March 15, 1941, Vol. 30, No. 24 Judgments, orders, regulations and rulings (Ottawa) Page 526

Application of the Canadian National Railways under Section 165A of the Railway Act and other appropriate statutory provisions, for an order granting leave to abandon the Deseronto Subdivision from a junction with the Gananoque Subdivision at Napanee (mile 0.00) to Deseronto (mile 6.34), a total distance of 6.34 miles.

39310.49

Judgment

Wardrope, Asst. Chief Commissioner:

This application was heard before the Board in the Town of Napanee, Ont., on Wednesday, the 23rd day of October, 1940. Mr. R. E. Laidlaw, K.C., appeared for the applicant railway; Mr. W. S. Herrington, K.C., for the Town of Deseronto; Mr. Redmond Code, K.C., for the Eddy Match Company; and Mr. W. H. Phillips on behalf of the Dominion Joint Legislation Committee Railway Running Trades.

Authority of the Board is sought for leave to abandon that portion of the applicants' railway running between the Towns of Napanee and Deseronto, a distance of 6.34 miles. It was stated that this portion was opened for operation between the above two points in 1902. It was built under the Charter of the Bay of Quinte Railwayu Company by virtue of the following statutory authority—Canada Act, 59 V. Chap. 15, 1896.

The principal community served by this line is the Town of Deseronto with a population of 1,476 (1931 census). The distance by highway to Marysville (the nearest railway station to Deseronto) is 4.9 miles, while distance by highway to Napanee is 6.7 miles. The main highway. (No. 2) between Toronto and Montréal runs through Napanee, Deseronto and Marysville. Apart from vehicular highway, Deseronto is also served to a lesser extent by water-borne traffic, principally, so it was stated, in the bringing in of bituminous coal.

There is no regular train service on this line, nor has there been for some years. What carload traffic offers itself is handled by the Tweed-Napanee mixed train making a special move into Deseronto as occasion arises. All express and L.C.L. freight traffic is now trucked under contract between Napanee and Deseronto, and, in any event, whether abandonment be granted or not, the applicant railway proposes to continue this service.

The application, therefore, actually involves the Board in weighing the benefits to the railway should abandonment 'be authorized, with consequent elimination of losses now being suffered by it, against the resultant inconvenience and added expense to Deseronto and its industries should the latter lose this facility for shipping carload traffic in and out.

The applicant submitted figures of revenue (less L.C.L. and express) and expenses (out-of-pocket only) for the years 1936 to 1939, inclusive, and, at the request of the respondents at the hearing, similar figures for the first nine months of 1940. Statements of system revenues and carloads by commodities were also furnished for the same periods.

System losses for the years 1936 to 1939, inclusive, amounted to—

1936 1937 1938 1939
2,282 2,916 3,322 4,128

and for the first nine months of the y'ear 1940 amounted to $2,948. During this period of four years and nine months there was a total inward movement to Deseronto of 370 carloads, and outwards 72 carloads, or, in other words, an average movement inwards or outwards of something less than eight cars a month or approximately one carload every four days, with a resultant average loss to the applicant of some $35 per car. The bulk of the inward movements consisted of fuel (anthracite coal, hardwood slabs, cordwood and coke) and empty cans, although it might be noted there were no shipments inwards of empty cans in 1939 or 1940.

Of the 72 outward carload shipments, 58 of these consisted of canned goods, the last substantial shipment consisting of 34 carloads in 1936.

There are two canning factories in Dcseronto; one, the Colonial Canners, Limited, successor to the Associated Quality Canners, has not been operated for some three years or more; the other, Metcalfe Foods, Limited.

Mr. P. G. Pryor appeared on behalf of the Colonial Canners, Limited, stating that his principals were trying to sell, lease or get the plant into operation somehow. He stated that they had in 1940 spent some $500 in the hope of enticing prospects in the canning business to take over the plant; that there was an investment in the plant of approximately $100,000.

