General railway discussions

[dowlingm]

I have a question about private sector rail ownership which flows out of the HSR thread but is equally applicable elsewhere - not intending for this to be a discussion on the merits of HSR itself here..

What it amounts to is this:

We seem to assume that railway tracks are immune from expropriation in a way that most other land ownerships are not - CN or CP owning a piece of track, whether it is Silver-Bramalea or whatever, is regarded as something which cannot be changed without their agreement, price, and conditions on future access. Let's set the actual legalities of that to one side for a moment.

What I'm interested in specifically arose from discussion about colocation of part of the VIA HFR on the CP Winchester ROW which appears to be wide enough for more tracks. The assumption is that the available choices in this situation is 1) pay CPR to add an additional track, similar to the CN Kingston sub project of bitter memory or 2) expropriate landowners along the edge of the ROW.

Why would it be offsite for VIA/GovCan to expropriate the unused part of the CP ROW, or other ROWs elsewhere in their operating area where it makes operating sense for them to have dedicated track but the railbed owner does not have track on it. They aren't using it, and they don't have track on it for the reasons @smallspy noted in the previous page re property tax, so... why can't they lose it? Or can they?

 

[lenaitch]

I have a question about private sector rail ownership which flows out of the HSR thread but is equally applicable elsewhere - not intending for this to be a discussion on the merits of HSR itself here..

What it amounts to is this:

We seem to assume that railway tracks are immune from expropriation in a way that most other land ownerships are not - CN or CP owning a piece of track, whether it is Silver-Bramalea or whatever, is regarded as something which cannot be changed without their agreement, price, and conditions on future access. Let's set the actual legalities of that to one side for a moment.

What I'm interested in specifically arose from discussion about colocation of part of the VIA HFR on the CP Winchester ROW which appears to be wide enough for more tracks. The assumption is that the available choices in this situation is 1) pay CPR to add an additional track, similar to the CN Kingston sub project of bitter memory or 2) expropriate landowners along the edge of the ROW.

Why would it be offsite for VIA/GovCan to expropriate the unused part of the CP ROW, or other ROWs elsewhere in their operating area where it makes operating sense for them to have dedicated track but the railbed owner does not have track on it. They aren't using it, and they don't have track on it for the reasons @smallspy noted in the previous page re property tax, so... why can't they lose it? Or can they?

Interesting post. I couldn't readily find anything in either the Expropriations Act (Canada) or Canada Transportation Act that specifically exempts railway lands, but I might have missed something. There also might be some terms in the original charters for the corridors, which can be very old, that might touch on it.

Notwithstanding the legalities, whether the Crown wanted an entire right-of-way or a longitudinal slice of it, the railway would likely argue strenuously for compensation that would make our eyes water. The 'make whole' compensation argument would try to address both current traffic income and their loss of ability to future-proof their network. Even if the proposal to buy it then lease back their trackage, it would likely face the same arguments. A railway without a right-of-way isn't a railway anymore.

 

[crs1026]

Interesting post. I couldn't readily find anything in either the Expropriations Act (Canada) or Canada Transportation Act that specifically exempts railway lands, but I might have missed something. There also might be some terms in the original charters for the corridors, which can be very old, that might touch on it.

Notwithstanding the legalities, whether the Crown wanted an entire right-of-way or a longitudinal slice of it, the railway would likely argue strenuously for compensation that would make our eyes water. The 'make whole' compensation argument would try to address both current traffic income and their loss of ability to future-proof their network. Even if the proposal to buy it then lease back their trackage, it would likely face the same arguments. A railway without a right-of-way isn't a railway anymore.

Exactly this. Of course the railway could be expropriated....it's the price that discourages this.

As a matter of public policy, the government would not want to hamstring freight operation or capacity... the country needs freight transportation. So they would wisely err on the side of caution before seriously constraining the freight corridor, even if it isn't being used at the moment. That would include provision to serve whatever industries might be located (now or in the future) on the passenger side of the corridor.

But beyond the prudent.... the sky is the only limit to the railway's ability to argue that they have been damaged and need to be made whole.

