The fight over railway running rights could be headed to court.
Ferroequus Railway Co., or FE, has asked the Federal Court of Appeal
for permission to appeal a decision handed down last month by the
Canadian Transportation Agency.
In its Sept. 10 four-to-one ruling, the agency rejected FE’s bid for
the right to haul grain over Canadian National Railway’s main line from
Camrose, Alta., to the export terminal at Prince Rupert, B.C.
In a motion filed in Federal Court in Vancouver Oct. 8, FE said the
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agency erred in areas of law and jurisdiction and misinterpreted the
section of the Canada Transportation Act governing running rights.
There is no indication when the court will decide whether to hear the
appeal.
FE president Tom Payne said the basis of the appeal is that the
agency’s Sept. 10 decision was at odds with a ruling it handed down a
year earlier, when the fledgling rail company made its initial bid to
secure running rights from CN.
“There is a huge dissonance between the decision of last year and this
one,” he said in an interview from the company’s Edmonton office.
“We applied this time for what the agency said last year was fairly
and squarely within the scope of the act.”
Payne acknowledged that going to court will be a long, complex and
expensive process, but said the railway isn’t going to give up.
“It’s tragic that it isn’t simpler, but you can’t quit,” he said,
adding the company has invested million of dollars in its proposal and
is convinced it’s in the right.
He said the case raises questions about the future of competitive rail
service in Canada, in particular grain service in Western Canada.
“Is the railway the only industry in Canada that doesn’t have to face
inter-industry competition?” he said. “And are the Canadian railways so
fragile, with their billions of dollars of profits, that they can’t
cope with a Canadian competitor?”
Payne said FE will also continue to press the federal government for
new rules that will make it easier to obtain running rights.
He said it would be preferable to have a political solution, but the
company felt obliged to go to court to keep its legal option open in
case the political lobbying doesn’t pan out.
The motion seeking leave to appeal names both the CTA and CN as
respondents.
Ron Ashley, senior counsel with the CTA, said the agency won’t
intervene in the court’s deliberations on whether to grant leave to
appeal.
He said the agency has not yet decided if it will file a formal
response to FE’s appeal if the case proceeds to the next stage. The
agency would participate in hearings to explain the reasons for its
decision to the court and answer questions, but it wouldn’t attempt to
re-argue the entire case.
In its motion seeking leave to appeal, FE said the agency improperly
attached a number of conditions before applying Section 138 of the act,
which sets out the rules under which running rights are to be granted.
It also said the agency considered “irrelevant” factors, denied FE a
fair hearing by refusing to hear certain evidence and based its
decision on law relating to competition policy that is outside its
jurisdiction.
