Date:
20080403
Docket: A-220-07
Citation: 2008 FCA 123
CORAM: DESJARDINS
J.A.
NOËL
J.A.
TRUDEL
J.A.
BETWEEN:
CANADIAN NATIONAL RAILWAY
COMPANY
Appellant
and
CANADIAN TRANSPORTATION AGENCY
Respondent
REASONS FOR JUDGMENT
NOËL
J.A.
[1]
This is an appeal by the Canadian National Railway Company (“CN”) from a
decision of the Canadian Transportation Agency (the “Agency”), dated December
29, 2006 regarding CN’s maximum grain revenue entitlement for the 2005-2006
crop year. Leave to appeal this decision was granted by this Court insofar as
it relates to the portion of revenues which may reasonably be characterized as
relating to demurrage (paragraph 150(3)(b) of Canada Transportation
Act, S.C. 1996, c. 10 ( the “CTA”)) and the portion of
intermodal revenues that properly relates to rail transport.
RELEVANT FACTS
[2]
Prior to August 1, 2000, the movement of western grain, for export, from
points in Western Canada to Thunder Bay and to Vancouver and Prince
Rupert was regulated on the basis of maximum rates. On August 1, 2000 the rate
regulation regime was replaced with the regulation of maximum annual revenues
that prescribed railway companies can earn for the movement of western grain as
set out in Division VI, Part III, sections 150 and 151 of the CTA.
[3]
According to these provisions, the Agency must first determine the
maximum revenue entitlement (the “Revenue Cap”) for each prescribed railway
company, from rail transportation of regulated grain for each year, ending July
31 (the “crop year”), according to the formula set out in section 151 of the
CTA. The Agency must then compare the Revenue Cap to the prescribed railway
company’s actual revenues related to the rail transport of regulated western
grain for the crop year (the “Western Grain Revenues”), taking into account
allowable exclusions including that set out in respect of revenues from
demurrage. If the Agency determines that a railway company’s Western Grain
Revenues exceed the company’s Revenue Cap, the excess amounts, together with a
related penalty, must be paid in accordance with the requirements set out in
the Railway Company Pay Out of Excess Revenue for the Movement of Grain
Regulations, SOR/2001-207 (the “Regulations”).
[4]
In this appeal, CN takes issue with the Agency’s decision to decrease
the amount of revenue attributable to demurrage, thereby increasing its Western
Grain Revenues by a corresponding amount. CN also takes issue with the Agency’s
decision to increase the portion of intermodal transport revenues attributed to
rail transport – and decrease the portion attributable to road transport –
thereby again increasing CN’s Western Grain Revenues. The challenged increases
represent in total $496,900 out of Western Grain Revenues which the Agency has
established at $398,438,496 for the crop year in issue.
Demurrage
[5]
While the CTA does not define “demurrage”, its meaning was firmly
ascertained in Canadian Pacific Railway Company v. Canadian Transportation
Agency and Canadian Wheat Board, [2003] 4 F.C. 558 (C.A.) (“C.P. Rail”
or “the demurrage decision”). At issue in that case was whether
certain amounts charged by CP as demurrage could be held by the Agency as
falling outside that description on the basis that the revenues attributable to
demurrage were unreasonable (C.P. Rail, supra, para. 4).
Rothstein J.A. (as he then was) identified the meaning of demurrage by
referring to the following judicial statement (para. 7):
As stated by
Rand J. in The North-West Line Elevators Association v. Canadian Pacific
Railway Co. ([1959] S.C.R. 239 at 244) demurrage charges "are
concerned with the unreasonable detention of railway equipment." The
parties have agreed, for the purposes of these proceedings, that demurrage
could be defined as:
A
charge made by the Railways for the detention of a freight car beyond the free
time provided for by the applicable special arrangements tariffs and is
intended as an inducement to promptly release the freight car, and
alternatively, to compensate partially the Railways, should the freight car be
detained beyond the free time allowance.
