Joint application of the Canadian Pacific Railway Company and Canadian National Raihvays for an Order granting authority as follows: (1) Canadian Pacific Railway to abandon operation of that part of its Bobcaygeon Subdivision between Dranoel, Mileage 0.13, and Lindsay, Mileage 17.51, together with tracks and facilities in Lindsay; and to abandon operation of that part of its Port McNicoll Subdivision, and other tracks extending from a point approximately I^OO feet east of road between Concessions 5 and 6, Township of Orillia, to Mileage 14.00, the point of junction with its MacTier Subdivision, in the Village of Medonte, Ont.; and (2) Canadian National Railways to construct and operate connecting tracks, and to abandon certain tracks and sidings in Town of Lindsay, Ont., and to construct and operate connecting tracks in the Town of Orillia, Ont.

Judgment

Stoneman, Commissioner:

This application was filed with the Board February 14th, 1940. The application was set down for hearing and heard in two parts—Trenton Division, Dranoel to Lindsay, was heard at Lindsay on May 7th, 1940; Bruce Division, Orillia to Medonte, was heard at Orillia on May 8th, 1940. Mr. K. D. M. Spence appeared for the Canadian Pacific Railway; Mr. A. D. McDonald for the Canadian National Railways; Mr. A. M. Fulton, K.C., for the towns of Lindsay and Bethany; Mr. T. H. Stinson, K.C., for the town of Lindsay and the municipalities; Mr. H. G. Pack for the town of Orillia; Mr. S. B. Brown for the Canadian Manufacturers' Association; and Mr. K. W. Peacock for Limestone Products.

At the Orillia sitting, application for leave to amend the original application as filed was made and granted.

The Chief Commissioner: The application to amend or to put the petition in the alternative will be allowed, but I might suggest to counsel for the railway companies that possibly when they have time they might file the proposed amendment in its proper form and furnish a copy to interested parties, particularly His Worship the Mayor of Orillia and Mr. S. B. Brown who represents the Canadian Manufacturers' Association.

The amended application referred to above was filed with the Board June 7th, 1940, in the following form:—

Canadian Pacific Railway Company and Canadian National Railways hereby severally apply to the Board of Transport Commissioners for Canada as follows:

The Pacific Company applies under Section 165 (a) of The Railway Act, Section 2, subsection (3) of the Canadian National-Canadian Pacific Act of 1933, and all other appropriate statutory provisions, for leave to abandon 'the operation of—

that part of its Bobcay^eon Subdivision commeneing at Dranoel, Mileage 0.13 and extending to the south limit of Russell street in the town of Lindsay, Mileage 17.51, together with the tracks and facilities in Lindsay shown in dotted green on Plan 1 attached to this application;

that part of its Port McNicoll Subdivision and other tracks extending from a point approximiately 400 feet east of the road between Concessions 5 and 6, townsihip of Orillia, to a point in the vicinity of Mileage 01.00, as shown in dotted green on Plan 3 attached to this application;

that part of its Port McNicoll Subdivision extending easterly from Mileage 14.00 in the village of Medonte for a distance of approximately 1,200 feet, as shown in dotted green on the said Plan 3.

The National Company applies—

under Section 165 (a) or The Railway Act, Section 2, subsection 3 oi the Canadian National-Canadian Pacific Act, 1933, and all other appropriate statutory provisions, for leave to abandon the operation of that part of its Midland Subdivision between a point near the westerly limit of the town of Orillia and a point in the village of Medonte, as, shown in dotted white on Plan 3 attached to this application;

under Sections 252 and 256 of The Railway Act, and ail other appropriate statutory provisions, for leave to construct and operate connecting tracks in the town oif Lindsay, and in and near the town of Orillia and the village of Medonte, as shown in yellow on Plans 1, 2 and 3 attached to this application;

under Section 187 of The Railway Act, and all other appropriate statutory provisions, for leave to abandon certain tracks and sidings in the town of Lindsay, shown in dotted white on Plan 1 attached to this application.

Leave for the foregoing is to be conditional upon the subsequent sanction by the Governor in Council upon recommendation by the Board of an agreement between the Canadian National and Canadian Pacific Railway Companies covering the transfer to the Canadian National of the Canadian Pacific line between the south side of Russell street, Lindsay, and the end of track in Bobcaygeon, the Canadian Pacific tracks in Orillia indicated in red on Pian 2 attached to this application, and that part of the Canadian Pacific line between Orillia and Medonte, Shown in solid green on Plan 3 attached to this application.

In support hereof the applicant companies submit the fallowing:—

Statement setting forth a general description of the lines, the territory served and alternative transportation facilities available;

Statements of revenues and analysis of freight traffic for the years 1936, 1937, 1938 and 1939;

Estimate adopted by the C.N.R.-C.P.R. Joint Co-operative Committee showing the annual joint net savings, cost oi physical changes necessary, estimated salvage value, etc.;

Three maps lettered 'A', 'B' and 'C showing the territory through which the lines run;

Three plans numbered 1, 2 and 3, showing details of the proposal.

The original application' contemplated the abandonment of the Canadian Pacific from Mileage 13.91 near Medonte to a point near Mileage 0.0, Orillia.

