The following is the text of the abandonment order issued by the National Transportation Agency on March 3, 1989. This text is also available from the CTA's web site.
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Order No. 1989-R-40
March 3, 1989
IN THE MATTER OF the application by the Canadian National Railway Company (hereinafter the Applicant), pursuant to section 255 of the Railway Act, R.S.C. 1985, c. R-3 (formerly section 253 of the Railway Act, R.S.C. 1970, c. R-2), for authority to abandon the operation of the Caraquet Subdivision between East Bathurst (M. 4.34) and Tracadie (M. 72.04), including the Shippigan Spur (hereinafter the branch line), a total distance of 74.97 miles, in the Province of New Brunswick. File No. 39310.254
WHEREAS the application was received by the Canadian Transport Commission (hereinafter the Commission) on August 8, 1983;
WHEREAS the operation of the branch line was last ordered continued by the Commission by Railway Transport Committee Order No. R-39217 dated April 1, 1986; and the decision appended to that Order required the application to be reconsidered in 1988;
WHEREAS the application must now be reconsidered by the National Transportation Agency (hereinafter the Agency) by virtue of the provisions of subsection 171(5) of the NTA, 1987;
WHEREAS on July 20, 1988, the Agency issued a Notice that it was reconsidering the application and invited submissions on the matter;
WHEREAS opposition to the proposed abandonment of the branch line was received in response to the Notice and is deemed to be a statement opposing the abandonment under section 161 of the NTA, 1987;
WHEREAS on December 2, 1988, the Agency issued a Public Notice that it was reconsidering the application and invited submissions and evidence on the possibility of the line becoming economic in the foreseeable future or on public interest issues in the matter;
WHEREAS no opposition was received in response to the Public Notice of December 2, 1988; and
WHEREAS no offer to purchase the branch line has been made pursuant to section 174 of the NTA, 1987 within the period prescribed in section 161 of the NTA, 1987.
UPON consideration of all material on file related to the subject application,
THE AGENCY HEREBY:
Determines that a public hearing is not necessary and that the Decision can be made on the information received and on file.
Determines that the branch line is uneconomic and that there is no reasonable probability of its becoming economic in the foreseeable future.
THE AGENCY HEREBY ORDERS THAT:
In compliance with subsection 165(1) of the NTA, 1987, the Applicant shall abandon the operation of the Caraquet Subdivision between East Bathurst (M. 4.34) and Tracadie (M. 72.04), including the Shippigan Spur, a total distance of 74.97 miles, in the Province of New Brunswick, sixty (60) days after the date of this Order.
The Applicant shall advise the Agency in writing of the dates upon which: i) the operation of the branch line has been abandoned, and ii) the trackage and other facilities were removed.
Reasons for this Order will follow under separate cover.
IN THE MATTER OF the application by the Canadian National Railway Company for authority to abandon the operation of the Caraquet Subdivision between East Bathurst (Mileage 4.34) and Tracadie (Mileage 72.04), including the Shippigan Spur, in the Province of New Brunswick.
HISTORY OF THE APPLICATION
On August 8, 1983, the Canadian National Railway Company (hereinafter CN) applied to the Canadian Transport Commission (hereinafter the Commission) pursuant to section 255 of the Railway Act, R.S.C. 1985, c. R-3 (formerly section 253 of the Railway Act, R.S.C. 1970, c. R-2) to abandon the Caraquet Subdivision between Gloucester Junction (M. 0.00) and Tracadie (M. 72.04), including the Shippigan Spur, in the Province of New Brunswick.
On September 21, 1984, CN filed an amendment to its application; CN sought the abandonment of trackage between Mile 4.34 near East Bathurst and Mile 72.04 at Tracadie, including the Shippigan Spur.
