helpful framework for assessing damages through its assessment rationale, namely by considering the number of carloads the plaintiff might reasonably have expected to move, how many of those carloads would have been shipped in the time period in question, and what damages the plaintiff suffered as a result (see Meagher at p 63).

[148] Regarding principle (ii), in McCain Produce, the plaintiffs filed claims against CN and CP for breach of contract, negligence, and failure to comply with statutory level of service obligations imposed by then‑subsection 262(7) of the Railway Act, RSC 1970, c R-2 (a more recent predecessor provision to subsection 116(5) of the Act). Both McCain Produce and Northern Railway held that a party should not be deprived of a damages award for a service breach just because the precise quantum of the loss is difficult or mathematically impossible to ascertain (McCain Produce at para 111).

[149] In Penvidic v International Nickel, 1975 CanLII 6 (SCC), [1976] 1 SCR 26 [Penvidic] at pp 279-280, Spence J cited Wood v Grand Valley Railway Company, 1915 CanLII 574 (SCC), 51 SCR 283 [Wood], in which Justice Davies wrote:

It was clearly impossible under the facts of that case to estimate with anything approaching to mathematical accuracy the damages sustained by the plaintiffs, but it seems to me to be clearly laid down there by the learned Judges that such an impossibility cannot "relieve the wrongdoer of the necessity of paying damages for his breach of contract" and that on the other hand the tribunal to estimate them whether jury or Judge must under such circumstances do "the best it can" and its conclusion will not be set aside even if "the amount of the verdict is a matter of guess work (at p. 289).

[150] The Supreme Court of Canada has stated, in the context of a tort damages (personal injury) action arising out of a motor vehicle accident, which involved estimating future compensation, that “damages are assessed, not calculated” (Townsend v Kroppmanns, 2004 SCC 10 at para 19) [Townsend]. The duty for trial courts to assess damages has more recently been found by the Ontario Court of Appeal in Eastern Power Limited v. Ontario Electricity Financial Corporation, 2010 ONCA 467 at para. 35 [Eastern Power].

D. Damages Arising from the Service Breach in this Action

[151] Here, given the statutory service breach within the unique context of the Act, the question is, but for the Breach, would the Plaintiff have been able to procure and sell additional grain, and if so, for what price? Otherwise stated, what would have happened if CN had fulfilled its statutory service obligations?

[152] To respond to this question, LDC must establish what would have happened in the hypothetical, “but for” world that would have seen it receive the 3,376 railcar shortfall identified by the Agency. Constructing the “but for” world is generally considered a factual inquiry and involves using “robust common sense” to determine what would have transpired had the wrong not been committed (Clements v Clements, 2012 SCC 32 at paras 8 and 9; Grenke Estate v DNOW Canada ULC, 2020 FCA 61at para 18; and Teva Canada Ltd v Pfizer Canada Inc v Teva Canada Limited, 2016 FCA 161 [Teva], at para 36).

[153] To warrant damages, a plaintiff holds the burden of proving, on a balance of probabilities, what would have happened without the breach (Pfizer at paras 53‑55, citing Apotex Inc v Merck & Co, Inc, 2015 FCA 171, 387 DLR (4th) 552 (Lovastatin)). However, if a defendant posits an alternative “but for” world, the defendant must prove its version of the “but for” world on a balance of probabilities (Teva Pfizer at paras 58‑66, citing Rainbow Industrial Caterers Ltd v Canadian National Railway Co, [1991] 3 S.C.R. 3, 84 DLR (4th) 291).

[154] The test for assessing the remoteness of damages under a tort law test rather than a contract law approach is whether the plaintiff’s injury or loss, at the time that the wrong took place, was the reasonably foreseeable result of the defendant’s wrongful conduct (Deloitte & Touche v Livent Inc (Receiver of), 2017 SCC 63 at para 78). The loss would only need to reach the threshold of being a “real risk” that would occur in the mind of a reasonable person in the position of the defendant (Overseas Tankship (UK) Ltd v Miller Steamship Co Pty, The Wagon Mound (No 2), [1967] 1 AC 617 at 643 (PC)).

[155] In this case, I find that it was reasonably foreseeable that LDC would lose profits due to CN’s neglect or refusal to provide additional railcars – a real risk that would occur in the mind of a reasonable person in CN’s position. This is because CN knew that the only way LDC could move grain to export positions from the Four Elevators was with CN‑supplied railcars, given LDC’s captivity to its rail system. As acknowledged by CN’s witness Mr. Auld, the Defendant was well aware of the very large crop by the Fall of 2013. LDC, through its various points of contact, put CN on timely notice of the damage that the shortages were causing during the Relevant Period.

E. Parties’ Position on Lost Profits vs Loss of Opportunity

[156] The parties differ on which model of losses this Court should adopt: a lost profits, or lost opportunities approach. LDC contends that a lost profits approach is more appropriate than a lost opportunity approach. This is because lost opportunity is more appropriately applied where there is significant uncertainty about whether the opportunity that the plaintiff lost due to the defendant’s Breach would have resulted in a benefit.

[157] LDC maintains we are not in that circumstance of uncertainty, contrasting LDC’s situation to cases where uncertainty was evident. For instance, in Eastwalsh Homes Ltd v Anatal Developments Ltd., 1993 CanLII 3431 (ONCA) [Eastwalsh], the Court determined that there was no reasonable probability that a planning subdivision approval, which was not obtained by the desired date, could in fact be received.

[158] In Olympic Construction Ltd. v Eastern Regional Integrated Health Authority, 2014 NLCA 20 [Olympic Construction], the plaintiff sought damages from being disqualified from a tendering process. However, the Court determined it was not reasonably probable that the plaintiff would have been awarded the bid “but for” being disqualified as a non-compliant bidder.

[159] In an older case, Chaplin v Hicks, [1911] 2 KB 786 (Eng CA) [Chaplin], the plaintiff lost the opportunity to participate in a contest; the Court discounted damages by reference to his chances of winning.

[160] Here, LDC argues that there was no uncertainty about its ability to purchase and sell grain, and turn a healthy profit, in the context of the Relevant Period. LDC argues, relying on cases like Pacific Elevators Ltd v Canadian Pacific Railway Co, 1973 CanLII 164 (SCC), [1974] S.C.R. 803 [Pacific Elevators] and Pembina Resources Ltd v ULS International Inc, [1989] FCJ No 902 (TD) [Pembina Resources], that this is a straightforward lost profits case, where CN’s wrong prevented LDC from earning a profit had it received the 3,376 railcars to which it was entitled. The resulting loss of use, according to LDC, is compensable as lost profits.

[161] Regarding the construct of its hypothetical world, LDC maintains that the only impediment to buying and selling more grain was railcar supply. LDC claims that if CN had delivered the 3,376 additional railcars, it could and would have moved an additional 309,000 MTs of grain in addition to the volumes that it actually moved during the 2013‑2014 crop year. LDC asserts that it would have naturally increased profits with the additional volumes of grain it could have transported and sold to a market that had great demand.

[162] CN, on the other hand, opposes LDC’s framing of this as a lost profits case, pointing out that LDC does not allege any particular lost contracts to purchase and sell grain at a particular price to specific customers. CN emphasizes that LDC achieved record performance and record profits in the 2013‑2014 crop year despite the service breach, and that LDC acknowledged this success through internal correspondence, even before it received its later “windfall” of railcars.

[163] Rather, CN asserts that LDC is speculating when it claims that should the shortfall railcars have been provided, it would have acquired more grain, and then transported and sold that grain to purchasers at a profit. CN accordingly contends, relying on the jurisprudence above, as well as Magnussen Furniture Inc v Mylex Ltd, [2006] OTC 169 at para 79, that this is a lost opportunity rather than a lost profits case.

F. A Lost Profits Assessment Applies in this Action

[164] I am persuaded that a lost profits approach should be taken to the damages assessment in the present circumstances. Section 116(5) of the Act is remedial. It seeks to compensate shippers for losses directly resulting from a railway’s failure to meet its level of service obligations and thereby to counterbalance CN’s market power. The damages inquiry, therefore, parallels the common law principle that a plaintiff is to be restored to the position they would have been in had the obligation been performed. CN’s submission that any damages must be confined to the loss of an “opportunity” because the precise profit cannot be proven with certainty, fails on both the law and the facts.

[165] There are three reasons why a lost profits basis approach must be taken here. First, the causal link between the missing railcars and the foregone sales is not speculative. The “opportunity” in question was not an uncertain business prospect, or something based on chance, but rather involved the concrete ability to move a determinable volume of grain through an established supply chain. This situation does not share the uncertainties of Chaplin, Eastwalsh and Olympic Construction, where the losses claimed were far more speculative. Instead, these circumstances share far more similarities with those in Pacific Elevators and Pembina Resources.

[166] In Pacific Elevators, the Supreme Court of Canada employed a lost profits approach in a grain context, when unloading facilities at the plaintiff's grain elevators were damaged as a result of railcar derailment on two occasions, both resulting from the negligence of a railway employee.

[167] The approach taken by this Court in Pembina Resources is also applicable. There, the defendant negligently damaged the plaintiff's submerged natural gas pipeline, knocking it out of service for over three months. Justice McNair employed a lost profits analysis in that case to determine damages flowing from loss of use of the pipeline (Pembina Resources at para 51).

[168] Here, the market conditions in the 2013‑2014 crop year were extraordinary. Record prairie yields allowed LDC to purchase grain at low prices, while disruptions in rail transport reduced coastal supply and drove export prices upward. The witnesses established that LDC had the elevator, processing, and terminal capacity to move additional volumes through facilities such as the Kinder Morgan, Cargill, and Prince Rupert Terminals. The evidence further demonstrates that when the Agency’s Interim Order temporarily increased railcar supply in May 2014, LDC immediately sold more grain and captured greater market share.

[169] As will be explained in the damages quantification section below, I am persuaded that even though the precise purchasers were unknown, and contracts were not used to make the calculations, Mr. De Pape’s loss calculation approach establishes that LDC’s losses were sufficiently real and significant to rise above speculation similar to what occurred in Sabongui v Soon-Shiong, 2018 ONSC 1963 [Sabongui] at para 88. In Sabongui, the Ontario Superior Court found that little turned on whether the plaintiffs “had actually approached the potential purchasers”. Rather, Justice Koehnen held that “[w]hat I take from the evidence is that there was a ready market for licences. One characterized by short supply and high demand” (Sabongui at para 94).

[170] Given the state of the market in the Relevant Period of the 2013‑2014 crop year, there was no need for LDC to identify actual contracts, given the ready market characterized by a very short supply of grain and high demand for it amongst existing and potential new customers, including competitors. Based on the totality of the evidence in this case, including the witness testimony supported by the large documentary trial record, I find that it is more likely than not that LDC could and would have made additional profit, but for the 3,376-railcar shortfall during the Relevant Period.

[171] The second reason that a lost profits approach should be adopted in this case, is that, contrary to the argument that evidence of contracts and/or purchasers has not been furnished by LDC, the jurisprudence dictates that absolute precision in quantifying damages is not needed. Once a plaintiff establishes a reasonable basis for its calculation, mathematical certainty is not required to arrive at a quantum: “damages are assessed by the court, not calculated, and a plaintiff is required only to prove sufficient facts upon which they can be estimated fairly and reasonably” (Nickel v Phoenix Construction Systems Ltd, 2021 BCCA 268 [Nickel], at para 34; see also Townsend at para 19; Eastern Power at para 35).

[172] Here, the statutory Breach deprived LDC of measurable grain throughput and a positive margin for that movement. The resulting profit can be determined with reasonable certainty. Indeed, LDC provided evidence from its officials that knowing it could not move grain, it reduced its sales activities for fear of letting down potential customers.

[173] I note that the British Columbia Court of Appeal [BCCA] has held that damages for lost profits are not to be constrained to specific contracts that the plaintiff has lost as a result of a defendant’s breach (Houweling Nurseries Ltd v Fisons Western Corp, 1988 CanLII 186 (BCCA), [1988] BCJ No 206 at pages 8‑9). All that is required are sufficient facts to estimate damages fairly and reasonably (Nickel at para 34). In fact, the BCCA recently held that “[t]he law has long recognized that the fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying damages” (Ojanen v Acumen Law Corporation, 2021 BCCA 189 at para 62).

[174] The third, and last reason to adopt a lost profits approach is that a “lost opportunity” framing would defeat the remedial purpose of the Act. Parliament did not intend that shippers bear the risk of a railway’s failure to meet its service obligations. The statutory right to damages exists precisely to neutralize the monopoly power of carriers like CN. To require LDC to point to specific contracts and suppliers for the sales would undermine the very power imbalance the provision was enacted to correct.

[175] Having considered the evidence and the statutory framework, I conclude that the appropriate measure of damages under section 116(5) of the Act is lost profits, representing the earnings LDC would have realized had CN provided the additional 3,376 railcars. LDC’s loss was the direct, foreseeable, and quantifiable result of CN’s Breach of its statutory duty.

G. Witness Testimony Relating to LDC’s Lost Profits

[176] Messrs. Conn, Toews and Lussier of LDC all compellingly testified to the ready availability of grain that producers were eager to sell for reduced prices, given the accumulation of grain on farms, with no elevator space available for storage, and the significant shortage of railcars to move the grain. Mr. De Pape spoke about how pricing, which he closely monitored, heavily impacted grain traders such as LDC, in light of the delayed shipments caused by the transportation issues that Winter. Thus, even in the unlikely event that LDC could not generate sales to customers, its competitors, who themselves could not transport adequate grain to their terminals, would have purchased the grain from LDC.

[177] Mr. Auld of CN acknowledged that the extra railcars provided to LDC from the Interim Order and OIC resulted in additional market share for LDC. Indeed, this increase was certain during times of railway rationing that occurred due to the shortfalls in the Relevant Period – since any additional cars allotted to LDC were deducted from those previously destined for Viterra, Richardson and Cargill, the major grain shippers, often referred to in the industry as the “Big 3”. Later on in 2014, railcars were removed “off the top” from all CN customers on a proportional basis, although the Big 3 continued to be badly impacted, given their size.

[178] LDC’s fact witnesses provided uncontradicted evidence of the Plaintiff’s ready ability to sell – whether through FOB, in-store or track sales – to international customers during the Relevant Period. Mr. Toews emphasized the company’s business objective: to maximize the amount of grain moving through its pipeline. The LDC witnesses, along with its expert Mr. De Pape, were all clear that LDC had ready access to available terminal capacity at the Vancouver terminals (both Kinder Morgan and Cargill), along with the Prince Rupert Terminal.

[179] Due to an agreement giving LDC exclusive use of its grain facilities, Kinder Morgan was LDC’s primary West Cost terminal. LDC asserted that Kinder Morgan could have handled four Unit Trains per week during the Relevant Period, based on its unloading activity, which continued to function even during a particularly challenging period from April 9‑13, 2014, when a fire shut down Kinder Morgan Terminal’s operations. Despite the slowdown, LDC loaded four trains in both that week and the following week (crop week 38) – as well as in later weeks in the year.

[180] LDC provided the following chart at paragraph 177 of its Closing Argument, to illustrate the fact that during most weeks of the Relevant Period, the Kinder Morgan Terminal could have handled 100% of the shortfall trains in the hypothetical “but for” world:

WEEK	UNLOADS AT KMT IN THE REAL WORLD210 (railcars)	MINIMUM REMAINING CAPACITY AT KMT²¹¹ (railcars)	SHORTFALL IN PREVIOUS WEEK (railcars)	SHORTFALL RAILCARS UNLOADED AT KMT IN THE “BUT FOR” WORLD (%)
14	262	154	3 (in Week 13)	100%
15	97	319	2 (in Week 14)	100%
17	110	306	52 (in Week 16)	100%
20	293	123	104 (in Week 19)	100%
22	176	240	52 (in Week 21)	100%
23	0	416	83 (in Week 22)	100%
24	43	373	8 (in Week 23)	100%
26	357	59	55 (in Week 25)	100%
27	104	312	104 (in Week 26)	100%
28	211	205	209 (in Week 27)	98%
29	143	273	208 (in Week 28)	100%
30	92	324	104 (in Week 29)	100%
31	136	280	416 (in Week 30)	67%
32	22	394	416 (in Week 31)	95%
33	0	416	416 (in Week 32)	100%
34	214	202	416 (in Week 33)	49%
35	102	314	312 (in Week 34)	99%
36	62	354	416 (in Week 35)	85%

[181] CN argues that these numbers are inflated. Even in the event that they are, the evidence provided by LDC’s witnesses indicated that the other three West Coast terminals could have comfortably absorbed anything beyond Kinder Morgan’s capacity. In particular, LDC had arrangements with the Prince Rupert and Cargill Terminals that would have provided any necessary extra terminal capacity.

[182] The evidence – including discovery read‑ins from CN, along with unload data from Quorum’s weekly reports and the Canadian Grain Commission – demonstrates the significant capacity available at Prince Rupert, even in excess of 2000 railcars in a single week. The data from that terminal reflects that for most of the under‑serviced weeks, including the largest shortfalls from weeks 27 through 36, much of the hypothetical deliveries of the additional 3,376 LDC railcars could have been handled by Prince Rupert.

[183] The Cargill Terminal in Vancouver also had capacity for grain from LDC which the evidence suggests would have been accessible to LDC as a secondary contingency plan (i.e., beyond Prince Rupert).

[184] If, in the very unlikely event that Kinder Morgan, Prince Rupert and Cargill would have all been at capacity and unable to accept grain from LDC, other West Coast terminals could have moved the grain in the “but for” world, including the large Viterra and Richardson terminals in Vancouver. Despite the fact that these companies were competitors, they would have purchased product from LDC given their immediate need for grain to reduce their own demurrage fees and satisfy waiting international customers whose deliveries were delayed. Long vessel line‑ups in and around the Vancouver ports persisted for much of the 2013‑2014 crop year, as stated by Messrs. Lussier and Conn in their testimony, as observed by Mr. De Pape in his Report, and as reported by the industry, including Quorum.

[185] Furthermore, as noted above, even in the very unlikely event that FOB or in‑store sales would not have been feasible in the “but for” world because LDC could not have found vessel terminal capacity, track sales were also available to LDC, given the favourable market conditions for grain traders. This is because unlike the other sales modes, track sales did not require LDC terminal facilities.

[186] Indeed, the evidence demonstrated a strong appetite for track sales through the full 2013‑2014 crop year, for the same reason that other modes of sale were also in demand. As Messrs. Conn and Lussier noted, LDC’s competitors needed grain to achieve several objectives in the business cycle – namely to fill orders, reduce demurrage charges, and avoid late deliveries to overseas customers. Having grain would also offset the high fixed costs of their underutilized terminal infrastructure by putting the terminals to productive use. Track sales prices would have been even stronger in the “but for” world than in the real world, since the other grain companies would have been short the 3,376 railcars and thus, their demand for LDC to supply grain to them to load their waiting ships would have been significant.

[187] Indeed, Mr. Conn testified that the additional value of selling grain on an FOB basis narrowed in relation to track sales after December 2013, due to the railcar shortage that resulted in the inability to get sufficient quantities of grain to the West Coast terminals. The value of vessel terminal services, or “elevations” normally reflected in FOB prices, declined due to underutilization. By early April 2014, there was no additional value in selling grain on an FOB basis compared to selling grain on a track sales basis. Again, track sales were faster than FOB or in‑store sales.

[188] Mr. De Pape’s expert reports and testimony at trial also confirmed the abundance of grain supply during the Relevant Period, consistent with the testimony of LDC’s fact witnesses. Citing a plethora of industry-specific evidence, Mr. De Pape’s reports concluded that market conditions favoured LDC’s sales to West Coast destinations throughout the 2013‑2014 crop year, including through the Relevant Period of weeks 13‑35. Mr. De Pape further testified that the extra 3,376 railcars in the “but for” world would have been – in the global sense of total grain sales – an immaterial addition to Canada’s market share, and thus would not have affected profitability calculations, or impacted global pricing.

[189] The issue that emerged clearly from the evidence of the various witnesses was that the inability to make greater sales with historically high grain supplies and ample international demand, resulted directly from the railcar shortfall. Indeed, Mr. De Pape opined that due to the dire situation, grain companies would actually pay more than the published bid prices that he tracked, and on which he based his damages calculation.

[190] I agree with LDC that the evidence, as demonstrated by LDC’s contemporaneous documents, emails and communications to CN, and as confirmed through the testimony of each of its fact witnesses, on which I place significant weight, has met the onus of showing that, on a balance of probabilities, CN’s Breach caused it to lose profits, based on the almost-certain sales it would have made but for the service breach.

[191] As to CN’s argument that LDC recovered any shortfall due to the extra cars provided once service resumed, LDC indeed admitted satisfying all its contractual obligations once railcar delivery resumed. LDC conceded that any additional railcars it received through the Interim Order, and subsequently in the Agency Decision (at paras 178‑180), gave LDC greater market share that it would have otherwise not had: each of LDC’s competitors would have lost access to their sales through those 3,376 railcars, just as they did with allocation reductions through the subsequent railcar rationing.

[192] Stated another way, the profits other grain companies realized as a result of having received the undelivered railcars would have been earned instead by LDC, in what the parties agree was a zero-sum environment. That is because with a limited supply of railcars that fell well below market demand, any railcars that one shipper received, resulted in an equivalent number of less railcars received by its competitor shippers.

[193] The question remaining to be resolved for this first head of damages is, in this “but for” world where CN supplied 3,376 additional railcars to LDC on a hypothetical basis, could and would LDC have sold an additional 3,376 railcars of grain for a profit with reasonable certainty, rather than just with a mere likelihood or possibility?

[194] The evidence produced and elicited at trial provides a positive answer – that LDC could have obtained the grain to fill the shortfall trains and would have sold that product with more than reasonable certainty. That leads, for the reasons explained above, directly to a loss of profit. I must now determine what that lost profit would have been.

H. What Financial Losses did LDC Suffer?

[195] As the parties set out in their first joint issue, the Court must decide how to quantify the losses that LDC sustained.

(1) The Lost Volume Principle

[196] LDC says that damages should be assessed in relation to the lost volumes. What, then, is the “lost volume principle”? The Court provided a concise explanation of the principle in Greenfix Golf Inc v Sportcover International Inc, 2016 ONSC 4189 at para 62:

[…] [L]ost volume principle is illustrated by the following example taken from the reasons of the Court of Appeals of New York in Neri v. Retail Marine Corporation 334 NYS 2d 164 (1972) (at pp. 169-170):

If a private party agrees to sell his automobile to a buyer for $2,000, a breach by the buyer would cause the seller no loss (except incidental damages, i.e., expense of a new sale) if the seller was able to sell the automobile to another buyer for $2,000. But the situation is different with dealers having an unlimited supply or standard-priced goods. Thus, if an automobile dealer agrees to sell the car to a buyer at the standard price of $2,000, a breach by the buyer injures the dealer, even though [the dealer] is able to sell the automobile to another for $2,000. If the dealer has an inexhaustible supply of cars, the resale to replace the breaching buyer costs the dealer a sale, because, had the breaching buyer performed, the dealer would have made two sales instead of one. The buyer’s breach, in such a case, depletes the dealer’s sales to the extent of one, and the measure of damages should be the dealer’s profit on one sale.

[197] The lost volume principle arises out of situations where the market is such that the seller is prevented from making a sale due to the breaching buyer, thus missing out on profits for that reason. Damages are calculated on the basis of sales foregone.

[198] Mitigation – a principle which generally applies to contract law as well as tort damages – does not apply in situations where lost volume has arisen, because the sales opportunity has passed and cannot be recovered. Normally in a breach of contract, the seller can only capture the difference between the contract price and the price for which the seller ultimately sells the goods to another buyer. But that is not applicable to a lost volume situation, such as LDC faced in this situation.

