In the matter of the application of the Canadian National Railway Company, dated December 15, 1958, for an Order under Section 168 of The Railway Act and Section 2, Subsection 3, of the Canadian National-Canadian Pacific Act and all other relevant statutory provisions, granting leave to abandon the operation of the Irondale Subdivision in the Province of Ontario between York River (Mile 0.00) and Rowland, a total distance of 50.96 miles.

39310.68

Before:

Rod. Kerr Q.C., Chief Commissioner.

A. Sylvestre, Q.C., Deputy Chief Commissioner.

J. M. Woodard, Commissioner.

Appearances:

W. G. Boyd	for the Canadian National Railway Company.
and
E. D. Angers,
Sterling Mathers,	representing the Township of Maynooth.
Willard Billings,	representing the Township of Glamorgan.
E. H. Peacock,	representing the Township of Snowdon.
Miss E. M. Nicol,	representing the Township of Dysart.
G. W. Barr,	in person.

Heard at Haliburton on October 15, 1959.

Judgment

Kerr, C.C.:

The hearing of the above mentioned application took place at Haliburton, Ontario, on October 15, 1959, after investigation in the area served by the railway line by officers of the Board's Engineering and Operating Branches. Due notice of the hearing was sent to the Reeve, Clerk, Secretary, or other officers of some ten municipalities and townships in the area and to other interested parties. Only the Townships of Maynooth, Glamorgan, Snowdon and Dysart and one shipper appeared at the hearing in opposition to the application. Letters in opposition were received from the Provisional County of Haliburton, the Township of Monmouth and the Improvement District of Bicroft and several residents of the area.

The line to which the application relates is Canadian National's Irondale Subdivision, 50.9 miles of single track railway in Ontario from York River to Howland. At York River the line joins the Maynooth Subdivision, at Howland it joins the Haliburton Subdivision.

The area served by the line is generally between the Haliburton Subdivision on the west, and the Maynooth Subdivision on the east and between the Haliburton Highlands and the Kawartha Lakes area.

The track is Class E, which is the lowest class of Canadian National track. In addition to stations at Howland and York River there are nine other stations on the line. None of them is an agency or open station.

The area is fairly well served by hard surfaced highways, which are being improved. The distance by highway from communities along the line to the nearest stations on other subdivisions, namely, Howland, Bancroft, Haliburton, and Kinmount, range from five miles to thirty miles. The area is extensively wooded and is also a farming and tourist area. Industrial activity is confined for the most part to forest products and some uranium mining.

Train service consists of one mixed train, No. 324, leaving Howland on Wednesday mornings, and one mixed train, No. 323, leaving York River on Thursday mornings. Prior to April last there were two round trips weekly. The train consists of one 1200 class diesel, one coach and one baggage-express car, plus the freight cars handled.

About 60 per cent of the rail is 56 and 70 pound rail, in poor condition and not suitable for use elsewhere. Ballast is in fair condition. Bridges and culverts are good, with some repairs needed. About 60 per cent of the ties were installed in the past ten years in order to maintain service on the line, and a large portion of these ties are treated and usable elsewhere. Prior to October, 1958, the section force consisted of three foremen, each with three sectionmen, but since then the force consists of one foreman and three sectionmen.

Canadian National offered evidence at the hearing respecting system revenues, division of revenues between the branch and the system, traffic handled, operating expenses and operating results, for the years 1955 to 1958 inclusive.

In computing system revenues the company counted the earnings accruing from shipments on the line and also from shipments between points on the line and points off the line; for example, on a shipment from a point on the line to, say, Sarnia, the total freight charges on the shipment to destination were counted as system earnings.

System revenues were shown as follows: (Exhibit 3).

C.N.R. System Revenues						Carload Traffic
	System Total					Cars
Year	Psgr.	Freight	Express	Misc.	Total	In	Out
1955	250	47,982	4,151	144	47,982	31	197
1956	172	44,414	2,898	186	47,460	35	212
1957	160	35,050	1,977	226	37,413	30	170
1958	134	24,867	1,350	333	26,684	38	119

In each of those years the principal carload commodities handled logs, lumber, fuelwood, pulpwood and veneer.

Less-than-carload traffic was as follows: (Exhibit 5).

	Tons	System Revenues
1955	197	$4,559
1956	170	$4,293
1957	95	$2,733
1958	55	$2,072

In calculating the division of revenues for those years between the branch line and system, Canadian National apportioned the waybills for the months of February, May, July and October and the average proportion between branch line revenue and system revenue obtained thereby was applied to the remainder of the year. The resulting division was as follows: (Exhibit 6).