This plant has a siding on the applicants' railway, and Mr. Pryor stated his instructions were to definitely protest the abandonment of the line because with no siding the chances of getting the plant into operation would be seriously jeopardized.

The plant would normally jack about 150,000 cases per year, and Mr. Pryor estimated that of the outward shipments the railways would get 50 per cent, with the other 50 per cent going to the trucking industry.

Mr. Pryor knew of no offers or prospective offers to purchase the plant.

Mr. Metcalfe, President of Metcalfe Foods, Limited, stated that the railway was an absolute necessity to his concern, and that if it should be abandoned they would have to withdraw their operations from the town. The plant capacity in a fair year is about 40,000 to 50,000 cases.

On cross-examination Mr. Metcalfe's evidence showed that in so far as his plant is concerned only a very small percentage of the output goes by rail, the trucking industry getting the bulk. As it is, the small proportion going by rail is now trucked by the firm's own truck to the car in Deseronto, and there loaded.

Objection was taken to the extra haul to Marysville or Napanee that would be neccssary to load a car should abandonment be granted.

The Dominion Match Company, owned by the Eddy Match Company, has been inoperative since 1928. Its position is similar to that of Colonial Canners Limited in that it is hoped to sell it to someone who will operate it either for its original purpose or some other for which the plant would be made suitable. No evidence of forthcoming sale or re-establishment was given.

As previously stated, the greater bulk of the carload traffic over this line has been inward movements of anthracite coal and other fuel. It was stated by one witness that bituminous coal is shipped in by water.

There are purported to be two coal and wood dealers in Deseronto. Unfortunately, no person directly interested in this business appeared before the Board to give evidence as to what the direct effect of abandonment of the line would have on his business. So although the situation is not altogether obscure, room is left for a greater latitude of estimation than is desirable.

Mr. Herrington, taking the year 1939, estimated there would be a grand total of inward movements of coal and wood of some 3,485 tons. While he stated he did not have the details as to what the extra cost of haulage from the nearest station would be, he estimated it would be in the neighbourhood of some $2,000.

The applicants produced two witnesses, truckers, who stated they would haul a ton of coal from Napanee to Deseronto for $1.15. and from Marysville for $1.10, but these figures included services such as loading and unloading that might have to be performed in any event. They were unable to show the Board by actually breaking down these figures exactly what extra cost to the citizens of Deseronto would be entailed.

It is difficult for me to see the relationship of the above figures to the relative distances of Marysville and Napanee from Deseronto, there being only five cents difference for some seven miles on the round trip.

Mr. Herrington pointed out to the Board that a bonus of $25,000 in thirty-year debentures had been granted in 1898 by Deseronto to the railway. Owing to the original documents being lost, whether this amount was for the purpose of subsidizing this portion of the line or something greater could not be determined, but, as has been pointed out by the Board in similar cases, it is not bound by subsidizing or bonusing agreements, express or implied, in so far as permitting abandonment of a line of railway under the Act unless, of course, such agreement should be confirmed by Special Act or otherwise of the Parliament of Canada.

To sum up, it is true that if this line were abandoned, in so far as carload traffic is concerned, there will be inconvenience and added expense to Deseronto and its industries, but L.C.L. and express shipments will still move as at present.

However, taking into consideration the annually increasing losses as shown to the railway, and weighing these against the immediate presence and use of good highway facilities and the comparative nearness of rail facilities at Marysville and Napanee, in my opinion the application was justified.

From the evidence presented at the hearing, although additional traffic might be forthcoming should Colonial Canners Limited and the Dominion Match Company be re-established, I do not believe there is sufficient traffic present or prospective to warrant continuance of the line.

I would grant the application.

February 26, 1941.

Hugh Wardrop.

I concur.

J. A. Cross.

J. A. Stoneman.

Railways: B.Q.Ry., C.N.Rys.

Stations: Canadian Canners Ltd. (Napanee), Deseronto, Napanee