[199] Other “lost volume” cases include Egmont Towing and Sorting Ltd v “Telendos”, (The), [1982] 43 NR 446 [Egmont] and APECO of Canada, Ltd v Windmill Place, 1978 CanLII 186 (SCC), [1978] 2 S.C.R. 385 [APECO]. In Egmont, the Appeal Division of the Federal Court of Canada held that what could have occurred had a tugboat been available, should have been evaluated by the referee who assessed the damages claim. The Court overturned that damages assessment on the basis that the referee should have considered the evidence that there was additional work that would have been done if the plaintiff’s tugboat had been available.

[200] Another application of the lost volume principle occurred in APECO, where a lessee repudiated their contract and the lessor rented the same space in a large building to another rentor and where much of the building continued to remain unoccupied. The Supreme Court held in APECO that the new lease “constituted an independent transaction which in no way arose out of the consequences of the breach by the appellant” (at p 389). Given that despite the new rental the building remained more than one-half vacant, the Court held that the new rental “is not to be deducted in mitigation of the damage suffered by the respondent” (at p 390). Thus, despite the fact that the lessor had a surplus of space, the opportunity to lease the particular unit in question to the repudiating renter, was lost.

[201] In McCain Produce, the New Brunswick Court of Appeal held that prior knowledge by the shipper of a potential breach of the railway company’s contractual and statutory obligation “does not take away the shippers’ right to recover fully the damages to which they might be otherwise legally entitled” (McCain Produce at para 20).

[202] Justice McNair of this Court, at paragraph 52 of Pembina Resources, relied on Pacific Elevators, citing Justice Pigeon of the Supreme Court of Canada as follows:

Grain cars diverted are really the basis on which the claim is to be assessed because, as counsel for the railway pointed out, appellant's revenues and profits for 1966 were up from the previous year. Its inventory was up too, as well as the quantities of grain received, stored and shipped. No ship was diverted from its dock. This does not mean that it suffered no loss because if, without the disruption caused by the accidents, it would have been able to handle and store still more grain and consequently would have made higher profits, it is undoubtedly entitled to claim the loss suffered although in spite of that loss, its profit was higher than in the immediately preceding year (at p. 806).

[203] Thus, in a negligence action, the Federal Court rejected the notion that greater quantities of grain shipped, and increased revenues and profits, should somehow negate the earlier service breach. Justice McNair noted that this approach “lends further countenance to the principle that lost profits are a proper measure for determining compensable damages flowing from the loss of use of profit-making property” (Pembina Resources at para 52).

[204] Likewise, in the present circumstances, just as occurred with the natural gas pipeline in Pembina Resources, the fact that LDC moved grain in later weeks through its elevator pipeline to the port terminals does not offset, mitigate, or otherwise rectify the losses it sustained during the Relevant Period. CN argues that those later‑week sales mitigate any damages. To endorse this position would be to allow CN to take advantage of events occurring after the harm occurred and after liability attached earlier in the 2013‑2014 crop year.

[205] This Court’s decision in Pembina Resources, along with other cases mentioned above that have adopted a lost volume approach, should guide the facts at hand. As LDC states at paragraphs 242‑243 of its Closing Argument, “[t]he time to argue that CN actually did provide LDC with some of the 3,376 railcars was the Agency proceeding. It is too late now. Allowing CN to effectively re-open the Agency’s factual finding of breach in the this [sic] action will create a perverse incentive for railway companies, as they could simply deliver railcars late to limit their liability for damages. That would undermine the section 116(5) remedy, which is meant to assist shippers”.

[206] CN, by contrast, argues against the lost volume principle and a quantification based on the Relevant Period. Rather, it argues that LDC eventually received extra cars later in the 2013‑2014 crop year through the dual impact of the Interim Order and OIC, gaining volume of railcars and sales, rather than losing out on them.

[207] I do not find CN’s argument regarding LDC’s profitability in total in the 2013‑2014 crop year to be persuasive. Rather, the Breach was found to have occurred during a fixed window of time in earlier decisions of the Agency, this Court, and the Federal Court of Appeal. Those cases all focused their analysis on the Relevant Period, namely weeks 13‑35 of the 2013‑2014 crop year. That Relevant Period, in my view, is determinative for the calculation of damages – not what occurred before or after those weeks – due to the lost volume principle.

[208] Having so concluded, the loss sustained by LDC must now be quantified. When it comes to calculating the loss based on this statutory Breach in the “but for” realm, one must start from the very real perspective that LDC properly expected, and then hypothetically received and sold, the contents of all 3,376 railcars. LDC expected that CN would supply the Four Elevators with these railcars, and for the purposes of the quantification to follow, they did so, hypothetically at least.

(2) Quantification of Damages: The Parties’ Positions on the Experts’ Testimony

[209] To quantify its loss, LDC retained John De Pape, a grain industry expert with over 40 years of experience, who concluded that CN’s failure to provide the 3,376 railcars represented a loss to LDC of approximately $21.6 million. Mr. De Pape explained that he based this estimate on precise historical data that he had collected. He also explained why $21.6M constitutes a conservative estimate of LDC’s lost profit.

[210] Mr. De Pape arrived at his $21.6 million quantum for damages by multiplying available profit margins by the Contract service shortfall (in MTs).

(a) CN’s Position on the De Pape Reports and Expert Testimony

[211] CN submits that Mr. De Pape’s quantification figure is grossly overstated for two reasons. First, CN posits that Mr. De Pape failed to address the key question of what would have happened if CN had performed its obligations under the Contract. CN further contends that Mr. De Pape employed flawed loss quantification calculations, based on evidence using false assumptions that cannot be proven.

[212] Second, CN claims that Mr. De Pape overlooked the Interim Order, which entirely offset any service shortfall, because more railcars were supplied to LDC than they were entitled to during the 22 weeks covered by that Interim Order. As a result, CN asserts that through the Interim Order and the subsequent allocation of additional railcars, LDC more than recouped all losses caused by the Breach during the Relevant Period – just later in the 2013‑2014 crop year.

[213] CN argues that because of these flaws, I am required to guess what damages LDC may have incurred, and that to do so would be an error of law. CN also claims that LDC did not mitigate any losses it may have incurred.

[214] CN’s expert, Mr. Dean Das, critiqued the De Pape methodology and quantum. Mr. Das did not provide an alternate methodology of calculation, or an alternate quantification of the loss. Rather, Mr. Das questioned the reliability of Mr. De Pape’s estimates based on industry methodology and standards. Mr. Das concluded that the time period that should have been considered for the loss calculation was later in the 2013‑2014 crop year, as opposed to the earlier shortfall weeks 13-35 (the Relevant Period) used by Mr. De Pape in his report.

[215] Mr. De Pape, in his Reply Report and subsequent testimony, disagreed with the approach and analysis taken in the Das Critique. Mr. De Pape showed that if he had used later weeks in the 2013‑2014 crop year as proposed by Mr. Das, a greater damages quantification would have resulted, due to the railcar shortfalls in the latter parts of that year. Mr. De Pape wrote, and then testified at trial, that profit margins on LDC sales would have increased the later he began his analysis in the 2013-2014 crop year.

[216] Mr. De Pape explained grain trading as being a “flow”, with grain companies buying and selling commodities to the limit of their physical capacities, to maximize the amount of grain handled, and thus profits. Consequently, Mr. De Pape explained that grain companies held back on trading when railcar supply was limited during the Relevant Period, as they could not move the grain.

[217] LDC witness Mr. Conn confirmed that the basis upon which Mr. De Pape assessed his calculations represented how LDC would have purchased and sold grain to fill an additional 3,376 railcars. LDC adopted Mr. De Pape’s methodology, which can be summarized as follows: lost profits equals profit margins multiplied by the contract service shortfall (in MTs).

[218] LDC reiterates Mr. De Pape’s evidence that if anything, the De Pape quantum underestimates the actual profit that could have been earned, due to his “conservative approach”. Under CN’s approach of using a later time frame in the crop year as the basis for the loss quantification, the margins would have been significantly higher than those used by Mr. De Pape, which would have in turn yielded greater damages.

[219] To take later starting points in time as examples, LDC asserts that if using margins one month after each service failure, LDC would have lost more than $31.1M in profit; 1‑4 months after, that figure would be $26.7M, and assuming that LDC captured the average margins between April and July 2014, LDC would have lost $23.8M in profit (on a track sales basis) – each significantly higher figures than the $21.6M calculated by Mr. De Pape.

[220] LDC further urges the Court to give no weight to the Das Critique, which it says failed to provide any alternate basis of quantification and assign any number for damages. LDC characterizes the Das Critique as “manifestly unhelpful”, such that the Court should entirely disregard it. LDC also argues that a critique report that fails to provide its own version of the damages serves only a partisan purpose, namely supporting CN’s position, rather than being helpful to the Court and that is not the proper role of an expert.

[221] There are several other elements of Mr. Das’ testimony that LDC criticizes. LDC contends that Mr. Das:

1)confused the term “basis” with “margin” during cross-examination, and then tried to explain away that confusion as a drafting issue;
2)reinterpreted certain components of the Das Critique at trial, such as the fact that Mr. Das testified that the “main driver” of LDC’s business was LDC’s entire grain handling business, but when cross-examined on this point, Mr. Das was unable to explain how the “main driver” of a business could be the entire business itself; and
3)never worked in or with the grain industry prior to his Critique, and thus lacks the industry background required to quantify the loss, in stark contrast to Mr. De Pape.

[222] CN, on the other hand, maintains that Mr. De Pape’s calculation methodology is fundamentally flawed. It counters that:

1)LDC did not address the critical issue, namely, what would have happened if the Contract had been performed;
2)Mr. De Pape failed to consider events that transpired after the Relevant Period, which offset any potential damages; and
3)Mr. De Pape is not an expert in loss quantification and therefore, did not provide any opinion on the proper quantification methodology. Rather, he simply applied the methodology handed to him by LDC’s counsel to calculate profit margins based on the number of shortfall railcars, assuming the purchase of additional wheat in the four months preceding the time when LDC learned about the shortfall.

[223] Given these observations, CN argues that Mr. De Pape’s conclusions are “completely unfounded”. CN also notes Mr. Conn testified that if LDC had received the shortfall cars during the shortfall weeks, it would have filled those cars with existing grain and used them to satisfy existing sales, which would have allowed LDC to execute its existing sales faster, freeing up capacity later in the crop year to make additional purchases and sales. Had LDC received the shortfall cars during those weeks, it would not have been possible for LDC to go back in time to make additional purchases and sales in the four preceding months.

[224] CN contends that margins depend on the timing of purchases and sales, and Mr. De Pape confirmed during his testimony that, given the unique circumstances of the 2013‑2014 crop year, a grain company’s timing of its purchases and sales would have had a significant impact on outcomes, since a large spread between purchase and sale prices existed for only a limited time. CN contends that due to these “time travel” errors in a crop year where timing was everything, Mr. De Pape committed fatal errors in his quantification of $21.6M in lost profits.

[225] CN further notes that Mr. De Pape, in his testimony, gave examples of different strategies he observed during the 2013‑2014 crop year. One grain trader purchased and sold 80 percent of their capacity by October and could then not make additional purchases and sales during the subsequent period in the crop year when margins were the widest. Another did better, having taken a short position by selling aggressively and then buying grain later at depressed prices. CN emphasizes that when asked, Mr. De Pape admitted that he did not know what LDC’s strategy was but testified that he knew what “might be a good strategy” and that is how he approached his analysis.

[226] CN maintains that these were fundamental errors, and thus fatal to the De Pape evidence, given that his underlying assumptions are false, and made without any factual foundation. CN argues that as a result, his opinions and conclusions should be given no weight. For this proposition, CN cites R v Gibson, 2008 SCC 16 [Gibson], at para 58, where the Supreme Court found that even admissible expert evidence cannot be given any weight without a proper factual foundation. CN also cites R v Abbey, [1982] 2 S.C.R. 24 at 46, also referred to by the Supreme Court of Canada in paragraph 58 of Gibson, where the Court had noted that before any weight can be given to an expert’s opinion, the fact upon which the opinion is based must be found to exist.

[227] Beyond the timing issue, CN criticizes the De Pape analysis on numerous other grounds, including purchase and sale prices, which used publicly available price indications for wheat and canola sales. CN also criticizes Mr. De Pape’s use of LDC bid prices for purchases of wheat and canola, rather than actual transaction and contract prices. CN notes that Mr. De Pape testified that although he had access to LDC’s actual sales contracts, he did not use those sale prices in his analysis because it would have been “very complicated” to match the contract date, delivery term, and delivery window in which he was interested. CN notes that equally for LDC’s purchase contracts, Mr. De Pape stated that it “would have been a lot of data to go through”.

[228] CN, in its closing submissions, pointed out that it was able to easily summarize LDC’s purchase and sale contract data to identify and focus on relevant delivery terms and delivery windows, and Mr. De Pape could and should have also done so, given his facility with data.

[229] CN additionally alleges that Mr. De Pape’s price indications did not match delivery terms (track sales Vancouver vs FOB sales) or delivery windows (spot/nearby vs deferred). CN maintains that actual contract prices should have been used for price indications, such that the fundamental basis of the calculations in the De Pape Report are flawed.

[230] To explain these calculation flaws, CN considered the price LDC would have paid to purchase wheat in December 2013, for April 2014 delivery of grain. Rather than using a price indication for a December purchase for April delivery, Mr. De Pape used pricing from the month of December, even though he acknowledged that the vast majority of grain is traded (i.e., both bought and sold) on a deferred basis, meaning long before its shipment was actually executed (De Pape Report at p 19 and confirmed by Mr. Conn in his trial testimony).

[231] Moreover, Mr. De Pape was also commissioned by CN to write a report on Grain Merchandising in 2014 (entitled “Grain Merchandising in 2013‑2014: A Review and Analysis of the Factors That Contributed to the Disruption of Grain Merchandising”, Farmers Advanced Risk Management Co, August 2014 [De Pape 2014 Report]). This De Pape 2014 Report concluded that LDC would pay more to producers to receive grain later. Mr. De Pape wrote that purchase prices for deferred delivery are higher than for immediate or nearby delivery. CN asserts that the entire thrust of the De Pape 2014 Report was that farmers ought to take advantage of the fact that the market will pay to store grain, indicating that deferred prices are higher than spot prices.

[232] Additionally, and specifically with regard to canola pricing calculations, CN argues that Mr. De Pape added $16.32 per MT to reflect the added value of moving the canola through a terminal (De Pape Report at p 23). The price indications used by Mr. De Pape for selling canola are track sales Vancouver prices. CN claimed that Mr. De Pape adjusted these prices to approximate FOB sales prices.

[233] In any event, CN maintains that given the logistical issues of grain making it to terminals during the December 2013 to April 2014 window, track sales values and FOB sales values narrowed significantly, to the point that there was no price difference between the two. CN argues that as a result, adding a fixed sum to track sales prices, as Mr. De Pape did, meant that LDC overstated FOB sales prices during this period.

[234] CN asserts that the fundamental flaw in the approach LDC had Mr. De Pape follow, is that it fails to consider the key question, namely what would have happened had CN delivered the shortfall railcars during the shortfall weeks, because LDC’s damages is the difference between the handling margins it actually earned, and the handling margins it would have earned if CN had supplied the shortfall railcars. This is because CN focused its loss analysis on the failure to perform its contract, the key question being what damages place the plaintiff in the position they would have occupied had the contract been performed (citing Waddams at § 5:1; and Fidler at para 27).

[235] CN stresses that LDC fulfilled all its existing contracts, and contends that the correct inquiry is “what sales did LDC not make” – i.e., its lost opportunity cost, which requires determining how much capacity remained to be sold, and whether any of that capacity was eventually sold at some later date. In other words, what more could LDC have sold, and did they ultimately sell it? CN explains that it was unable to answer these questions with the responses produced from LDC, whether through any of its (a) monthly capacity figures used for planning, (b) sales book progression over time, and (c) completion of existing sales. CN describes the LDC records provided as either “indecipherable” or nonexistent.

[236] CN surmises that LDC may have had very little unsold capacity left going into the late Fall and Winter of 2013, given the high sales volume in the early Fall. Indeed, this occurred in competitors, as Mr. De Pape testified that some grain shippers aggressively purchased and sold grain in the Fall of 2013, thereby filling up their forward sales book, but then could not take advantage of the high margins in February and March to make additional sales. Given the volume of sales LDC put on its books in the Fall, CN concludes they may very well have been in the same position in 2014.

[237] CN further remarks that LDC did not provide any evidence from which to determine what additional capacity it could have actually sold, as opposed to stating it had limitless sales opportunities with an inability to capitalize on them due to shortages, including the various tenders LDC decided not to bid for. CN pointed out that even those foregone contracts and bids it attributed to lack of railcar supply were undermined by inconsistent evidence on the point, including an Itochu December 5 tender for a Japan Ministry of Agriculture, Forestry and Fisheries contract. Mr. Conn, on cross-examination, confirmed that LDC did, in fact, bid on the tender. This was done through Mitsui, a different Japanese trading house and LDC’s largest customer. LDC’s Mitsui bid was accepted.

[238] Similarly, CN points to Mr. Conn’s direct examination, in which he stated that LDC did not bid on two other tenders due to railcar supply, but later conceded in cross-examination that both tenders were for feed wheat and feed barley – commodities that LDC was not selling at the time. CN also observes that LDC sold “huge volumes” of grain in December 2013 (specifically, 283,886 MTs of grains and oilseeds for FOB or in-store sales delivery to West Coast terminals, for the January through April 2014 delivery time frame). CN notes that Mr. Conn did not recall specific discussions relating to wheat trading with Mr. Petras, who was head of that group during the Relevant Period.

[239] Ultimately, to CN, railcar orders should not be the focus of the current inquiry. The appropriate focus is what LDC could have done with those railcars – or the additional capacity it could have sold. Moreover, CN’s position is that using railcar orders as a proxy for lost opportunity would overstate the loss. If LDC had been receiving the cars ordered, it would have entered fewer total orders into CN’s railcar ordering system. This is because when LDC did not receive the railcars it ordered in a given crop week, it would reorder those railcars for a subsequent crop week to move the same grain.

[240] According to CN, LDC acknowledged that it was reordering cars to move the same traffic. For example, LDC wanted to move a single train (104 cars) from Kegworth to Thunder Bay to pre-position grain into storage. When it did not receive those railcars, it ordered them repeatedly until some 520 cars had been ordered.

[241] LDC’s evidence at trial included a number of Excel tables which it referred to as “station planners”. Prepared by Carolyn Barless of LDC, these “station planners” were the primary tool used by LDC for planning its weekly railcar orders. CN points out that on several occasions, LDC’s elevator managers expressed concern about LDC’s plans to order full railcar spots in consecutive weeks at one location, and that the station planners show that LDC never planned consecutive full railcar spots at all Four Elevators – until Mr. Randles (then-President of LDC) ordered Ms. Barless to do so in his January 21, 2014, email.

[242] On that date, Mr. Randles instructed Mr. Toews and his transportation group at LDC to order 100 railcars per week every week at the Four Elevators. CN maintains that this was done regardless of need, and despite the fact that LDC did not traditionally do so, and continued until the Interim Order was granted, even though according to LDC’s station planners, LDC did not have any plans for many of the railcars it ordered. CN submits that LDC subsequently received all the railcars it ordered during the Interim Order period, so it started ordering fewer railcars. Indeed, CN says that station planners show that LDC had, prior to this email, based their orders primarily on LDC’s ability to handle grain at each of its grain elevators. However, following the Randles email, CN observed that LDC’s railcar orders at the Four Elevators often exceeded the railcar orders planned in the station planners.

[243] CN also contends that due to the significant differences between the price indications used by Mr. De Pape in his calculations and LDC’s actual contract prices, he understated purchase prices and overstated sale prices, creating artificially high estimated margins, as opposed to those that LDC was actually able to capture in the real marketplace. To illustrate this, CN produced the following tables in their Trial Brief (at para 121), showing LDC’s purchase contracts by contract month and delivery month for wheat and for canola at each of the Four Elevators to arrive at weighted average prices, comparing them to Mr. De Pape’s price indications that were based on posted cash bid prices:

Blank		CANOLA PURCHASES
Blank		LDC Daily Posted Cash Bid Prices					LDC Purchase Transactions (wtd avg)				Difference
Blank		Aberdeen	Glenavon	Joffre	Lyalta	Aberdeen		Glenavon	Joffre	Lyalta	Aberdeen	Glenavon	Joffre	Lyalta
August/13		$ 502.71	$ 499.70	$ 512.77	$ 523.14	$ 495.31		$ 484.76	$ 517.49	$ 523.65	$ (7.40)	$ (14.93)	$ 04.72	$ 00.50
September/13		$ 460.44	$ 460.93	$ 466.96	$ 473.70	$ 463.58		$ 468.42	$ 485.10	$ 497.16	$ 3.15	$ 7.50	$ 18.14	$ 23.47
October/13		$ 447.13	$ 449.40	$ 452.65	$ 463.21	$ 450.99		$ 450.74	$ 472.49	$ 492.06	$ 3.86	$ 1.34	$ 19.84	$ 28.86
November/13		$ 457.04	$ 453.17	$ 458.86	$ 469.58	$ 453.05		$ 457.76	$ 482.24	$ 495.72	$ (3.99)	$ 4.60	$ 23.38	$ 26.14
December/13		$ 410.38	$ 401.57	$ 399.91	$ 419.55	$ 424.38		$ 435.92	$ 435.41	$ 444.56	$ 14.00	$ 34.35	$ 35.50	$ 25.01
January/14		$ 377.40	$ 370.65	$ 380.48	$ 384.52	$ 389.45		$ 387.78	$ 402.47	$ 411.77	$ 12.05	$ 17.14	$ 21.99	$ 27.25
February/14		$ 370.96	$ 363.38	$ 373.57	$ 377.29	$ 392.60		$ 394.86	$ 397.44	$ 420.93	$ 21.64	$ 31.49	$ 23.87	$ 43.64
March/14		$ 401.72	$ 396.50	$ 412.35	$ 412.64	$ 422.98		$ 413.74	$ 428.81	$ 438.52	$ 21.26	$ 17.24	$ 16.46	$ 25.88
April/14		$ 422.11	$ 416.32	$ 426.45	$ 431.04	$ 444.93		$ 441.71	$ 451.26	$ 466.35	$ 22.82	$ 25.39	$ 24.81	$ 35.31
Source:	LDC Daily Posted Cash Bid Prices come from De Pape Report, Appendix 1.6; canola analysis tab, columns T-W, rows 472-480
blank	LDC Purchase Transaction prices come from Exhibit 1727 (LDC Purchase Contracts). See also Appendix III (Summary of Elevator Purchases – CWRS & Canoing

Blank	WHEAT PURCHASES
Blank	LDC Daily Posted Cash Bid Prices					LDC Purchase Transactions (wtd avg)				Difference
Blank	Aberdeen	Glenavon	Joffre	Lyalta	Aberdeen		Glenavon	Joffre	Lyalta		Aberdeen	Glenavon	Joffre	Lyalta
August/13	$ 245.45	$ 248.66	$ 247.29	$ 260.98	$ 242.01		$ 250.57	$ 244.56	$ 257.44		$ (3,44)	$ 1.92	$ (2.73)	$ (3.53)
September/13	$ 224.26	$ 226.28	$ 229.34	$ 237.19	$ 229.78		$ 234.45	$ 237.71	$ 246.53		$ 5.51	$ 8.17	$ 8.37	$ 9.34
October/13	$ 233.75	$ 232.98	$ 239.92	$ 243.24	$ 235.10		$ 241.24	$ 241.91	$ 243.67		$ 1.35	$ 8.26	$ 1.99	$ .43
November/13	$ 222.28	$ 225.55	$ 229.48	$ 230.05	$ 221.80		$ 226.32	$ 229.77	$ 228.28		$ (0.48)	$ .77	$ .29	$ (1.76)
December/13	$ 190.92	$ 187.75	$ 178.46	$ 188.27	$ 207.57		$ 211.33	$ 208.94	$ 205.61		$ 16.66	$ 23.58	$ 30.48	$ 17.35
January/14	$ 163.34	$ 164.06	$ 144.14	$ 168.22	$ 184.24		$ 184.62	$ 163.00	$ 184.33		$ 20.90	$ 20.55	$ 18.86	$ 16.11
February/14	$ 169.79	$ 175.74	$ 157.21.	$ 179.84	$ 174.75		$ 179.93	$ 168.91	$ 181.60		$ 4.96	$ 4.19	$ 11.71	$ 1.76
March/14	$ 200.03	$ 203.96	$ 188.55	$ 209.95	$ 200.78		$ 178.82	$ 187.51	$ 202.12		$ .76	$ (25.14)	$ (1.04)	$ (7.83)
April/14	$ 202.56	$ 204.69	$ 186.49	$ 208.47	$ 217.88		$ 191.98	$ 181.13	$ 203.51		$ 15.32	$ (12.70)	$ (5.36)	$ (4.95)

[244] CN also provided other tables in their Trial Brief to summarize weighted average prices of LDC’s West Coast prices, comparing them to Mr. De Pape’s price indications:

blank	WHEAT SALES
blank	De Pape Price Indications	LDC Sale Transactions
blank	De Pape Price Indications	Wtd Avg	Difference
August/13	$ 315.91	$ 296.00	$ (19.92)
September/13	$ 300.69	$ 313.93	$ 013.24
October/13	$ 318.22	$ 270.67	$ (47.54)
November/13	$ 313.00	$ 297.97	$ (15.03)
December/13	$ 307.66	$ 290.79	$ (16.87)
January/14	$ 315.94	$ 335.04	$ 019.10
February/14	$ 338.61	$ 323.47	$ (15.14)
March/14	$ 365.25	$ 305.41	$ (59.83)
April/14	$ 352.41	$ 325.43	$ (26.98)

blank	CANOLA SALES
blank	De Pape Price Indications		LDC Sale Transactions
blank	Track Van	FOB / Clean	Wtd Avg	Difference
June/13	$642.56	$663.88	blank	blank
July/13	$580.03	$601.35	blank	blank
August/13	$543.30	$564.62	$549.00	$(15.62)
September/13	$520.81	$542.13	$534.50	$(07.63)
October/13	$508.86	$530.18	blank	blank
November/13	$512.27	$533.59	$497.61	$(35.98)
December/13	$475.23	$496.55	$533.50	$036.95
January/14	$456.87	$478.19	blank	blank
February/14	$455.75	$477.07	blank	blank
March/14	$514.88	$536.20	$454.05	$(82.15)
April/14	$523.33	$544.65	blank	blank

Note: Columns in this chart that are blank were blank in the original at para 122
of the CN Trial Brief

[245] CN submits that, with respect to pricing as set out in these charts, Mr. De Pape inflated his potential margin estimates, in that LDC actually paid more for its grain and earned less on its sale.

