Ferroequus appeals CTA running rights ruling

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Published: October 24, 2002

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.

About the author

Adrian Ewins

Saskatoon newsroom

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