The Agency also defined demurrage in Decision No. 114-R-2001, rendered
on March 16, 2001, which dealt with the interpretation of the new Revenue Cap
regulations:
Demurrage:
is a charge to freight cars, applicable to the shipper, which typically occurs
when established time limits are exceeded for the loading or unloading of the
cars. It is a penalty which is intended to penalize inefficient activities
beyond the carrier's control.
[6]
According to paragraph 150(3)(b) of the CTA, revenues from
demurrage are not included in the calculation of Western Grain Revenues in a
given crop year:
|
150 (3) For the purposes of this section, a
prescribed railway company’s revenue for the movement of grain in a crop year
shall not include
(a) incentives, rebates or any
similar reductions paid or allowed by the company;
(b) any amount that is
earned by the company and that the Agency determines is reasonable to
characterize as a performance penalty or as being in respect of
demurrage or for the storage of railway cars loaded with grain; or
(c) compensation for running
rights.
|
150 (3) Pour l’application du présent article, sont exclus du
revenu d’une compagnie de chemin de fer régie pour le mouvement du grain au
cours d’une campagne agricole :
a) les incitatifs, rabais ou réductions semblables versés ou accordés
par la compagnie;
b) les recettes attribuables aux amendes pour non-exécution,
aux droits de stationnement et aux droits de stockage des wagons chargés
de grain que l’Office estime justifié de considérer comme telles;
c) les indemnités pour les droits de circulation.
|
[My emphasis]
Pursuant
to this provision, the Agency was called upon to determine, in the course of
auditing CN’s Western Grain Revenues for the crop year ending July 31, 2006,
whether amounts collected by CN pursuant to a new demurrage policy implemented
effective April 1, 2006 could reasonably be characterized “as being in respect
of demurrage”.
[7]
These new demurrage charges
were computed on a per car per day basis when a car was held longer than the
free time allowed for unloading (a straight plan) rather than CN’s previous
method of using an averaging system that allowed shippers to gain credits for
early unloads, which could be accumulated to offset instances where more than
the free time was otherwise used. The new rules also allowed for dwell time as
the demurrage "clock" did not begin to count free time until midnight
(00:01) on the day after the car was made available (in contrast to the old
rules whereby the demurrage clock started immediately, at the time of actual or
constructive placement) but reduced the number of free days that shippers were allowed for each car unloaded from two to one.
Finally, the demurrage charge per car per day for a car held after the expiry
of the free time was reduced from $75 to $60.
[8]
After reviewing these rules, the Agency, relying on paragraph 150(3)(b)
of the CTA, held that a portion of the revenues collected by CN as demurrage,
pursuant to this new policy, was to be included in the computation of CN’s
Western Grain Revenues.
Intermodal Transportation
[9]
The Revenue Cap regime only applies to those revenues that relate to the
movement of grain over a railway line (section 147 of the CTA). Consequently,
in the case of intermodal customers (customers that require grain to be
transported both by truck and train from their point of origin to their point
of destination) who are charged a composite amount for the entire transport,
the Agency had to determine the proportion of revenues that properly related to
the rail portion of the transport (Reasons, para. 36).
[10]
In order to determine the rail revenues, the Agency focused on the
portion of CN’s costs that arise from trucking. CN used a tariff-based
methodology that estimates what CN’s payments to truckers would be for the
truck portion of intermodal movements. Agency staff tested this methodology and
concluded that CN’s estimations exceeded trucker invoiced amounts by 26.9%
(Reasons, para. 38). The Agency adjusted the revenues allocated to rail
transport accordingly. This had the effect of raising CN’s Western Grain
Revenues by an amount of $380,000 (Reasons, para. 46).
AGENCY DECISION
[11]
The Agency begins its analysis by setting out the applicable provisions
and the principles enunciated by this Court in C.P. Rail, supra,
(Reasons, para. 57). In particular, it highlights the statement made by
Rothstein J.A. to the effect that it may not be reasonable to characterize
extreme charges as being in relation to demurrage (Reasons, para. 58). The
Agency stresses in particular the fact that the “elimination of free days”
would take a demurrage policy outside what can be reasonably characterized as
one (Reasons, para. 68).