[246] CN additionally argues that Mr. De Pape’s assessment of LDC’s ability to (i) handle additional grain at its elevators, (ii) move it through West Coast export terminals, and (iii) sell that grain to buyers, was also flawed. This is because, according to CN, Mr. De Pape used his estimate of annual elevator capacity to conclude that LDC would have had capacity to handle the additional grain at the Four Elevators, rather than evaluating whether the elevators had the capacity during the specific weeks in question.

[247] CN also criticizes Mr. De Pape’s view of total Canadian grain exports, in which he determined that the additional grain could be obtained as it fell within historical export volume ranges (De Pape Report at section 6.0). However, CN notes that Mr. De Pape did not consider (i) where the grain may have been exported to, (ii) who the grain buyer might have been, or (iii) whether LDC had any relationship with that buyer.

[248] CN further asserts that the De Pape Report’s calculations are inconsistent with the evidence adduced at trial. Specifically, Mr. De Pape was asked to assume that an average railcar shipped from each of the Four Elevators contained loading weights of either 97 MTs for wheat or 88 MTs for canola (De Pape Report at para 7). CN argues that these assumed lading weights are higher than LDC’s actual lading weights, which varied across its elevators: the elevators at Kegworth and Lyalta had a weight limit of 268,000 pounds, with Aberdeen and Joffre at 286,000 pounds. CN further notes that CN’s hopper car sizes varied, per fleet, as Mr. Toews explained in his testimony. According to LDC’s rail shipment data, the average lading weight for railcars transporting wheat and canola from each of the four elevators during the 2013‑2014 crop year were as follows:

LDC Rail Shipments Lading Weights (MT/Car)
Blank	Canola	Wheat
ABERDEEN	85.5	98.1
JOFFRE	84.7	97.1
KEGWORTH	81.8	91.5
LYALTA	83.8	91.6

Table reproduced from CN’s Trial Brief at para 128

[249] In addition to what CN labeled the (a) “instructed assumptions” from LDC counsel regarding lading weights, it states that Mr. De Pape developed (b) an assumption regarding the proportions of wheat and canola handled at each elevator. CN critiques the fact that Mr. De Pape used these two assumptions to calculate the “tonnes not shipped” in the shortfall cars, which he calculates as LDC’s loss (De Pape Report at section 3.2). According to CN, the proportions used in the De Pape Report do not accurately reflect the proportion of wheat and canola actually shipped by rail from each of the Four Elevators during the 2013‑2014 crop year based on LDC’s rail shipments, nor are they reflective of the commodities for which LDC actually ordered the shortfall cars (referencing CN’s Trial Brief at Appendix V – “Commodity Split”).

[250] Rather, CN argues that if using the actual lading weights and commodity split from LDC’s rail shipment data, the tonnes not shipped were actually 301,776 MTs, not 317,846 MTs (citing “Tonnes Not Shipped” Document, CN’s Trial Brief at Appendix VI).

[251] CN notes that in each case, the wheat volume decreased, while the canola volume increased, materially impacting total margins, because the handling margins for wheat were significantly higher than for canola.

[252] CN further argues that the focus of Mr. De Pape’s sales analysis is wrong: LDC instructed Mr. De Pape to assume that if CN had supplied the shortfall cars, it would have made additional FOB sales exclusively at West Coast export terminals (De Pape Report at para 4). However, CN contends that this neither reflects the destinations to which LDC actually shipped during the 2013‑2014 crop year, nor destinations to which LDC ordered the shortfall cars. Rather, CN provides the following charts to show where LDC actually (i) ordered its shortfall cars to, and (ii) shipped its grain from, during the 2013‑2014 crop year:

LDC Shortfall Car Orders by Destination
blank	Vancouver	Prince Rupert	Thunder Bay	Other
ABERDEEN	80%	20%	0%	0%
JOFFRE	85%	15%	0%	0%
KEGWORTH	30%	0%	60%	10%
LYALTA	87%	13%	0%	0%

LDC Rail Shipments by Destination
blank	Vancouver	Prince Rupert	Thunder Bay	Other
ABERDEEN	60%	40%	0%	0%
JOFFRE	61%	39%	0%	0%
KEGWORTH	22%	11%	27%	40%
LYALTA	82%	18%	0%	0%

Tables reproduced from paras 131‑132 of CN’s Trial Brief

[253] CN notes that Kegworth, the LDC elevator with the highest number of shortfall cars, shipped only a fraction of its traffic to the West Coast. Rather, the majority of Kegworth traffic went to Thunder Bay and other destinations in North America. CN endorses Mr. De Pape’s observation in his Reply Report, that different delivery points had different sale prices for grain. CN explains that the freight rates and terminal costs would also differ, such that potential margins available for sales from the 731 railcars that LDC had destined to go to Thunder Bay would be different from those made to the West Coast.

[254] Moreover, CN argues that LDC underestimated variable costs in asking Mr. De Pape to assume the cost of moving grain through the three West Coast terminals (De Pape Report, Appendix 1.18 at paras 1‑5). For example, the “Terminal Services Agreement” with Kinder Morgan stated that the handling charge for unloading, conveying, and loading grain to vessels was just $4.75 per MT during “straight time”, which did not include common extra charges such as for overtime, weather delay, and shifting vessels (see Terminal Services Agreement at Schedule B, Exhibit #213). Kinder Morgan tracked these charges and reported to LDC the “effective” cost per MT, which varied from a low of $7.59/MT to a high of $16.46/MT (Key Performance Indicator [KPI] Report, Exhibit #1663). As the other terminals did not track and report the effective cost per MT, CN was unable to test the assumptions used by Mr. De Pape for those terminals.

(b) LDC’s Position on the Das Critique Report and Expert Testimony

[255] Just as CN criticizes Mr. De Pape’s expert testimony, as summarized immediately above, so too does LDC in response to Mr. Das. LDC takes issue with the basic premise of critique reports, such as Mr. Das’. LDC points to one such observation in Pacific Elevators, where the Supreme Court commented at page 105 that:

[…] the Court was faced with a task of exceptional difficulty in the circumstances because the railway, to the very end persisted in only making objections to the elaborate computations submitted by the appellant, never suggesting any alternative basis on any point. This is, of course, what a defendant is legally entitled to do but when a claim rests on complex accounting and the basis adopted by the claimant is erroneous, the making of a satisfactory adjudication becomes really arduous.

[256] Ultimately, Justice Pigeon in Pacific Elevators accepted that a reduced number of railcars at the elevator resulted in lost profits, and calculated the profit loss based on railcar capacity, elevator capacity and the plaintiff’s costs.

[257] LDC notes that critique reports have been disparaged in other proceedings, with Courts sometimes assigning them no weight, or even excluding them (for instance in Ascent One Properties Ltd v Liao, 2017 BCSC 1017 at paras 160‑162 [Ascent One] and M v F, 2015 ONCA 277 at paras 30‑35). In Ascent One, at para 160, the Court held that cross-examination, rather than a critique, is the preferred means of testing expert evidence.

[258] Furthermore, LDC points out that in Nickel, the defendants’ expert critiqued the plaintiff’s costs estimates, but did not provide his own estimate of the damages in question. The trial judge concluded that this omission was “deliberate” and discounted the critique evidence on the basis that the defendants’ expert did not provide any alternative proposals or estimates (at paras 23, 33‑34).

(3) Analysis Regarding Parties’ Competing Positions on the Experts, and Mr. Conn

[259] I find myself in a similar position to some of the sentiments expressed by Justice Pigeon in Pacific Elevators, namely, with a technical case that has a plethora of possible outcomes with respect to the accounting of losses. For the reasons explained next, I place significant weight and rely heavily on Mr. De Pape’s specialized knowledge for the pricing data and assessment in the context of the very unusual circumstances of the Relevant Period, as a basis for the loss quantification.

[260] While the Das Critique provides some useful content and counterpoint to Mr. De Pape’s calculations, it lacks an alternate loss calculation methodology. CN was provided an opportunity to have Mr. Das provide a sur-reply expert report, in which a quantification could have been provided (see Louis Dreyfus Company Canada ULC v Canadian National Railway Company, 2024 FC 832 at para 31, and para 3 of that Order). However, CN opted not to do so, and so no alternate computation was provided by the Defendant – other than charts and descriptions of why Mr. De Pape’s assessment was flawed.

[261] I acknowledge that CN’s position through its expert is that LDC did not provide sufficient data in order for Mr. Das to calculate a loss. I also appreciate that Mr. Das and CN take the position that LDC did not sustain a loss due to the Breach. However, I place more weight on the De Pape analysis, and the lost profit sustained by the Plaintiff as a result of the railcar shortfall. I rely on the De Pape Report’s analysis in assessing the loss that LDC sustained as a result of CN’s service Breach and am adopting its quantification methodology and conclusions.

[262] I find that the De Pape Reports’ analyses and calculations are consistent with that of Meagher and the suggested damages approach above (see paragraph 147 of these Reasons), and even to the extent there are some variations in items like the date of index pricing, the type of sales that they are based on (FOB vs. in-store vs. track sales), and contracts that may have existed, the jurisprudence makes it clear that in the “but for” world, scientific precision is not required for the calculation of damages (Penvidic at pp 279-280, Wood at pp 289, and Townsend at para 19).

[263] Ultimately, the De Pape quantification may not be perfect. CN definitely makes some valid points in their criticism of his computation. I fully agree with CN that the assessment could have been done based on different inputs. Mr. De Pape could have used different modalities of sale. He could have input different pricing bases. He could have looked at different time periods, such as deferred sales to the weeks and months after the Relevant Period. He could have run calculations on the basis of existing contracts.

[264] Indeed, it is not lost on the Court that all of these suppositions form part of the broad suite of possibilities that could have guided a quantification of the hypothetical, “but-for” world. Here we are thus striving to arrive at a valuation for something that by its very nature does not exist and is imprecise. There were no deliveries made by CN. There were no sales executed by LDC. Ultimately, the inputs will be somewhat arbitrary and unpredictable, due to the very fact that they don’t exist. Rather, they are an estimate of what could have been, based on the context surrounding the Breach. Perfection is neither possible nor attainable. Rather, the Court should adopt a reasonable basis for the calculation.

[265] As has been made clear in the case law, a valuation cannot be speculative. Mr. De Pape provided the detailed basis for all of his assumptions, including an explanation at trial about how he collected his data and why he felt his loss calculation was as good a representation based on actual grain pricing, as could be estimated.

[266] Mr. Das could have provided other modelling that might have been more compelling, but he did not do so. Calculations premised on the later months would have ended up at either very similar amounts, or higher damages, given Mr. De Pape’s alternate calculations using other figures and later month statistics that were available to him. As a result, while I find the De Pape model may have some imperfections, it is entirely defensible in the circumstances. Given this conclusion, there is no need to further discuss LDC’s criticism outlined in paragraph 221(1) above.

[267] I would also make the following two observations in response to CN’s impugning of Mr. Conn’s reliability as a witness (see paragraphs 237‑238 above). First, I have concluded that this case requires a lost profit approach. While LDC may or may not have been eligible to bid on specific tenders at the time, they have proven on a balance of probabilities that there were other opportunities from which to profit at the time. If certain bids were not made, other sales opportunities were available.

[268] Second, in the decade between the events and the testimony at trial, it is natural that recollections may have faded, and specific discussions may no longer be recalled. In short, I do not feel that these points diminished Mr. Conn’s credibility or reliability as a witness. Overall, Mr. Conn was very forthright and consistent, and it certainly was not lost on the Court that the events in question dated back over ten years before trial. Some minor points that may have been off in his recollection of the 2013‑2014 crop year, when viewed in context of all his other testimony, do not undermine Mr. Conn’s overall reliability, which I find he established with consistent and compelling testimony in chief and cross-examination that occurred over nearly two full days on the stand.

I. The First Head of Damages (Lost Profits from the Service Breach)

[269] The key dispute between the parties on the first head of damages is how to evaluate LDC’s claimed losses. CN argues that LDC has failed to prove damages. CN maintains that LDC’s loss quantification approach is fundamentally flawed because it grossly overstates its loss and effectively asks this Court to guess what its ultimate loss was. Indeed, CN claims that any shortfall during weeks 13 to 35 was mitigated by a windfall of trains, and ultimately additional revenues that LDC received later in the crop year, thereby recouping any losses sustained during the Relevant Period. The combination of high demand and low supply of grain resulting from the shipping shortfalls to the West Coast meant that prices increased. In fact, West Coast terminal grain stocks proved to be lower than the 2012‑2013 crop year, a year which yielded a small crop due to a drought on the Prairies.

(1) Quantification of Damages: The Parties Positions on the Witness Testimony

[270] Senior representatives of both CN and CP testified before the Parliamentary Committee in February 2014, a few weeks before the government took action in ordering railcars through its OIC. David Miller (AVP for CN) noted the record 76 million MTs crop, which at the time was 20 million MTs over the five-year average, and 20% over the previous 2008 record crop years (Transcript of the Committee, Exhibit 1873 [Committee Transcript]). Mr. Miller went on to state to the Committee (at p 11):

When you have a number of companies competing, obviously everybody wants to move as much crop as they can, as fast as they can. Clearly the pressures are on us in the first three months of the year.

[271] I also heard consistent testimony on wheat and canola transportation from LDC’s principal witnesses (Messrs. Conn, Lussier, and Toews) as well as Mr. Auld, CN’s principal witness. They all described the grain transportation system as a “pipeline” that enabled its elevator and terminal “throughput”.

[272] Mr. Conn also emphasized that as a “fixed cost” business, with little in the way of variable costs, LDC’s objective was to maximize the amount of grain it handled, sometimes referred to as its “velocity”. These phrases were reminiscent of testimony of CN a decade earlier at the February 2014 hearing before the Committee. At that time, Mr. Miller of CN testified to the Committee members about network and railcar fleet velocity, as did his counterparts from CP (such as CP’s Michael Murphy at pages 7‑10 of the Committee Transcript). Specifically, Mr. Miller testifying about CN’s efforts over the difficult, cold Winter of 2014, explained to the Committee that:

We’ve worked hard on maximizing our hopper car fleet velocity. This requires the focus of all participants on the same objective of moving cars through supply chains as quickly and efficiently as possible.

[273] While railcar delivery improvements were made to LDC in the latter half of the 2013‑2014 crop year with the federal government’s March 2014 OIC, and the Agency’s May 2014 Interim Order, performance remained suboptimal later in the Spring and Summer of 2014. Mr. Lussier stated at trial that the issue throughout the Relevant Period for LDC remained the lack of railcars. The Quorum Reports from April to June 2014 support this testimony.

[274] Similarly, Mr. Toews, spoke about the unprecedented number of vessels that remained waiting in the Ports of Vancouver, Prince Rupert, and Victoria, and even off Vancouver Island, lasting throughout the Relevant Period. The objective documentary evidence from the Quorum Reports also confirmed these assertions.

[275] There is also ample documentary evidence on the record, primarily in the form of emails, that LDC officials became increasingly concerned about the lack of CN railcar deliveries. LDC witnesses Messrs. Conn, Toews, Lussier, and Ms. Hawryluk all exchanged emails between themselves and other senior officials (such as Messrs. Randles and Petras), and their CN contacts. These emails included discussions about the deteriorating situation of LDC, vis-à-vis its commitments to its customers resulting from the railcar shortage. This, according to the Plaintiff, resulted in both lost sales and increasing demurrage costs. CN acknowledged – through Mr. Keon’s testimony – that it had received numerous messages from LDC regarding the situation.

(2) My Assessment of the First Head of Damages (Lost Profits from the Service Breach)

[276] I find that LDC has met its burden of establishing that the only impediment to buying and selling more grain was its lack of railcar supply. But for the shortfall of 3,376 railcars, LDC would have moved an additional 309,000 MTs of grain to the West Coast and would have earned additional profits as a result.

[277] Even if CN’s theory of deferred “but for” sales were correct, Mr. De Pape convincingly showed in his testimony that bid prices continued to increase through the course of the 2013‑2014 crop year. High sales prices and profits ensued later in the year when LDC received its trains in 2014 through the OIC and Interim Order. At worst, even in the situation where LDC discovered (in the hypothetical world) that it was not subject to CN’s rationing policy, it would have learned that later in the Fall of 2013. The evidence shows that CN was well aware of railcar shortfalls to grain shippers in the Fall of 2013. Mr. Lussier’s evidence is that the grain industry knew of the problems by mid‑October of 2013. Mr. Lussier also testified about a presentation he gave on behalf of grain shippers in Tokyo in November 2013, in which he described the mounting railcar order shortfalls from both CP and CN (Exhibit 379).

[278] I am not persuaded by the arguments posited by Mr. Das that the ordinary course of orders would not take place in the “but for” world (Critique Report, at para 84). I note a few issues with these observations of Mr. Das. First, had the railcars been spotted by CN when ordered – which would have been when demand spiked throughout the Fall of 2013, and into 2014 – LDC would have maximized the flowthrough of its grain pipeline. The evidence described above establishes the ample grain supply, strong demand, elevator and terminal capacity, and sales opportunities, whether that grain was ultimately sold on the basis of FOB, in‑store, or track sales terms.

[279] Second, CN does not provide any alternate estimate of costs, other than supporting the Das Critique. It only asserts that if there are any damages that resulted – which it denies because it argues LDC ultimately received all shortfall railcars – then the computation should have been done based on data from later in the crop year. However, even if adopting CN’s approach, which is not the case, I note the prices continued to rise through the Winter months of 2014. Thus, calculating profits on later prices would have resulted in an even larger damages quantum, as demonstrated by Mr. De Pape.

[280] Third, the fact that LDC made significant profits notwithstanding the Breach, should not work against it for the loss quantification analysis, as this is not determinative (Pembina Resources at para 49, Egmont at para 56). Indeed, LDC took the business risk of setting up the Four Elevators, at great expense, placing sole reliance on CN. LDC exchanged that “captivity” for the terms secured in the Contract, a document which itself refers to the relevant statutory service provisions (i.e. sections 113‑116 of the Act). To negate an award on the basis of later‑delivered trains would defeat the purpose of the contractual bargain made by two sophisticated parties.

[281] Fourth, as previously noted, we are in the realm of a statutory breach, and the Contract specifically mentioned that statute at section 7.1. Courts have been clear that the one of the goals of the statutory regime is to protect shippers (for instance, see Univar at para 32; Canadian Pacific Ltd v Canada (National Transportation Agency), 1992 CanLII 14731 (FCA), 3 FC 145 (CA) at p 150; Canadian National Railway Company v Neptune Bulk Terminals (Canada) Ltd, 2006 BCSC 1073 at para 89). In light of this jurisprudence, failing to take into account the legislative provisions would be to overlook the purpose and context of the Act (Rizzo at para 21, R v Wilson, 2025 SCC 32, at para 129). The Act is primordial in the Court’s exercise of its duties under section 116(5) in the context of this Action.

[282] Fifth, Mr. Das himself acknowledged in cross-examination that in the “but-for” world, LDC does receive the 3,376 railcars. Furthermore, Mr. Das acknowledged that if there was an inexhaustible supply of grain, a missed week of buying and selling was a permanent loss and that if LDC lost an opportunity to buy and sell grain to another grain company due not having sufficient rail capacity to seize the opportunity, that opportunity was also permanently lost.

[283] I agree that LDC’s lost profit formula (profit margins multiplied by the Contract service shortfall in MTs) is apt, and need not be complicated any further: in light of jurisprudential principles noted above (including McCain Produce at para 106, Northern Railway at para 31 and Eastern Power at para 35), one cannot expect mathematical precision or certainty when quantifying the exact loss that would have resulted from the hypothetical delivery of the 3,376 railcars. I acknowledge CN’s arguments that LDC has not provided contracts or any data to show opportunities lost, but as concluded above, this situation requires a lost profit rather than a loss of opportunity approach. CN’s position on missing sales contracts and sales made after the Relevant Period does not concord with a lost profit analysis, which I have concluded is the appropriate approach to adopt in this matter.

[284] Having so concluded, it is now incumbent on me to quantify those lost profits. In his expert report, Mr. De Pape provided a solid foundation of reliable, historical data, based on the published bid prices for grain sales that he personally collected for years, including bid prices from each day of the Relevant Period. Mr. De Pape provided a compelling estimate of LDC’s lost profit of $21,641,943, using railcar lading weights provided by CN.

[285] I further agree with LDC that Mr. De Pape’s estimate is conservative and, if anything, understates LDC’s lost profits. This is because Mr. De Pape used the pricing at more expensive Prince Rupert and Cargill Terminals for a substantial amount of the hypothetical grain movement. However, as illustrated in his chart provided above (at paragraph 180 of these Reasons), the more economical Kinder Morgan Terminal could have handled most of the 3,376 railcars, and calculations based on Kinder Morgan pricing would have yielded greater profits.

[286] In addition, for all shortfall railcars, Mr. De Pape used CN’s costlier high-capacity railcar rates as a basis of calculation. However, the railcar lading weights he used to reach the $21.6 million figure assumed that LDC would receive a mix of high-capacity and low-capacity railcars. Again, that resulted in a lower lost profit calculation. Finally, Mr. De Pape, on instruction from LDC’s counsel in preparing the quantification contained in the De Pape Report, deducted variable elevator costs, despite considering these costs to be immaterial, once again reducing what could have been a greater lost profit.