The new plan provides a connection between the Canadian Pacific and Canadian National at approximately Mileage 13.91 near Medonte in order to provide operation by the Canadian National Railways over the existing Canadian Pacific tracks to a point near Tafton at approximately Mileage 2.2, then to come back onto the Canadian National tracks and operate over the Canadian National through the Town of Orillia to the original connection with the Canadian Pacific Railway. The reason for coming back on the Canadian National tracks west of the town of Orillia is to overcome an objection raised by the town of Orillia to the retention of the Canadian Pacific tracks along the waterfront. The change also eliminates an existing level crossing of the Canadian National Railways at Highway No. 11 and the crossing at Silver Creek, all as indicated on plan known as Exhibit No. 2. Under the plan Exhibit No. 2 the Canadian National Railways' tracks between the points mentioned would be abandoned instead of the tracks of the Canadian Pacific.

The proposal embodied in part one of the application is to abandon the Canadian Pacific Raihvay tracks between. Dranoel, Mileage 0.13, and extending to the south limit of Russell street in the town of Lindsay, Mileage 17.51, together with the tracks and facilities in Lindsay shown in dotted green on Plan 1 attached to this application. The mileage is approximately 17 miles and serves four stations other than Dranoel and Lindsay, namely, Bethany, Fleetwood, Rea's and Hillhead. The total revenue received by the railway at the four stations mentioned above was as follows during the last four years:—

	1936	1937	1938	1939
Bethany	3,189	3,608	2,906	4,512
Fleetwood	9	355	908	103
Rea's	1	.	1	.
Hillhead	551	.	1	1

The revenues indicate cleanly that Bethany is the only point which is likely to suffer to some extent by the closing of the proposed branch line. The carload traffic at Bethany is practically all inward, made up mostly of coal, cattle, cement, grain and salt. The total inward and outward carload traffic was as follows during the last four years:—

1936	. . . . . . . .	11	cars
1937	. . . . . . . .	17	"
1938	. . . . . . . .	8	"
1939	. . . . . . . .	29	"

A reference to map C indicates Bethany as only a short distance from Dranoel, which is on the Canadian Pacific line to be retained, that is the line to Peterborough. At the present time there is no real access to Dranoel station by road but the applicants state it is their intention to build a road from the station at Bethany to the nearest highway, making use of their right of way if abandoned. When that is done the people of Bethany can obtain rail service by travelling 2 1/2 miles. It is also stated by the applicants that it is their intention to continue over the highway express service if arrangements can be arrived at between the two railways.

There is really only one point between Dranoel and Lindsay where slight inconvenience may be caused if the application is granted, namely Bethany. Counsel for Bethany and also counsel for the municipalities stressed the need of continued service to the hamlet of Bethany for the accommodation of skiing traffic and urged that prospects for expansion in the sport were very bright.

The general merchant located at Bethany, who appeared, stressed the poor condition of the highways presently serving Bethany and urged that the railway was a great asset to their community when highways were blocked with snow in the winter-time.

With regard to the condition of the roads in the community the evidence indicates very clearly that highway transport is used extensively, and with direct reference to Mr. Eastwood's evidence (p. 1196 of the Evidence) he states that in so far as snow conditions are concerned^ he was able to drive his car to Bethany eight out of ten week-ends this winter (1939-40). There is direct evidence also by another witness that snow conditions did not block the highways until March of this year, although it is stated by other witnesses that snow conditions are somewhat difficult to contend with in the area affected. In so far as Lindsay is concerned the complaint seems to be inconvenience and increased cost because of the abandonment of the one railway and loss of what is termed the competitive rate.

With regard to part two of the application, which was heard at Orillia on May 8th, there is no question of abandonment or lack of service at any station on the part of the Port McNicoll Subdivision involved. The opposition of those appearing on behalf of the town of Orillia, the Canadian Manufacturers' Association and Limestone Products is similar to the opposition of those opposing the application on behalf of the town of Lindsay, namely, inconvenience and increased cost because of the abandonment of the one railway, and loss of what is termed the competitive rate.

I propose to deal with the complaint as set out above, which was heard at both points, as one complaint.

Representations were made concerning increased freight rates resulting from abandonment of these lines because the charge for a two-line haul, in the case of shipments to and from non-competitive points on the other railway, would be higher than the single-line charge. It is general in the freight rate structure for single-line haul rates to be upon a somewhat lower basis than for joint movements over two or more lines, for reasons that have been repeatedly set out in the Board's decisions. The situation in this respect is no different from that existing in other cases where the Board has granted permission to abandon lines. In such cases, some rate increases result, with respect to a small proportion of the total traffic involved, although the railways have, in numerous instances, avoided any substantial rate increase by establishing suitable joint rates for the principal traffic movements affected. It was stated by railway counsel that they would give consideration to the establishment of joint rates where the traffic warranted such action, as, for example, in the case of the lumber shipped to the Pedwell Lumber Co. Shippers and consignees are also frequently in a position to shift the traffic movement so as to avoid any increase in rate. Mr. Pedwell was unable to state whether he could secure all his lumber requirements from Canadian National points and avoid any rate increase. With regard to the large movement of fluxing stone from Uhthoff to Copper Cliff and Coniston, the Canadian National Railways state the present rate will be continued. Regarding less than carload traffic, truck competition will probably prevent any appreciable rate increase or truck transportation may be available to and from many points at no rate increase. There was so little specific information given as to the non-competitive points on the other railway to and from which the traffic is actually moving, and the volume of it, that it is impossible to form any conclusion as to the general result or extent of any rate increase which will actually be incurred. A specific complaint may at any time be made to the Board concerning any alleged unreasonableness or unjust rate discrimination, which will be dealt with on its merits.