A public hearing was held on October 21, 1985, in Bathurst, New Brunswick. Upon consideration of the evidence presented before and during the hearing, Railway Transport Committee Order No. R-39217 dated April 1, 1986 was issued wherein CN was ordered to continue the operation of this branch line and the Commission was to reconsider the case in 1988. An annual report describing related marketing initiatives, indicating success or failure was to be forwarded to the Commission each year from the date of the said Order for the next two years.
HISTORY OF THE LINE
Between April 8, 1874 and June 1888, the Caraquet Railway Company built a line from Gloucester Junction to Shippigan Harbour.
The Gulf Shore Railway Company was incorporated under New Brunswick Cap. 49, April 6, 1885, to construct and maintain a railroad from a point on the Caraquet Railway to Tracadie. A line from Pokemouche Junction to Tracadie, a distance of 13.44 miles, was completed about July 1, 1887.
Both companies were amalgamated to form the Caraquet and Gulf Shore Railway Company on April 13, 1911.
On May 22, 1918, the Dominion of Canada was authorized to purchase the Caraquet and Gulf Shore Railway Company. The purchase was subject to the terms of the Dominion Act 5, Geo. V, Cap. 16, April 15, 1915, which authorized the Minister of Railways and Canals to acquire any railways directly connected with the existing Government Railways system in the Maritime Provinces. The Caraquet and Gulf Shore Railway Company became a part of the Government Railways system on June 1, 1920.
Under Dominion Order-in-Council P.C. 115 dated January 20, 1923, management and operation were entrusted to CN.
LOCATION OF THE LINE
The Caraquet Subdivision extends from Gloucester Junction, which is a junction with the CN Newcastle Subdivision, to Tracadie. The Shippigan Spur extends from Pokemouche, mile 59.3 on the Caraquet Subdivision, northward to Shippigan, a distance of 7.27 miles. The portion of the Caraquet Subdivision proposed for abandonment serves the communities of Janeville (M. 37.0), Upper Caraquet (M. 44.3), Caraquet (M. 48.5), Pokemouche Junction (M. 59.3), Inkerman (M. 60.3), Tracadie (M. 72.0) and Shippigan at the end of the Shippigan Spur.
A map of the area is attached.
CONDITION OF THE TRACK
Engineering reports indicate that twenty-five per cent of both the total track ties and the track ties in the joints were defective. Fifteen per cent of the track bolts in the joints were loose with nine percent missing. The brush and alder bushes have overgrown the right-of-way and roadbed with the worst area being between mileage 6.0 and mileage 16.0 and between mileage 30.0 and mileage 36.0. The remaining mileages have spots where the brush is bad. If the brush is not cut by another season, a high-rail truck will not be able to go over this branch line.
SERVICES ON THE BRANCH LINE
Train service on the Subdivision was reduced to one trip per week in turnaround service from Bathurst in 1981. It remained as such with minor interruptions until January 7, 1984, when it was closed due to a major washout and winter conditions. It was reopened on June 6, 1984. The Subdivision was subject to "winter closures" from December 19, 1984, to May 20, 1985 and from December 1985 to April 1986, with rail carload traffic being transshipped at Bathurst, then transported by highway to and from points on the Caraquet Subdivision. The Subdivision was again closed to rail traffic for the winter in November 1986 and there has been no train service since that date. Train service is now available only on an "as and when required" basis.
CARLOAD TRAFFIC
Carload traffic on this Subdivision consists of a wide range of products. The volume of traffic has not varied significantly between 1984 and 1986. According to an initial submission by the Applicant, 66 carloads destined to or originating at points on the Subdivision in 1987 were handled by truck to or from the transshipment point, East Bathurst.