[287] In short, Mr. De Pape provided a fair quantification, and I thus rely on his assessment, with his posted bid price data he collected contemporaneously that included the 2013‑2014 crop year (2021 Report at section 7.2, and Appendix 10.06). Mr. De Pape convincingly explained both the (a) genesis of the bid price data, namely that he would collect prices posted on different companies’ websites, representing approximately 65% of all the grain bids in Canada, in addition to (b) the data’s reliability, and (c) his rationale for collecting the data, which was his strong personal interest in the industry in which he had specialized for over three decades at the time.

[288] Under cross-examination, Mr. De Pape remained firm in his view that his historical bid prices were appropriate proxies for the price at which LDC could have sold additional grain. As already noted above, CN did not lead any expert evidence to contradict Mr. De Pape on this point, and did not offer any counter-quantification analysis of the loss. Rather, it only critiqued Mr. De Pape’s calculations through reliance on the Das Critique.

[289] The daily fluctuations in grain purchase and sales pricing render LDC’s lost profit difficult to calculate with precision. However, damages quantification necessarily constitutes a speculative endeavour in the “but for” world. As noted by the Supreme Court, the Court must “do the best it can” for that assessment (Wood at p 289, Penvidic at pp 279‑280). Other cases involving lost commodity sales provide further colour to illustrate the best efforts scenario to estimate lost profits.

[290] In Rockland Industries Inc v Amerada Minerals Corp of Canada, [1980] 2 S.C.R. 2 [Rockland], a plaintiff obtained damages against a defendant who had refused to deliver a large shipment of sulphur, such that the opportunity to sell the sulphur was lost. The Supreme Court upheld the trial judge’s approach of using the average selling price over a period of time to arrive at a lost profits quantum, even though there was no evidence of any firm commitments for sale (Rockland at pp 18-19).

[291] The Supreme Court, in allowing Rockland’s appeal, found that the trial judge “arrived at this amount [of lost profits] by taking the average of sale prices per ton for sulphur during the period” in which the appellant would have been taking deliveries of sulphur from the respondent, as being the figure at which the appellant could reasonably have been expected to resell the 25,000 tons of sulphur (Rockland at p 5). The Supreme Court went on to state, in upholding the trial judge’s lost profit calculation that was based on approximate market prices for the relevant period in Rockland, that “[b]oth of the parties to the contract were experienced traders. It was known to both that the appellant wished to purchase the sulphur for purposes of resale and that the appellant would seek to obtain the best price which it could” (at p. 19).

[292] In Input Capital v Gustafson, 2021 SKQB 250 [Input Capital] at para 33, the Court used the Statistics Canada average market price of canola over a four-month period each year (September through December) to assess the plaintiff’s damages resulting from the defendant’s delivery failures. The Court found that the formula suggested by the plaintiff was reasonable. It was a similar formula to the one that Mr. De Pape employed to arrive at his calculations, namely the average price per tonne for that four-month period each year, multiplied by the number of tonnes of canola that the defendant failed to deliver, less the applicable crop payment (Input Capital at paras 35‑36). Like in Rockland, the Input Capital damages valuation was calculated using best estimates available from market pricing, rather than specific contract prices (and I acknowledge that both Input Capital and Rockland were breach of contract cases).

[293] In the present circumstances, I am persuaded that the best evidence is the market data that Mr. de Pape used from the 2013‑2014 crop year. Average market prices have been used to quantify profits in situations where market demand outstripped supply, on a lost profit basis, that is not restricted to a point in time (such as in Input Capital). Here, Mr. De Pape did not settle for arbitrary calculations. He used a thoughtful analysis, predicated on data-based methodology and average pricing for the Relevant Period. His methodology and calculations were sound, and indeed reasonable, in light of the requirements set out by jurisprudence cited above, including Rockland, Input Capital¸ Wood, and Penvidic.

[294] Using the yearly average margins would yield approximately $20.6M in lost profits (Appendix II to LDC’s Closing Argument). That is close to Mr. De Pape’s endorsed damages amount of $21.6M. Given the fact that Mr. De Pape used a methodology that would follow the normal sales cycle for orders in his lost profit assessment, I find his calculation to be more appropriate than one based on a yearly average: they were sound estimates based, in my view, on the best available evidence. For these reasons, I find the De Pape calculations – even if imperfect or with alternate possible models available – to be reasonable, given that they were based on supportable assumptions from market data arising from the Relevant Period when the Breach occurred.

[295] For all the reasons above, I agree with LDC and adopt Mr. De Pape’s methodology on the first head of damages in this case, namely the lost profit analysis. Thus, I award LDC $21,641,943 in damages for lost profits resulting from CN’s service failure during the Relevant Period.

J. Damages to LDC cannot be Reduced or Offset by the Minimum Performance Principle or Mitigation

[296] CN asks this Court to apply the minimum performance principle and/or to conclude that LDC has mitigated its losses by making more sales and receiving more railcars than its regular allotment during the period covered by the Interim Order, namely that period immediately following the Relevant Period. LDC, on the other hand, cautions the Court on considering the impact of the Interim Order, and not to take what CN deems as LDC’s “mitigation” into account.

[297] Despite deciding that a tort approach must guide the assessment of damages for LDC’s lost profits, even if a contractual approach to damages were to have been followed, I do not find that the application of either of the minimum performance or mitigation principles would result in a reduction in the quantification of damages of $21.6M.

(1) The Parties’ Positions on Minimum Performance

[298] CN posits that the Court must determine any damages LDC incurred as a result of the Breach identified by the Agency, and in doing so, the Court has to look at what transpired after the Breach occurred, because as of the date the Breach occurred, LDC had not lost any profits or opportunities, contracts with its producers or its customers, or handling revenue. All that existed when the Breach occurred, according to CN, was the possibility that the delay in executing LDC’s existing contracts would eventually cause it to miss out on future grain sales opportunities, and thus forego future sales to catch up. That eventuality never occurred, according to CN.

[299] CN argues that Mr. De Pape’s methodology is flawed because it failed to account for events that transpired after the Relevant Period, in accordance with LDC’s instructions to him. To CN, the Interim Order allowed LDC to receive more railcars than it would have been entitled to during that period and therefore, made more sales than it would ordinarily have, and consequently more than recovered any losses incurred during the Relevant Period. CN maintains that on account of this windfall of cars, LDC entirely mitigated its losses in the months after the Relevant Period because of the Interim Order. According to CN, LDC’s entire approach to damages is flawed in that it fails to account for events that transpired after the Relevant Period, and it instructed its expert to do the same.

[300] Turning to its own expert, Mr. Das, CN explains that although LDC received fewer cars than it was entitled to during the 18 weeks of the Relevant Period, the Plaintiff then received more cars than it was entitled to during the 22 weeks that followed the Relevant Period when the Interim Order went into effect (i.e., beginning in week 41). CN refers to this as “a significant windfall of empty car distribution”, which it maintains relieved any loss that might have otherwise resulted from the service breach.

[301] In support of its arguments, CN focuses on the fact that the Agency revised its original decision. The Agency’s May 2, 2014, Interim Order granted LDC’s request for interim relief, recognizing a “Service Unit” as a minimum of 100 cars, and ordering CN to provide to LDC a minimum of one Service Unit (100 cars) weekly to each of the Four Elevators (Interim Order, pp 8‑9). This remained in effect until the Agency issued the Agency Decision five months later, on October 3, 2014. The Agency Decision revisited its earlier interpretation of the Contract contained in the Agency’s Interim Order, concluding its previous definition of a “Service Unit” as a minimum of 100 cars was erroneous (Agency Decision, paras 110‑112). CN emphasizes that unlike the Interim Order, the Agency Decision at paragraph 115 concluded that the Contract does not specify the number of cars to be provided in a Service Unit:

[…] The Agency finds that LDC is entitled under the Confidential Contract to receive the number of cars for which it has finalized orders, subject to that number being reduced through the application of Car Allocation Policies in accordance with section 7.1B of the Confidential Contract.

[302] CN also highlights paragraph 180 of the Agency Decision:

Under the Confidential Contract, CN may, when providing cars to LDC, apply a car allocation policy that it also applies to its other grain shippers. CN has level of service obligations to all of these shippers. Therefore, when CN applies any car allocation policy in fulfilling its level of service obligations under the Confidential Contract, the policy cannot be inconsistent with CN’s level of service obligations to other shippers.

[303] CN is of the view that this is consistent with the LDC Decision #2, where the Agency dismissed LDC Complaint #2, finding that railcar rationing was justified given the circumstances of the 2013‑2014 crop year, as it was in the FCA’s ruling in Viterra, which confirmed that CN had a right to apply a car allocation policy to Viterra in 2013‑2014. Here, CN argues that while the Agency determined CN could not justify its failure to fulfill LDC’s car orders on the basis of its rationing methodology, that was due to CN’s failure to provide sufficient evidence as to how that methodology led CN to provide the number of cars to LDC that it did. CN references paragraph 154 of the Agency Decision in this regard:

CN has provided no evidence or explanation to establish that, for the service weeks where it failed to supply the number of cars requested by LDC, it did so because it was observing a car allocation policy in a manner consistent with section 7.1B. Specifically, CN did not demonstrate how, under its car allocation policy, the number of cars delivered to LDC was determined, nor how many cars this would have represented for each service week. Moreover, CN did not demonstrate that any such car allocation policy was respected when comparing the weekly car allocation against the actual number of cars delivered.

[304] Rather, CN contends that at best, the Agency found that the application or lack thereof of the rationing policy during the weeks when LDC received no cars, was not justified. If the Agency considered CN’s rationing policy to be inconsistent with its level of service obligations, it would not have specifically referred to that policy as a reason for justifying the service failure when the Agency determined that CN could justify its failure to fulfill LDC’s railcar orders in part on the basis of its rationing methodology (LDC Decision #2, para 78). CN also notes that LDC previously attempted to argue that CN’s rationing methodology was inconsistent with its level of service obligations and the Agency Decision, and failed (in LDC Decision #3).

[305] In short, CN maintains that it was both legally and contractually entitled to ration railcar supply to LDC during the five-month period when the Interim Order was in place, just as it rationed railcars to all other grain companies during that period. In any event, CN argues that the legal questions before the Agency differed from those at hand in this Action, and as a result, the Court does not lose jurisdiction to consider the issue of the Car Allocation Policy simply because the Agency might have also had to consider the same rationing policy in its decisions.

[306] CN indicates that it intended its rationing methodology to be “objective, equitable and balanced” for all customers, based on their historic use of CN’s grain services during the post‑harvest peak period (weeks 8 to 22) of the 2012‑2013 crop year. Mr. Auld, in his trial testimony, stated that CN selected this reference period because it (a) was recent; (b) represented the current customer base and infrastructure; (c) covered a period when grain was available; and (d) provided a match between railcar order requests and CN’s pace in spotting railcars. CN also provided a written explanation to Agency staff to explain this to the Minister of Transport in June 2014 (“Fact-Finding questions from Agency Staff to CN and CP”, Exhibit 1837).

[307] For its rationing policy, CN calculated a target allocation percentage of railcars by customer rather than by elevator, leaving that internal allocation up to them. CN emphasized to the Court that LDC was entitled to approximately 300 railcars per week more than it would have been allocated under the rationing methodology due to the Interim Order, resulting in a “significant windfall of empty car distribution” to LDC. CN therefore made adjustments to its weekly railcar allocation calculations, beginning in week 41.

[308] CN identified its total allocation of railcars during the Interim Order period, as well as LDC’s market share allocation of those railcars, and compared that market share allocation to the number of railcars actually received and shipped by LDC, being 3,274 more than its historical market share, as set out in the following graph (reproduced from CN’s Trial Brief at para 189):

Car Allocation Policy Interim Order Period (Six Facilities)
Grain Week	CN Total Allocation	LDC Market Share Allocation	LDC Total Shipped	Total Shipped v Market Share
41	5,301	223	554	331
42	5,251	221	480	259
43	5,600	235	441	206
44	6,004	252	324	72
45	6,002	252	471	219
46	6,024	253	492	239
47	5,645	237	251	14
48	5,402	227	537	310
49	5,220	219	298	79
50	4,420	186	353	167
51	5,100	214	357	143
52	5,205	219	152	-67
1	5,600	235	197	-38
2	5,600	235	247	12
3	5,600	235	305	70
4	5,600	235	406	171
5	5,400	227	200	-27
6	5,400	227	622	395
7	4,900	206	296	90
8	5,427	228	522	294
9	5,427	228	441	213
10	5,502	231	352	121
Totals	119,630	5,024	8,298	3,274

[309] CN argues that the minimum performance principle should apply to define an upper limit to its liability and reduce the damages owed to LDC. In other words, LDC should only be compensated for CN’s minimum performance of the Contract, which according to CN would be the application of a car allocation policy, as contemplated by section 7.1B of the Contract. Indeed, the application of a Car Allocation Policy would allow CN to provide fewer cars than requested by LDC.

[310] LDC rejects the notion of employing the minimum performance principle in this case. It contends that to engage the minimum performance principle, the different contractual methods of performance must be true “alternatives” exercisable at the defendant’s “option” (Open Window at paras 1, 11, 17, 18 and at para 13 citing Withers v General Theatre Corp, [1933] 2 KB 536 (CA) at pp 548‑49). Here, there were no such options for CN, according to LDC.

[311] LDC further cautions the Court not to adopt CN’s position on rationing as an alternate method of performance of the Contract. LDC argues that factoring in minimal performance to reduce the service Breach would trench on the exclusive jurisdiction of the Agency which has already concluded that CN’s proposed Car Allocation Policy was irreconcilable with the requirements of the Act, when read in conjunction with the Contract.

(2) Analysis of the Minimum Performance Principle

[312] The minimum performance principle starts from the common law proposition that when a claimant sustains a loss as a result of a breach of contract, damages are to place the plaintiff in the position they would have occupied had the contract been performed. Yet, where there are alternative modes of performing a contract, damages will be calculated in accordance with the mode of performance least profitable to the plaintiff and least burdensome to the defendant (Open Window at para 20). This arises from the application of the expectancy principle of damages and defines the upper limit of a defendant’s liability for those damages (Fidler at para 27 and Atlantic Lottery Corp Inc v Babstock, 2020 SCC 19 at para 108).

[313] I have not been persuaded by CN’s minimum performance argument. Under the Contract, applying a Car Allocation Policy within the meaning of section 7.1B was not an alternative mode of performance that CN had the option to employ. Nothing in section 7.1B gave CN a choice about whether to apply such a policy. The Contract expressly states that both parties intended for CN to “continue to observe the current Car Allocation Policy”.

[314] Therefore, if a Car Allocation Policy were in place, CN had to apply that policy. This was just as much LDC’s right as it was CN’s. Indeed, the Agency Decision rejected CN’s 2013‑2014 rationing methodology as not being compliant with its level of service obligations (to LDC or to other shippers generally). LDC’s car allocation “windfall” that CN describes began in crop week 41. The Relevant Period as determined by the Agency in its decision, ended six weeks prior to that in week 35.

[315] In addition, I have found that the damages in this case must be awarded through a tort rather than a breach of contract approach. The minimum performance principle cannot be applied to reduce the damages owed to LDC as it is a contract law principle specifically related to the calculation of damages resulting from a breach of contract. In any event, the Agency has determined that the Car Allocation Policy did not and could not apply during the Relevant Period (Agency Decision at paras 154‑157).

[316] CN’s argument about retroactively recovering all losses through extra railcar deliveries on account of the Interim Order and Agency Decision is also flawed, in my view. While the events unfolding after CN’s service failures and LDC’s further sales would be considered in a breach of contract approach to damages, what happened after the Breach is irrelevant in the tort approach I have adopted. Future sales that were made after the Relevant Period thus cannot be used to offset prior losses caused by the service breach. Additionally, because the Relevant Period and the period covered by the Interim Order do not overlap, sales made during the latter cannot be said to offset losses during the Relevant Period, including as a result of the lost volume principle discussed above.

[317] Turning to the case law that CN argued on this issue, when the FCA confirmed that Agency’s finding in CN FCA, it held at paras 14 and 15:

With respect to CN’s car allocation policies, the Agency noted in paragraph 154 that:

… CN has provided no evidence or explanation to establish that, for the service weeks where it failed to supply the number of cars requested by LDC, it did so because it was observing a car allocation policy in a manner consistent with [redacted]. Specifically, CN did not demonstrate how, under its car allocation policy, the number of cars delivered to LDC was determined, nor how many cars this would have represented for each service week. Moreover, CN did not demonstrate that any such car allocation policy was respected when comparing the weekly car allocation against the actual number of cars delivered.

The Agency also reviewed section 14 of the Confidential Contract, which provides [redacted]. However, as noted by the Agency, in order to invoke this clause CN would have had to give notice that it was doing so and CN did not provide this notice. Therefore, the Agency found that CN could not rely on [redacted] event in this case.

[318] It appears that the redaction that the FCA was referring to was section 7.1B of the Contract, which contained the Car Allocation Policy, the text of which was confidential at the time of that FCA decision in 2016, but which the parties have confirmed in these proceedings is no longer the case in 2025.

[319] CN also invokes the other two LDC complaints in its arguments on minimum performance. First, regarding the Dawson Creek elevator in LDC Complaint #2, it is true that the Agency found that CN had not breached its level of service obligation. There, however, no confidential contract existed or applied at the relevant elevator and LDC had received 83% of the railcars ordered during the period under review.

[320] Second, in their LDC Complaint #3 against CN, LDC was seeking an order restraining CN from applying a railcar allocation policy. The Agency concluded it had no jurisdiction to do so as the claim related to an anticipated service breach rather than one that had already occurred.

[321] Apart from the Agency findings in LDC Complaints #2 and #3 being different from the one at hand in this Action, the Agency did not consider CN’s Car Allocation Policy in the other two complaints.

[322] Here, during the Relevant Period, only a Car Allocation Policy within the meaning of section 7.1B of the contract could have reduced CN’s entitlement to railcars. There was no such policy in place during crop weeks 13-35. An alternative mode of performance under a contract must be available at the time of the breach to trigger the application of the minimum performance principle (see, for instance, Newport v 2033862, 2016 ONSC 6703 at paras 27‑29 and 32‑33).

[323] Furthermore, I reject CN’s reliance on Viterra in suggesting the Federal Court provided that the Car Allocation Policy applies to all situations during the Relevant Period. This Court was not asked to address such an issue, and in any event, the shipper at issue in that decision (i.e., Viterra) did not have a confidential contract with CN within the meaning of the Act, placing it in a very different position than LDC was at the time.

[324] Ultimately, I agree with LDC that CN’s reliance on the minimum performance principle is misplaced, as it is a principle of contract law, and this Court must assess damages resulting from the Breach as found in the Agency Decision, and subsequently by this Court in LDC FC – both of which were upheld on appeal, in CN FCA and LDC FCA respectively.

(3) The Parties’ Positions on Mitigation

[325] CN argues that LDC mitigated its losses because the shortfall railcars were subsequently delivered as a result of the Interim Order, and its grain was eventually moved, meaning that the Plaintiff did not incur any loss. Effectively, CN contends that the Interim Order mitigated any damages LDC suffered from the service failures and allowed CN to recover more than it had previously lost. Thus, according to CN, the windfall of empty railcar distribution received by LDC completely negated the impact of the service failure on LDC.

[326] CN further argues that LDC was even able to capture more opportunities than it would have without the Breach during the Relevant Period, due to the fact that LDC gained access to railcars that were taken from its direct competitors, and provided to LDC instead.

[327] CN concedes that LDC’s sales plans were initially impacted as a result of the shortfall, but argues its execution velocity then recovered - and in fact accelerated - through the Interim Order period. Indeed, CN posits that the “windfall” of empty railcars LDC received during the Interim Order period allowed LDC to catch up by executing its sales faster, rather than by foregoing sales.

[328] In short, CN argues that LDC recovered its losses during the Interim Order period, and asks this Court to (1) offset any damages incurred by LDC during the Relevant Period by the extra sales it was able to make as a result of the railcars received per the Interim Order, (2) conclude that LDC mitigated its losses, and (3) award no damages.

[329] LDC counters that CN is under the misapprehension that LDC must prove that its losses were not mitigated by subsequent events. However, once a plaintiff has established a prima facie case for damages, the onus switches to the defendant asserting a claim for actual mitigation (Karas et al v Rowlett, 1943 CanLII 53 (SCC), [1944] S.C.R. 1 at p 9; Teva at paras 58‑66).

(4) Analysis of Mitigation

[330] In my view, LDC has not only established a prima facie case of damages, but also proven lost profits due to CN’s failure to deliver the shortfall railcars when it ought to have delivered them, causing a permanent loss, as testified to by Messrs. Conn, Lussier, and De Pape. The Breach resulted in a “lost volume” situation, where damages could not be mitigated by subsequent sales.

[331] In Pembina Resources, the defendant made a similar argument to that which CN is making before this Court, pleading that an interruption was merely a deferral of production which did not result in a permanent loss. In rejecting the defendant’s proposition, this Court cited the following comment from a US decision regarding business interruption, finding that the “oil companies are like a single shipowner with his ship laid up. It would be no answer to his claim to assert that he has lost nothing because the same cargo is still on the dock when his ship comes out of repair and that he can move it then – if other cargoes are also then available” (Pembina Resources at para 49, citing Continental Oil Co. v S S Electra, 431 F.2d 391 (5th Cir. 1970).

[332] I am of the view that the same concept applies here. Using the sales LDC made during a subsequent period to the Relevant Period to conclude that LDC recovered what it would have sold during the Relevant Period had CN delivered the 3,376 shortfall railcars, would undermine the but-for analysis. Indeed, in Pembina Resources, this Court concluded that the question of whether the plaintiff could have recovered the lost production later was “irrelevant” to its right to recover damages for the lost production during the period in which the defendant had been found to be negligent (Pembina Resources at para 56). Similarly here, I am of the view that CN “cannot take advantage of events occurring after harm has occurred and liability has attached to reduce the damages for that harm” (Pembina Resources at para 56, citing National Steel Corp v Great Lakes Towing Co, 574 F2d 339 (6th Cir. 1978))

[333] CN’s reliance on the Interim Order as an argument that LDC “caught up” on sales is simply erroneous. This, in my view, could potentially be applicable if the Relevant Period and the Interim Order had overlapped. Since the last week of the shortfall identified by the Agency was crop week 35 (the week of March 30, 2014) and the Interim Order took effect in crop week 39 (the week of May 2, 2014), any sales made by LDC as a result of the Interim Order did not make amends for the service failures.

K. Conclusion on First Head of Damages – Lost Profits

[334] Ultimately, I find that the damages for lost profits of $21,641,943 should not be reduced by events that occurred after the Relevant Period on the basis of mitigation. I further find that, given the tort approach that has been adopted, I will not reduce the damages awarded on the basis of the minimum performance principle.

VII. Second Head of Damages: How Much Did LDC Incur in Vessel Demurrage Because of CN’s Level of Service Breach?

[335] “Vessel demurrage” is a penalty fee accumulated on vessels for breaching laytime. “Laytime” is the time normally required to load the vessel at the terminal. Generally, when vessels arrive at the port terminal, their contract provides for a specific amount of time at the terminal for loading, during which no extra charges are assessed. If the stipulated loading times are exceeded, additional charges are incurred, known as vessel demurrage fees. For every hour vessels are delayed in loading beyond their permitted time, vessel demurrage fees are charged to the company responsible for providing the grain to load them. In this case, the responsible party was LDC.

[336] In the 2013‑2014 crop year, vessel demurrage fees were approximately USD $20,000 per day, per Mr. Toews’ testimony at trial. There is no dispute that LDC incurred USD $5,308,180.85 and CAD $479,969.85 in total vessel demurrage fees during the 2013‑2014 crop year. Of that, LDC claims USD $3,715,726.60 and CAD $335,978.90 in damages from CN, representing 70% of the total vessel demurrage costs incurred. Mr. Conn estimated that 70% to 80% of these fees were incurred because of the shortfall. According to LDC, had CN provided timely delivery of the 3,376 railcars, vessel demurrage charges paid by LDC in the Relevant Period would have been significantly reduced.

