The Federal Court of Appeal has ruled against Canadian National Railway in a dispute over rail switching rules near Winnipeg.The court on June 21 upheld a February 2009 decision by the Canadian Transportation Agency that exchange of cars between the two railways is interswitching as defined in the Canadian Transportation Act and the rate should remain regulated.Grain shippers and exporters saw this as an important case to ensure the continued smooth and efficient shipment of grain to the United States.CN argued that for legal and technical reasons it was not interswitching and as a result the railway should be free to negotiate a commercial rate with BNSF.Shippers said that would invariably result in higher rates, making the movement less competitive.The case was subject of a hearing by a three-judge panel of the Federal Court of Appeal in Ottawa on May 11.The court rejected CN’s arguments, ruling among other things that the CTA acted within its authority, it properly defined interchange and interswitching, CN is a local carrier as defined by the Act, and that the rules of interswitching apply to the Winnipeg situation.It awarded costs to BNSF, and to the CWB and Paterson Grain, which had intervened on behalf of BNSF.The interchange and interswitching agreement between CN and BNSF dates back to 1912. It is the only point on the prairies from which grain cars can be shipped directly to the United States.In a brief to the original CTA hearing, the Canadian Wheat Board said it shipped about 130,000 tonnes of wheat directly to U.S. buyers via BNSF in 2009.
Appeals court upholds decision against CN in rail switching dispute
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