Decision No. 113-R-2016

April 13, 2016

APPLICATION by the City of Surrey (City) pursuant to subsection 101(3) of the Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA).

Case number: 
14-06066

INTRODUCTION

[1] On November 27, 2014, the City filed an application with the Canadian Transportation Agency (Agency) pursuant to subsection 101(3) of the CTA, for authority to construct and maintain a storm sewer and a storm water diversion system at mileage 3.95 of the Fraser Valley Subdivision, of the Southern Railway of British Columbia Limited (SRY), in the municipality of the corporation of Delta (Delta), in the province of British Columbia (Province). The Fraser Valley Subdivision is a corridor between New Westminster and Chilliwack, British Columbia, a portion of which has been licensed to SRY for the operation of its railway until 2064. The land on this corridor is owned in fee simple by British Columbia Hydro and Power Authority (BC Hydro).

[2] The storm sewer and storm water diversion system would be constructed under and adjacent to the railway operated by SRY, partly on land owned by Delta, but mostly on land owned by BC Hydro. This is shown on the drawing dated September 17, 2015 and attached as Exhibit F to BC Hydro’s answer to the application (BC Hydro drawing).

[3] In 1988, the Province adopted legislation to privatize the operation of the railway. Pursuant to that legislation, BC Hydro was permitted to, and did, transfer the authority to operate the line of railway to SRY, transfer the ownership of its railway assets to SRY and retain ownership of the former railway right of way lands on which the line of railway had been operated.

[4] In 2006, the Province adopted the crossing provisions of the CTA as part of its provincial legislation and the Agency has been delegated the authority to administer these crossing provisions. As such, the Agency has jurisdiction to determine crossing applications involving provincially-regulated railway companies within the Province, including SRY.

[5] Delta has consented to the construction and maintenance of the storm sewer and storm water diversion system on its lands; however, the City was unable to negotiate agreements with SRY or BC Hydro.

[6] On January 22, 2015, the City filed a request to add BC Hydro as a respondent and amend its application. In Decision No. LET-R-57-2015, the Agency granted the City’s request on the basis that the City had sufficiently demonstrated that BC Hydro may potentially be bound by an Agency order.

[7] While none of the parties dispute the Agency’s jurisdiction to determine this application, at issue is whether an Agency decision authorizing the construction of the storm sewer and the storm water diversion system would be binding on BC Hydro.

[8] For the reasons indicated in this Decision, the Agency finds that the proposed storm sewer and storm water diversion system at mileage 3.95 of SRY’s Fraser Valley Subdivision is adequate and appropriate, and therefore suitable for the purposes for which it is intended. The Agency therefore authorizes the City to construct and maintain the utility crossing at its own expense. Furthermore, the Agency’s Decision is final and binding on the parties, including BC Hydro.

BACKGROUND

SRY, its line of railway and existing crossings

[9] SRY is a railway company subject to the legislative jurisdiction of the Province. The line of railway that SRY operates runs between New Westminster and Chilliwack (Fraser Valley Corridor).

[10] The line of railway has been in continuous operation for the movement of freight since 1911. From 1911 through to 1961, the line of railway was operated by the British Columbia Electric Railway Company and, from 1961 to 1988, by BC Hydro, a crown corporation.

[11] Pursuant to the Province’s Hydro and Power Authority Privatization Act, S.B.C. 1988, c. 39, and an Asset Transfer Agreement, in 1988, BC Hydro’s railway assets were transferred to SRY.

[12] As expected, given the significant length of a line of railway that has been in continuous operation for over 100 years, numerous crossings of various kinds have been constructed under and across the line of railway over the years. These crossings were authorized by the regulatory authority in effect at the relevant time, the provincial Minister of Commercial Transport. Details of some of the numerous types of utility and other crossings built under and across the line of railway and their authorizations are set out at paragraph 11 of the City’s reply to its request to amend its application dated February 16, 2015.

[13] The corollary is also true; as the undertaking of the railway grew and was extended, BC Hydro, as operator of the line of railway, was required to seek regulatory approval to construct the extensions of its line of railway across highways and across the lines of other utility companies. These authorizations were granted by the provincial Minister of Commercial Transport. Details of some of the numerous crossings carrying the line of railway over and across various roadways and pipelines are set out set out at paragraph 12 of the City’s reply to its request to amend its application dated February 16, 2015.