[12]
The Agency then embarked upon an analysis of the reasonableness of CN’s
demurrage policy. While the Agency finds that CN’s new demurrage rules are
significantly stricter than CN’s policies in previous years as well as those of
Canadian Pacific Railway (see the comparison table at paragraph 68 of the
Reasons), the Agency only takes issue with the reduction of free days from two
to one, combined with the change in time at which the clock starts running. The
Agency finds that the reduced free time renders CN’s demurrage policy
“unreasonable” (Reasons, para. 68).
[13]
The Agency goes on to conclude that revenues collected pursuant to the
new policy, which exceed those that would have been gathered pursuant to the
prior policy, were to be added under the Revenue Cap Regime:
[72]
The Agency finds that the amounts that CN collected as grain port demurrage for
crop year 2005-2006 cannot all reasonably be characterized as being in respect
of demurrage pursuant to paragraph 150(3)(b) of the CTA. Accordingly, a
portion of CN's grain port demurrage receipts will constitute revenue under the
Revenue Cap Regime. That portion will be an amount equal to the difference
between what CN billed shippers under its new rules less what would have been
generated under the rules using the previous tariff allowance of two and one
half days of total free time at port.
[My emphasis]
As
a result, an amount of $116,900 was added to CN’s Western Grain Revenues for
the crop year 2005-2006.
[14]
With respect to the allocation of intermodal transport revenues, the
Agency explains that in order to determine the amount of revenue that properly
relates to rail transport, certain charges such as trucking charges, pick up and delivery,
lifting charges, container maintenance costs, and ownership costs for CN owned
containers, must be quantified and subtracted from the composite amount
(Reasons, para. 36).
[15]
The Agency focused its attention on pick up and delivery trucking charges
(Reasons, para. 37). After conducting an audit of a sample of CN’s invoices
(paid by CN to Truckers) involving 55 movements and 97 truck pick up and
delivery charges (Reasons, para. 38), the Agency concluded that CN’s
methodology for calculating revenues related to trucking exceeded invoiced
amounts by 26.9%; this in contrast to the previous year’s 9.5% overstatement
(Reasons, para. 45). In response to CN’s explanation for this
overstatement, the Agency recognized that additional amounts for empty pick up
and delivery charges for the placement of containers (Reasons, para. 40) as
well as fuel subsidies (Reasons, para. 42) fell outside the scope of Western
Grain Revenues. However, it did not accede to CN’s request that certain
overhead costs related to trucking also be considered as falling outside that
description (Reasons, para. 44).
POSITIONS
OF THE PARTIES
[16]
At the hearing of the appeal, both parties relied on the decision of the
Supreme Court in Dunsmuir v. New Brunswick, 2008 SCC 9 (“Dunsmuir”)
– released a few days prior to the hearing – to support their respective view
as to the applicable standard of review. CN argued that the
applicable standard with respect to both issues remains correctness, as had
been argued in its Memorandum, whereas the Agency took the position that it is
entitled to the deference which the revised standard of reasonableness now
imposes on a reviewing court.
[17]
Applying a
standard of correctness, CN asks this Court to undertake its own analysis of
the demurrage issue based on its contention that the Agency wholly misconstrued
the decision of this Court in C.P. Rail, supra. Specifically, CN
contends that the Agency erred in focusing its analysis on whether CN’s
demurrage policy was reasonable in order to determine whether revenues were
reasonably characterized as relating to demurrage (Appellant’s Memorandum,
paras 57, 58). This amounts to rate-regulation, a practice which, according to C.P.
Rail, supra, is no longer authorized. Instead, CN submits that the Agency
should have focused on whether the rules established a charge for the detention
of a freight car beyond the free time provided for and whether the rules were
intended to induce prompt release the freight car (Appellant’s Memorandum,
para. 75). Had it done so, it would have concluded that the demurrage policy
falls squarely within this definition.
