December 2, 1935 B.R.C. File No. 39310.12 (Otterville Sub. - Burgessville to Woodstock) (Ottawa)

The Board of
Railway Commissioners for Canada

File 39310.12

Garceau, F. N., Deputy Chief Commissioner (Dissenting):

This application for abandonment is similar as to circumstances to the application (file 39310.11) of the Canadian National Railways for leave to abandon the operation of a portion of its Iberville subdivision, between Noyan Junction and Iberville, a distance of 21.9 miles.

In both cases, service has been discontinued for years and the field left to motor vehicles.

With due deference to any conflicting opinion, I believe the following considerations embodied in my minority judgment in the above-mentioned case ought to prevail.

The transportation problem in Canada was studied by a Royal Commission in 1931-32; the necessity of the railways being maintained and of a control of highway carriers was insisted upon. Paragraph 43 of the report, at p. 102, reads thus:—

Relief to the railways from the inroads being made by trucks into freight earnings will come by restriction and regulation of truck traffic as distinct from taxation, and by some form of co-ordination with rail traffic.

Paragraph 46, p. 103, says:—

  ..  there is a growing realization that conditions of operation must be equalized as far as, possible between the railway and the truck. The truck cannot replace the railway and it must not be allowed to completely strangle its competitor and leave the country without an essential transport service.

I would also refer to paragraph 49, p. 103.; paragraphs 55, 56 and 57, p. 104; paragraph 63, p. 105.

As railways are essential, it is urgent that the transport by trucks, busses or water be controlled in exactly the same manner and by the same authority as, the transport by rail, so that, instead of competing ruinously with each other, the various means of transportation would complement one another and furnish the public with transportation facilities at the lowest possible prices.

The plight of the railways is uncontrolled competition by other public carriers, motor vehicles, etc.

Mr. Rand, C.N.R. Counsel, blames cessation of railway service on truck competition (Evidence Noyan Junction-Iberville Case, vol. 621, part 2, p. 650).

I would also refer to the dictum of Mr. B. T. Chappell, General Superintendent of the Canadian National Railways at Vancouver (see Ottawa Citizen, September 3, 1935):—

There are those who think the railways are backward in failing to go into the truck business, but the railway company, no matter how efficiently it operated trucks, would lose money competing against operators ignorant of costs and rates. In the meantime, the trucks are using the highways practically free of charge as compared with the railways' enormous investments in right-of-way, all of which is taxed.

The people of Canada intent upon getting transportation at the cheapest cost, do not realize the effect of unfair truck competition upon the railway industry, which is not only a basic necessity, but with which they are deeply concerned because of their investments in both the publicly-owned and the privately-owned systems.

Mr. T. E. McDonnell, of Toronto, President and general Manager, Canadian Pacific Express, said at Québec before the Kiwanis Club, on the 17th of October, 1935:—

Railways were produced on their own rights-of-way and are maintained and operated for the sole purpose of commercial transportation. Highways were not built for commercial transportation, but having been built for another purpose, their use is permitted under varying conditions in different provinces.

Their use for commercial transportation is of the nature of a by-product and it is suggested that to the extent this by-product threatens the commercial life of the country, it must be controlled not in the interest of the railways, but in the interest of Canada.

Mr. McDonnell stressed the fact that when control and co-ordination are accomplished, it will be done not to help the railways but to protect the people of Canada who must use the railways.

  ..  Canada is entitled to have a complete transportation system made up of all proven methods, so co-ordinated that each method will function in that sphere in which it is most efficient and economical.

Mr. McDonnell defined transportation as the commercial movement of people and their goods from where they are to where they want to be.

The control of transportation agencies is also urged by the automotive industry. On the 12th September last, Mr. J. B. Baillargeon, of Montréal, President of the Automotive Transportation Association of Québec, insisted on the necessity of regulation of highway carriers.

Mr. W. L. Best, Vice-Resident and National Representative of the Brotherhood of Locomotive Firemen and Enginemen, in his memorandum of January 20, 1935, developed that same proposition.

The above quotations and the evidence given by various witnesses heard by the Board at sittings held at St. Johns, Farnham, Montréal, Victoriaville, Nicolet, Mansonville and elsewhere, show that public opinion acknowledges the necessity of a unique control over transportation agencies by rail or highway.

The truck cannot replace the railway, says the report of the Royal Commission above quoted. Experience has proven the truth of this dictum.

Excepting for local carriage in terminal areas, railroad service is not only faster but cheaper than highway transport, asserts the report of experts after two years of study of all forms of transportation (see Labor, Washington, D.C., July 18, 1933).

Even if trucks could be satisfactorily substituted to the railway, it would be against public weal to consent ta an abandonment of a line in the actual circumstances, until such motor carriers have become real public carriers, under as efficient a control as that to which the railways are subject.

The Board, the authority constituted by Parliament to safeguard to the public a system of transportation, ought not by a decision to expose a section of the country to be deprived entirely of transportation facilities, at the option of the carriers, or to be charged prohibitive prices.

The Interstate Commerce Commission, in the United States, relying on the services provided by motor vehicles to serve the community, two years ago allowed the abandonment of a fifty-mile branch line between Sioux City and Wynot, in Nebraska. The tracks disappeared, railway employees were separated from their jobs; and now, the Grain and Feed Review summarizes the economic results, as follows:—

First of all, the grain rate by rail to Sioux City and the East was 3 cents per hundred from the farthest point on the line. Now the rate is 10 cents a bushel to Sioux City. Coal was laid down in the farthest town for 20 cents a ton, while at present truckers are offering to deliver coal to close-in points at $2 a ton.

Farm values have depreciated from 50 to 75 per cent  ..  . (See Labor, Washington, D.C., November 12, 1935).

It is true that this line was not operated during the last few years, but the motor vehicle operators knew that the line was not abandoned. If to-morrow this line were dismantled, the inhabitants of this region might face the experience of the Nebraska people.

It is all very well to say that motor transportation is a substitute to the railways but we must not forget that this substitute can cease to exist on the morrow.

Relief to the railways' difficulties lies not with tho Board but with the Parliament of Canada. The co-ordination and control of all carriers so as to constitute a national transportation system, all agencies completing one another, would be a work for the general advantage of Canada.

I would dismiss the application as being premature.

F. Nap. Garceau.

December 2, 1935.

Railways: C.N.Rys.