The Board of
Transport Commissioners for Canada

Application of the Canadian National Railways under Section 165A of the Railway Act and all other appropriate statutory provisions for an order granting leave to abandon the operation of the Tweed Subdivision between Yarker (mile 0.00) and Tweed (mile 33.94), a distance of 33.94 miles.

Judgment

Wardrope, Assistant Chief Commissioner

This application was heard it the Town of Napanee on the 24th day of October, 1940.

Mr. R. E. Laidlaw, K.C., appeared for the applicants; Mr. I. D. Corcoran for the municipalities; Mr. T. J. Rigney, K.C., for the City of Kingston; Mr. T. E. Bennett for the Post Office Department; and Mr. W. H. Phillips for the Dominion Joint Legislative Committee Railway Running Trades.

It is stated that this portion of the applicants' railway was opened for operation between Yarker and Tweed in 1889. It was built under the charter of the Napanee, Tamworth and Québec Railway under the following statutory authority, Dominion of Canada, Act. 42 V. Chap 67, 1879.

The Napanee, Tamworth and Québec Railway Company was incorporated under Act 42 V. Chap. 67 of Canada in 1879, and changed its name to the Kingston, Napanee and Western Railway Company in 1890, which amalgamated with the Bay of Quinte Railway and Navigation Company in 1896 to form the Bay of Quinte Railway Company. This latter company was acquired by the Canadian Northern Railway Company in 1914, control of which passed to the Dominion Government in 1917, and, in conjunction with other Government railways, is operated under the title of Canadian National Railways.

This portion of the line passes through a mixed farming community which also produces some lumber and pulpwood. It formerly extended from Tweed in a northwesterly direction through Actinolite, Queensboro, Allan and on Bannockburn on the Maynooth Subdivision of the Canadian National Railways. However, in 1935, owing to losses sustained by the railway on this latter portion of the line, application was made to the Board for abandonment of same. This application was granted by Board's judgment reported in 44 C.R.C., p. 53.

Starting at Yarker, where the existing line proposed to be to be abandoned joins the Smith's Falls Subdivision of the Canadian National Railways between Napanee and Smith's Falls, the line passes through in a westerly direction the following villages—Moscow, Enterprise, Tamworth, Erinsville, Marlbank, Larkins and Stoco, and thence runs into Tweed. Tweed is also served by the main line of the Canadian Pacific Railway between Toronto and Montréal via Peterboro. The Canadian Pacific Lake Shore Line from Toronto to Montréal through Belleville crosses the line proposed to be abandoned about ten miles northwest of Raker and just west of the Village of Enterprise. The country in the vicinity of the line is plentifully supplied with reasonably good roods, although it was emphasized at the hearing that during the winter-time those roads are frequently blocked by snow. An improved secondary road roughly parallels the line between Yarker and Tweed, and from this southward run good roads connecting with important centres such as Belleville and Napanee situated on No. 2 King's Highway.

The train service for some years past and at present consists of a mixed train in each direction daily, except Sunday, between Napanee and Tweed. The line is in far to poor condition, necessitating a speed restriction of twenty-five miles per hour.

The applicant alleges that owing to the lack of traffic and consequent loss sustained on this line it is impossible to keep it up to a higher standard, and already facing it is the question of deferred maintenance to the extent of some $5,000, in addition to average annual maintenance, for the replacing of ties on bridges, and elsewhere and also painting of bridges, etc.

In support of its application the applicant filed statements of revenues and expenses for the year 1936 to 1939, inclusive, and following the request of the respondents at the hearing, a statement of revenues and expenses for the first nine months of 1940. The applicant also filed analyses for the same periods of freight, passenger, express and miscellaneous traffic on this line.

