Agency Rulings

Decision No. 192-R-2002

April 19, 2002

APPLICATION by 510845 N.B. Inc. pursuant to section 91 of the Canada Transportation Act, S.C., 1996, c. 10, for a certificate of fitness for the proposed rail operation from the international pier on the waterfront in Sydney to a coal storage facility in Victoria Junction, and from Victoria Junction to the Lingan power generating plant owned by Nova Scotia Power Inc., on the Lingan Subdivision, Cape Breton Island, in the province of Nova Scotia.

File No. R 8005/N4

On March 11, 2002, 510845 N.B. Inc. (hereinafter NBI) applied to the Canadian Transportation Agency (hereinafter the Agency) for the certificate of fitness as set out in the title. NBI, a wholly-owned subsidiary of Emera Inc., acquired surface assets from the Cape Breton Development Corporation (hereinafter CBDC), a crown corporation, on December 18, 2001.

Subsection 92(1) of the Canada Transportation Act (hereinafter the CTA) requires that the Agency issue a certificate of fitness for the proposed operation of a railway if the Agency is satisfied that there will be adequate liability insurance coverage for the proposed operation. Section 87 of the CTA provides, in part, that a "railway" means a railway within the legislative authority of Parliament.

In this case, the assets acquired by NBI consist of the Devco Railway's lines and equipment formerly owned by CBDC. Cape Breton Development Corporation carrying on business as Devco Railway was operated by virtue of a certificate of fitness issued by the Agency as section 35 of the Cape Breton Development Corporation Act, R.S., 1985, c. C-25 declared the works and undertakings operated by CBDC to be a work for the general advantage of Canada.

CBDC is currently being dissolved pursuant to the Cape Breton Development Corporation Divestiture Authorization and Dissolution Act, S.C., 2000, c. 23 (hereinafter the Act). Section 5 of the Act provides that the works and undertakings operated or carried on by CBDC on or after June 15, 1967 are declared to be work for the general advantage of Canada. Therefore, this railway remains a work for the general advantage of Canada, regardless of ownership, and thus is subject to federal jurisdiction.

With respect to the insurance coverage adequacy, the Agency has reviewed the material filed and is satisfied that NBI has adequate third party liability insurance coverage, including self-insurance, for the proposed railway operation.

Accordingly, pursuant to subsection 92(1) of the CTA, the Agency will issue a certificate of fitness to NBI which permits the operation of its railway from the international pier on the waterfront in Sydney to a coal storage facility in Victoria Junction, and from Victoria Junction to the Lingan power generating plant owned by Nova Scotia Power Inc., on the Lingan Subdivision, Cape Breton Island, in the province of Nova Scotia.

NBI shall expediently notify the Agency of any incidents which may result in claims against its insurance policy in excess of $250,000. NBI shall also provide annually to the Agency a copy of its audited financial statements.