The Board of
Railway Commissioners for Canada

Application of the Canadian National Railways for an Order granting leave to abandon the operation of the Port Rowan Branch of its Simcoe Subdivision, in the Province of Ontario, between Simcoe (Mile 7.11) and Port Rowan (Mile 16.92), a distance of 16.92 miles.

(File 39310.33)

Judgment

Garceau, Deputy Chief Commissioner:

This is an application to abandon the operation of the Canadian National Railways' branch from Simcoe to Port Rowan, a mileage of 16.92.

This line was formerly the South Norfolk Railway, incorporated by Act of Parliament in 1887. It received subsidies as follows:—

Town of Charlotteville	$ 20,000.00
Village of Port Rowan	20,000.00
Township of South Walsingham	40,000.00
Township of Woodhouse	5,000.00
Town of Simcoe	5,000.00
Dominion Government	54,000.00
	144,000.00

The condition upon which the subsidies were granted, as appears from the respective subsidizing by-laws, is as follows: to operate said line of railway to run at least one train each way per day, with proper accommodation for passengers between the said Town of Simcoe and the said Village of Port Rowan.

The line was opened for operation in 1889. It is in good condition except for the ballast which is of sand and badly in need of resurfacing, and the ties which are soft wood and untreated and in poor condition.

The territory through which the line passes, says Mr. McDonald of the Canadian National Railways, is a well settled farming country producing chiefly apples, small fruits, tobacco and other farm produce, and Port Rown is the centre of considerable industry and some volume of fish traffic is shipped by express.

There are station agents at Port Rowan and at St. Williams. According to Evidence and the statement of Mr. Tisdale, Counsel for the Municipalities, traffic before the depression was sufficient to permit the railway to operate the line profitably.

Since then, the industrious population of this region has worked steadily and successfully to improve production.

The railway's statement for the year 1937 justifies Mr. Tisdale, Counsel for the Municipality, to say, after stating that the McCall firm of St. Williams during the period of 1927 to 1930 has paid freight to this branch amounting to $55,7000, while, during the period from 1934 to 1937 the revenues credited to this branch and the balance of the system only amount of $66,476:—

What is the answer? Just this—the depression years so depleted the volume of business done by every concern in Canada and elsewhere, almost without exception that naturally the volume of business which these firms could do with the railway was likewise depleted. With the return of normal times and the return of normal business conditions, the firms, which during the depression years had only a small volume of business to give the railways because they were doing only a small volume of business themselves, will, because of their increasing trade, be shipping more and more goods by the railway. I hope and expect that within a few years the McCall firm and other firms and individuals along this branch line will be doing a volume of business exceeding that of the predepression years and I do not feel that I am being unduly optimistic in my hope and expectations.

Even the statements of the four-year period of 1934-1937 do not disclose any situation which warrants abandonment. An operating loss of $10,084 in 1936 was cut to $4,639 in 1937. As to 1938, I understand that May 1938 revenue exceeded May 1937 by over $1,000 for Port Rowan and St. Williams alone.

The revenues in 1934 were $28,114; the expenses amounted to $38,672, leaving a deficit of $10,648; in 1935 the revenues where $26,494, the expenses were $35,822, making a deficit of $9,328; the revenues for 1936 were $24,761, the expenses $34,846, leaving a deficit of $10,084; the figures for 1937 show revenues of $32,941, expenses of $37,580, making a deficit of $4,649.

These statements show that the traffic was always very important and that it has been increasing since 1934, the deficit for the last year being reduced to $4,639.

Since the hearing, the railways have filed detailed statements of their expenses, the labour costs amounting to the following figures:—

Maintenance of Way and Structures—	Labour
1934	$ 7,524.00
1935	6,144.00
1936	6,574.00
1937	6,175.00
Transportation—
1934	9,809.36
1935	10,634.20
1936	10,795.68
1937	8,476.56

In 1934, the deficits were $10,648 and wages paid to labour amounted to $14,333.36; in 1935, the deficit was $9,328 and the wages paid to labour $16,778.20; in 1936, the deficit was $10,084, and the wages paid were $17,367.68; in 1937, the deficit was $4,639 and the wages paid were $14,651.56.

The abandonment, according to the operation of 1937, would mean an economy of approximately $4,639 for the railway company but labour would incur a loss of $15,000 in wages, with corresponding loss in buying power and ill results for trade and industry.

Moreover, the transportation facilities of this region would be disorganized for a certain period, resulting in inconvenience and loss to the public.

From the facts above stated, it is evident that it is in the public interest for the railway to continue to co-operate towards the development and prosperity of this region, for which purpose it was subsidized.

The railway was justified in making this application and in leaving to the Board the decision regarding its duty to the public in connection with this line, in order to protect itself against unfair criticism about deficits more apparent than real, the services rendered buy the railway company cannot all be determined in dollars and cents, and the line should be maintained, more particularly in view of the larger revenue anticipated.

I would dismiss the application.

F. Nap. Garceau

November 14, 1935.

In my opinion, the record indicates, very clearly, that an increase in earnings may be expected on this line in the very near future. I was very favourably impressed with the presentation made on behalf of those opposing this application, and I therefore agree that the application should be dismissed.

J. A. Stoneman.

I concur,

G. A. Stone.

Railways: C.N.Rys.

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