In the matter of the application of the Canadian Northern Railway Company (C.N.R.) under Section 2 of Subsection 3 of the Canadian National-Canadian Pacific Act, 1933 and all other appropriate statutory provisions for an Order granting it leave to abandon the operation of the following line of railway, namely: the Westport Subdivision in the Province of Ontario between Lyn Junction (mile 0.0) and Westport (mile 40.51), a total distance of 40.51 miles.

39310.58

Before:

Mr. Hugh Wardrope, Assistant Chief Commissioner.

Mr. H. B. Chase, C.B.E., Commissioner.

Heard at:

Brockville, Ontario, on June 5, 1952.

Appearances:

Mr. A. K. Dysart, for the Canadian National Railways.

Mr. C. G. MacOdrum, Q.C, M.P.P., for Village of Athens, County of Young and. Escott, Village of Westport, County of N. Crosby, County of S. Crosby, Rear County of Leeds and Lansdowne.

Judgment

Chase, Commissioner:

The application for the abandonment of the Westport Subdivision of the Canadian National Railways, hereinafter referred to as the Branch, was filed with the Board under date of June 15, 1951. As above noted, the Hearing was conducted on June 5, 1952.

A short history of the Branch is as follows: It nms between Lyn Junction (mile 0.0) and Westport (mile 40.51), a distance of 40-51 miles.

It was built by the Brockville, Westport and Sault Ste. Marie Railway Company under Ontario Act 47 V. Chapter 63, 1884, and opened for traffic in 1888. The property was sold under foreclosure in 1903 and a new charter was granted the purchasers under the name of Brockville, Westport and North Western Railway Company. In 1911 the Company defaulted on its bond interest, was purchased by the Canadian Northern Railway interests and now forms part of the Canadian National System. Prior to its acquisition by the Canadian National Railway System, the line extended from Brockville to Westport.

The physical characteristics of the Branch are such that it cannot be used for heavy traffic. About 32 miles of the rail is ol the 56-pound type which was laid in 1887 and is in poor condition. The ties are mainly untreated and in poor condition, and the same can be said of the ballast. The maximum grades are: eastbound, 1.6%; westbound, 1.2%.

It operates through a well settled, prosperous farming country serving nine stations. It is paralleled almost for its entirety by a good, paved highway which is open all year round and upon which bus and truck services operate, furnishing service to the communities now served by the railways.

In support of the application the railways submitted exhibits and evidence showing traffic handled, revenues and expenses for the years 1946-51, inclusive, as related to the Branch and the Canadian National System. As the value of a branch line cannot be fully determined by merely taking into account the revenues and expenditures relating thereto, I will refer mainly to the effect the operation of the Branch has on the Canadian National System as a whole. The information is fully set forth in Exhibit No. 24 reproduced below, where it will be noted that the out-of-pocket expenses for the operation of the Branch were $159,190, while the System loss was $83,035.

Canada National Railways
System Revenues:	1946	1947	1948	1949	1950	1951
Passenger	266	305	186	311	169	116
Freight	76,984	73,218	73,130	81,577	68,173	63,454
Express	6,994	7,473	8,205	9,777	8,535	10,513
Miscellaneous	2,688	2,520	2,401	2,377	2,118	2,072
	86,932	83,516	83,922	94,042	78,995	76,155
Expenses (Out-of-Pocket)
Branch Line
Maintenance of Way and Structure	48,144	45,600	52,590	47,243	50,456	49,974
Train Service	38,708	42,434	47,739	49,682	49,682	53,627
Maintenance of Equipment	3,784	4,091	4,843	4,852	4,852	5,466
Station Service	6,692	7,471	9,027	8,705	8,895	11,232
Taxes	32	4,336	4,336	4,336	4,336	4,336
Off-Line
Expenses 50 per cent Operation Ratio on freight and express	39,331	37.776	38,064	42.741	35,883	34.555
	136,691	141,708	156,599	157,559	154,104	159,190
System Loss	49,759	58,192	72,677	63,517	75,109	83,035

Montréal, Que., June 3, 1952.

The train service on the Branch consists of a mixed train operating on certain days in the week, and the carload traffic outward and inward for the year 1951 amounted to a total of 329 cars, an average of less than one car a day. No mail is handled and the entire passenger service for the year 1951 amounted to $25 for the Branch and $116 for the System as a whole. (See Exhibit No. 14).