[337] CN does not dispute that LDC incurred and paid the total vessel demurrage fees it lists. CN, however, disputes the amount that would have been incurred regardless of not meeting its service obligations. Although CN acknowledges that the shortfall railcars may have caused LDC to incur some additional vessel demurrage fees, CN maintains that LDC (1) has failed to prove causation with respect to the majority of the charges claimed, which is premised on unproven assumptions, (2) ignored evidence of delays at the four elevators which were not caused by CN’s service failures, and (3) does not have a sound basis for validating the quantum for the vessel demurrage damages claimed.

[338] I agree with CN that the evidence shows that there were multiple factors that led to delays in the very unusual 2013‑2014 crop year. To claim, as LDC does, that 70% of the total demurrage fees incurred in the 2013‑2014 crop year arose from the Breach during weeks 13‑35 of that year, is not justified by the record. While some demurrage fees are certainly attributable to the railcar shortfall during the Relevant Period, other events and circumstances during those weeks, as well as the remainder of the crop year, contributed significantly to the loading delays and resulting demurrage fees.

[339] Given my findings that CN did not bear sole responsibility for a significant portion of the demurrage fees, an explanation for which is provided in the section below, damages of USD $1,857,863.30 and CAD $167,893.90 are awarded to LDC, representing 35% of their total vessel demurrage fees during the 2013‑2014 crop year – or 50% of the damages claimed by LDC in the second head of damages in this Action.

A. Overview of Vessel Demurrage Fees

[340] During the Relevant Period, LDC ordered railcars from multiple origins to meet specific vessels at port to fulfil grain orders from overseas customers. This included the Four Elevators, LDC’s facilities at Dawson Creek and Rycroft, and LDC’s facilities served by CP. Once a vessel arrived at port, it tendered a Notice of Readiness [NOR] and was inspected by the port authority. When the port authority agreed that the vessel was ready to load, the NOR was accepted, and the vessel went into the vessel line-up, awaiting cargo. The NOR could, however, be rejected if the port authority concluded the vessel was not ready to load. In such a case, the vessel owner was responsible for preparing the vessel with the port authority’s recommendations, and then re‑tendering the NOR for acceptance. Once the NOR was accepted, if there were other vessels in line, there was a real chance there may not be a berth available immediately, and vessels would have to wait in line. The time relevant for “free” loading time and vessel demurrage calculations would start counting at 8:00 A.M. on the next business day after the NOR was accepted.

[341] LDC and its customers would agree in advance on a load rate as part of the sale, based on the number of MTs that LDC expected to load on a vessel in a day. As explained by Mr. Lussier at trial, LDC and its customers typically fixed an “SSHEX” load rate, which meant that weekends and holidays were excluded. This would constitute LDC’s “free time” to load the vessel.

[342] For example, if LDC had 32,000 tonnes to load on a vessel with an 8,000 MT load rate, LDC had 4.0 days of “free time” to load the vessel. During the free time, weekends and holidays were not counted nor were periods of rain, because the “free time” clock would pause given the complications that would arise in loading grain in the rain, due to spoilage and other wetness-related risks. If a vessel was not fully loaded at the end of its “free time” period, the demurrage clock would begin. Once the demurrage clock began, it would not stop, including on weekends, holidays and rainy periods, until the vessel was fully loaded.

[343] David Miller, CN’s AVP, provided the following input to parliamentarians in February 2014, regarding the monetary “hits” railway customers sustained due to the issues faced during the 2013‑2014 crop year:

Take intermodal for example which is the most time-sensitive of traffic – that’s containers, that’s consumer goods – there’s no question. There are hits that customers are facing; it’s inevitable. I can’t begin to quantify it. One can’t really compare one commodity to another. There certainly would be similar demurrage charges that some of the other commodities that are not hitting their ships would be facing. There’s no question. I would say that all of our customers are taking some hit as a result of the problems we are facing.

Committee Transcript at p 13

[344] Mr. Miller thus contemporaneously acknowledged that shippers were experiencing vessel demurrage costs in excess of what they would normally incur due to the shipping slowdowns, which affected the industry in its entirety.

B. Parties’ Positions on Demurrage Fees

[345] In the current dispute, LDC argues that if CN had provided the 3,376 railcars to LDC when it was required to, LDC’s vessel demurrage charges would have been reduced significantly, because LDC could have loaded its customers’ vessels earlier, and would have avoided demurrage charges. LDC relies on the New Brunswick Court of Appeal’s decision in McCain Produce to argue that demurrage charges are “the natural and indeed almost inevitable results” of CN’s breach of service (McCain Produce at para 94, albeit regarding a service failure by CP in that instance).

[346] LDC contends that the test to be applied on this second issue, similar to that applied to the first issue, is to determine whether CN’s railcar supply failures at the Four Elevators caused LDC to incur demurrage fees, by employing the “but for” test: but for CN’s failure to supply the 3,376 railcars when they ought to have been provided, would LDC have paid the vessel demurrage fees that it did? LDC submits that the answer is a clear no, and contends that the increased demurrage fees during the Relevant Period should not be attributed to any factor other than CN’s rail service failures.

[347] LDC acknowledges that an increased number of railcars, or a timelier supply of railcars at locations other than the Four Elevators, could have reduced demurrage fees, in responding to one of CN’s arguments. However, LDC claims that consideration is irrelevant. Indeed, LDC contends that there are no Agency orders finding level of service breaches at the Dawson Creek or the Rycroft elevators, or at LDC’s CP‑served elevators during the Relevant Period. As such, LDC posits that it is but a theoretical alternative solution to its demurrage problem which does not break the causal link between the service failures found by the Agency and LDC’s increased demurrage fees.

[348] Ms. Hawryluk, LDC’s controller, indicated that during the 2012‑2013 crop year, LDC paid an average of $0.12 per MT in vessel demurrage fees, which was significantly less than the average of $7.45 in demurrage fees that it contends it paid for every MT of product (i.e. wheat and canola, averaged) in the 2013‑2014 crop year. LDC states that it moved 776,241 MTs of grain to the vessels that are the subject of its demurrage claim, and calculates that it would only have had to pay $93,142 in demurrage fees had the service failures not occurred. However, LDC actually paid USD $5,308,180.85 and CAD $479,969.85 in fees.

[349] In his testimony, Mr. Conn estimated that 70% to 80% of the demurrage fees that LDC incurred in the Relevant Period were directly caused by CN’s failure to supply the shortfall railcars. In arriving at the second head of damages for demurrage, LDC based its calculation on the lower end of Mr. Conn’s estimate, seeking compensation for 70% of its total vessel demurrage costs, thus seeking USD $3,715,726.60 and CAD $335,978.90 of the totals of USD $5,308,180.85 and CAD $479,969.85 paid in demurrage fees during the 2013‑2014 crop year. LDC produced the following chart setting out the actual costs that 30 vessels incurred in demurrage fees during the 2013‑2014 crop year:

VESSEL NAME	GROSS MT⁴	Demurrage at CAD $0.12/MT⁵	Actual Vessel Demurrage Paid by LDC⁶
Golden Heiwa	27,759.017	$3,331.08	USD $152,991.65
Oriente Victoria	22,280.000	$2,673.60	USD $1,003.47
Pacific Trust	10,500.000	$1,260.00	USD $12,369.79
Great Resource	29,466.000	$3,535.92	USD $66,677.08
King Milo	18,074.504	$2,168.94	CAD $17,897.45
Fiorela	18,796.005	$2,255.52	USD $8,288.19
Vega Granat	28,219.110	$3,386.29	USD $116,432.25
Glorious Hope (#2)	31480.235	$3,777.63	CAD $133,112.73
Orient Tide	27502.248	$3,300.27	USD $72,729.17
Glorious Fuji	29613.359	$3,553.60	USD $103,947.92
Ikan Bawal	5700.000	$684.00	CAD $8,121.47
Atlantic Tramp	25408.771	$3,049.05	USD $235,443.71
Ikan Suji	49500.000	$5,940.00	USD $398,354.69
Global Forwarder	21547.600	$2,585.71	USD $560,158.78
Misato K	5120.000	$614.40	CAD $94,503.98
Misato K	21682.484	$2,601.90	CAD $94,503.98
ISS Spirit	30856.740	$3,702.81	USD $321,699.00
Nikiland	26250.000	$3,150.00	USD $33,084.38
Glorious Hope	27500.000	$3,300.00	USD $283,859.72
Glorious Hope	16500.000	$1,980.00	USD $283,859.72
Tenna Bulker	18596.499	$2,231.58	CAD $129,045.28
New Inspiration	4945.010	$593.40	CAD $97,288.94
New Inspiration	13133.646	$1,576.04	CAD $97,288.94
Densa Cheetah	30980.711	$3,717.69	USD $679,261.46
Densa Sea Lion	29802.878	$3,576.35	USD $372,230.44
Belle Masuka	24990.000	$2,998.80	USD $452,647.92
Atlantic Ensenada	26830.000	$3,219.60	USD $435,013.80⁷
Atlantic Ensenada	22670.000	$2,720.40	USD $435,013.80⁷
New History	28377.938	$3,405.35	USD $403,653.16
Oriente Challenger	19924.646	$2,390.96	USD $126,112.04
Pos Oceania	22260.000	$2,671.20	USD $193,729.17
Hong Yuan	59973.504	$7,196.82	USD $278,493.06
blank	blank	blank	USD $5,308,180.85
TOTALS	776,240.905 MT	CAD $93,148.91	CAD $479,969.85

Reproduced from LDC’s Closing Argument, Appendix III, p 2

[350] LDC claims that if the shortfall railcars had been delivered by CN, its vessel demurrage fees at multiple ports and for vessels awaiting different types of crops would have been reduced. For instance, LDC claims that if CN had supplied three shortfall cars at Aberdeen during crop week 13, demurrage fees would have been reduced for four of these vessels, the (i) Golden Heiwa, (ii) Oriente Victoria, (iii) Great Resource and (iv) Pacific Trust.

[351] LDC further alleges that the terminals cannot be blamed for the loading delays, because the West Coast vessel terminals performed admirably during the Relevant Period. It argues that factors such as winter conditions which were said to slow down railway operations, could not be tested or assessed, because CN failed to provide key evidence in this regard such as terminal dwell data (meaning the amount of time a railcar or set of railcars spend in a railway yard, as opposed to a vessel terminal), and railcar velocity data.

[352] As for CN, it contends that LDC has not proven causation with respect to the majority of the amount it claims in demurrage fees, and its analysis of causation contains numerous flaws. It argues that LDC’s analysis fundamentally ignores the reality that a single railcar cannot carry different types of grain or be shipped to different ports simultaneously, and CN takes issue with LDC’s demurrage estimates, which it contends are based on these faulty assumptions.

[353] Rather, CN submits that had the shortfall railcars been provided, they would have been loaded with the cargo that was planned, shipped to the intended destination, and loaded onto a particular vessel, which it claims LDC ignores in its evidence. In addition to what commodities LDC had intended for the shortfall cars, CN contends that there is evidence of what railcars were planned for which particular vessel in both the Kinder Morgan pipeline reports and station planners, both produced by LDC. For instance, of the four ships LDC refers to above (the (i) Golden Heiwa, (ii) Oriente Victoria, (iii) Great Resource and (iv) Pacific Trust), only one – the Golden Heiwa – was to be loaded with canola at the Kinder Morgan Terminal while the other three vessels were to be loaded with wheat at Prince Rupert.

[354] CN notes that the Kinder Morgan pipeline reports were a point-in-time snapshot of LDC’s forecasted plans for the railcars and cargo that were expected to ship from a specific elevator facility to a particular vessel, according to Mr. Toews’ testimony at trial. Mr. Toews also explained that in addition to the pipeline reports, LDC’s station planners covered multiple terminals and forecasted (a) the vessels scheduled to arrive at port, (b) the grain needed to fill those vessels, and (c) the facility from which the grain was to be shipped.

[355] These station planners were prepared by LDC’s transportation logistics team regularly, and were shared with the elevator managers and LDC’s sales desk, to obtain their input. Mr. Toews further testified that these were one of the primary planning documents for LDC to coordinate grain to export terminals throughout the year, although the pipeline reports and station planners were subject to change, and plans for a particular vessel often changed over time.

[356] CN further claims that LDC significantly underestimates the amount of vessel demurrage it would have incurred as a regular cost of doing business in the Relevant Period – just as it would have always paid some demurrage as a normal part of doing business.

[357] CN also disagrees with LDC’s proposed method of using Ms. Hawryluk’s evidence that LDC paid $0.12 per MT in vessel demurrage in the 2012‑2013 crop year to calculate how much excess demurrage charges it paid during the Relevant Period. CN claims that the 2012‑2013 crop year was not representative because it was a drought year, with a small crop, as confirmed at trial by Mr. Lussier. Where there is more grain to move, which occurred in the 2013‑2014 crop year at issue, there are more vessels arriving at port closer together, and more competitors trying to move their grain as well. This causes congestion at the ports and can delay vessel loading. CN argues that using a drought year where LDC moved significantly less grain is not an accurate benchmark for “normal” vessel demurrage costs to be used for subsequent years, starting with the following the crop year which included the Breach.

[358] Specifically, whereas LDC moved 972,048 MT in the 2012‑2013 crop year, those numbers climbed to 1,745,650 MT in 2013-2014, 1,927,737 MT in 2014-2015, and 1,782,753 MT in 2015-2016. CN emphasizes that in the 2014‑2015, 2015‑2016 and 2016‑2017 crop years where LDC moved similar volumes of grain to the 2013‑2014 crop year, LDC paid substantially more in demurrage fees. Based on LDC’s own evidence, it paid an average of approximately $1.60 US per MT in 2014‑2015, $1.62 US per MT in 2015‑2016, and $2.64 US per MT in 2016‑2017 (Exhibit 2032, Discovery Read Ins of CN).

[359] CN also contends that the fact that it did not provide terminal dwell data, which LDC criticizes, is irrelevant to the vessel demurrage damages analysis. Although CN does not dispute that it failed to provide the shortfall railcars identified by the Agency, CN argues that the relevant question is what amount of vessel demurrage fees can be attributed to those shortfall railcars, which it maintains that LDC has failed to demonstrate, and thus establish any causation.

[360] CN further takes issue with LDC’s submissions on the West Coast terminals’ performance during the Relevant Period. For example, CN contends that the Kinder Morgan Terminal generally worked seven days a week and two shifts per day. CN also points out that railcars were not unloaded immediately upon arrival but rather when the next full shift started. LDC, conversely, argues Kinder Morgan would work whenever LDC ordered labour, which typically resulted in three to four trains being unloaded per week, or up to five trains in particularly “big” weeks, as testified to by Mr. Conn.

[361] CN references the evidence of performance issues at the Kinder Morgan Terminal during the Relevant Period. In fact, as testified to by Mr. Lussier at trial, LDC experienced issues as to how to handle its products and to understand the terminal’s systems. Mr. Lussier explained at trial that the 2013‑2014 time frame represented the early stages of the agreement between LDC and Kinder Morgan, and LDC needed to understand how the facility operated to improve speed of vessel load and achieve maximal capacity.

[362] CN further underlines that that Kinder Morgan experienced a fire and mechanical failure at the terminal. As a result, it had to declare a force majeure effective just after midnight on April 9, 2014, until just before midnight on April 13, 2014, when it resumed operations. Kinder Morgan was unable to perform railcar receiving operations during that time. The parties disagree on the impact this halt in operations had on the number of railcars unloaded during that week. LDC claims that despite the fire, Kinder Morgan still managed to unload four trains (approximately 400 railcars) in week 37. CN asserts that the fire occurred in the middle of week 36, and Kinder Morgan only unloaded 62 railcars that week, but unloaded four full trains the following week after the issue arose.

[363] In short, according to CN, due to logistical and other issues unrelated to the railcar shortfall, LDC has failed to establish that the Breach identified by the Agency caused it to incur vessel demurrage fees with respect to the following fifteen vessels: (i) Vega Granat, (ii) Glorious Fuji, (iii) Atlantic Tramp, (iv) Oriente Challenger, (v) Golden Heiwa, (vi) King Milo, (vii) Glorious Hope #2, (viii) Hong Yuan, (ix) Fiorela, (x) Ikan Bawal, (xi) Nikiland/Gurasis, (xii) Pacific Trust, (xiii) Glorious Hope, (xiv) Atlantic Ensenada and (xv) Pos Oceania. The vessel demurrage fees LDC paid in respect of those vessels were USD $1,979,765.68 and CAD $159,131.65.

[364] Just to take the first of the vessels listed (the Vega Granat) as an example, CN highlights that the ship was at port during crop weeks 18 to 21. Although it conceded that there were 52 shortfall railcars at Lyalta during week 21 that planned to carry wheat to Kinder Morgan, CN emphasizes that there is no evidence that the 52 shortfall cars could have arrived in time to reduce demurrage fees paid for the Vega Granat – or for that matter, that the 52 shortfall railcars had planned to carry cargo for that vessel.

[365] Rather, CN asserts that the Kinder Morgan pipeline reports show that railcars from Tisdale and Dawson Creek were planned for the Vega Granat, along with railcars from Lyalta and Aberdeen during weeks 16, 17, and 18, where there were no shortfalls (referencing Exhibits 367 and 434). CN also references internal LDC emails showing that railcars were planned for delivery to the Vega Granat in week 19 from Dawson Creek and Aberdeen, where once again there were no shortfalls (referencing Exhibits 491 and 500).

[366] CN also emphasizes evidence of non-rail delays during the Vega Granat loading period at the Kinder Morgan Terminal. For example, CN notes that there was no loading during the afternoon and graveyard shift on December 22, 2013, because there were no Canadian Grain Commission staff available to monitor loading operations (per Exhibit 519). Furthermore, records showed that it rained every hour during the afternoon shift on December 22, 2013 when the Vega Granat was already on demurrage, so it would not have been possible to load the vessel in any event. In addition, there was no labour available at Kinder Morgan as of noon on December 24, 2013, and all day on December 25, 2013. And in its KPI Report prepared for LDC, Kinder Morgan indicated that 47.3 percent of the Vega Granat’s time at berth was spent actually loading the vessel. The remaining time was attributed to various non-rail delays as set out in this chart setting out the various causes of the delay:

Vega Granat Shipping Summary
Vessel / Reason	Hours	% of Total
Vega Granat	129.58	100.0%
Loading	61.25	47.3%
Weather Delay	46.08	35.6%
Shifting	8.67	6.7%
Mechanical Delay	6.25	4.8%
Other	3.25	2.5%
Safety Talk	2.00	1.5%
Electrical Delay	1.67	1.3%
Vessel Delay	0.42	0.3%

Reproduced from CN Trial Brief, Appendix XIII, p 3

[367] CN undertakes a similar analysis of the other vessels for which it submits that LDC has failed to establish any causation between the Breach and vessel demurrage fees (as listed at paragraph 363 above).

[368] CN acknowledges that that the Breach identified by the Agency may have contributed to some of the vessel demurrage fees incurred with respect to the following nine vessels: (i) Orient Tide, (ii) Densa Cheetah, (iii) Densa Sea Lion, (iv) New Inspiration, (v) Oriente Victoria, (vi) Great Resource, (vii) Ikan Suji, (viii) Global Forwarder and (ix) ISS Spirit. The total vessel demurrage fees paid by LDC with respect to these nine vessels was UDS $3,328,415.17 and CAD $320,838.20.

[369] CN submits that the relevant question is: what portion, if any, of the vessel demurrage fees for each of the nine vessels is attributable to the Breach identified by the Agency, and what portion was caused by unrelated factors, of which CN lists several for each of those vessels. As an illustration, CN produced the following five charts with respect to five of these ships.

Orient Tide Shipping Summary
Vessel / Reason	Hours	% of Total
Orient Tide	92.00	100%
Loading	47.00	51.1%
Other	25.83	28.1%
Shifting	7.00	7.6%
Vessel Delay	6.58	7.2%
Safety Talk	3.00	3.3%
Electrical Delay	2.08	2.3%
Weather Delay	.50	.50%

Densa Cheetah Shipping Summary (Berth 1)
Vessel / Reason	Hours	% of Total
Densa Cheetah Shipping Summary	126.00	100.0%
Idle	63.50	50.4%
Loading	30.08	23.9%
Weather Delay	16.75	13.3%
Mechanical Delay	7.50	6.0%
Shifting	4.58	3.6%
Electrical Delay	1.25	1.0%
Vessel Delay	1.00	0.8%
Other	1.00	0.8%
Safety Talk	0.33	0.3%

Densa Cheetah (2) Shipping Summary (Berth 2)
Vessel / Reason	Hours	% of Total
Densa (2) Shipping Summary	55.92	100.0%
Loading	21.83	39.0%
Weather Delay	16.25	29.1%
Vessel Delay	13.50	24.1%
Mechanical Delay	2.08	3.7%
Other	2.00	3.6%
Safety Talk	.25	0.4%

Densa Sea Lion Shipping Summary
Vessel / Reason	Hours	% of Total
Densa Sea Lion Shipping Summary	108.25	100.0%
Loading	49.75	46.0%
Weather Delay	37.83	34.9%
Vessel Delay	9.42	8.7%
Mechanical Delay	8.08	7.5%
Other	3.00	2.8%
Safety Talk	0.17	0.2%

New Inspiration Shipping Summary
Vessel / Reason	Hours	% of Total
New Inspiration Shipping Summary	104.50	100.0%
Loading	56.83	54.4%
Weather Delay	34.33	32.9%
Idle – Rail Delay	6.50	6.2%
Vessel Delay	3.17	3.0%
Other	2.67	2.6%
CGC	1.00	1.0%

Reproduced from CN Trial Brief, Appendix XIII, pages 5, 12, 14, and 31

[370] Thus, once again, one can see that according to CN, there were many factors at play that led to the delays, few of which had to do with the railcar shortfall.

[371] CN also highlights that Mr. Conn’s testimony that LDC was getting such poor service at its facilities in Dawson Creek and Rycroft, as well as its CP-served facilities, that it was relying primarily on the Four Elevators to move grain to the West Coast. This led LDC to claim, in LDC Complaint #2, that the service failures at Dawson Creek and Rycroft caused LDC to incur $7.3M in demurrage fees. These fees overlap with the demurrage fees claimed in this Action according to the Defendant: LDC ordered railcars from CP or from CN at Dawson Creek or Rycroft for many of the vessels for which LDC is now claiming vessel demurrage fees in this Action. LDC counters that service failures at other elevators are irrelevant to the assessment of vessel demurrage fees incurred.

C. Assessment of Vessel Demurrage Claim

[372] Considering all the evidence and given CN’s service Breach, I find that LDC has established causation with respect to certain of the demurrage fees. It has proven that on a balance of probabilities, but for the delays occasioned by the Breach, it would not have incurred a portion of its demurrage fees that resulted directly from the non-delivery of railcars.

[373] However, I find that there is substantial evidence as highlighted by CN of non‑rail‑related issues that contributed to the vessel demurrage fees. I do not accept Mr. Conn’s estimate of 70% to 80% of the vessel demurrage fees were due to CN’s service failures at the Four Elevators, based on the totality of the evidence presented. CN has convincingly showed through its evidence, and in particular in its detailed, ship-by-ship analysis contained in Appendix XIII to its Trial Brief, including through its charts reproduced above, that significant extenuating factors beyond the railcar shortfall during weeks 13-35 caused vessel delays that lasted throughout the entire crop year, which contributed to the increase in demurrage fees during that period.

[374] While acknowledging that providing precise calculations or allocations of demurrage fees given the number of ships and reasons for delay is a challenge, I further agree with CN that LDC has failed to provide the Court with evidence that would allow a precise determination of exactly what vessel demurrage charges were caused by the shortfall railcars, and which ships they impacted.

