Application of the Canadian National Railways for an Order granting leave to abandon the operation of that portion of its Port Perry Subdivision, in the Province of Ontario, between Whitby Town (Mile 2.8) and Cresswell (Mile 32.8)—a total distance of 30.0 miles.

Judgment

Commissioner Stone:

Built under the. charter of the Port Whitby and Port Perry Railway Company which later became the Whitby and Port Perry Extension Railway Company, this line was opened for operation in 1877 and in the same year became known as The Whitby, Port Perry and Lindsay Railway Company. It provided connection between Lake Ontario and Lake Scugog at Port Perry and from there to the navigable water in the town of Lindsay and thence to Fenelon Falls. In 1882 in consolidation with other lines it became The Midland Railway Company. In 1884 the Midland Railway Company was leased to the Grand Trunk Railway, and in 1893 amalgamated with the Grand Trunk Railway finally becoming part of the Canadian National Railways in 1923.

No ballast has been placed on the roadbed since 1915; it is very light and generally worn out. Ties are untreated and old. There are seven steel bridges in fair condition and six timber bridges in poor condition. Culverts are in poor condition. The rails are poor and in places badly bent. Sixteen miles were laid with 56-pound rail in 1886, and eight miles with 65-pound rail in the same year. The balance of six miles is laid with 80-pound rail. Train movements are restricted to ten miles per hour, more particularly between Port Perry and Cresswell.

Application was made by the Canadian National Railways under section 165A, section 2, subsection 3, of the Canadian National-Canadian Pacific Act of 1933, and all other appropriate statutory provisions, for an order granting it leave to abandon the operation of its line between Whitby Town and Cresswell, a total distance of 30 miles.

On receipt of this application arrangements were made for investigation by the Board's officers. On March 20, 1935, a general inspection of the line was made by officers of the Engineering and Operating Departments of the Board, and representatives were heard from Port Perry, Reach township, village of Brooklin, Scugog township, merchants and shippers. The case was heard by the Board at Port Perry on Wednesday, May 29, 1935.

Prior to March 9, 1931, the service consisted of a daily except Sunday passenger train, and a daily except Sunday mixed train connecting at Whitby Junction with main line trains east and west. Service was reduced on March 9, 1930, to a daily except Sunday mixed service; and on September 27, 1931, the service was further reduced to a tri-weekly mixed train service. In addition there was a tri-weekly mixed train service furnished between Whitby Junction and Brinlook crossing by the train operating over the Orono Subdivision. This service was further reduced to a bi-weekly mixed train service; also a bi-weekly service between Whitby Junction and Brinlook crossing. In describing the territory involved the applicant states:—

The line passes through a prosperous mixed farming country. The villages served are farming communities and are of minor importance with the exception of Port Perry, which is the business and commercial centre of a large farming community. There are no industries of consequence being developed along this line. A good concrete highway (No. 7) parallels the line and is kept open all year. There is bus and truck competition serving most of this territory.

In support of the application the following summarized statements were submitted:—

Revenues accruing to:	Branch	Balance of System	Total
Oct., 1930-Sept., 1931	12,989 00	36,481 00	49,470 00
1933	4,005 00	21,472 00	25,477 00
1934	. .	. .	34,644 00
Expenses incurred on:
Oct., 1930-Sept., 1931	62,636 00	17,418 00	80,054 00
1933	32,267 00	17,418 00	42,642 00
1934	. .	. .	. .
System loss from operation:
Oct., 1930-Sept, 1931	. .	. .	30,584 00
1933	. .	. .	17,164 00
1934	. .	. .	8,336 00
Car movements on line:	Inward	Outward	Total
Oct, 1930-Sept., 1931	328	152	480
1933	241	68	309
1934	287	112	399

Referring to the various items included in receipts shown for 1930-31, counsel for the applicant explained that distribution of earnings as between the branch line and the balance of the system was divided on a mileage basis, and that the cash collections are insignificant, as a check of representative months would not warrant adding more than $50 to the amount already shown.

Maintenance of way and structure expenses during the same period was compiled on a yearly average covering the period 1928 to 1933 inclusive, and included $2,040 for divisional superintendence, which may not become material or represent an actual saving. The balance of expense included operating and station costs carrying traffic over other lines of the system, and an annual outlay of $2,550 for provincial taxes.

Cost for placing the line in condition under which reasonable operation might be carried on was estimated by the railway company at $10,000.

Counsel for the applicant further stated that Cresswell was approximately three-quarters of a mile south of Manilla Junction, but the community would still be served by the railway. Sonya was of minor importance, but there was a substantial shipment of turnips from Seagrave. The country on the westerly side between Seagrave and Port Perry is a bit rocky and swampy, and it was suggested shipments from the vicinity of Seagrave could be taken care of from Blackwater Junction. Port Perry is the important point on the line, as during the period from October, 1930, to September, 1931, 193 carloads were shipped in and 32 carloads out, consisting principally of coal, lumber, slabs, grain and flour. In the same year the freight earnings were $17,929, and total traffic $24,390. In 1934 freight earnings $18,926, total traffic $21,027. The inward carload movements were considerably in excess of the outward movements at both Port Perry and Brooklin. Port Perry is on Highway No. 12 connecting with Highway No. 7, and the Canadian Pacific Railway crossed this line at Myrtle, approximately seven miles from Port Perry and the railway had recently inaugurated the pick-up and delivery service operating from Oshawa, which will serve all these points as far north as Port Perry; that this service would shortly be in effect and take care of outbound and inbound L.C.L. freight and what might formerly go by express.