[14] As shown on the drawing dated November 26, 2014 and attached as Schedule A to the application, there currently exists a 900-millimetre concrete culvert at mileage 3.95 of SRY’s Fraser Valley Subdivision, which allows for Delta Creek to cross 96th Avenue. As part of the work proposed in this application, the City intends to extend this existing concrete culvert as part of the storm water diversion system.

BC Hydro and the BC Hydro lands

[15] According to the Hydro and Power Authority Act, R.S.B.C. 1996, c. 212 (Hydro Act), under which BC Hydro is continued, BC Hydro’s purposes are:

  1. to generate, manufacture, conserve, supply, acquire and dispose of power and related products,
  2. to supply and acquire services related to anything in paragraph (a), and
  3. to do other things as may be prescribed.

[16] In this regard, BC Hydro states that it owns and operates transmission lines on the BC Hydro lands, which form an integral part of BC Hydro’s power and transmission distribution network throughout the Province.

[17] The BC Hydro lands, identified as Parcel Identifier 009-057-854, were initially acquired in 1910 in fee simple by the Vancouver Power Company, Limited (VPC) for the purpose of developing a railway in the Fraser Valley Corridor. This is evident by the fact that the document transferring the BC Hydro lands to VPC (Transfer Instrument Number 23205, registered on August 9, 1910) includes a plan identifying those lands as the railway right of way. Additionally, two years prior to VPC’s acquisition of the BC Hydro lands, VPC submitted location maps, location profiles and books of references to the Chief Commissioner of Lands and Works as per the requirements of section 10 of the British Columbia Railway Act, R.S.B.C. 1897 (Railway Act, 1897), which required that surveys and levels be taken of the lands through which a railway is to pass. VPC received approval of the maps, profiles and books of reference.

[18] In 1946, VPC transferred the BC Hydro lands to the British Columbia Electric Railway Company Limited (BC Electric), which registered a Certificate of Indefeasible Title over the BC Hydro lands in 1959.

[19] In 1964, BC Electric and the British Columbia Power Commission were amalgamated under the British Columbia Hydro and Power Authority Act, S.B.C. 1964, c. 7 (Hydro Act, 1964). According to BC Hydro, it is under the Hydro Act, 1964 that BC Hydro assumed the assets, powers and liabilities of BC Electric, including the BC Hydro lands. BC Hydro assumed the power to generate, transmit and distribute electricity. In some areas, BC Hydro also took over fee simple ownership of corridors containing various combinations of railways, transmission and distribution lines and electric facilities. In other areas, BC Hydro took over various combinations of statutory rights of way authorizing the construction and operation of railways, electric transmission and distribution lines.

[20] BC Hydro continuously operated the railway until 1988, at which point the Province allowed it to transfer the railway operations to SRY, but to retain fee simple ownership of the land on which the railway operated. As part of the transfer of the railway to SRY, the Province also permitted BC Hydro and SRY to enter into the Fraser Valley Corridor Licence and the Real Property Operating Agreement, for the operation of the railway on a portion of the BC Hydro lands (licensed area). The licensed area is approximately 16.7 meters wide, while the BC Hydro lands are approximately 30.5 meters wide in total, as shown on the BC Hydro drawing.

[21] Article 2.01 of the Fraser Valley Corridor Licence sets out that SRY is entitled to enter upon, construct facilities and operate the railway on the licensed area. SRY has the right to enter upon the BC Hydro lands outside the licensed area for purposes such as maintaining or constructing rail facilities with BC Hydro’s consent, and may request permission to expand the rail facilities within the licensed area.

[22] Although the Province allowed BC Hydro to lease portions of its lands to SRY for the operation of SRY’s railway line, BC Hydro continues to operate electric transmission facilities on the BC Hydro lands, and by registration dated May 15, 2007 under the Land Title Act, R.S.B.C. 1996, c. 250, BC Hydro registered a statutory right of way against the BC Hydro lands. According to BC Hydro, there are no charges, liens or interests registered on title limiting the use of the BC Hydro lands to railway uses.

Storm sewer and storm water diversion system

[23] The storm sewer and storm water diversion system will form part of the Delta Creek Diversion Project (diversion project), which is intended to divert peak rainfall event storm water from Delta Creek into Scott Creek to reduce erosion in Delta Creek. Delta Creek runs closely adjacent to SRY’s railway track and flows from south to north, more or less in the same direction as the railway line. On August 25, 2015, the Agency authorized the construction and maintenance of two other storm sewer crossings of the SRY railway, both of which are a part of the diversion project.