[375] Mathematical precision for demurrage charges in the circumstances, is not achievable, as Mr. Alex Hudson, counsel for LDC, pointed out in LDC’s closing submissions. There, he explained why LDC was not claiming the entire amount of the demurrage quantum, but rather a “conservative” percentage of it. Mr. Hudson explained that the 70% figure was “based on Mr. Conn's evidence that 70 percent was approximately how much of the West Coast grain the four elevators covered. That is a reasonable basis to provide that estimate. This is the kind of situation where an estimate is all that the Court can do. It's not possible to track every notionally provided railcar and assign it to a vessel…it's not possible to forensically reconstruct the but-for world in which LDC receives all of these incremental railcars earlier. We know that there is a correspondence in time between when LDC received the railcars and / or should have received the railcars and the vessels that were waiting in anchor charging demurrage” (Day 14 Transcript at pages 132-133).

[376] LDC has the burden of proving, on a balance of probabilities, which vessel demurrage charges were caused directly by CN’s Breach. LDC’s claim of 70% of its 2013‑2014 crop year demurrage fees, as the lower range of Mr. Conn’s estimate, is premised on the broad supposition that had all the shortfall railcars been provided, vessel demurrage fees for multiple vessels loading different types of grain at different port terminals would have been largely reduced or eliminated.

[377] However, Mr. Conn confirmed that during the Relevant Period, LDC was ordering railcars for vessels from origins other than the Four Elevators at issue. Trains from these facilities could and did in fact arrive late to port, which caused LDC to incur vessel demurrage fees as well. As CN noted, LDC admitted that there were unfulfilled railcar orders and/or late delivery of railcars (i) by CN at Dawson Creek and Rycroft (i.e. not the Four Elevators), and (ii) by CP at LDC’s elevator facilities at Wilkie (Brass), Tisdale, and Virden, and that both of these circumstances delayed the delivery of grain destined for vessels at West Coast export terminals during the 2013‑2014 crop year.

[378] Although CN has satisfied me that there were several other factors, such as delays stemming from LDC facilities other than the Four Elevators that also led to vessel loading delays, inclement weather (i.e. rain), and general delays that would have occurred in the ordinary course of doing business, the Plaintiff has nonetheless proven that it is more likely that the Breach and resulting railcar shortfall to its Four Elevators resulted in a portion of the vessel demurrage fees.

[379] The substantial increases in demurrage fees in the 2013‑2014 crop year went well beyond the customary costs of operating a grain trading business, including demurrage fees. This reality was recognized at the time by Mr. Miller of CN (at paragraph 343 above). Thus, a portion of the vessel demurrage fees is appropriate to be awarded to LDC to compensate the company for those fees it absorbed due to the railcar delays.

[380] After conducting a ship-by-ship analysis, CN conceded that it was responsible for part of the vessel demurrage fees incurred for specific vessels, namely a portion of USD $3,328,415.17 and CAD $320,838.20 that LDC claimed relating to demurrage fees from nine of the 30 vessels.

[381] As has already been established for the assessment of damages for lost profits, they can rarely be assessed with mathematical precision in the hypothetical, “but for” world (McCain Produce at para 106; Northern Railway at para 31). This principle equally applies to the calculation of demurrage fees that spiked in the 2013‑2014 crop year (see by way of analogy the McCain Produce case, the New Brunswick Court of Appeal’s discussion of the trial judge’s findings at paras 131‑133, both of which were upheld by the Supreme Court of Canada).

[382] Given the totality of the evidence and the detailed submissions of the parties, I agree with CN that LDC’s 70% figure is inflated, particularly considering the evidence that a significant number of delays were caused by third parties or by extraneous circumstances including operational slowdowns at the terminals, rain loading delays, the harsh winter slowdowns, staffing shortages, and other issues including a fire at the Kinder Morgan Terminal, LDC’s primary terminal on the West Coast.

[383] As a result, I award damages to LDC for vessel demurrage in the amount of USD $1,857,863.30 and CAD $167,893.90, representing 35% of the total vessel demurrage fees incurred during the 2013‑2014 crop year, namely 50% of the amount for demurrage that LDC claims in this Action.

D. Conclusion on Second Head of Damages – Demurrage Fees

[384] LDC will be awarded 50% of the demurrage fees that it claims. There is no doubt that LDC incurred vessel demurrage fees in excess of what it would have incurred had the shortfall railcars been delivered on time by CN, with LDC’s customers having planned for and relied on orders for vessels to arrive at port. However, various of the loading delays were caused by issues separate and apart from CN’s Breach. CN will accordingly pay 35% of LDC’s demurrage fees.

VIII. Third Head of Damages: Did LDC Suffer any Reputational Harm Because of CN’s Level of Service Breach?

[385] The two parties have diametrically opposite views on the issue of whether the shortfall of railcars during the Relevant Period caused reputational harm to LDC, as the latter claims.

A. The Parties’ Positions on Reputational Harm

[386] LDC claims CN’s service failures damaged its reputation with producers (farmers) and purchasers (customers). It claims $3.5M for reputational harm. LDC alleges its reputation was harmed with grain producers from whom it purchased supply, because it did not have the railcars to clear space in its elevators, preventing it from taking in more grain. Similarly, LDC alleges that it sustained reputational harm with its purchasers because they expected to receive the grain they had ordered on a timely basis during the Relevant Period.

[387] On the one hand, it is evident, as Mr. Conn explained at trial, that CN’s rail service failure limited LDC’s ability to take in more grain from farmers. Mr. Lussier explained at trial that farmers were upset that they were producing more grain than LDC was capable of accepting, which it can be assumed, led to its own financial consequences. On the other hand, CN’s service failures inevitably had an impact on LDC’s overseas customers.

[388] LDC argues that the nature of reputational harm makes damages in this area intrinsically difficult to quantify, but difficulty in assessing damages cannot preclude this Court from an award where a wrong has been shown to result in damages. LDC contends that it tendered sufficient evidence to establish that CN’s Breach caused producers and customers to lose confidence in LDC’s ability to fulfil contracts and led to a loss of business.

[389] According to LDC, damages can be awarded for reputational harm in commercial cases (Foaminol Laboratories Ltd v British Artid Plastics, Ltd, [1941] 2 All ER 393 (KB) [Foaminol Laboratories], cited in Wyman v Vancouver Real Estate Board (No 6), 1962 CanLII 657 (BCSC)). As Professor Waddams wrote, “there is no cogent reason why damages should not be given for loss of reputation in a contract case” so long as the loss can be established: SM Waddams & P Healy, Law of Damages (Toronto: Thomson Reuters, looseleaf revision 2023-1), ch 4 at § 4:6. LDC contends this principle can be applied by analogy to a section 116(5) action, despite the fact that is not a purely contractual matter.

[390] CN rejects LDC’s claim of reputational harm. CN maintains that its service failures did not cause or result in any tangible or quantifiable loss. At most, CN argues that the evidence only shows that Canada’s reputation could have been harmed as a grain exporter, but not that LDC was harmed as a singular shipper or trader. It maintains that LDC failed to establish that service failures caused or resulted in any tangible or quantifiable loss through lost business with producers or customers. CN maintains that LDC has not met its onus to demonstrate, on a balance of probabilities, that its business was harmed due to the railcar shortfall, and/or that any purported lost business would have materialized.

B. Analysis of Reputational Harm

[391] I agree with CN’s position on this third issue, for the reasons set out below, and as a result, will not award any damages for reputation harm.

[392] To recover damages for reputational harm, LDC must establish that CN’s service failures caused harm to LDC’s reputation that resulted in a tangible and quantifiable loss. At common law, it is not sufficient for a plaintiff to assert that its reputation was damaged (Nolar Industries Ltd v Freight Transportation Association, [2005] OJ No 4495 (Ont SCJ) at para 32.

[393] A plaintiff claiming damages for reputational harm must prove that the underlying conduct caused loss beyond mere reputational harm (Bella v Young, 2006 SCC 3 at para 56; BPI Resources Ltd v Merrill Lynch Canada Inc, 1989 ABCA 106 at para 51). To do so, LDC must adduce evidence that will allow me to quantify the loss it claims is due to its reputation being harmed. Indeed, when LDC alleges that it lost business, it must demonstrate on a balance of probabilities that the lost business would have materialized (Venture Capital USA Inc v Yorkton Securities Inc (2003), 66 OR (3d) 760 at para 92 [Venture Capital]; Foaminol Laboratories at 399).

[394] Damages should not be awarded for lost business that is entirely speculative or uncertain (Sunsource v University of Windsor, 2022 ONSC 6047 at para 1180. The plaintiff must identify a monetary loss caused by the defendant’s breach and provide some reasonable basis to quantify the loss (see for instance Venture Capital at para 92).

[395] I agree with CN that LDC has failed to substantiate a tangible and quantifiable loss resulting from the impact on its reputation that would be attributed to CN’s Breach. LDC has not demonstrated that its reputation was harmed as a result of CN’s Breach, or that its business was impacted beyond the already-established loss of opportunity/profits for two reasons: (a) the evidence tendered at trial established that the industry as a whole was impacted by service issues both by CN and CP; and (b) the evidence tendered by LDC in an attempt to demonstrate that its customers had lost confidence in its ability to do business, is not convincing. I will briefly expand on these two evidentiary points next.

[396] The evidence clearly shows that the industry as a whole was impacted and affected by delays during the Relevant Period, and that LDC’s issues with CN were not isolated cases between a shipper and its customers. Recognizing the gravity of the situation, the federal government issued its OIC on March 7, 2014, requiring both CN and CP to move specified minimum volumes of grain in Western Canada. The OIC targeted both CN and CP, and was intended to stabilize the disruption that affected the industry at large (see extract of the OIC’s RIAS above at paragraph 71 of these Reasons).

[397] As noted above, Mr. Miller of CN also acknowledged before the Committee that all of CN’s customers were impacted by the issues it was facing during the Relevant Period, and that although commodities cannot be compared to one another in terms of the impact the delays had, “there is no question” that CN’s customers were all facing an “inevitable” impact (Committee Transcript, at p 13).

[398] Moreover, LDC ultimately received railcars that its competitors did not receive. It would not be justified to award damages to LDC for reputational harm when it is clear that its competitors were impacted just as much, if not more, than LDC was by CN’s industry-wide service failures. CP, Canada’s other national railway, also faced these issues, and its customers, including LDC, were negatively impacted. It can be inferred that customers who would usually get bids from multiple companies including from CN’s other customers, received service no worse than others from LDC, given its advantageous allocations from CN that ultimately flowed later in the 2013‑2014 crop year.

[399] Related to the prior point, although I cannot look solely at LDC’s profits during the Relevant Period and subsequent years to justify not awarding damages for reputational harm (1704604 Ontario Ltd v Pointes Protection Association, 2020 SCC 22, at para 69), it is certainly a very good indicator in this case that LDC’s customers were not reluctant to conduct business with LDC during and after CN’s service failures. I am not convinced by LDC’s argument that it would have received even more future business from its existing customers had its reputation not been harmed by CN’s service failures. Without more concrete evidence, that assumption necessitates a certain measure of conjecture on my part.

[400 ] Moreover, contrary to LDC’s arguments, the record does not support a finding that LDC’s reputation with Mitsui, or with any other customer, was damaged as a result of CN’s Breach during the Relevant Period.

[401] To demonstrate the impact on its customers and show harm to its reputation, LDC led evidence at trial on the impact of the delays on Mitsui, its most important customer at the time. LDC tendered two letters from Mitsui describing the delivery delays it encountered during the Relevant Period, and the effect that these delays had on Mitsui. The Mitsui letters also speak to the harm done to Canada’s reputation.

[402] The first of these two letters is dated April 2014 [Mitsui April Letter]. In an email exchange between Tamaki Iida at Mitsui and Mr. Lussier immediately preceding the Mitsui April Letter, LDC asked Mitsui to write a letter. In fact, Mitsui’s representative, Ms. Iida, wrote in the email exchange with LDC that “we are drafting the letter and had a discussion internally today. We have one question about the letter how you need it like [sic] to be” (Exhibit 633). This letter was subsequently appended to LDC’s Complaint to the Agency in this matter, filed four days later.

[403] The second Mitsui letter is dated September 11, 2014 [Mitsui September Letter]. In this second letter, Mitsui writes: “To be clear, our first priority is maintaining our strong longstanding partnership with LDC. […] We are committed to maintaining the special relationship between Mitsui and LDC and we are resolved to come to a solution all parties can agree to.”

[404] I note that both letters were also filed by LDC in support of LDC Claim #2, in which LDC had requested an interim order in relation to its elevators at Dawson Creek and Rycroft on October 17, 2014. In its decision dismissing the request, the Agency found that the letters were “general in nature”, and that they “actually reflect the fact that LDC’s reputation has been maintained and the only reputational damage alluded to by Mitsui concerns Canada and not LDC” (Interim Agency Decision dated December 23, 2014, Exhibit 1892 at paras 78 and 80).

[405] I agree with the Agency’s determination in its December 23, 2014 decision. The Mitsui letters are the only documentary evidence of reputational harm tendered by LDC. Mr. Lussier also testified at trial that LDC’s business with Mitsui diminished in the subsequent crop year. He indicated that in the 2013‑2014 crop year, Mitsui purchased about 680,000 tonnes of wheat and canola from LDC. In the following crop year, Mitsui purchased 534,000 tonnes of wheat and canola from LDC, representing approximately a 20% drop in sales, which LDC attributes to CN’s service failures during the Relevant Period.

[406] I acknowledge Mr. Lussier’s evidence that LDC’s business with Mitsui diminished in the crop year following the Relevant Period, but am not convinced this is due to its business relationship being harmed. LDC has failed to establish a causal link to this effect. Other factors could explain the difference, including the fact that LDC’s sales to Mitsui varied annually. That mere number does not prove reputational harm. Indeed, based on the evidence adduced by LDC, its reduced sales program to Mitsui in the 2014‑2015 crop year was entirely consistent with LDC’s annual sales trends. Even if the slight drop in sales was attributed to the customer experience of the 2013‑2014 crop year, the Breach was not the only service issue during the time period in question.

[407] For example, issues arose between Mitsui and LDC when a quality control issue led to contaminated grain being delivered to Mitsui on or around June 8, 2014. It is clear from the record that Mitsui was extremely concerned by this incident (Mitsui On-board Inspection Request, Exhibit 969).

[408] Furthermore, Mr. Lussier acknowledged that LDC’s inability to fulfil certain orders, including orders by Mitsui, was caused in part by the service LDC received at locations other than the Four Elevators (namely from stocks being stored at the Dawson Creek and Rycroft elevators).

[409] Mitsui, as a global trading company, was certainly aware of the issues experienced by the entire industry in Canada in the Relevant Period and spoke about that in their letters. The evidence also showed that companies abroad were generally aware of the challenges faced by the Canadian grain transportation industry at the time, and that LDC itself was not creating the issues, but they were rather industry-wide challenges.

[410] Finally, there is no doubt that LDC obtained a larger number of railcars in the Spring of 2014. The car increases began after the government’s OIC that mandated both CN and CP to ensure service to the industry more broadly, on a threat of monetary penalties. Railcar supply increases continued as a result of the Agency’s Interim Order.

[411] These measures shifted market share to LDC: had LDC not received extra cars, its competitors would have sold more grain. It was a zero-sum game in that sense, given the limitation in the total number of railcars in CN’s inventory. If railcars were allocated to one customer, such as LDC, they were unavailable to others. Thus, when CN decided to allocate railcars to LDC in response to the Interim Order and Agency Decision, CN took those cars away from its three major customers and gave them instead to LDC. The Big 3 thus lost sales and profits that their grain transportation business would have otherwise generated, while LDC received those railcars.

[412] The same rationale applies to the “off the top” allocation choices made by CN after the Agency Decision, which impacted other competitors beyond the Big 3, to which they would have otherwise been allocated. This meant that each of the Big 3, in addition to the other competitors, such as Parrish & Heimbecker and Patterson Grain, lost out on sales to LDC, which continued to receive additional re-allocated railcars.

C. Conclusion on Third Head of Damages – Reputational Harm

[413] In short, LDC gained market share at the expense of its competitors later in the 2013‑2014 crop year. For the various reasons explained above, I am not convinced that LDC’s reputation was harmed as a result of CN’s service failures. Accordingly, I award no damages to LDC for this third part of its claim.

IX. Conclusion of Findings for this Action

[414] After considering and weighing the evidence, I find that LDC had the ability and infrastructure to process additional grain through its pipeline, with the concurrent potential to acquire ample supplies of canola and wheat from farmers who were desperate to move their product at prices favourable to LDC. At the same time, significant vessel terminal capacity existed in West Coast facilities during the Relevant Period. This would have allowed LDC to move the grain to overseas buyers, either directly through vessel terminals to which LDC had secured access, or through LDC’s competitors who, due to the rail shipping crisis, needed grain at their terminals to meet their own shortfalls in loading waiting vessels, and supplying their own international customers.

[415] First, I find LDC has made out its claim, on a balance of probabilities, that CN’s Breach caused it to lose sales and thus profits. If CN had not breached its level of service obligations and supplied the required railcars, LDC could and would have sold additional grain at rates favourable to it. LDC’s consequent losses from its foregone sales are not remote. Indeed, they were reasonably foreseeable. Despite CN’s emphasis on the frigid Winter and record harvest, LDC has satisfied me that the Breach would have resulted in lost profits “but for” the railcar shortfall during the Relevant Period.

[416] Second, I find that LDC incurred additional demurrage fees as a direct consequence of the railcar shortfall. I agree with CN that 70% of the total demurrage fees claimed by LDC should not be awarded. I award half of the fees claimed by LDC, namely 35% of their total demurrage fees, rather than the 70% claimed by LDC.

[417] Finally, on the third issue, I agree with CN that the only evidence of reputational harm accrued to Canada and its grain transportation and handling system, rather than to LDC, given that it failed to demonstrate any tangible loss resulting from reputational harm.

[418] To sum up, damages are awarded to LDC for CN’s service Breach during weeks 13 to 35 of the 2013‑2014 crop year, the Relevant Period. Those damages amount to CAD $21,641,943 for lost profit, and USD $1,857,863.30 and CAD $167,893.90 for vessel demurrage. No damages are awarded for the third head of reputational harm.

X. Interest

[419] The only matter that remains to be decided at this time is that of interest on the damages that have been assessed in these Reasons.

[420] LDC seeks pre‑ and post‑judgment interest at the rate of 5%, relying on section 3 of the Interest Act, RSC 1985, c I-15, s 3 [Interest Act]. This provision stipulates that a standard interest rate of 5% applies where interest is payable by agreement or by law, and where no rate is otherwise fixed. LDC suggests that applying a 5% rate is justified in this case.

[421] CN counters that the default Interest Act of 5% should not apply in this case, as it would “overcompensate” the Plaintiff. Rather, CN asks that I exercise my discretion to assign a rate lower that the 5%.

[422] Sections 36 and 37 of the Federal Courts Act, RSC, 1985, c F-7 FC Act] govern the award of pre‑ and post‑judgment interest. More specifically, the subsections 36(2) and 37(2) of the FC Act provide that where a cause of action arises in more than one province, as it is the case in this Action, the FCA or Federal Court of Canada may include in an award of damages pre‑ and post‑judgment interest at any rate that the Court considers reasonable in the circumstances. Pre‑judgment interest on unliquidated damages accrues from the date on which the claimant gave notice in writing to the defendant of its claim per the FC Act at paragraph 36(2)(b), while post‑judgment interest is calculated from the time of giving the judgment per subsection 37(2) of the FC Act.

[423] LDC relies on recent caselaw from this Court where my colleagues have relied on section 3 of the Interest Act to justify the 5% rate they are seeking (see for instance RS Marine Ltd v M/V Terre Neuvas (Ship), 2024 FC 1825 at paras 66, 69 [RS Marine]; Sani Bleu Inc v 9269-6806 Québec Inc, 2022 FC 1711 at paras 54‑55 [Sani Bleu]; Demirören TV Radyo Yayincilik Yapimcilik AS v General Entertainment and Music Inc, 2024 FC 1127 at paras 91‑92 [Demirören]). They also point to Dermaspark Products Inc v Patel, 2023 FC 388 [Dermaspark Products], at para 161.

[424] One of the factors this Court may consider in exercising its discretion to set an interest rate is the manner in which the proceedings were conducted (Apotex Inc v Wellcome Foundation Ltd (CA), 2000 CanLII 16270 (FCA) at para 124). In this case, LDC argues that this Action has now been ongoing for over 10 years and that the resolution of the matter was delayed by CN’s conduct in the proceedings.

[425] LDC points to (i) CN’s jurisdictional argument before this Court and subsequently in front of the FCA, which was resolved in 2019, and (ii) CN’s amendment to its pleadings as late as 2022, which necessitated a second round of examinations for discovery and document production, and thus further delayed obtaining a trial date, while the issues raised by CN in 2022 could and should have been raised at the onset of the litigation. LDC claims that because of these delays, it could have sought a higher interest rate from this Court than 5%.

[426] CN, on the other hand, submits that this Court has explicitly found that subsections 36(2) and 37(2) of the FC Act are processes provided “by law” (Seedlings Life Science Ventures, LLC v Pfizer Canada ULC, 2020 FC 505 [Seedlings]), and therefore the “default” proposed by LDC under the Interest Act does not apply in this case.

[427] Furthermore, CN points out that this Court has exercised its discretion to assign an interest rate lower than the 5% requested where it has found that a higher rate would “overcompensate” the plaintiff (Seedlings at paras 34-40; see also Guest Tek Interactive Entertainment Ltd v Nomadix, Inc, 2021 FC 848 at paras 78-79). CN argues that this is clearly a case where LDC would be overcompensated if this Court assigned a 5% rate, and submits that the modern approach to determining an appropriate interest rate was established by Justice Grammond in Boily v Canada, 2022 FC 1243 at para 298 [Boily], where he found that a 5% interest rate sought would overcompensate the plaintiff, and instead awarded pre‑judgment interest at a 2% rate and post‑judgment interest at a 4% rate:

[298] With respect to prejudgment interest, this Court’s practice is to award it according to the Bank of Canada’s borrowing rate, to which 1 percent is often added. With respect to post-judgment interest, this Court can set a higher rate, taking into account commercial rates or rates determined by provincial laws for post-judgment interest: Seedlings Life Science Ventures, LLC v. Pfizer Canada ULC, 2020 FC 505, 172 C.P.R. (4th) 375, at paragraphs 33–40.

[428] CN further rejects LDC’s argument that its conduct in this litigation caused delays. CN contends that this argument was previously rejected by this Court when it granted CN’s motion to amend its pleading (Order of Case Management Judge Kathleen Ring issued October 5, 2022 at para 5). Moreover, CN submits that the steps taken in this litigation were necessary to advance a proper defence, and that interest rates are compensatory in nature and not punitive (Seedlings at para 39, citing Bank of America Canada v Mutual Trust Co, 2002 SCC 43 at para 36 [Bank of America]).

[429] Ultimately, CN argues that the cases cited by LDC are distinguishable because they relate to significantly smaller sums of damages and interest accruing for shorter periods. CN submits that considering the sum claimed here and the several years of litigation, awarding a 5% interest rate would be inequitable and would result in LDC being overcompensated.

A. Pre-Judgment Interest

[430] In determining the appropriate rate of pre‑judgment interest, I have considered the guidance in Boily, where the Court adopted a calculation based on the Bank of Canada lending rate plus one percent as a guidepost. At the time of that decision, the Bank of Canada rate stood at 1.0%, resulting in an ultimate calculation of pre‑judgment interest rate of 2.0%. Since that time, however, the lending rate has fluctuated dramatically, reaching levels as high as 5%.

[431] In the present case, the award of simple (rather than compound) interest better reflects both the protracted duration of these proceedings and the volatility of the lending environment during that period. I agree with CN that nothing points to dilatory conduct. By the same token, I do not see that LDC would be overcompensated with a standard 5% imposition of interest (RS Marine, Sani Bleu, and Demirören). In my view, a 5% pre‑judgment interest rate is reasonable in the circumstances, and consistent with both sections 36(2)(1) and 27(2) of the FC Act, and the jurisprudence that has interpreted it. It will run from April 14, 2014.