The old lawyer's adage is - don't ask a court for a decision unless you are willing to hear (and live with) the answer. As this is a relatively unplumbed area legally, I suspect the government would be fearful that a court might well set the sale price high. The uncertainty would by itself discourage government from jumping into expropriation.

- Paul

 

[Northern Light]

Exactly this. Of course the railway could be expropriated....it's the price that discourages this.

As a matter of public policy, the government would not want to hamstring freight operation or capacity... the country needs freight transportation. So they would wisely err on the side of caution before seriously constraining the freight corridor, even if it isn't being used at the moment. That would include provision to serve whatever industries might be located (now or in the future) on the passenger side of the corridor.

But beyond the prudent.... the sky is the only limit to the railway's ability to argue that they have been damaged and need to be made whole.

The old lawyer's adage is - don't ask a court for a decision unless you are willing to hear (and live with) the answer. As this is a relatively unplumbed area legally, I suspect the government would be fearful that a court might well set the sale price high. The uncertainty would by itself discourage government from jumping into expropriation.

- Paul

While acknowledging the need to be aware of how businesses/investors or ordinary citizens would perceive anything that smacked of expropriation w/o compensation............

It is worth pointing out that private property rights do not existing in Canada's constitution.
That was a very conscious choice, not an accident, and there is much writing and jurisprudence on that.
Property rights are legislative and common law construct and therefore can be rescinded by law.

Note I am not arguing for that action merely noting it is legally plausible.

I'm also going to note, however, that when Universal healthcare was created, neither insurers nor doctors were compensated for lost income.

 

[OntarioOnTheMove]

https://www.cbc.ca/news/canada/sudbury/reported-washouts-train-derailment-northern-ontario-1.6116771

 

[lenaitch]

While acknowledging the need to be aware of how businesses/investors or ordinary citizens would perceive anything that smacked of expropriation w/o compensation............

It is worth pointing out that private property rights do not existing in Canada's constitution.
That was a very conscious choice, not an accident, and there is much writing and jurisprudence on that.
Property rights are legislative and common law construct and therefore can be rescinded by law.

Note I am not arguing for that action merely noting it is legally plausible.

I'm also going to note, however, that when Universal healthcare was created, neither insurers nor doctors were compensated for lost income.

It may well be legally possible (absent any other impediments), but the potential cost might well be so exorbitant that it would be cheaper to expropriate a brand new virgin ROW.

When the public health legislation was rolled out in the 1950s and '60s, it would an interesting historical research to know how widespread health insurance was vs simply paying out of pocket. I would assume if insurers or doctors felt financially aggrieved they could have sued the government, but the medical community would have had to establish financial loss. With not having to spend time and treasure chasing payments of cash or chickens, maybe they were better off. I couldn't find a version of the original (pre-Charter) Medical Care Act so don't know if the legislation had a 'hold harmless' provision that protected the Crown, but that is generally a fairly recent construct.

 

[Northern Light]

It may well be legally possible (absent any other impediments), but the potential cost might well be so exorbitant that it would be cheaper to expropriate a brand new virgin ROW.

When the public health legislation was rolled out in the 1950s and '60s, it would an interesting historical research to know how widespread health insurance was vs simply paying out of pocket. I would assume if insurers or doctors felt financially aggrieved they could have sued the government, but the medical community would have had to establish financial loss. With not having to spend time and treasure chasing payments of cash or chickens, maybe they were better off. I couldn't find a version of the original (pre-Charter) Medical Care Act so don't know if the legislation had a 'hold harmless' provision that protected the Crown, but that is generally a fairly recent construct.

I believe the largest insurer at the time (in Ontario) was PSI, Physicians Services Incorporated...........for which my grandfather worked for a time.

It was founded by OMA, and was a non-profit.

It survives today as a foundation.

About - PSI Foundation

www.psifoundation.org

 

[Northern Light]

@lenaitch

Beyond that, I would suggest the government is generally immune from paying compensation for running competing public services.

Private gyms cannot sue because the City opens a free Recreation Centre next door.
Landlords cannot sue if the government builds Rent-Geared-to-Income Housing.

The principle is long established in Canadian law that the state may provide what services it wishes w/o compensating adversely effected industries.