[18]
For its
part, the Agency submits that its interpretation and application of paragraph
150(3)(b) of the CTA is reasonable. The Agency recognized the limits on
its mandate, which were spelled out in C.P. Rail, supra, and noted that
any demurrage policy that resulted in the imposition of extreme charges may
fall outside of what constitutes a reasonable policy as would any demurrage
policy that eliminated free days. In this case, the Agency concluded that the
change relating to the number of free days was so pervasive in its impact upon
shippers (effectively removed any free days) that it was not “reasonable to
characterize” these revenues as being in respect of demurrage (Respondent’s
Memorandum, paras 56, 57).
[19]
With
respect to the Agency’s allocation of intermodal revenues, CN submits that the
Agency erred in adopting a method based on costs rather than revenues
(Appellant’s Memorandum, paras 99-103). According to CN, the cost method used
by the Agency to segregate trucking revenues from rail revenues is not mandated
by the CTA (Appellant’s Memorandum, para. 107).
[20]
In
response, the Agency submits that it is CN that developed the methodology that
would allow for “netting out” from CN’s composite revenue the amounts relating
to the trucking portion of the movements and advocated that the Agency accept
this methodology. CN cannot now take the position that this method, which the
Agency used as a proxy for actual trucker payments, ought not to form any part
of the Revenue Cap determination (Respondent’s Memorandum, para. 70).
ANALYSIS AND DECISION
Standard of review
[21]
The crux
of the demurrage issue turns on the proper construction of paragraph 150(3)(b)
of the CTA. The question raised is the same as that which was addressed by this
Court in C.P. Rail, supra, where it was held that the Agency’s
construction of paragraph 150(3)(b) of the CTA is subject to the
standard of correctness (C.P. Rail, supra, paras 14-21). Subsequently,
in Council of Canadians with Disabilities v. Via Rail Canada Inc., 2007
SCC 15, [2007] 1 S.C.R. 650 (paras 98-100) (“Via Rail”), Abella J.,
writing for the majority of the Supreme Court Judges held that reasonableness
was the appropriate standard on appeal from a decision of the Agency on a
question which, although different from the one here in issue, also turned on
the interpretation of the Agency’s governing statute. The approach used by
Abella J. in Via Rail, supra in order to identify the appropriate
standard as well as the standard which she identified were recently applied by
this Court in Canadian Pacific Railway Company v. Canada (Canadian
Transportation Agency), 2008 FCA 42, [2008] F.C.J. No. 175 (para. 14), a
decision dealing with the Agency’s interpretation of the expression “utility
crossing” under section 100 of the CTA.
[22]
As
mentioned earlier, in a decision rendered a few days before the hearing of this
appeal
(Dunsmuir,
supra), the
Supreme Court revised
the framework of analysis to be used by a reviewing court in identifying the
standard of review. There are henceforth two standards, correctness and
reasonableness. Significantly for our purposes the Supreme Court has indicated
that it is not necessary to conduct an exhaustive analysis where the
appropriate standard has already been determined in a satisfactory manner in a prior
decision (Dunsmuir, supra, para. 57). At the same time, the Supreme
Court has reiterated that deference may be owed to an administrative tribunal
in interpreting its own statute by reason of its particular familiarity with
this legislation (Dunsmuir, supra, para. 54).
[23]
There is
no need to revisit the analysis conducted by this Court in C.P. Rail, supra,
in order to determine the standard of review applicable to the demurrage issue.
The only question which arises with respect to demurrage – as the submissions
of the parties and the reasons of the Agency demonstrate – is whether the
Agency properly understood and applied the reasoning set out in that case. In
my respectful view, this Court is better positioned than the Agency to construe
its own jurisprudence and I therefore propose to apply a standard of
correctness in reviewing this aspect of the Agency’s decision.