For the respondents it was argued that with the completion of the St. Lawrence Seaway, great industrial development would take place in Brockville and the territory adjacent thereto, and in addition there was a strong possibility of a mining industry being established for lead and iron ore in the vicinity of Lyndhurst, and for these reasons the Branch should be kept in operation for a period of at least another five years.

Although the Railway Act lays down no principles upon which the Board should act in granting or withholding approval in applications for abandonment of railway lines, the issue in each ease where abandonment is sought resolves itself into a Question of whether the loss and inconvenience to the public consequent upon the abandonment outweigh the burden that Continued operation of the railway line involved would impose upon the Railway Company. Here I would refer to the decision in re C.N.R. Tweed Subdivision reported in Canadian Railway Cases No. 53, at page 142, where approval was given for the abandonment of operation of the Tweed Subdivision between Yarker and Tweed, Ontario, a distance of 33.94 miles, and it is significant to note that in that particular case the system loss was shown as being; $22,203 for the year 1939 and $14,139 for the first nine months of the year 1940. Also the case re C.N.R. Lakefield Subdivision reported in Canadian Railway Cases No. 66, at page 344. The mileage involved was 16.24 miles. The System's savings, if line abandoned, would amount to $21,392, and the abandonment was approved. As stated above, in this particular case the system's savings in the event of the approval of the abandonment would be $83,035 per annum.

I would also refer to the Report of the Royal Commission on Transportation where, commencing at page 134, the following appears:

On the general question of the future of Canada's railways there are certain matters which must be borne in mind by all those who are concerned in any manner with the solution of railway problems. The most important of these is the fact that motor truck competition has made it increasingly harder, during the last 25 years, for the railways to maintain their position as carriers who ought to be able to give the public in all parts of Canada reasonably equal treatment in respect to tolls. Truck competition in Central Canada has grown to such a size as to eat into the railway's revenues by capturing a great portion of their most profitable traffic and by making it necessary for them to reduce their rates to what looks like a dangerously low point in order to retain some of it. The problem is a difficult one to handle because truck traffic, in by far its largest form, is a subject which is of provincial and not of federal control, and it is further divided between the private trucks carrying the goods of their owners and the trucks that work for hire. Of these two classes of trucks the former is very much the larger.

The figures set out at the beginning of this section show that about 15,000 miles of railway in the United States were abandoned between 1921 and 1948 because of truck competition. So far this competition has had no appreciable effect in reducing railway mileage in Canada, but the near future will show to what extent the railways can meet competition successfully. This question is dealt with more fully in another part of this report. The present tendency of our population to increase, especially in Ontario, and the accompanying increase in business throughout the country will widen the possibilities of this competition and at the same time intensify it.

Up to the present, line and service abandonments by railways have not been looked upon with favour in Canada. It is time now for all concerned to re-consider their attitude in this regard. If the American railways had not been allowed to meet by abandonment, sometimes partial and sometimes total, the difficulties created by highway competition, by the cessation or relocation of industry, by the exhaustion of natural resources, etc. they would undoubtedly have been in a much more unfavourable position than they are today. Our railways should be allowed to practise similar economies in cases where operations are shown to have become substantially unnecessary or to be definitely unprofitable, especially, of course, when it is shown that reasonable service can be assured by other agencies.

Considering the decisions in the cases mentioned above, the conclusions of the Royal Commission on Transportation with respect to the applications for abandonment, the substantial losses to the railways and all that was presented to the Board at the Hearing, I believe that the application for abandonment is justified.

There will be some inconvenience to the public. The argument advanced by the respondents does not, in my opinion, carry much weight. If the St. Lawrence Seaway is completed and industrial activity is increased in the vicinity of Brockville it is unreasonable to assume that it will extend through to Westport or anywhere near there. If the mining development becomes a reality and a rail line is needed, it would only be necessary to build a few miles of track from Forfar to the place where the ore is said to be found, and there could be no good reason for postponing the abandonment for a period of five years during which the C.N.R. would lose possibly another half million dollars. Other transportation facilities can and are being used. No evidence was submitted to show that the main highway, which practically parallels the railway, is not open for traffic, even in the winter months. There is not now sufficient traffic, present or prospective, to warrant continuance of the service in the face of the operating losses to the railways. In my opinion, the losses to the railways outweigh the loss and inconvenience to the public.

I would grant the application.

H. B. Chase.

June 18, 1952.

I concur:

Hugh Wardrope.