As such, were the gov't of Canada to feel inclined to spend, the could build a competing railway and price their services to bankrupt the existing carriers with impunity.
That's not to suggest that I endorse such an idea, or think it particularly wise.

Rather that the government has a suite of tools available to it to encourage cooperative behavior.
The choice to use them or not, or to threaten to use them or not; is just that, a choice.

Meaning the gov't is shy on excuses when it acts as if the status quo isn't alterable.

 

[crs1026]

As such, were the gov't of Canada to feel inclined to spend, the could build a competing railway and price their services to bankrupt the existing carriers with impunity.
That's not to suggest that I endorse such an idea, or think it particularly wise.

Rather that the government has a suite of tools available to it to encourage cooperative behavior.
The choice to use them or not, or to threaten to use them or not; is just that, a choice.

Meaning the gov't is shy on excuses when it acts as if the status quo isn't alterable.

I don’t dispute what you say, but I wouldn’t underestimate the leverage that the railways and their shareholders have to arrive at that “cooperative” balance.

I have long maintained that a small and non-punitive nudge to coproduction in Ontario might free up plenty of capacity for HFR. Even that seems to be blasphemy in some folks’ eyes.

Others even maintain that the railways have an outstanding social debt by virtue of having been given land grants in the 1800s and early 1900’s.

I would say we have long since squared the ledger with the shareholders on that one. But, having attracted CN investors with an apparent regulatory regime (which may arguably be part of the “virtual prospectus“ that supported the CN IPO) the government might be found guilty of bait-and-switch if it reversed that position. (Admittedly, the CN IPO was a quarter century ago….nothing lasts forever).

The biggest lever the railways have is their control of investment in the freight network. The dispute over minimum grain volumes is a good example of what happens when Ottawa and the railways square off. Personally I’m not a fan of the railways’ freedom to turn away customers who offer only low but positive ROI. Allowing railways to offer superior return to investors (as opposed to utility grade roi) is not good policy IMHO. But I love my CN dividend cheques, and I’m not sure the government wants to be the one finding the capital.

- Paul

 

[dowlingm]

While acknowledging the need to be aware of how businesses/investors or ordinary citizens would perceive anything that smacked of expropriation w/o compensation............

It is worth pointing out that private property rights do not existing in Canada's constitution.
That was a very conscious choice, not an accident, and there is much writing and jurisprudence on that.
Property rights are legislative and common law construct and therefore can be rescinded by law.

I can understand why government would have to pay Full Market Value for an active, signalled railbed. My point is that it should in no way be cheaper to undertake the massive costs of creating a modern fit for purpose track bed while bulldozing houses and factories and greenspace when there is a trackless railbed growing weeds beside. There should be a consequence to putting part of your ROW "on waivers" so to speak.

 

[roger1818]

I can understand why government would have to pay Full Market Value for an active, signalled railbed. My point is that it should in no way be cheaper to undertake the massive costs of creating a modern fit for purpose track bed while bulldozing houses and factories and greenspace when there is a trackless railbed growing weeds beside. There should be a consequence to putting part of your ROW "on waivers" so to speak.

In densely populated urban areas, where there are houses and factories directly adjacent to the ROW, finding a way to share the ROW is likely necessary; however, in rural areas, where there are no houses or factories directly adjacent to the tracks, expropriating the thin strip of greenspace adjacent to the existing ROW should be relatively affordable.

 

[lenaitch]

@lenaitch

Beyond that, I would suggest the government is generally immune from paying compensation for running competing public services.

Private gyms cannot sue because the City opens a free Recreation Centre next door.
Landlords cannot sue if the government builds Rent-Geared-to-Income Housing.

The principle is long established in Canadian law that the state may provide what services it wishes w/o compensating adversely effected industries.

As such, were the gov't of Canada to feel inclined to spend, the could build a competing railway and price their services to bankrupt the existing carriers with impunity.
That's not to suggest that I endorse such an idea, or think it particularly wise.

Rather that the government has a suite of tools available to it to encourage cooperative behavior.
The choice to use them or not, or to threaten to use them or not; is just that, a choice.

Meaning the gov't is shy on excuses when it acts as if the status quo isn't alterable.