[24] The storm sewer will be constructed on, under, through and within 96th Avenue in Delta and will extend onto the BC Hydro lands and to a lesser extent, land owned by Delta. It is described as a 900-millimetre diameter, 13.5-millimetre wall thickness welded steel pipe. Details of the storm sewer are provided in the drawings dated November 26, 2014 and attached as Schedules A, B, C and C.1 to the application.

[25] The proposed storm water diversion system includes an upstream inlet being an approximately 3.5-metre long, 1200-millimetre diameter welded section of pipe with a welded steel reducer connection to a 900-millimetre diameter pipe and concrete headwall. The storm water diversion system also includes an extension of the existing concrete culvert at mileage 3.95 of the SRY Fraser Valley Subdivision, a concrete overflow manhole and a 5-metre long, 750-millimetre diameter high density polyethylene storm sewer with a concrete inlet. These structures, which form part of the storm water diversion system, will divert water from the portion of Delta Creek located on the BC Hydro lands, as shown on the drawings dated April 2012, and attached as Schedule B.1 to the application.

[26] The City engaged in negotiations with BC Hydro between August 2012 and January 2015 and with SRY between October 2012 and September 2014. However, no agreement was reached with either BC Hydro or SRY.

[27] No issues have been raised with respect to the design and method of construction of the proposed storm sewer system. The City states that the storm sewer and storm water diversion system will have no negative impact on SRY’s railway operations and railway line, and should have no negative impact going forward. Furthermore, the City submits that it will assume the construction and maintenance costs of the storm sewer and storm water diversion system.

[28] The parties disagree as to whether the Agency’s Decision on this application would be binding on BC Hydro as owner of the lands in question. In addition, there is no agreement on the following terms and conditions of the proposed construction:

  1. The duration of the agreement;
  2. Terms in the agreement regarding the removal or alteration of the storm sewer;
  3. The imposition of liability, release and indemnity provisions;
  4. Compensation; and,
  5. Reserved rights.

ISSUES

  1. Is the storm sewer and storm water diversion system a utility crossing as contemplated under sections 100 and 101 of the CTA?
  2. If the storm sewer and storm water diversion system constitutes a utility crossing, should the Agency authorize its construction?
  3. If the Agency authorizes the crossing, what terms and conditions, if any, should be included?
  4. Does the Agency’s jurisdiction over SRY and the line of railway that it operates include jurisdiction over the land on which the line of railway is located?
  5. Should the Agency grant SRY’s request to dismiss the application?

LEGISLATIVE CONTEXT

[29] Through an administrative agreement further detailed below, the Province has delegated to the Agency the authority to administer the CTA’s crossing provisions.

Federal legislation

[30] Section 100 of the CTA states:

“utility crossing” means the part of a utility line that passes over or under a railway line, and includes a structure supporting or protecting that part of the utility line or facilitating the crossing;

“utility line” means a wire, cable, pipeline or other like means of enabling the transmission of goods or energy or the provision of services.

[31] Subsection 101(3) of the CTA states:

If a person is unsuccessful in negotiating an agreement or amendment mentioned in subsection (1), the Agency may, on application, authorize the construction of a suitable road crossing, utility crossing or related work, or specifying who shall maintain the crossing.

Provincial legislation

[32] Subsection 3 of the British Columbia Railway Act, R.S.B.C. 1996, c. 395 (Railway Act) states:

3(1) For the purposes of this section:

“company” means a person, firm or corporation that owns, constructs or operates, or intends to own, construct or operate, a railway or tramway in British Columbia and to which, except for this section, this Act would not apply, and includes a corporation empowered to act as a carrier of passengers and freight;

“railway” means a railway or tramway subject to the legislative authority of the Legislature, and includes any undertaking of a company subject to that authority which is by any certificate of the minister designated as a railway.

[…]

(6) Subject to the Railway Safety Act, a company must not operate a railway in British Columbia except with the consent in writing of the minister and subject to conditions the minister may impose.