Following is a condensed statement of revenues and expenses:—

Gross C.N.R. revenues	Calendar year				Nine months of 1940
Gross C.N.R. revenues	1936	1937	1938	1939	Nine months of 1940
Passenger	2,150	2,340	1,398	1,304	1,070
Freight	35,965	43,209	32,351	34,177	31,750
Express	4,558	4,473	3,881	3,702	2,755
Miscellaneous	761	923	1,191	1,268	1,055
Mail	3,837	3,825	3,825	3,813	2,872
Total	47,271	54,770	42,646	44,264	39,502
Expenses (out-of-pocket)
Maintenance of W. and S.	30,339	22,280	16,200	19,016	15,372
Maintenance of equipment	4,714	4,607	4,548	4,613	3,438
Transportation, train service	18,472	20,814	21,029	20,821	15,712
Station service	5,137	5,412	5,394	5,500	4,099
Balance of system, 50 per cent operating ratio on off-line freight and express	17,678	20,774	15,790	16,517	15,020
Total	76,340	73,887	62,951	66,467	53,641
System loss	29,069	19,117	20,305	22,203	14,139

The above item labelled 50 per cent operating ratio on off-line freight and express simply means that the freight and express revenue received by the railway for traffic moved to and from the branch line has to be apportioned between the system on the one hand and the branch line on the other and this is done on a mileage basis. The railway assume that to move that traffic on the off-line haul or system, exclusive of branch line, it costs fifty cents for every dollar of revenue, or, in other words, a 50 per cent operating ratio. This is reasonable since the operating ratio for the Canadian National Railways was 89.8 per cent in 1939, 96.7 per cent in 1938, and 91.1 per cent in 1937. Had the railway applies these ratios, the loss from the operation of the branch line would have been greater in every year than shown in the statements filed with the application.

An analysis by the Transportation Economist of the Board of the figures submitted by the railway, together with additional figures called for by the Board with regard to cost of snow removal, train miles and car miles, wages, fuel, supplies and switching, reads, in part, as follows:—

The normal maintenance of way and structures expenses on this type of line should average between $500 and $600 per mile per annum, or $19,000 for the total line. Snow conditions on this line are average or possibly somewhat below conditions prevailing in other parts of Ontario. The figures for the last four years indicate an average snow removal cost in the vicinity of $30 per mile. Based on the locomotives miles, the passenger car miles and the freight car miles performed during the last four years, the equipment repairs would cost the company some $4,000 annually. This last figure is based on an average cost of 11 cents per locomotive mile, 2.66 cents per passenger car mile and 1.25 cents per freight car miles.

The transportation train service expenses on this line would average approximately $20,500 per annum. According to the breakdown furnished by the railway it will be noted that the wages per train mile are in vicinity of 51 cents. This is slightly higher than usual, but can reasonably be explained by the fact that although the present service consist of a mixed train operating in each direction six times a week, the crew receive way-freight wages and overtime. A glance at the timetable indicates that the train leaves Tweed at 8.40 a.m. and returns at 4.40 p.m. This alone constitutes an eight-hour day without taking into account the usual preparatory and final inspection time. The fuel consumed at 40 cents per locomotive mile is possibly a little high, but not enough to distort the railway's statement.

The train miles performed during this four-year period amounted to 86,364. The study of carload movement indicates that the loaded car miles during the same period were 40,198, or an average of 0.465 loaded car mile per train mile. There is no need to dwell any longer on these figures as they speak for themselves of the low density of traffic on the line proposed to be abandoned.

A further analysis by the Board's Transportation Economist for the years 1936 to 1939, and the first nine months of 1940, inclusive, was made with respect to the distribution of carload traffic and distribution of freight revenues, as shown in the following table.

Place	Distribution of revenue Per cent	Distribution of carload traffic Per cent
Moscow	4.4	11.0
Enterprise	13.9	18.9
Tamworth	13.3	14.2
Erinsville	5.0	7.8
Marlbank	4.9	7.9
Larkins	1.9	3.1
Stoco	1.3	0.6
Tweed	55.3	37.4
Total	100.0	100.0

Strong objections were taken to the proposed abandonment by representatives of the municipalities and other interested parties.