I don't know if there is any legal impediment for businesses to sue the government but, in the examples, they would have to prove loss. The defence might well be that a free Rec. Centre (a) offers services that the gym doesn't, or (b) its clientele could not reasonably afford a gym membership.

Of course, the big deterrence for small business is the cost to launch and carry a suit. Larger corporations often have no such impediments. I don't think we should underestimate the fearlessness of corporations to use the courts to extract as much money as they can; or underestimate governments' fear of getting embroiled in protracted legal battles, particularly if it portrays them as being interfering with free enterprise.

Edit: I changed the last sentence to make more sense (to me anyway).

 

[Northern Light]

I don't know if there is any legal impediment for businesses to sue the government but, in the examples, they would have to prove loss. The defence might well be that a free Rec. Centre (a) offers services that the gym doesn't, or (b) its clientele could not reasonably afford a gym membership.

Of course, the big deterrence for small business is the cost to launch and carry a suit. Larger corporations often have no such impediments. I don't think we should underestimate the fearlessness of corporations to use the courts to extract as much money as they can; or overestimate governments' fear of getting embroiled in protracted legal battles, particularly if it portrays them as being interfering with free enterprise.

Crown Liability and Proceedings Act

Federal laws of Canada

laws-lois.justice.gc.ca

From this article:

It has gotten a lot harder to sue the Ontario government - The Litigator - AGM LLP

A key value in any free and democratic society is the principle that no one is above the law. In democracies, even the government can be required by the Courts to pay compensation to persons harmed by negligent or intentional government actions. However, thanks to the Crown Liability and...

www.thelitigator.ca

"In some ways, the Crown Liability and Proceedings Act, 2019 codifies what the settled common law already said about government liability – that the government cannot be sued for policy decisions or decisions on how, where and when to spend its money "

****

"In particular, the Crown Liability and Proceedings Act, 2019 insulates from civil action what it calls “regulatory decisions” made by in good faith by the government or one of its officers, employees or agents, even when negligent or made through a failure to take reasonable care. A regulatory decision is defined very broadly as a decision respecting, among other things, whether a particular person, place, entity or thing has met or breached a requirement under an Act of the province, whether a condition, permission or licence should be issued under an Act of the province, whether an investigation, inspection or enforcement action should be conducted under a provincial Act, or “any other matter that may be prescribed.” This latter, catch-allin the definition of “regulatory decision” means that the government can in the future decide which other decisions it wants to make immune from lawsuits."

 

[lenaitch]

Crown Liability and Proceedings Act

Federal laws of Canada

laws-lois.justice.gc.ca

View attachment 337397

From this article:

It has gotten a lot harder to sue the Ontario government - The Litigator - AGM LLP

A key value in any free and democratic society is the principle that no one is above the law. In democracies, even the government can be required by the Courts to pay compensation to persons harmed by negligent or intentional government actions. However, thanks to the Crown Liability and...

www.thelitigator.ca

"In some ways, the Crown Liability and Proceedings Act, 2019 codifies what the settled common law already said about government liability – that the government cannot be sued for policy decisions or decisions on how, where and when to spend its money "

****

"In particular, the Crown Liability and Proceedings Act, 2019 insulates from civil action what it calls “regulatory decisions” made by in good faith by the government or one of its officers, employees or agents, even when negligent or made through a failure to take reasonable care. A regulatory decision is defined very broadly as a decision respecting, among other things, whether a particular person, place, entity or thing has met or breached a requirement under an Act of the province, whether a condition, permission or licence should be issued under an Act of the province, whether an investigation, inspection or enforcement action should be conducted under a provincial Act, or “any other matter that may be prescribed.” This latter, catch-allin the definition of “regulatory decision” means that the government can in the future decide which other decisions it wants to make immune from lawsuits."

I don't read the Act the same way although, quite admittedly, I 'tain't no lawyer. The article posted is discussing the Ontario Provincial Statute, not the federal one (WRT discussions about railways and expropriation).

 

[Northern Light]

The article posted is discussing the Ontario Provincial Statute, not the federal one (WRT discussions about railways and expropriation).

I agree; though I thought the key passage was the act was codifying established common law; the principles in question being, to my reading, parliamentary sovereignty and crown prerogative..

But I likewise am not a lawyer........