Administrative agreement

[33] Pursuant to section 9 of the Railway Safety Act, S.B.C. 2004, c. 8 (RSA), the minister may, by regulation, adopt provisions of other named statutes, including the CTA, and once adopted, these provisions apply to railway companies. Pursuant to this authority, the Province, by its Railway Safety Adopted Provisions Regulation, B.C. Reg. 210/2004, adopted sections 99 to 103 of the CTA, with the exception of subsection 101(4). Then, pursuant to section 157.1 of the CTA, the Province entered into an administrative agreement dated September 11, 2006, whereby the administration of these provisions was delegated from the Province to the Agency (Agreement). As a result, disputes involving crossings of railways under the jurisdiction of the Province are adjudicated by the Agency.

[34] SRY is a railway undertaking subject to the legislative jurisdiction of the Province and the Agency therefore has jurisdiction over SRY and over this application within the scope of the Agreement.

ISSUE 1: IS THE STORM SEWER AND STORM WATER DIVERSION SYSTEM A UTILITY CROSSING AS CONTEMPLATED UNDER SECTIONS 100 AND 101 OF THE CTA?

Positions of the parties

BC Hydro

[35] BC Hydro submits that as the main body of the storm sewer and storm water diversion system is not located on a railway line, it does not meet the definition of a “utility crossing” for the purposes of the RSA and the CTA and as such, the application should be dismissed for lack of jurisdiction. According to BC Hydro, the lands outside the licensed area are not and have never been used as a railway line.

[36] BC Hydro submits that previous Agency decisions held that the definition of “railway” in the context of a utility crossing only extends to those facilities and land within the railway right of way and that this has been upheld by the Federal Court of Appeal in Canadian National Railway Company v. Canada (Canadian Transportation Agency), [1999] F.C.J. No. 1961 (CNR 1999). BC Hydro also refers to Decision No. 33-R-2011, where the Agency found that the definition of a “utility line” would include any part of a pipeline that is on or under the railway right of way. Consistent with these decisions, BC Hydro argues that the widest application that the definition of “utility crossing” in the CTA, as adopted by the RSA and relevant jurisprudence, can support, is those parts of a utility line that run over, under, along or across the railway line and are located within the railway right of way.

[37] BC Hydro argues that the only decision that it is aware of where the Agency required construction on lands that were not part of a railway right of way was Decision No. 617-R-2007. In that case, the Agency required the construction of works on property that was adjacent to the railway right of way, but still held by the railway owner. BC Hydro submits that the Agency asserted jurisdiction in that case because a major part of the proposed crossing project fell under the Agency’s purview, and because the applicant agreed to provide the railway company with fair and reasonable compensation for the use of the contiguous railway land. The Agency also determined that the inclusion of a service road was necessary to construct the road crossing and was therefore a related work subject to the Agency’s jurisdiction.

[38] BC Hydro argues that in this case only a small part of the City’s proposed storm water sewer and storm water diversion system lies within the licensed area, and that even if the Agency were to determine that the licensed area is a railway right of way, the circumstances in Decision No. 617-R-2007 are absent in this case.

SRY

[39] SRY agrees with the Agency’s past finding that a railway company’s right of way forms part of its railway line. However, SRY argues that in this case, as it neither owns nor controls the land contiguous to its track, land cannot be described as a railway right of way under the Agency’s jurisdiction. SRY, however, acknowledges that the Agency may have jurisdiction over its tracks and supporting infrastructure to the extent that a proposed utility line impinges on those facilities.

[40] SRY also questions the Agency’s jurisdiction to authorize the structural components of the storm water diversion system on the basis that they constitute a means of obtaining drainage, as opposed to the laying of water pipes. SRY argues that the Agency no longer has jurisdiction over drainage since the repeal of the Railway Act, R.S.C. 1985 c. R-3, s. 212 (federal Railway Act).

[41] SRY also argues that the Agency does not have jurisdiction to authorize the structural components of the diversion structures, as they do not meet the definition of a “utility line” under section 100 of the CTA. SRY submits that section 100 of the CTA defines a “utility line” as “a wire, cable, pipeline or other like means of enabling the transmission of goods or energy or the provision of services.” SRY maintains that the proposed diversion structures, which consist of a headwall, culvert extension, concrete overflow manhole structure and concrete inlet structure, do not belong in the category of “wire, cable, pipelines or other like means.” SRY further argues that the structural components of the storm water diversion system cannot be considered as necessary and consequential facilities related to a pipeline or storm sewer pipe.