Mr. W. S. Gordon, President of the Tweed Steel Works and Tweed Foundries, Limited, stated that having both the C.P.R. and C.N.R. at this service in Tweed was a great help to his business; that over the C.N.R. he shipped many thousands of dollar worth of freight annually, and if the C.N.R. should be removed, in certain instances his freight rates would be increased and delays caused by having to ship to C.N.R. points via C.P.R.

There is a substantial cheese industry throughout this territory. Cheese factories are numerous, and many of them are equipped with or being equipped with refrigerator plants under Government bonus. From evidence given at the hearing it would appear that the great bulk of the cheese is shipped to Montréal.

The Board was informed that if the cheese can be taken from the refrigerating plant and immediately shipped in refrigerated cars, a more remunerative grading of the product is attainable. Complaints were made that not only as the service is now is it difficult to obtain iced cars when wanted, but that if the line were removed it would necessitate a longer haul by truck to the nearest available rail point and, therefore, advantages of refrigeration would be lost. However, at present time the bulk of the cheese movement is by truck to Belleville and thence by water to Montréal.

With regard to pulpwood, it was stated by the one witness who gave evidence concerning this commodity that although there had not been much of a market for the last five years, he considered the future prospects to be good. He felt that if the line were abandoned he would be forced to go out of this business, notwithstanding the fact that he had made shipments via C.P.R. from Lens.

Representatives of the milling interests from Tamworth and Enterprise objected to abandonment on the grounds of increased costs that would be occasioned by the necessary increased road haul of incoming grain from Lens on the C.P.R.

Representatives of other lines of endeavour, including merchants situated at Tamworth and Enterprise, gave evidence to show the probable detrimental effects abandonment would have on them. It was acknowledged, however, that merchandise and groceries were regularly trucked into the area.

Nearly all who gave evidence against the proposed abandonment emphasized very strongly the difficulties encountered at times during the winter-season owing to snow blocked roads. It was stated that there would be periods of days at a time when vehicular traffic could not move on account of snow, and it was alleged that, consequently, the railway would be essential for passengers as well as freight movements. It was stated that in winter the farmers themselves are responsible for the opening of the township roads, while the county looks after the county roads. Owing to lack of money and consequent lack of heavy equipment, the counties find it difficult to clear the roads of snow after a storm as quickly as the users thereof would like.

Practically speaking, we all know how difficult it is in certain sections of the country to clear roads of snow following a severe storm. But I question whether the above argument is altogether reasonable for it must be remembered that the railway's own right-of-way is not cleared of snow without cost. The railway alleged that for snow cleaning between Yarker and Tweed for the years 1936 to 1939, inclusive, it expended the following sums, respectively,—$1,598, $404, $654 and $1,137.

It is on file and was stated at the hearing that this line was bonused many years ago conditioned upon due observance of certain obligations as to running of trains. No evidence in the form of agreement or by-law was filed. However, with regard to this feature, a feature that arises in many applications for abandonment, I can only repeat in summary form what, in various ways, has been stated on other similar occasions. Reserving to the affected parties whatever right they may have in other courts by virtue of the terms of such agreement, the Board in its deliberations under the Railway Act as to whether or not it will permit abandonment is not bound by any such agreement, unless, however, such agreement be confirmed by Special Act of the Dominion of Canada.

Although the Railway Act lays down no principles upon which the Board should act in granting or withholding approval in applications for abandonment or railway lines, I would refer to the language of Guthrie, lat Chief Commissioner, in Vancouver, Victoria and Eastern Railway and Navigation Company v. Princeton, et al, 45 C.R.C. 178 at pages 197 and 198, which reads as follows:—

The issue in each case 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.' This was the decision pronounced by the Board in the recent case of C.N.R. v. Tweed (1935), 44 C.R.C. 53. IN my opinion this decision constitutes a guiding principle for the determination of cases similar to that now under consideration.