B. Post‑Judgment Interest

[432] Post‑judgment interest under section 37(2) of the FC Act is a discretionary power aimed at placing a successful party entitled to damages in the same situation as if the if the damages had been paid immediately when they became due (Seedlings at par 39, Bank of America, at para 36).

[433] Were this Action confined to a single province, section 3 of the Interest Act would apply directly, prescribing a 5% rate for both pre‑ and post‑judgment interest. Although the present case is not so confined, several decisions have relied on the Interest Act as a persuasive guide (see, for instance, Janssen-Ortho Inc v Novopharm Ltd, 2006 FC 1234 at para 136, aff’d 2007 FCA 217; and Eli Lilly Canada Inc v Apotex Inc, 2015 FC 1165 at para 24). Considering that this proceeding commenced in 2015 and that the purpose of post‑judgment interest is to encourage timely satisfaction of the award, I am satisfied that a rate of 5% is fair, reasonable, and consistent with the equitable principles underlying such awards.

C. Conclusion on Interest

[434] Accordingly, I award pre‑judgment and post‑judgment interest at a rate of 5% per annum, calculated on a simple (non-compounded) basis. This rate appropriately reflects the prevailing lending environment over the relevant period, ensures the plaintiff is adequately compensated for the time value of money, and aligns with both statutory and jurisprudential guidance. It also serves the underlying purpose of post‑judgment interest: to encourage prompt satisfaction of the judgment while avoiding overcompensation.

XI. Costs

[435] The parties have agreed to address costs after the release of these Reasons. The Plaintiff will have 30 days after receipt of these Reasons to report their agreement on costs back to the Court. If an agreement cannot be reached in that time frame, each party will have an additional 30 days to provide costs submissions to the Court, of no more than 10 pages in length.

JUDGMENT in T-1292-15

THIS COURT’S JUDGMENT is that:

Damages for lost profit are awarded to LDC in the amount of $21,641,943 (CAD) for the Breach.
Damages for the demurrage fees are awarded to LDC in the amount of USD $1,857,863.30 and CAD $167,893.90 resulting from the Breach.
No damages will be awarded as LDC did not suffer reputational harm on account of the Breach.
Both pre‑ and post‑judgment interest will accrue at 5%.
LDC will have 30 days after receipt of these Reasons to report back to the Court any costs agreement that has been reached by the parties. If an agreement has not been reached in that time frame, each party will have an additional 30 concurrent days to provide costs submissions to the Court, of no more than 10 pages in length.

Alan S. Diner”

Judge

ANNEX A

Canada Transportation Act, SC 1996, c 10[1]

Loi sur les transports au Canada, LC 1996, ch 10

Review and Appeal	Révision et appel
Governor in Council may vary or rescind orders, etc.	Modification ou annulation
40 The Governor in Council may, at any time, in the discretion of the Governor in Council, either on petition of a party or an interested person or of the Governor in Council’s own motion, vary or rescind any decision, order, rule or regulation of the Agency, whether the decision or order is made inter partes or otherwise, and whether the rule or regulation is general or limited in its scope and application, and any order that the Governor in Council may make to do so is binding on the Agency and on all parties.	40 Le gouverneur en conseil peut modifier ou annuler les décisions, arrêtés, règles ou règlements de l’Office soit à la requête d’une partie ou d’un intéressé, soit de sa propre initiative; il importe peu que ces décisions ou arrêtés aient été pris en présence des parties ou non et que les règles ou règlements soient d’application générale ou particulière. Les décrets du gouverneur en conseil en cette matière lient l’Office et toutes les parties.
Appeal from Agency	Appel
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 on application made within one month after the date of the decision, order, rule or regulation being appealed from, or within any further time that a judge of that Court under special circumstances allows, and on notice to the parties and the Agency, and on hearing those of them that appear and desire to be heard.	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 sur demande présentée dans le mois suivant la date de l’acte ou dans le délai supérieur accordé par un juge de la cour en des circonstances spéciales, après notification aux parties et à l’Office et audition de ceux d’entre eux qui comparaissent et désirent être entendus.
[…]	[…]
Extraordinary Disruptions	Perturbations extraordinaires
Governor in Council may prevent disruptions	Mesures d’urgence prises par le gouverneur en conseil
47 (1) Where the Governor in Council is of the opinion that	47 (1) Le gouverneur en conseil peut, par décret, sur recommandation du ministre et du ministre responsable du Bureau de la politique de concurrence, prendre les mesures qu’il estime essentielles à la stabilisation du réseau national des transports ou ordonner à l’Office de prendre de telles mesures et, notamment, imposer des restrictions relativement à la capacité et aux prix s’il estime :
(a) an extraordinary disruption to the effective continued operation of the national transportation system exists or is imminent, other than a labour disruption,	a) qu’une perturbation extraordinaire de la bonne exploitation continuelle du réseau des transports — autre qu’en conflit de travail — existe ou est imminente;
(b) failure to act under this section would be contrary to the interests of users and operators of the national transportation system, and	b) que le fait de ne pas prendre un tel décret serait contraire aux intérêts des exploitants et des usagers du réseau national des transports;
(c) there are no other provisions in this Act or in any other Act of Parliament that are sufficient and appropriate to remedy the situation and counter the actual or anticipated damage caused by the disruption,	c) qu’aucune autre disposition de la présente loi ou d’une autre loi fédérale ne permettrait de corriger la situation et de remédier à des dommages ou en prévenir.
the Governor in Council may, on the recommendation of the Minister and the minister responsible for the Bureau of Competition Policy, by order, take any steps, or direct the Agency to take any steps, that the Governor in Council considers essential to stabilize the national transportation system, including the imposition of capacity and pricing restraints.	Blanc
[…]	[…]
DIVISION IV	SECTION IV
Rates, Tariffs and Services	Prix, tarif et services
Interpretation	Définitions
Definitions	Définitions
111 In this Division,	111 Les définitions qui suivent s’appliquent à la présente section.
*competitive line rate* [Repealed, 2018, c. 10, s. 22]	*prix de ligne concurrentiel* [Abrogée, 2018, ch. 10, art. 22]
*confidential contract* means a contract entered into under subsection 126(1); (contrat confidentiel)	*contrat confidentiel* Contrat conclu en application du paragraphe 126(1). (confidential contract)
*connecting carrier* means a railway company, other than a local carrier, that moves traffic to or from an interchange over a portion of a continuous route; (transporteur de liaison)	*transporteur de liaison* Compagnie de chemin de fer, transporteur local exclu, qui effectue du transport à destination ou à partir d’un lieu de correspondance sur une partie d’un parcours continu. (connecting carrier)
*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; (lieu de correspondance)	*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. (interchange)
*interswitch* means to transfer traffic from the lines of one railway company to the lines of another railway company; (interconnexion)	interconnexion Le transfert du trafic des lignes d’une compagnie de chemin de fer à celles d’une autre compagnie de chemin de fer. (interswitch)
*interswitching rate* means a rate determined by the Agency in accordance with section 127.1; (Version anglaise seulement)	blanc
*local carrier* means a class 1 rail carrier that moves traffic to or from an interchange on a continuous route from the point of origin or to the point of destination that is served exclusively by the class 1 rail carrier; (transporteur local)	*transporteur local* Transporteur ferroviaire de catégorie 1 qui effectue du transport à destination ou à partir d’un lieu de correspondance à un point d’origine ou à un point de destination qu’il dessert exclusivement. (local carrier)
*long-haul interswitching rate* means a rate determined by the Agency in accordance with paragraph 134(1)(a); (Version anglaise seulement)	Blanc
*service obligations* means obligations under section 113 or 114. (Version anglaise seulement)	Blanc
Rates and Conditions of Service	Prix et conditions de service
Commercially fair and reasonable	Obligation
112 A rate or condition of service established by the Agency under this Division must be commercially fair and reasonable to all parties.	112 Les prix et conditions visant les services fixés par l’Office au titre de la présente section doivent être commercialement équitables et raisonnables vis-à-vis des parties.
Level of Services	Niveau de services
Accommodation for traffic	Acheminement du trafic
113 (1) A railway company shall, according to its powers, in respect of a railway owned or operated by it,	113 (1) Chaque compagnie de chemin de fer, dans le cadre de ses attributions, relativement au chemin de fer qui lui appartient ou qu’elle exploite :
(a) furnish, at the point of origin, at the point of junction of the railway with another railway, and at all points of stopping established for that purpose, adequate and suitable accommodation for the receiving and loading of all traffic offered for carriage on the railway;	a) fournit, au point d’origine de son chemin de fer et au point de raccordement avec d’autres, et à tous les points d’arrêt établis à cette fin, des installations convenables pour la réception et le chargement des marchandises à transporter par chemin de fer;
(b) furnish adequate and suitable accommodation for the carriage, unloading and delivering of the traffic;	b) fournit les installations convenables pour le transport, le déchargement et la livraison des marchandises;
(c) without delay, and with due care and diligence, receive, carry and deliver the traffic;	c) reçoit, transporte et livre ces marchandises sans délai et avec le soin et la diligence voulus;
(d) furnish and use all proper appliances, accommodation and means necessary for receiving, loading, carrying, unloading and delivering the traffic; and	d) fournit et utilise tous les appareils, toutes les installations et tous les moyens nécessaires à la réception, au chargement, au transport, au déchargement et à la livraison de ces marchandises;
(e) furnish any other service incidental to transportation that is customary or usual in connection with the business of a railway company.	e) fournit les autres services normalement liés à l’exploitation d’un service de transport par une compagnie de chemin de fer.
Carriage on payment of rates	Paiement du prix
(2) Traffic must be taken, carried to and from, and delivered at the points referred to in paragraph (1)(a) on the payment of the lawfully payable rate.	(2) Les marchandises sont reçues, transportées et livrées aux points visés à l’alinéa (1)a) sur paiement du prix licitement exigible pour ces services.
Carriage on payment of levy	Paiement de la contribution
(2.1) If a railway company is to carry traffic in respect of which there is a levy under section 155.3 or 155.5, the traffic must be carried from a point referred to in paragraph (1)(a) by the railway company on the payment to the company of the levy, by the shipper, if the company is the first railway company to carry, at a rate other than an interswitching rate, the traffic after its loading.	(2.1) Lorsque le transport de marchandises par une compagnie de chemin de fer est associé à une contribution prévue aux articles 155.3 ou 155.5, celles-ci sont transportées par la compagnie de chemin de fer aux points visés à l’alinéa (1)a) sur paiement de la contribution par l’expéditeur à cette compagnie si elle est la première compagnie de chemin de fer à transporter les marchandises après leur chargement pour un prix autre qu’un prix fixé en application de l’article 127.1.
Compensation for provision of rolling stock	Indemnité de matériel roulant
(3) Where a shipper provides rolling stock for the carriage by the railway company of the shipper’s traffic, the company shall, at the request of the shipper, establish specific reasonable compensation to the shipper in a tariff for the provision of the rolling stock.	(3) Dans les cas où l’expéditeur fournit du matériel roulant pour le transport des marchandises par la compagnie, celle-ci prévoit dans un tarif, sur demande de l’expéditeur, une compensation spécifique raisonnable en faveur de celui-ci pour la fourniture de ce matériel.
Confidential contract between company and shipper	Contrat confidentiel
(4) A shipper and a railway company may, by means of a confidential contract or other written agreement, agree on the manner in which the obligations under this section are to be fulfilled by the company.	(4) Un expéditeur et une compagnie peuvent s’entendre, par contrat confidentiel ou autre accord écrit, sur les moyens à prendre par la compagnie pour s’acquitter de ses obligations.
Facilities for traffic	Installations de transport
114 (1) A railway company shall, according to its powers, afford to all persons and other companies all adequate and suitable accommodation for receiving, carrying and delivering traffic on and from its railway, for the transfer of traffic between its railway and other railways and for the return of rolling stock.	114 (1) Chaque compagnie de chemin de fer doit, dans le cadre de ses attributions, fournir aux personnes et compagnies les aménagements convenables pour la réception, le transport et la livraison de marchandises sur son chemin de fer et en provenance de celui-ci, pour le transfert des marchandises entre son chemin de fer et d’autres chemins de fer ainsi que pour le renvoi du matériel roulant.
Through traffic	Trafic d’entier parcours
(2) For the purposes of subsection (1), adequate and suitable accommodation includes reasonable facilities for the receiving, carriage and delivery by the company	(2) Pour l’application du paragraphe (1), les aménagements convenables comprennent des installations de réception, de transport et de livraison par la compagnie :
(a) at the request of any other company, of through traffic and, in the case of goods shipped by carload, of the car with the goods shipped in it, to and from the railway of the other company, at a through rate; and	a) à la demande d’une autre compagnie, de trafic d’entier parcours et, dans le cas de marchandises expédiées par wagons complets, du wagon et de son contenu à destination et en provenance du chemin de fer de cette autre compagnie, à un tarif d’entier parcours;
(b) at the request of any person interested in through traffic, of such traffic at through rates.	b) à la demande de tout intéressé au trafic d’entier parcours, de ce trafic à des tarifs d’entier parcours.
Connecting railway to reasonable facilities	Installations raisonnables
(3) Every railway company that has or operates a railway forming part of a continuous line of railway with or that intersects any other railway, or that has any terminus, station or wharf near to any terminus, station or wharf of another railway, shall afford all reasonable facilities for delivering to that other railway, or for receiving from or carrying by its railway, all the traffic arriving by that other railway without any unreasonable delay, so that	(3) Toute compagnie de chemin de fer possédant ou exploitant un chemin de fer qui, en se reliant à un autre chemin de fer, ou en le croisant, fait partie d’un parcours ininterrompu de chemin de fer, ou qui possède une tête de ligne, une gare ou un quai à proximité d’une tête de ligne, d’une gare ou d’un quai d’un autre chemin de fer, doit accorder toutes les installations raisonnables et voulues pour livrer à cet autre chemin de fer, ou pour en recevoir et expédier par sa propre voie, tout le trafic venant par cet autre chemin de fer, sans retard déraisonnable, et elle doit faire en sorte que le public désirant se servir de ces chemins de fer comme voie ininterrompue de communication n’y trouve pas d’obstacles à la circulation et puisse ainsi s’en servir en bénéficiant à tout moment de toutes les installations raisonnables de transport par les chemins de fer de ces diverses compagnies.
(a) no obstruction is offered to the public desirous of using those railways as a continuous line of communication; and	Blanc
(b) all reasonable accommodation, by means of the railways of those companies, is at all times afforded to the public for that purpose.	Blanc
Similar facilities for truckers	Facilités analogues
(4) If a railway company provides facilities for the transportation by rail of motor vehicles or trailers operated by any company under its control for the conveyance of goods for hire or reward,	(4) Si elle fournit des installations de transport par rail de véhicules automobiles ou de remorques exploités pour le transport de marchandises à titre onéreux par une compagnie dont elle a le contrôle, la compagnie de chemin de fer doit offrir à toutes les compagnies qui exploitent des véhicules automobiles ou des remorques pour le transport de marchandises à titre onéreux des installations semblables à celles qu’elle fournit pour les véhicules automobiles ou remorques exploités par la compagnie dont elle a le contrôle, aux mêmes prix et aux mêmes conditions; l’Office peut rejeter tout prix ou tarif qui n’est pas conforme au présent paragraphe et ordonner à la compagnie de chemin de fer d’y substituer un prix ou tarif conforme au présent paragraphe.
(a) the railway company shall offer to all companies operating motor vehicles or trailers for the conveyance of goods for hire or reward similar facilities at the same rates and on the same terms and conditions as those applicable to the motor vehicles or trailers operated by the company under its control; and	Blanc
(b) the Agency may disallow any rate or tariff that is not in compliance with this subsection and direct the company to substitute a rate or tariff that complies with this subsection.	Blanc
Adequate and suitable accommodation	Installations convenables
115 For the purposes of subsection 113(1) or 114(1), adequate and suitable accommodation includes reasonable facilities	115 Pour l’application des paragraphes 113(1) ou 114(1), des installations convenables comprennent des installations :
(a) for the junction of private sidings or private spurs with a railway owned or operated by a company referred to in that subsection; and	a) pour le raccordement de voies latérales ou d’épis privés avec un chemin de fer possédé ou exploité par une compagnie visée à ces paragraphes;
(b) for receiving, carrying and delivering traffic on and from private sidings or private spurs and placing cars and moving them on and from those private sidings or private spurs.	b) pour la réception, le transport et la livraison de marchandises sur des voies latérales ou épis privés, ou en provenance de ceux-ci, ainsi que le placement de wagons et leur traction dans un sens ou dans un autre sur ces voies ou épis.
Complaint and investigation concerning company’s obligations	Plaintes et enquêtes
116 (1) On receipt of a complaint made by any person that a railway company is not fulfilling any of its service obligations, the Agency shall	116 (1) Sur réception d’une plainte selon laquelle une compagnie de chemin de fer ne s’acquitte pas de ses obligations prévues par les articles 113 ou 114, l’Office mène, aussi rapidement que possible, l’enquête qu’il estime indiquée et décide, dans les quatre-vingt-dix jours suivant la réception de la plainte, si la compagnie s’acquitte de ses obligations.
(a) conduct, as expeditiously as possible, an investigation of the complaint that, in its opinion, is warranted; and	Blanc
(b) within 90 days after receipt of the complaint, determine whether the company is fulfilling that obligation.	Blanc
Time limits	Délais
(1.1) For the purpose of an investigation conducted under subsection (1), the Agency shall allow a company at least 20 days to file an answer and at least 10 days for a complainant to file a reply.	(1.1) Dans le cadre d’une enquête menée au titre du paragraphe (1), l’Office accorde à la compagnie au moins vingt jours pour produire sa réponse et au moins dix jours au plaignant pour produire sa réplique.
Agency’s own motion	Initiative de l’Office
(1.11) The Agency may, with the authorization of the Minister and subject to any terms and conditions that the Minister considers appropriate, of its own motion, conduct an investigation to determine whether a railway company is fulfilling its service obligations. The Agency shall conduct the investigation as expeditiously as possible and make its determination within 90 days after the investigation begins.	(1.11) L’Office peut, si le ministre l’autorise et selon les conditions que celui-ci estime indiquées, enquêter de sa propre initiative sur la question de savoir si une compagnie de chemin de fer s’acquitte de ses obligations prévues par les articles 113 ou 114. L’Office mène l’enquête aussi rapidement que possible et décide de la question dans les quatre-vingt-dix jours suivant le début de l’enquête.
Considerations	Éléments à prendre en compte
(1.2) The Agency shall determine that a company is fulfilling its service obligations if it is satisfied that the company provides the highest level of service in respect of those obligations that it can reasonably provide in the circumstances, having regard to the following considerations:	(1.2) L’Office décide que la compagnie s’acquitte de ses obligations prévues par les articles 113 ou 114 s’il est convaincu, compte tenu des éléments ci-après, que celle-ci fournit, en ce qui a trait à ces obligations, le niveau de services le plus élevé qu’elle peut raisonnablement fournir dans les circonstances :
(a) the traffic to which the service obligations relate;	a) le transport en cause;
(b) the reasonableness of the shipper’s requests with respect to the traffic;	b) le caractère raisonnable des demandes de l’expéditeur pour le transport en cause;
(c) the service that the shipper requires with respect to the traffic;	c) les services dont l’expéditeur a besoin pour le transport en cause;
(d) any undertaking with respect to the traffic given by the shipper to the company;	d) les engagements pris par l’expéditeur envers la compagnie relativement au transport en cause;
(e) the company’s and the shipper’s operational requirements and restrictions;	e) les besoins et les contraintes de l’expéditeur et de la compagnie en matière d’exploitation;
(f) the company’s obligations, if any, with respect to a public passenger service provider;	f) les obligations que peut avoir la compagnie envers une société de transport publique;
(g) the company’s obligations in respect of the operation of the railway under this Act;	g) les obligations de la compagnie au titre de la présente loi relativement à l’exploitation du chemin de fer;
(h) the company’s contingency plans to allow it to fulfil its service obligations when faced with foreseeable or cyclical events; and	h) les plans établis par la compagnie pour lui permettre de s’acquitter de ses obligations prévues par les articles 113 ou 114 quand elle fait face à des situations cycliques ou prévisibles;
(i) any information that the Agency considers relevant.	i) les renseignements qu’il estime pertinents.
Confidential contract binding on Agency	Contrat confidentiel
(2) If a company and a shipper agree, by means of a confidential contract, on the manner in which service obligations under section 113 are to be fulfilled by the company, the terms of that agreement are binding on the Agency in making its determination.	(2) Dans les cas où une compagnie et un expéditeur conviennent, par contrat confidentiel, de la manière dont la compagnie s’acquittera de ses obligations prévues par l’article 113, les clauses du contrat lient l’Office dans sa décision.
Long-haul interswitching order binding on Agency	Arrêté d’interconnexion de longue distance
(3) If a long-haul interwitching (The apparent omission of “s” in “interswitching” appears to be a drafting error.) order has been made under subsection 134(1), the terms established by the order that are related to the manner in which the local carrier is to fulfil its service obligations are binding on the Agency in making its determination.	(3) Dans sa décision, l’Office est lié par l’arrêté d’interconnexion de longue distance pris en vertu du paragraphe 134(1) en ce qui concerne les moyens à prendre par le transporteur local pour s’acquitter de ses obligations prévues par les articles 113 et 114.
Orders of Agency	Arrêtés de l’Office
(4) If the Agency determines that a company is not fulfilling any of its service obligations, the Agency may	(4) L’Office, ayant décidé qu’une compagnie ne s’acquitte pas de ses obligations prévues par les articles 113 ou 114, peut :
(a) order that	a) ordonner la prise de l’une ou l’autre des mesures suivantes :
(i) specific works be constructed or carried out,	(i) la construction ou l’exécution d’ouvrages spécifiques,
(ii) property be acquired,	(ii) l’acquisition de biens,
(iii) cars, motive power or other equipment be allotted, distributed, used or moved as specified by the Agency, or	(iii) l’attribution, la distribution, l’usage ou le déplacement de wagons, de moteurs ou d’autre matériel selon ses instructions,
(iv) any specified steps, systems or methods be taken or followed by the company;	(iv) la prise de mesures ou l’application de systèmes ou de méthodes par la compagnie;
(b) specify in the order the maximum charges that may be made by the company in respect of the matter so ordered;	b) préciser le prix maximal que la compagnie peut exiger pour mettre en œuvre les mesures qu’il impose;
(c) order the company to fulfil that obligation in any manner and within any time or during any period that the Agency deems expedient, having regard to all proper interests, and specify the particulars of the obligation to be fulfilled;	c) ordonner à la compagnie de remplir ses obligations selon les modalités de forme et de temps qu’il estime indiquées, eu égard aux intérêts légitimes, et préciser les détails de l’obligation à respecter;
(c.1) order the company to compensate any person adversely affected for any expenses that they incurred as a result of the company’s failure to fulfil its service obligations or, if the company is a party to a confidential contract with a shipper that requires the company to pay an amount of compensation for expenses incurred by the shipper as a result of the company’s failure to fulfil its service obligations, order the company to pay that amount to the shipper;	c.1) ordonner à la compagnie d’indemniser toute personne lésée des dépenses qu’elle a supportées en conséquence du non-respect des obligations de la compagnie ou, si celle-ci est partie à un contrat confidentiel avec un expéditeur qui prévoit qu’elle versera, en cas de manquement à ses obligations, une indemnité pour les dépenses que l’expéditeur a supportées en conséquence du non-respect des obligations de la compagnie, lui ordonner de verser à l’expéditeur cette indemnité;
(d) if the service obligation is in respect of a grain-dependent branch line listed in Schedule I, order the company to add to the plan it is required to prepare under subsection 141(1) an indication that it intends to take steps to discontinue operating the line; or	d) en cas de manquement à une obligation de service relative à un embranchement tributaire du transport du grain mentionné à l’annexe I, ordonner à la compagnie d’ajouter l’embranchement au plan visé au paragraphe 141(1) à titre de ligne dont elle entend cesser l’exploitation;
(e) if the service obligation is in respect of a grain-dependent branch line listed in Schedule I, order the company, on the terms and conditions that the Agency considers appropriate, to grant to another railway company the right	e) en cas de manquement à une obligation de service relative à un embranchement tributaire du transport du grain mentionné à l’annexe I, ordonner à la compagnie, selon les modalités qu’il estime indiquées, d’autoriser une autre compagnie :
(i) to run and operate its trains over and on any portion of the line, and	(i) à faire circuler et à exploiter ses trains sur toute partie de l’embranchement,
(ii) in so far as necessary to provide service to the line, to run and operate its trains over and on any portion of any other portion of the railway of the company against which the order is made but not to solicit traffic on that railway, to take possession of, use or occupy any land belonging to that company and to use the whole or any portion of that company’s right-of-way, tracks, terminals, stations or station grounds.	(ii) dans la mesure nécessaire pour assurer le service sur l’embranchement, à faire circuler et à exploiter ses trains sur toute autre partie du chemin de fer de la compagnie, sans toutefois lui permettre d’offrir des services de transport sur cette partie du chemin de fer, de même qu’à utiliser ou à occuper des terres lui appartenant, ou à prendre possession de telles terres, ou à utiliser tout ou partie de l’emprise, des rails, des têtes de lignes, des gares ou des terrains lui appartenant.
Right of action on default	Droit d’action
(5) Every person aggrieved by any neglect or refusal of a company to fulfil its service obligations has, subject to this Act, an action for the neglect or refusal against the company.	(5) Quiconque souffre préjudice de la négligence ou du refus d’une compagnie de s’acquitter de ses obligations prévues par les articles 113 ou 114 possède, sous réserve de la présente loi, un droit d’action contre la compagnie.
Right of action not limited	Droit d’action non affecté
(5.1) If an arbitrator’s decision made under section 169.37 includes a term with respect to an amount described in paragraph 169.31(1)(c.1), the term does not limit the right to claim an amount of compensation in an action under subsection (5).	(5.1) Si une décision arbitrale rendue en vertu de l’article 169.37 établit les modalités concernant les sommes à payer par la compagnie en cas de non-respect des conditions d’exploitation, ces modalités ne limitent pas le droit d’action en ce qui a trait au montant de l’indemnisation qui peut être demandé.
Company not relieved	Compagnie non soustraite
(6) Subject to the terms of a confidential contract referred to in subsection 113(4) or a tariff that sets out, in accordance with subsection 136.4(1), terms established in a long-haul interswitching order, a company is not relieved from an action taken under subsection (5) by any notice, condition or declaration if the damage claimed in the action arises from any negligence or omission of the company or any of its employees.	(6) Sous réserve des stipulations d’un contrat confidentiel visé au paragraphe 113(4) ou d’un tarif où figurent, en application du paragraphe 136.4(1), les termes établis par un arrêté d’interconnexion de longue distance, une compagnie n’est pas soustraite à une action intentée en vertu du paragraphe (5) par un avis, une condition ou une déclaration, si le dommage allégué est causé par la négligence ou les omissions de la compagnie ou d’un de ses employés.
[…]	[…]
Confidential contracts	Contrats confidentiels
Confidential contracts	Conclusion de contrats confidentiels
126 (1) A railway company may enter into a contract with a shipper that the parties agree to keep confidential respecting	126 (1) Les compagnies de chemin de fer peuvent conclure avec les expéditeurs un contrat, que les parties conviennent de garder confidentiel, en ce qui concerne :
(a) the rates to be charged by the company to the shipper;	a) les prix exigés de l’expéditeur par la compagnie;
(b) reductions or allowances pertaining to rates in tariffs that have been issued and published in accordance with this Division;	b) les baisses de prix, ou allocations afférentes à ceux-ci, indiquées dans les tarifs établis et publiés conformément à la présente section;
(c) rebates or allowances pertaining to rates in tariffs or confidential contracts that have previously been lawfully charged;	c) les rabais sur les prix, ou allocations afférentes à ceux-ci, établis dans les tarifs ou dans les contrats confidentiels, qui ont antérieurement été exigés licitement;
(d) the manner in which the company is to fulfil its service obligations under section 113; and	d) les moyens pris par la compagnie pour s’acquitter de ses obligations en application de l’article 113;
(e) any conditions relating to the traffic to be moved by the company, including any amount to be paid by the company or the shipper in relation to a failure to comply with any condition related to the service obligations referred to in paragraph (d).	e) les conditions relatives au transport à effectuer par la compagnie, notamment les sommes à payer par la compagnie ou l’expéditeur en cas de non-respect de toute condition liée aux obligations visées à l’alinéa d).
Request for confidential contract	Demande de contrat confidentiel
(1.1) A shipper may request that a railway company make it an offer to enter into a contract under subsection (1) with the railway company respecting	(1.1) L’expéditeur peut demander à une compagnie de chemin de fer de lui présenter une offre en vue de la conclusion d’un contrat, en application du paragraphe (1), concernant :
(a) the manner in which the company is to fulfil its service obligations under section 113; or	a) les moyens que celle-ci doit prendre pour s’acquitter de ses obligations en application de l’article 113;
(b) any amount to be paid in relation to the company’s or the shipper’s failure to comply with a term related to those service obligations, the purpose of which is to encourage the efficient movement of the shipper’s traffic and the performance of the railway system.	b) les sommes à payer, pour encourager l’efficacité du transport des marchandises de l’expéditeur et l’amélioration du rendement du système de chemin de fer, en cas de non-respect, par la compagnie ou l’expéditeur, des conditions liées à ces obligations.
Restriction	Restriction
(1.11) The shipper may only make a request in respect of an amount described in paragraph (1.1)(b) if the amount relates to a term that is included in the request under subsection (1.1).	(1.11) L’expéditeur ne peut présenter une demande au titre du paragraphe (1.1) concernant les sommes à payer en cas de non-respect par la compagnie ou l’expéditeur des conditions liées aux obligations prévues par l’article 113 qu’à l’égard de celles de ces conditions qui sont elles aussi visées par la demande.
Content of request	Contenu de la demande
(1.2) The request must describe the traffic to which it relates, the services requested by the shipper with respect to the traffic and any undertaking that the shipper is prepared to give to the railway company with respect to the traffic or services.	(1.2) La demande mentionne le transport en cause, les services exigés par l’expéditeur à l’égard de celui-ci et tout engagement que l’expéditeur est disposé à prendre envers la compagnie de chemin de fer relativement au transport ou aux services.
Offer	Offre
(1.3) The railway company must make its offer within 30 days after the day on which it receives the request.	(1.3) La compagnie de chemin de fer est tenue de présenter l’offre dans les trente jours suivant la date de réception de la demande.
Exception to offer	Exception
(1.4) Subject to subsection (1.5), the railway company is not required to include in its offer terms with respect to a matter that	(1.4) Sous réserve du paragraphe (1.5), la compagnie de chemin de fer n’est toutefois pas tenue d’inclure dans son offre une stipulation portant sur une question qui, selon le cas :
(a) is governed by a written agreement to which the shipper and the railway company are parties;	a) fait l’objet d’un accord écrit auquel l’expéditeur et la compagnie de chemin de fer sont parties;
(b) is the subject of an order, other than an interim order, made under subsection 116(4);	b) est visée par un arrêté, autre qu’un arrêté provisoire, pris en vertu du paragraphe 116(4);
(c) is set out in a tariff referred to in subsection 136.4(1) or 165(3); or	c) figure dans un tarif visé aux paragraphes 136.4(1) ou 165(3);
(d) is the subject of an arbitration decision made under section 169.37.	d) fait l’objet d’une décision arbitrale rendue en vertu de l’article 169.37.
Clarification	Précision
(1.5) The railway company must include in its offer terms with respect to a matter that is governed by an agreement, the subject of an order or decision or set out in a tariff, referred to in subsection (1.4) if the agreement, order, decision or tariff expires within two months after the day on which the railway company receives the request referred to in subsection (1.1). The terms must apply to a period that begins after the agreement, order, decision or tariff expires.	(1.5) La compagnie de chemin de fer est toutefois tenue d’inclure dans son offre une telle stipulation si l’accord, l’arrêté, le tarif ou la décision arbitrale visés au paragraphe (1.4) expirent dans les deux mois suivant la date de réception de la demande prévue au paragraphe (1.1). La stipulation s’applique alors à la période postérieure à l’expiration.
No investigation or arbitration of confidential contracts	Arbitrage
(2) No party to a confidential contract is entitled to submit a matter governed by the contract to the Agency for final offer arbitration under section 161, without the consent of all the parties to the contract.	(2) Toute demande d’arbitrage au titre de l’article 161 sur une question faisant l’objet d’un contrat confidentiel est subordonnée à l’assentiment de toutes les parties au contrat.