Under examination by counsel a number of representative witnesses of various business interests located in Port Perry and adjacent farming activities opposed the application and gave evidence emphasizing the necessity for continued operation of the line as it meant the very life of the community and the business interests served.

It was stated that Port Perry had a resident population of 1,200 persons and was the only logical outlet for the inhabitants of the municipality of Scugog, an island eleven miles long and thirty-three miles in circumference, surrounded by Lake Scugog. This municipality was not served by the Burketon Junction-Lindsay line of the Canadian Pacific Railway. Decrease in rail traffic in recent years was due partly to the depression, but primarily to change in farming methods from seed grain to cattle raising, on account of penalties imposed by United States tariffs.

Q. What has become of the said business?

A. Well, of recent years two unfortunate tariffs were put on by the United States. When the first tariff was placed, $2.40 a bushel, we still did business, but when it was placed at $4.80 a bushel that was prohibitive. Tariff was placed probably five or eight years ago. Evid., Vol. 623, p. 1718.

Cattle raising had not been a profitable business for the farmer, and with a substantial reduction in tariff on seed grain this business would again revive and bring additional revenue to the railway. Various business interests during recent years had changed hands, and these business interests had facilities for storage of coal, grain and other commodities, which would be a direct loss. The firm of Hogg & Lytle Company contended their business would be cut in two by the closing of the line, two-fifths of which was done at Port Perry, and their elevator being worth $30,000 would be a direct loss if operation were abandoned. The lumber interests at Port Perry would be considerably handicapped as competition was keen, and the business would not absorb the additional costs for trucking from Myrtle, seven and a half miles distant, the nearest rail connection to Port Perry. Half of the Township of Cartwright was served through Port Perry, which is considered by those in the trade as probably one of the best trading country points in the province for inward and outward freight. The Kroehler furniture manufacturers who previously shipped by motor-truck had found this method of transportation unprofitable and scrapped their motor-trucks, and in future furniture would be transported by rail.

In a brief submitted by Mr. J. D. Lucas, K.C., representing various interests opposing the application, it is contended that the districts along the railway, such as the village of Port Perry, were built up after the railway was constructed and as a result of the presence of the railway; that the development of the area, the municipal indebtedness for schools, public improvements, etc., has resulted from the development brought about by the railway; that it is not in the public interest to deprive or to hinder farmers in the marketing of their products at a time when the tendency of legislation and public feeling is in favour of assisting and re-establishing farmers and producers; that with the improvement of conditions it is inopportune to request the abandonment of the line until further opportunity is given to test its usefulness to the citizens of these communities; that if the railway is abandoned it will take away the possibilities of the economic advancement of the communities served and farmers and others will be at the mercy of the ungoverned truckers; and that any saving to the Canadian National Railways from the operating loss currently present in the operation of the branch line is outweighed by the far greater loss which there would be to the municipalities served by the railway, etc.

The revenue received from passenger traffic does not warrant continued train operation. The abandonment of the line to movements of carload freight traffic, and its subsequent effect on the business and community interests, is the predominant factor involved, and applies more particularly to Port Perry and the municipality of Scugog than to other points.

Seagrave, 7.4 miles north of Port Perry, is the only station between Port Perry and Cresswell where cars are loaded. The loadings consist principally of turnips and grain hauled by the farmers, in some cases, twelve miles to the station. The only record shown for inbound movements was one car of cattle during the test period of 1930-31. It is alleged no serious inconvenience would be caused the farmer if the outward shipments were made from other adjacent stations, particularly those located west of Seagrave, as they could ship through Blackwater Station.

Approximately four-fifths of the carload freight movements are routed through Whitby to or from Port Perry and intermediate stations. The municipality of Scugog is served through Port Perry. The commodities hauled by the railway are heavy and bulky, for which proper facilities have been erected for storage at Port Perry. If transported by truck from Myrtle, a distance of seven and one-half miles, or other available stations it is alleged the additional cost for truck haul plus rail charges would seriously handicap, and in some cases prohibit, the continuation of business industries at Port Perry, thereby reacting to the detriment of community interests in general.

The Canadian Pacific line east of Lake Scugog, formerly known as its Burketon-Lindsay line, was abandoned for service as of December 12, 1932; and authority has been granted for the abandonment of the Canadian National line between Greenburn and Ronnac, known as the Orono Subdivision, from which line a former tri-weekly mixed service was furnished between Whitby Junction and Brinlook Crossing.

It was admitted by counsel for the applicant that it is questionable whether the charges for divisional superintendence would be actually saved by the abandonment of the line and might, therefore, reasonably be deducted from the various losses shown, as well as credit given for cash fares collected but not recorded in the statements.

If authority were granted for abandonment of that portion of the line between Port Perry and Cresswell a substantial saving would be made in costs for operation, maintenance, provincial taxes, prospective rehabilitation expense and would also reimburse the railway to some extent for material salvaged.

It will be noted from the statements filed that a considerable reduction was made in the losses shown in 1934 as compared with previous years. Much of this was due to economies put into effect by the railway company. It is alleged, however, that it would cost 110,000 to rehabilitate this line for service, but this amount would be considerably reduced by the abandonment of that portion of the line between Cresswell and Port Perry.

Considering all that is involved in this case, I am of the opinion order should issue authorizing the railway company to abandon that portion of its line between Cresswell and Port Perry, to take effect thirty days subsequent to issuance of the order. The line between Port Perry and Whitby to be rehabilitated and operated to take care of traffic offering; the same to be without prejudice to any future application the railway company may desire to make after the expiration of two years, provided future operation demonstrates this segment of the line shows a continued loss in revenue.

Ottawa, February 3, 1936.

The Assistant Chief Commissioner and Commissioner Norris concurred.