	Branch Line	Balance of System	Total
1955	7,227	40,755	47,982
1956	7,099	40,571	47,670
1957	5,628	31,785	37,413
1958	4,165	22,519	26,684

Exhibit 6 also shows Canadian National's calculation of operating results on the branch line basis, as follows:

	Branch revenues	Branch expense	Branch loss	Branch loss per mile
1955	7,227	118,710	111,483	2,188
1956	7,099	116,390	109,291	2,144
1957	5,628	122,560	116,932	2,294
1958	4,165	121,740	117,575	2,307

Details of branch expenses were given for the four years. Those for 1958 are as follows:

Train Service	31,345
Maintenance of Equipment	8,155
Station Expenses	1,300
Maintenance of Way and Structures	73,270
Payroll burden (Unemployment Insurance, Health and Welfare Plan, etc.)	7,670
Total	121,740

The train service amount includes $24,240 for wages and $4,900 for fuel. Maintenance of way and structures expense includes $31,475 for labour and $41 ,795 for material, mostly ties.

Canadian National's Exhibit 7 shows its appraisement of the effect of operating the branch on the system as a whole. It includes the out-of-pocket expenses of the branch above set forth, and the balance of system expenses incurred in handling the off-line traffic, the latter calculated on the basis that at least 50 per cent of the system revenues for the freight and express handled would be the expense to Canadian National of handling the traffic on the balance of the system. The Exhibit shows the following results for the years 1955 to 1958.

Operating Results, System Basis

	1955	1956	1957	1958
System Revenues	47,982	47,670	37,413	26,684
Out-of-Pocket Expenses
Branch Line	118,710	116,390	122,560	121,740
Balance of System Expenses
50% Operating Ratio on off-line
Freight	18,678	19,098	15,072	10,693
Express	1,637	1,145	781	533
Total	$139,025	$136,633	$138,413	$132,966
Annual System Loss	91,043	88,963	101,000	106,282
Annual System Loss Per Mile	1,786	1,747	1,982	2,085

If operation of the line is abandoned Canadian National will incur switching expenses on its Bessemer, Coe Hill and Maynooth Subdivisions which were estimated to amount to $32,520 if the switching had been performed in 1958, and this amount is deductible from the $106,282 annual system loss above mentioned, leaving $73,762 as the company's appraisement of the annual saving on 1958 figures that would result to Canadian National from abandonment of operation of the branch line.

Canadian National also gave figures of traffic handled during the first eight months of 1959, which showed that the number of outbound cars dropped to 45 as compared with 70 for the same period in 1958; and that the number of inbound cars increased but only because of heavy shipments of asphalt and highway material, which were said to be non-recurring traffic.

Evidence was given as to bus operations and trucking operations in the area.

The general purport of objections to the application that were made by those who appeared at the hearing and by persons who wrote to the Board, were that large timber in the area has become exhausted and there is only pulpwood and fuelwood left and the line is needed for these commodities; that highway construction is coming to a close and the farmers will go back to seasonal cutting of trees; that a large amount of money has been spent by the company in recent years in putting in new ties and otherwise repairing the line and structures, and this should enable operation to be carried on for some years with a minimum of expense; and that the railway is necessary in order that railway rates may help to hold down trucking rates.

Findings and determination

The line has had a long and useful life and, like some other branch lines, has handled much more traffic in former years than in latter years. The changes that have taken place in the economy and industry of the area, coupled with the development of paved highways and highway transportation services by bus and truck, both private and public, have been influential in reducing traffic handled by this branch line to a weekly average of approximately two to three outbound cars, mostly pulpwood and forest products, and less than one inbound car. On behalf of Canadian National it was said that on a per mile basis this branch is one of its most unprofitable lines and that Canadian National management sees no prospect that patronage will increase to an extent sufficient to warrant continuance of operation of the line. The evidence supports the view taken by Canadian National of future prospects for the line. The patronage in recent years and the prospective patronage for the future are not such as to warrant continuance of operation.

As was stated by the Board in its decision in 1935 in C.N.R. v. Tweed, 44 C.R.C. 53, the issue in each case where abandonment is sought resolves itself into the question 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.

In my opinion the burden that continuance of operation of this line would impose upon Canadian National Railways greatly outweighs the loss and inconvenience to the public that would result from abandonment.

I would grant the application and authorize abandonment of operation to take place at any time after March 31, 1960. I feel that the area should continue to have the services of the line during the coming winter, and shippers will have that period to make adjustments in their transportation arrangements for the future.

An Order will be issued accordingly.

Rod. Kerr

I agree:

A. Sylvestre

I concur:

J. M. Woodard

Ottawa: December 11, 1959.

Railways: C.N.Rys.

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