Thus is the Board guided in its determinations in such cases.

The revenues of the railway for the four years 1936 to 1939 have been fairly constant. The first nine months of 1940 showed an increase over the corresponding nine months of 1939. The increase was principally attributable to the traffic from Tweed and Enterprise. With regard to the increase at Enterprise, this would appear to be attributable to an inward movement of five cars of transmission tower material; these cars being responsible for a revenue of $3,100. This would be a non-recurrent item.

Turning back to the table of distribution of revenue and distribution of carload traffic relative to the stations on the line, it will be seen that whereas Tweed produced only 37.4 per cent of the total carload for four years and nine months, it produced 55.3 per cent of the total revenues. Without the C.N.R., Tweed shippers, such as the Tweed Steel Works and the Tweed Foundries, Limited, should they so desire to ship to points served solely by the C.N.R., would, in certain cases, probably incur increased freight rates. Mention was made by the president of these companies of shipments to Vancouver, Moncton and Halifax; to these points he would suffer no change in rates. For more local shipments, from the evidence it would seem road transport service would principally be used.

Insofar as shipment of cheese from Tweed to Montréal via C.P.R. is concerned, there would be no increase in the carload rate. This also applies to shipments of this commodity from C.P.R. stations in the vicinity of Tweed, and also C.P.R. stations in the vicinity of Lens between Tichburn and Kingsford. However, the C.N.R. has in force at present a rate of 27 1/2 cents, including pick up and delivery on L.C.L. cheese shipments from Tweed to Montréal, while the rate via C.P.R. from Tweed is 25 cents, exclusive of pick up and delivery. It might be mentioned here that these published rates of the railways on cheese are shown as being issued to meet motor truck and/or water competition, and are effective each year between April 10th and December 31st, and, as such, are subnormal rates. With main line service of the C.P.R. at hand, and bus and truck services serving Tweed, I do not think it would be seriously affected without the services of the C.N.R.

This then leaves the balance of the line to consider that contributes some 45 per cent only of the total revenues, i.e., all the stations previously mentioned except Tweed. From these stations principal carload shipments are livestock outwards and grain and mill products inwards.

From the same table of distribution of revenue and carload traffic it will be seen that the stations of Moscow, Tamworth and Enterprise contribute some 50 per cent of the above balance of revenues. It is understood that most of the livestock movement from this area is by train, and i brought to the railroad by truck or team. In the event of abandonment, in some instances, this movement would require a longer haul to reach Lens on the C.P.R., or some other convenient rail point. The same would apply to cheese, although from the evidence at the hearing, at present the great bulk of the cheese is already moving by truck to Belleville, and thence via water to Montréal.

Considering the substantial losses to the railway and all that was presented to the Board at the hearing, I believe the application for the abandonment was justified. Mr Pringle, General Superintendent, Southern Ontario District, Canadian National Railways, in his evidence stated that in 1932 when he made a previous study of this line its revenue earnings were in the neighbourhood of $72,000. As will be seen, these are substantially greater earnings than those of today. In my opinion, the falling off in revenue can be principally attributed to good roads, buses, trucks and the private motor car.

That there will be inconvenience and, in some instances, increased costs to those concerned if abandonment be authorized is undoubted. Mail service will have to be reorganized and other adjustments made. However, taking all things into consideration, in my opinion there is not now sufficient traffic, present or prospective, to warrant continuance of the service in face of the operating losses to the railway. Other railroad facilities can be utilized. The existence of these railway facilities and the availability of good roads to vehicular traffic, both private, and public, in my opinion, make the sustained losses to the railway outweigh the loss and inconvenience to the public consequent upon abandonment.

I would grant the application

Hugh Wardrope.

April 7, 1941.

I concur,
J. A. Cross,
J. A. Stoneman