[24]
The
opposite conclusion is warranted with respect to the Agency’s allocation of
CN’s intermodal revenues. CN has identified the underlying question as one
involving the use by the Agency of a method of allocation that is not
authorized under the CTA. However, when regard is had to the record, it becomes
apparent that CN never took issue with the method used by the Agency to
allocate intermodal revenues. Rather, the issue throughout has been whether according
to this method, certain costs should or should not be deducted (Reasons, paras
36-47). In my view, this question is essentially factual and would call for the
application of the more deferential standard henceforth identified as
reasonableness.
The demurrage issue
[25]
The ratio
of the demurrage decision is set out in the following passage by Rothstein
J.A., which the Agency quotes at paragraph 57 of its reasons:
[t]he Agency
may consider the level of charges and the revenues earned from imposition of
those charges. However, its mandate is not to determine the reasonableness
of the charges or revenues. It is to determine if the level of charges or the
manner of imposing the charges indicates that any part of the revenues arising there
from is not reasonable to be characterized as being in respect of demurrage.
[My
emphasis]
[26]
This
statement is unambiguous. The Agency is authorized to review the level of the
charges or the manner of imposing them to determine if any part of the revenues
arising from these charges cannot reasonably be characterized as demurrage.
However, to the extent that the Agency is satisfied that it is dealing with a
charge that comes within the accepted definition of demurrage (see definition
of demurrage quoted at paragraph 5 of these reasons), it is not empowered to
inquire into its reasonableness.
[27]
Accordingly,
the Agency cannot interfere with CN’s calculation of revenues related to
demurrage unless it finds that the charges levied by CN as demurrage are not
aimed at promoting the efficient release of cars or that the charges otherwise
fall outside the accepted meaning of the term demurrage. As the Court in C.P. Rail, supra, writes at paragraph 25:
According to the definition of demurrage adopted by this Court, if
the Agency determines that it is reasonable to characterize revenues as
resulting from charges made by a railway company to induce a shipper or
consignee to promptly release cars and to compensate the railway company for
the detention of cars beyond the allowed free time, its jurisdiction is
exhausted.
[28]
The Court in the demurrage decision went on to explain by way of example
the circumstances in which the Agency may properly invoke paragraph 150(3)(b)
of the CTA. It notes, for instance, that an attempt by a prescribed railway
company to impose “extreme charges” could result in revenues not reasonably
characterized as demurrage (C.P. Rail, supra, para. 39):
One purpose
of demurrage charges is to compensate the railway company for the investment in
the car, i.e. for the lost opportunity to earn revenue if the car had been
promptly released. I accept that if a railway company attempted to impose
extreme charges for detention of cars, it would be open to the Agency to determine
that all the revenues arising from the charges could not reasonably be
characterized as being in respect of demurrage.
[My emphasis]
A charge could accordingly be challenged if it bore no
relationship to the lost revenues which it is intended to compensate. An
extreme charge would be one which can be shown to overshoot this target. As I
read the decision of the Agency no such issue arises here (Reasons, para. 61 b)).
[29]
The
Court also endorsed by way of a further example the finding of a dissenting Member of the
Agency in the decision which was under appeal to the effect that demurrage is
not demurrage simply because a railway labels it as such. The dissenting member
referred to the situation where free time would be eliminated altogether (C.P.
Rail, supra, para. 26):
I think
member Keith Penner had the correct appreciation of the Agency's role in his
dissenting reasons. Mr. Penner:
…
5.
determined that demurrage is not demurrage simply because a railway labels
it as such; and
6.
provided an example of charges that could not reasonably be characterized as
demurrage -- charges arising from the elimination by a railway company of free
time for loading or unloading, i.e. giving the shipper or consignee no free
time.
[My
emphasis]
[30]
In
justifying its intervention in the present case, the Agency placed considerable
reliance on these statements with emphasis on this last example (Reasons, para.
58). According to the Agency, CN’s overall reduction in free days is “tantamount
to the “elimination of free days” ” (Reasons, para. 68) and such an elimination
takes the demurrage policy beyond what can be reasonably characterized as one
(Reasons, para. 69).