I have submitted the traffic statements submitted by Mr. G. A. Walker with his letter of April 26th, to the Traffic Department for analysis, and I am embodying the analysis made by the Department:—

On the inward traffic to Orillia, 82 per cent of the cars received at that point in 1939 consisted of the following commodities:

Canned milk . . . . . . . . 18 cars

Coal . . . . . . . . 13 "

Coke . . . . . . . . 15 "

Gasoline . . . . . . . . 123 "

Lumber . . . . . . . . 127 "

Scrap iron and steel . . . . . . . . 28 "

Steel bars . . . . . . . . 26 "

Wool . . . . . . . . 18 "

368 cars

Similarly, at Lindsay, 81 per cent of the traffic inward consisted of:

Coal . . . . . . . . 141 cars

Coke . . . . . . . . 36 "

Gasoline . . . . . . . . 73 "

Newsprint . . . . . . . . 11 "

Rock . . . . . . . . 19 "

280 cars

I shall comment on each commodity as follows:

Canned Milk:

The Canadian Trade Index of the Canadian Manufacturers' Association shows only one producer who is not at a point served by both Canadian Pacific and Canadian National Railways, and this one point is located on the Canadian National tracks; consequently, there is not likely to be any hardship by abandoning the Canadian Pacific line.

Coal and Coke:

On traffic coming into Canada through the Niagara gateway, both the Canadian National and Canadian Pacific have equal rates. As far as the movement of coal between Canadian points is concerned, there are mileage rates on both lines, and the principal sources of supply would be from the lake ports or import through the ocean ports, consequently no hardship should there be experienced. In so far as coke is concerned, the principal sources of supply would be centres such as Montréal, Toronto, Hamilton, etc., where both railways would have equal rates.

Gasoline:

The movement of gasoline would undoubtedly be under Agreed Charge No. 3, which is upon a mileage basis and has a wide variety of points of origin, mostly marine terminals. This is a truck competitive situation and there should be no doubt about the continuance of competitive rates.

Lumber:

Specific reference was made to this commodity by Pedwell Lumber Co., upon which comments have above been made. However, lumber generally moves under mileage rateS' and, with a wide source of supply, it is doubtful if any real hardship will occur by the discontinuance of one line or the other.

Scrap Iron and Steel:

These commodities move under mileage rates which are equal to both lines. The source of supply is varied, and there would seem to be no question of hardship in this case.

Newsprint Paper:

Most of the paper mills in Canada are served by both railways, with the exception of the International Paper Company's' mills at Gatineau and Three Rivers. The quantity of paper consumed would seem to involve no hardship in securing adequate supplies without any additional transportation cost.

Steel Bar:

It is difficult to anticipate whether there would be any change in the transportation cost. In general, the iron or steel tariffs apply by both lines from the principal iron and steel mills. Of the movement was to take place from Sault Ste. Marie, there are to-day specific rates applicable by both Canadian Pacific and Canadian National routes, the Canadian National route being in conjunction with the Algoma Central & Hudson Bay Railway and via a circuitous mileage. It might be ultimately affected if the competition of the short-line Canadian Pacific route were withdrawn, but it would seem logical that commercial competition between the steel mills would equalize some of these disadvantages if any should occur.

Rock:

This commodity moves under mileage rates which are equal for both lines. It is a commodity which has many sources of supply, and it would not appear difficult to obtain the necessary shipments over one railroad.

Wool:

This commodity moves under class rates, and without knowledge of the sources of supply, it is difficult to anticipate that there would be any serious disparity by abandonment of one of the lines.

The applicant states that the estimated joint net annual saving to be made is $55,700. In applications of this sort the estimated saving is weighed against the inconvenience which might accrue to the community. The evidence in this case, I think, clearly indicates that the inconvenience would be very slight.

I would grant the application in toto with leave to abandon, make the necessary connections to serve industry now served by the Canadian Pacific, and make the necessary recommendation to ithe Governor in Council as to the agreement referred to in the application; this order to become effective only when the agreement referred to above has been approved by the Governor in Council.

J. A. STONEMAN.

July 10th, 1940.

I concur:

Hugh Wardrope.

J. A. Cross.

Canned milk	. . . . . . . .	18	cars
Coal	. . . . . . . .	13	"
Coke	. . . . . . . .	15	"
Gasoline	. . . . . . . .	123	"
Lumber	. . . . . . . .	127	"
Scrap iron and steel	. . . . . . . .	28	"
Steel bars	. . . . . . . .	26	"
Wool	. . . . . . . .	18	"
		368	cars