Order Imposing Measures to Address the Extraordinary Disruption to the National Transportation System in Relation to Grain Movement, SOR/2014-55

Décret imposant des mesures pour régler la perturbation extraordinaire du réseau national des transports liée au mouvement du grain, DORS/2014-55

Whereas the Governor in Council is of the opinion that an extraordinary disruption to the effective continued operation of the national transportation system, other than a labour disruption, exists;	Attendu que le gouverneur en conseil estime qu’une perturbation extraordinaire de la bonne exploitation continuelle du réseau national des transports — autre qu’en conflit de travail — existe;
Whereas the Governor in Council is of the opinion that a failure to act under section 47 of the Canada Transportation Act^a at this time would be contrary to the interests of users and operators of the national transportation system;	Attendu que le gouverneur en conseil estime que le fait de ne pas prendre un décret comme le permet l’article 47 de la Loi sur les transports au Canadaa serait contraire aux intérêts des exploitants et des usagers du réseau national des transports;
And whereas the Governor in Council is of the opinion that there are no other provisions in that Act or in any other Act of Parliament that are sufficient and appropriate to remedy the situation and counter the anticipated damage that would be caused by the disruption;	Attendu que le gouverneur en conseil estime qu’aucune autre disposition de cette loi ou d’une autre loi fédérale ne permettrait de corriger la situation et de remédier à des dommages ou de les prévenir,
Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Transport, and of the Minister of Industry in the Minister’s capacity as the minister responsible for the Competition Bureau, pursuant to section 47 of the Canada Transportation Act^a, makes the annexed Order Imposing Measures to Address the Extraordinary Disruption to the National Transportation System in Relation to Grain Movement.	À ces causes, sur recommandation de la ministre des Transports et du ministre de l’Industrie à titre de ministre responsable du Bureau de la concurrence et en vertu de l’article 47 de la Loi sur les transports au Canadaa, Son Excellence le Gouverneur général en conseil prend le Décret imposant des mesures pour régler la perturbation extraordinaire du réseau national des transports liée au mouvement du grain, ci-après.
Definitions	Définitions
1 The following definitions apply in this Order.	1 Les définitions qui suivent s’appliquent au présent décret.
grain means any grain, crop or product listed in Schedule II to the Canada Transportation Act. (grain)	grain Tous les grains, plantes et produits énumérés à l’annexe II de la Loi sur les transports au Canada. (grain)
move means to carry grain over a railway line from a point on any rail line west of Thunder Bay or Armstrong, Ontario, to any point in Canada or the United States or beyond for unloading. (transporter)	transporter Action de transporter du grain sur une ligne ferroviaire à partir d’un point sur toute ligne ferroviaire située à l’ouest de Thunder Bay ou d’Armstrong (Ontario) vers tout point situé au Canada ou aux États-Unis ou au delà pour déchargement. (move)
Measures	Mesures
2 Subject to volume demand and corridor capacity, the Canadian National Railway Company and the Canadian Pacific Railway Company must each move the following minimum amounts of grain:	2 Sous réserve de la demande en volume et de la capacité des corridors, la Compagnie des chemins de fer du Canada et la Compagnie de chemin de fer Canadien Pacifique transportent chacune la quantité minimum de grains suivante :
(a) during the first full crop week after the day on which this Order comes into force, a minimum of 250,000 t;	a) au cours de la première semaine agricole complète après l’entrée en vigueur du présent décret, 250 000 tonnes métriques;
(b) during the second full crop week after the day on which this Order comes into force, a minimum of 312,500 t;	b) au cours de la deuxième semaine agricole complète après l’entrée en vigueur du présent décret, 312 500 tonnes métriques;
(c) during the third full crop week after the day on which this Order comes into force, a minimum of 375,000 t;	c) au cours de la troisième semaine agricole complète après l’entrée en vigueur du présent décret, 375 000 tonnes métriques;
(d) during the fourth full crop week after the day on which this Order comes into force, a minimum of 437,500 t; and	d) au cours de la quatrième semaine agricole complète après l’entrée en vigueur du présent décret, 437 500 tonnes métriques :
(e) during any subsequent full crop week after the day on which this Order comes into force, a minimum of 500,000 t.	e) au cours de toute autre semaine subséquente après l’entrée en vigueur du présent décret, 500 000 tonnes métriques.
Reporting	Rapports
3 The Canadian National Railway Company and the Canadian Pacific Railway Company must provide the Minister of Transport with a report indicating the weekly volume demand and the volumes of grain moved in each corridor, within one week after the end of a crop week.	3 La Compagnie des chemins de fer nationaux du Canada et la Compagnie de chemin de fer Canadien Pacifique fournissent au ministre des Transports la demande hebdomadaire en volume et les volumes de grain transportés pour chaque corridor dans la semaine suivant la fin d’une semaine agricole.
Effective period	Mesure temporaire
4 This Order is effective for a period of 90 days after the day on which the Order comes into force.	4 Le présent décret vaut pour une période de quatre-vingt-dix jours après son entrée en vigueur.
Coming into force	Entrée en vigueur
5 This Order comes into force on the day on which it is registered.	5 Le présent décret entre en vigueur à la date de son enregistrement.

Railway Act, RSC 1906, c 37, section 284(7)

Loi sur les chemins de fer, SRC 1906, c 37, article 284(7)

Right of action on default

Droit d’action en cas de défaut

7. Every person aggrieved by any neglect or refusal of the company to comply with the requirements of this section shall, subject to this Act, have an action therefor against the company, from which action the company shall not be relieved by any notice, condition or declaration, if the damage arises from any negligence or omission of the company or its servant.

7. Toute personne lésée par quelque négligence ou refus de la Compagnie de se conformer aux exigences du présent article, sauf les restrictions imposées par la présente loi, a droit d’action pour dommages-intérêts contre la Compagnie ; et la Compagnie ne peut se mettre à l’abri de dette action par aucun avis, condition ou déclaration, si le tort fait a cette personne résulte d’une négligence ou omission de la Compagne ou de ses employés.

Railway Act, RSC 1970, c R 2, section 262(7)

Loi sur les chemins de fer, LRC 1970, c R 2, article 262(7)

Right of action on default

Droit d’action en cas de défaut

(7) Every person aggrieved by any neglect or refusal of the company to comply with the requirements of this section has, subject to this Act, an action therefor against the company from which action the company is not relieved by any notice, condition or declaration, if the damage arises from any negligence or omission of the company or of its servant.

(7) Quiconque a été lèse par la négligence ou le refus de la compagnie de se conformer aux exigences du présent article, a, sous réserve de la présente loi, le droit d’intenter une poursuite contre la compagnie ; et la compagnie ne peut se mettre à l’abri de cette poursuite en invoquant un avis, une condition ou une déclaration, si le tort résulte d’une négligence ou d’une omission de la compagnie ou de ses employés.

Interest Act, RSC 1985, c I-15

Loi sur l’intérêt, LRC (1985), ch I-15

Rate of Interest	Taux d’intérêt
Interest rate when none provided	Taux d’intérêt lorsque non fixé
3 Whenever any interest is payable by the agreement of parties or by law, and no rate is fixed by the agreement or by law, the rate of interest shall be five per cent per annum.	3 Chaque fois que de l’intérêt est exigible par convention entre les parties ou en vertu de la loi, et qu’il n’est pas fixé de taux en vertu de cette convention ou par la loi, le taux de l’intérêt est de cinq pour cent par an.

Federal Courts Act, RSC 1985, c F-7

Loi sur les Cours fédérales, LRC (1985), ch F-7

Substantive Provisions	Dispositions de fond
Prejudgment interest — cause of action within province	Intérêt avant jugement — Fait survenu dans une province
36 (1) Except as otherwise provided in any other Act of Parliament, and subject to subsection (2), the laws relating to prejudgment interest in proceedings between subject and subject that are in force in a province apply to any proceedings in the Federal Court of Appeal or the Federal Court in respect of any cause of action arising in that province.	36 (1) Sauf disposition contraire de toute autre loi fédérale, et sous réserve du paragraphe (2), les règles de droit en matière d’intérêt avant jugement qui, dans une province, régissent les rapports entre particuliers s’appliquent à toute instance devant la Cour d’appel fédérale ou la Cour fédérale et dont le fait générateur est survenu dans cette province.
Prejudgment interest — cause of action outside province	Intérêt avant jugement — Fait non survenu dans une seule province
(2) A person who is entitled to an order for the payment of money in respect of a cause of action arising outside a province or in respect of causes of action arising in more than one province is entitled to claim and have included in the order an award of interest on the payment at any rate that the Federal Court of Appeal or the Federal Court considers reasonable in the circumstances, calculated	(2) Dans toute instance devant la Cour d’appel fédérale ou la Cour fédérale et dont le fait générateur n’est pas survenu dans une province ou dont les faits générateurs sont survenus dans plusieurs provinces, les intérêts avant jugement sont calculés au taux que la Cour d’appel fédérale ou la Cour fédérale, selon le cas, estime raisonnable dans les circonstances et :
(a) where the order is made on a liquidated claim, from the date or dates the cause of action or causes of action arose to the date of the order; or	a) s’il s’agit d’une créance d’une somme déterminée, depuis la ou les dates du ou des faits générateurs jusqu’à la date de l’ordonnance de paiement;
(b) where the order is made on an unliquidated claim, from the date the person entitled gave notice in writing of the claim to the person liable therefor to the date of the order.	b) si la somme n’est pas déterminée, depuis la date à laquelle le créancier a avisé par écrit le débiteur de sa demande jusqu’à la date de l’ordonnance de paiement.
Interest on special damages	Dommages-intérêts spéciaux
(3) Where an order referred to in subsection (2) includes an amount for special damages, the interest shall be calculated under that subsection on the balance of special damages incurred as totalled at the end of each six month period following the notice in writing referred to in paragraph (2)(b) and at the date of the order.	(3) Si l’ordonnance de paiement accorde des dommages-intérêts spéciaux, les intérêts prévus au paragraphe (2) sont calculés sur le solde du montant des dommages-intérêts spéciaux accumulés à la fin de chaque période de six mois postérieure à l’avis écrit mentionné à l’alinéa (2)b) ainsi qu’à la date de cette ordonnance.
Exceptions	Exceptions
(4) Interest shall not be awarded under subsection (2)	(4) Il n’est pas accordé d’intérêts aux termes du paragraphe (2) :
(a) on exemplary or punitive damages;	a) sur les dommages-intérêts exemplaires ou punitifs;
(b) on interest accruing under this section;	b) sur les intérêts accumulés aux termes du présent article;
(c) on an award of costs in the proceeding;	c) sur les dépens de l’instance;
(d) on that part of the order that represents pecuniary loss arising after the date of the order and that is identified by a finding of the Federal Court of Appeal or the Federal Court;	d) sur la partie du montant de l’ordonnance de paiement que la Cour d’appel fédérale ou la Cour fédérale, selon le cas, précise comme représentant une perte pécuniaire postérieure à la date de cette ordonnance;
(e) where the order is made on consent, except by consent of the debtor; or	e) si l’ordonnance de paiement est rendue de consentement, sauf si le débiteur accepte de les payer;
(f) where interest is payable by a right other than under this section.	f) si le droit aux intérêts a sa source ailleurs que dans le présent article.
Judicial discretion	Discrétion judiciaire
(5) The Federal Court of Appeal or the Federal Court may, if it considers it just to do so, having regard to changes in market interest rates, the conduct of the proceedings or any other relevant consideration, disallow interest or allow interest for a period other than that provided for in subsection (2) in respect of the whole or any part of the amount on which interest is payable under this section.	(5) La Cour d’appel fédérale ou la Cour fédérale, selon le cas, peut, si elle l’estime juste compte tenu de la fluctuation des taux d’intérêt commerciaux, du déroulement des procédures et de tout autre motif valable, refuser l’intérêt ou l’accorder pour une période autre que celle prévue à l’égard du montant total ou partiel sur lequel l’intérêt est calculé en vertu du présent article.
Application	Application
(6) This section applies in respect of the payment of money under judgment delivered on or after the day on which this section comes into force, but no interest shall be awarded for a period before that day.	(6) Le présent article s’applique aux sommes accordées par jugement rendu à compter de la date de son entrée en vigueur. Aucun intérêt ne peut être accordé à l’égard d’une période antérieure à cette date.
Canadian maritime law	Droit maritime canadien
(7) This section does not apply in respect of any case in which a claim for relief is made or a remedy is sought under or by virtue of Canadian maritime law.	(7) Le présent article ne s’applique pas aux procédures en matière de droit maritime canadien.
Judgment interest — causes of action within province	Intérêt sur les jugements — Fait survenu dans une seule province
37 (1) Except as otherwise provided in any other Act of Parliament and subject to subsection (2), the laws relating to interest on judgments in causes of action between subject and subject that are in force in a province apply to judgments of the Federal Court of Appeal or the Federal Court in respect of any cause of action arising in that province.	37 (1) Sauf disposition contraire de toute autre loi fédérale et sous réserve du paragraphe (2), les règles de droit en matière d’intérêt pour les jugements qui, dans une province, régissent les rapports entre particuliers s’appliquent à toute instance devant la Cour d’appel fédérale ou la Cour fédérale et dont le fait générateur est survenu dans cette province.
Judgment interest — causes of action outside or in more than one province	Intérêt sur les jugements — Fait non survenu dans une seule province
(2) A judgment of the Federal Court of Appeal or the Federal Court in respect of a cause of action arising outside a province or in respect of causes of action arising in more than one province bears interest at the rate that court considers reasonable in the circumstances, calculated from the time of the giving of the judgment.	(2) Dans le cas où le fait générateur n’est pas survenu dans une province ou dans celui où les faits générateurs sont survenus dans plusieurs provinces, le jugement porte intérêt, à compter de son prononcé, au taux que la Cour d’appel fédérale ou la Cour fédérale, selon le cas, estime raisonnable dans les circonstances.

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:	T-1292-15
STYLE OF CAUSE:	LOUIS DREYFUS COMPANY CANADA ULC v CANADA NATIONAL RAILWAY COMPANY
PLACE OF HEARING:	vancouver, british columbia
DATES OF HEARING:	november 25, 26, 27, 28, 2024, December 2, 3 4, 5, 10, 11, 12, 16, 17, 2024 January 13, 14, 2025
JUDGMENT AND REASONS:	DINER J.
DATED:	november 25, 2025

APPEARANCES:

John Landry

Alex Hudson

Stephanie Wright

Tea Mimic

For The Plaintiff

Douglas Hodson

Kristen MacDonald

Nathaniel Wingerak

Erica Klassen

For The defendant

SOLICITORS OF RECORD:

DLA Piper (Canada) LLP

Barristers and Solicitors

Vancouver, British Columbia

For The plaintifF

MLT Aikins LLP

Barristers and Solicitors

Saskatoon, Saskatchewan

For The defendant

[1] Current version of the relevant legislation has been utilized throughout. That is the version the Parties provided, and a comparison of previous versions to the current version indicates that any changes that have been made to the legislation since LDC made its Complaint in 2014 have not impacted the sections that are relevant to this Action.

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Louis Dreyfus Company Canada ULC v. Canada National Railway Company, 2025 FC 1868

Citations2025 FC 1868

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