| CARAQUET SUBDIVISION | |||
| (Total Annual Carloads) | |||
| YEAR | IN | OUT | TOTAL |
| 1984 | 22 | 55 | 77 |
| 1985 | 25 | 47 | 72 |
| 1986 | 27 | 35 | 62 |
| 1987 | 0 | 0 | 0 |
ACTUAL LOSSES
The actual losses as determined by the National Transportation Agency (hereinafter the Agency), pursuant to the provisions of the Railway Costing Regulations, SOR/80-940, and section 157 of the National Transportation Act, 1987, S.C. 1987, c. 34 (hereinafter the NTA, 1987) for the years 1984 through 1986 are as follows:
| Year | Total Costs | Revenues | Actual Losses |
| $ | $ | $ | |
| 1984 | 780,619 | 223,654 | 556,965 |
| 1985 | 725,749 | 229,118 | 496,631 |
| 1986 | 700,325 | 236,714 | 463,611 |
| 1987 | 465,817 | 4,905 | 460,912 |
The 1984 to 1986 data in the tables of actual losses were published within the notice of reconsideration, issued to the statutory interested parties on July 20, 1988, in order that interveners would be aware of this economic information and have an opportunity to submit comments and evidence relevant to paragraph 167(a), and sections 163 and 164 of the NTA, 1987. The 1987 data were acquired subsequent to the July 20, 1988 date. The statements of "Actual Loss" which contain more detailed cost information are attached.
ALTERNATIVE TRANSPORTATION SERVICES
In the event of abandonment, alternative rail service would be available on CN's Newcastle Subdivision at Bathurst or Newcastle. Alternative rail service is also available on the Caraquet Subdivision at the East Bathurst station. The maximum distance to the nearest alternative station from an on-line station is approximately 65 miles.
Provincial Highway No. 11 parallels the Caraquet Subdivision on most of its length, from Bathurst to Tracadie. Communities not served by Highway No. 11 are served by Secondary Highways 113 and 135. There are seven trucking companies licensed to serve the area.
SUMMARY OF THE EVIDENCE
The following parties replied to the Notice of reconsideration issued July 20, 1988.
Mr. Sheldon Lee, Minister of Transportation of New Brunswick, stated that the Railway Transport Committee of the Commission had ordered CN to:
"a) ... continue train operations on the branch line."
Mr. Lee then noted that CN had halted all train service effective November 1986, seven months after the issuance of the Order.
The Minister also pointed out to the Agency that preliminary estimates of the cost of upgrading the highways in the area served by the branch line and Spur, such that no Spring Weight Restrictions would be in effect, totaled not less than $20 million, and that the maximum amount of financial assistance available to the province under subsection 175(7) of the NTA, 1987 would be near $1.6 million. He concluded by requesting that public hearings be held so that the views of all interested parties could be obtained.
Mr. Douglas Young, in his capacity as Minister of Fisheries and Aquaculture of New Brunswick, stated that he was opposed to the proposed abandonment. He stated that CN had not established a marketing strategy to attract customers to the line as had been prescribed to CN in Order No. R-39217 of the Commission in 1986. He also pointed out that CN had been ordered to maintain service on the line, but that in reality CN had curtailed all service, in contravention of the Order.
Mr. Young requested a public hearing to show that other transportation alternatives in the Acadian peninsula are inadequate and it will thus not be in the public interest to abandon the rail lines. The public hearing would also be used to present arguments to the Agency to recommend to the Minister of Transport that special subsidies be given to the area for transportation alternatives, pursuant to sections 173 and 175 of the NTA, 1987 if it were decided to abandon the Caraquet Subdivision.
Mr. Gérard Brideau, Industrial Commissioner of the Economic Expansion Commission of the Peninsula Inc. expressed the Commission's opposition to the proposed abandonment, with the request that an adequate road system be established before considering abandoning the branch line.
Godin, Lizotte & Cie, Barristers, representing Fisons Western Corporation Ltd. of Maisonnette and Lameque, expressed their clients' opposition to the proposed abandonment stating that without the continued inbound shipments of perlite and outbound shipments of peat moss at their operations at Lameque, the company would be at a disadvantage, relating to freight costs, with their competitors who are located near rail service. As part of their submission, Fisons Western Corporation Ltd. included a statement of inbound and outbound carload traffic projections. It was anticipated that for the years 1989 to 1992 inbound shipments of perlite would range from 110 carloads to 230 carloads respectively, and possible outbound shipments of peat moss for the years 1989 and 1990 would be 125 and 150 carloads respectively.