[31]
In
assessing the propriety of the Agency’s intervention, it is important to focus
on the “no free day” example adopted by this Court in the demurrage decision. A
so called “demurrage charge” levied with no free days would not be a charge in
respect of demurrage because demurrage is defined as a charge to freight cars,
applicable to the shipper, which is triggered when specified time limits for
the loading or unloading of the cars are exceeded. However one might describe a
charge that applies without a time limit, it is not “demurrage” within the
accepted definition. Properly understood, the discussion of the Court on this
point is not an invitation to the Agency to inquire into the reasonableness of a
demurrage charge which comes within the accepted definition, but an example of
a charge that would fall outside this definition regardless of the label placed
on it by a railway company.
[32]
In this
case, the charges levied by CN pursuant to its new demurrage policy are
contingent on cars remaining on CN’s tracks beyond a specified time period. In
particular CN’s policy allows shippers one full day to unload, which period is
extended to one day and a half when regard is had to the dwell time (Reasons,
paras 62, 63). Significantly the Agency finds, as a fact, that 87% of CN’s
grain traffic is unloaded within this time frame (Reasons, para. 69).
[33]
The Agency
nevertheless questions whether the efficient unloading of the cars which this
percentage illustrates can be attributed to CN’s new demurrage policy (Reasons,
para. 68):
[68] The
most recent changes to CN's demurrage rules become manifestly a total
elimination of free days because, apart from multi-car block incentives, in the
ordinary course it will become extremely difficult if not impossible for grain
shippers to unload within the allotted "free day" - there are just
too many variables in the transportation chain for export grains on the way to
and at port that are beyond their control. Basically, it has become an
incentive for unloading efficiencies at port that cannot serve its purpose
because it has become so narrow in application.
[My emphasis]
It further writes:
[71] CN
also suggests that quicker unload times at port are needed in order to avoid
growing congestion there. In this respect, CN's unload volume of grain at Vancouver where most
demurrage charges occur was 6.1 million tonnes for the 2005-2006 crop
year. In 2000-2001, when the free time allowance fell to two days -
from five and one half days for the previous crop year CN's volume at Vancouver was greater,
at 6.5 million tonnes. CN's volumes or tariff policies, therefore, do not
appear to be the sole source of congestion. In fact, it is generally accepted
in the industry - by shippers, the CWB, grain elevators and other industry
participants - that one of the most significant issues relating to logistical
problems at port relate to car "bunching" wherein more than one train
arrives at a terminal within a short time period. The Agency finds that a
tightening of a demurrage policy will have little if any impact on car
"bunching".
[My emphasis]
[34]
It is
evident from these passages that the Agency is questioning the effectiveness of
CN’s change in policy. However, the Agency does not take issue with the fact that
the policy’s sole purpose is to induce the prompt release of freight cars by
imposing a charge on shippers who do not load or unload cars within the allotted
time.
[35]
In order
to justify its intervention, the Agency had to find that the charge, although
labelled as a demurrage was not a demurrage. It fell short of making this
finding since the evidence showed that all the elements of a demurrage were
present. Rather the Agency second guessed CN’s decision to alter its demurrage
policy, and held that the portion of the revenues generated by the new policy was
to be excluded in the computation of CN’s demurrage revenues (Reasons, para.
72). In disregarding revenues which come within the four corners of the
accepted definition of demurrage, based on its assessment of the effectiveness
of the charges, the Agency embarked on the type of exercise which this Court
held as falling outside the Agency’s mandate under the current railway
legislation (C.P. Rail, supra, paras 27-31):
[27] Determining whether
demurrage revenues are reasonable is an entirely different function. That
function would require the Agency to engage in a broad assessment of whether
demurrage charges or increases in demurrage charges can be justified by market
and/or railway cost considerations and the effect on shippers and consignees.