Mr. Raymond Benoît, Administrator of the Town of Tracadie, stated that the Council of the Town of Tracadie had reconsidered the abandonment proposal of the Caraquet Subdivision and had decided to again oppose it. Mr. Benoît pointed out that the proposed abandonment would put even more pressure on Highways 11, 113 and 8, and considering the importance of these highways as the main transportation arteries connecting the Acadian Peninsula and the North American market, these roadways will have to be improved. Furthermore, it was noted that the two most important industries in the area, peat moss and fishing, depend entirely on these highways to get their products to the world market.
Anne Marie Kilfoil, citizen of Bath, New Brunswick, opposes the abandonments of rail lines in the province. She claims that the increase in local road traffic can be better served by rail.
On December 2, 1988, a Public Notice was published in several newspapers inviting submissions and evidence on the possibility of the line becoming economic in the foreseeable future or on public interest issues in the matter. No opposition was received in response to this Public Notice.
MATTERS CONSIDERED
CN submitted the following to the Agency. In accordance with Railway Transport Committee Order No. R-39217 dated April 1, 1986, CN submitted to the Agency two marketing reports; one received on July 3, 1987 and the other on April 14, 1988. The first report received indicated that its objective was to establish a viable, long-term, rail-oriented transportation system for the industries served by the Caraquet Subdivision. It was concluded that CN could not compete for traffic to or from the Caraquet coast on a price or service basis using the carload mode. An improved piggyback operation was introduced allowing CN to regain much of its market share position. Due to increased traffic volumes and customer support of intermodal alternatives, CN requested within their report an early review of the Order. In the second market report received on April 14, 1988, CN suggested strongly that a certain segment of traffic, despite the successful implementation of an intermodal option, is more conveniently and economically moved by carload to or from a rail point (i.e., East Bathurst) where it is transshipped and subsequently delivered or forwarded up by truck.
Regarding the evidence that the branch line could possibly become economic in the future, only one traffic forecast was submitted. While Fisons Western Corporation Ltd. provided a traffic forecast, it is clear they were not using rail service in 1987 at all. Further, in view of the exceptional difference between their volume forecast and the actual traffic level handled by rail carload in past years, this forecast would appear to be rather optimistic.
There has been no train service on this Subdivision since November 1986 due to CN having implemented the intermodal and transshipment alternatives. CN has indicated that it will continue to offer those transportation alternatives outlined above if the proposed abandonment is approved. It is concluded therefore that adequate alternative transportation does and will continue to exist to meet the needs of the region.
FINDINGS
Section 164 of the NTA, 1987 requires the Agency, as its first consideration, to determine if the line is economic or uneconomic and further whether there is a reasonable probability of the branch line becoming economic in the foreseeable future.
The Agency has determined, on the evidence submitted, that the branch line is uneconomic. The branch line has incurred significant losses in recent years; these losses averaged close to one half million dollars a year. There is not reliable evidence that would indicate a future reversal of this situation which would make the line economic in the foreseeable future. Thus, the Agency determines that the line is uneconomic and that there is no reasonable probability of the line becoming economic in the foreseeable future. It is noted that in 1987, the year for which the most recent data were available, 66 carloads of Caraquet traffic were served without using the branch line.
Accordingly, in compliance with subsection 165(1) of the NTA, 1987 the Agency must conclude that the operation of the Caraquet Subdivision from East Bathurst (Mileage 4.34) to Tracadie (Mileage 72.04), must be abandoned.
Section 168 of the NTA, 1987 governs the time limits within which the Agency must order the abandonment of the operation of a branch line.
The Agency determines that it would be in the public interest for the line to be abandoned sixty (60) days from the date of issue of Order No. 1989-R-40.