That type of intensive freight rate regulation is no longer applicable under
current railway legislation. Even in the case of the movement of western grain
by rail, where regulation is more pervasive than for other commodities or
regions, the regulation of a railway company's revenues is not based on
reasonableness but rather on application of a formula taking into account
changes from base year figures in volume, length of haul and relevant
inflation.
[28] An interpretation of
paragraph 150(3)(b) that would confer on the Agency intensive regulatory
control over the reasonableness of a railway company's demurrage revenues is
not in keeping with Parliament's intent to minimize regulation as expressed in
paragraph 5(c) of the Canada Transportation Act (National
Transportation Policy): (citation omitted) …
[29] The regulation of rates
charged by railway companies is not unknown to Parliament. Historically, during
the period of intensive regulation of railway companies, the Board of Transport
Commissioners for Canada was empowered to
"disallow any tariff or any portion thereof that it considers to be unjust
or unreasonable". See Railway Act, R.S.C. 1952, c. 234, s. 328.
While railway companies today operate in a much more deregulated environment
and the Agency does not have pervasive power to control railway rates, it is
apparent that the terminology to control rates, if it intended to do so, was
not unknown to Parliament. Indeed, under the current legislation, section 112,
which applies to a limited number of rates established by the Agency, requires
that the "rate ... be commercially fair and reasonable". While
section 112 is not applicable to demurrage revenues or charges, it further
indicates the type of terminology that Parliament uses when it intends there to
be regulatory control over the reasonableness of a railway company's rates or
revenues.
[30] Had it been
Parliament's intention that a railway company's demurrage charges or demurrage
revenues should be subject to a reasonableness test, Parliament would have
adopted well known terminology to effect that purpose. It did not do so.
Rather, it adopted quite a unique word formula "... any amount ... that
the Agency determines is reasonable to characterize ... as being in respect of
demurrage ...". The necessary implication is that Parliament's intention
was not to make demurrage charges or revenues subject to a reasonableness test.
[31] Read in its ordinary
and grammatical sense and in context, paragraph 150(3)(b) empowers the
Agency to characterize amounts as being, or not being, in respect of demurrage.
But it does not grant the Agency the authority to determine the
reasonableness of demurrage revenues.
[My emphasis]
[36]
In my
respectful view this is precisely what the Agency did in this case. Absent a
finding that the demurrage charges did not come within the accepted meaning of
that term or that the charges were excessive, it was not open to the Agency to
conclude that a portion of the demurrage revenues generated by CN could be
disregarded pursuant to paragraph 150(3)(b) of the CTA.
Intermodal revenues
[37]
The second issue on appeal is whether the Agency erred in calculating
the portion of intermodal transportation revenues that are appropriately
attributed to rail. In obtaining leave to appeal, CN framed the question on
this aspect of the appeal as whether the selection by the Agency of a method of
allocation based on costs rather than revenues was authorized under the CTA
(specifically sections 150 and 151). However as noted earlier, CN never took
issue with the method used by the Agency to segregate intermodal revenues in
this case with the result that this is not an issue that was considered or
addressed by the Agency in the course of its decision. In these circumstances,
it was not open to CN to raise this argument on appeal. Nothing prevents CN
from taking issue with the Agency’s allocation method in a subsequent crop
year.
[38]
The remaining
issue as between CN and the Agency is whether certain costs should or should
not be deducted in applying the method used by the Agency to segregate
intermodal revenues. This question falls outside the jurisdiction of this Court
when regard is had to section 41 of the CTA which provides for a right of
appeal on questions of jurisdiction and law only. It follows that CN cannot
succeed with respect to this aspect of its appeal.
[39]
I would therefore allow the appeal in part, set aside the decision of
the Agency insofar as it relates to the demurrage charges, and remit the matter
to the Agency for re-determination on the basis that no part of the demurrage
charges recorded by CN according to its new demurrage policy is to be included
in CN’s Western Grain Revenues for the 2005-2006 crop year.
“Marc Noël”
“I
concur,
Alice Desjardins J.A.”
« I agree,
Johanne
Trudel J.A. »
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