The City

[42] Regarding SRY’s argument that the storm water diversion structures constitute a means of obtaining drainage, the City submits that in Decision No. 213-R-2015, the Agency approved a storm water pipe (storm sewer) and the improvement of a pre-existing drainage ditch (rock-lined ditch) as a utility crossing. The City argues that it was not Parliament’s intent to remove the Agency’s authority to approve drainage crossings when the federal Railway Act was repealed.

[43] The City disagrees with SRY’s position that the storm water diversion structures do not constitute a “utility line” pursuant to section 100 of the CTA. According to the City, SRY has not filed any engineering evidence to challenge the City’s evidence. The City refers to Decision No. 709-R-2006, where the Agency found that you cannot have valves without a pipeline. The City submits that, consistent with that decision, you cannot have a storm water diversion system without a storm sewer.

[44] According to the City, the engineering design drawings attached at Schedules B.1 and B.2 of its application clearly show that the storm sewer cannot function independently from the storm water diversion system. The City asserts that if the Agency does not accept that the storm water diversion system is a work related to the storm sewer, then the Agency should find that the storm water diversion system is a “like means enabling the provision of a service,” i.e. the distribution of water. The City further states that the Agency has taken a broad and purposive approach to interpreting its legislation as doing otherwise would frustrate the intent of section 101 of the CTA.

[45] With respect to BC Hydro and SRY’s position that the storm water diversion structures are for the most part not located on SRY’s railway line, the City submits that the BC Hydro lands are fully contained within the railway right of way. According to the City, the fact that BC Hydro and SRY have amongst themselves temporarily identified a licensed area which forms part of the railway right of way does not change the fact that the whole of the BC Hydro lands form part of a railway right of way and are, therefore, a railway line over which the Agency has jurisdiction. The City asserts that it is not material or relevant that SRY is not the fee simple owner of the railway right of way in light of the fact that that right of way forms an integral part of SRY’s railway.

Analysis and findings

[46] Section 100 of the CTA defines a “utility crossing” as the part of a utility line that passes over or under a railway line, and includes a structure supporting or protecting that part of the utility line or facilitating the crossing.

[47] As noted by the parties, the Agency has consistently held that a railway line can include a railway right of way. In Decision No. 709-R-2006, the Agency found that a utility crossing under section 100 of the CTA is intended to include encroachments on the land of the railway company’s right of way by utility lines that run alongside the trackage.

[48] SRY contends that the BC Hydro lands contiguous to its railway do not form part of its railway line, as it does not own or control those lands. The Agency notes, however, that the City provided copies of 1908 location plans, location profiles and books of reference of the railway right of way, as approved by the Commissioner of Lands and Works pursuant to the Railway Act, 1897. These approvals were issued to VPC, which is BC Hydro’s predecessor.

[49] Furthermore, the BC Hydro lands were acquired as part of a plan to construct a railway and as noted in the Background section of this Decision, that railway was indeed constructed and continues to be in operation over 100 years later. Additionally, the land transfer instrument and associated plans related to the transfer of the BC Hydro lands to VPC indicate that the BC Hydro lands form part of a railway right of way.

[50] In light of the history of the BC Hydro lands as detailed above, the Agency does not accept SRY’s position that the land contiguous to the railway tracks does not form part of the railway line because the Fraser Valley Corridor Licence only licenses a portion of the BC Hydro lands to SRY for the operation of its railway. The BC Hydro lands were acquired for purposes of operating a railway. A railway has been operated over these lands for over 100 years. BC Hydro’s decision to license a somewhat narrower area of the land to SRY does not change the nature of these lands. The Agency is of the opinion that the entirety of the BC Hydro lands continue to form the railway right of way. The Agency therefore finds that it has jurisdiction to authorize the construction of the storm water diversion system, despite the fact that the structures are located, in part, outside of the licensed area.

[51] Regarding SRY’s claim that the storm water diversion structures constitute drainage and are therefore not subject to the Agency’s jurisdiction, the Agency notes that in Decision No. 213‑R‑2015, it authorized a storm sewer and a rock-lined ditch as a utility crossing, pursuant to section 101 of the CTA. The Agency finds that that decision is directly applicable to this matter and it confirms that the Agency has previously considered a storm sewer, which happened to improve drainage, to be a utility crossing.

[52] Pursuant to section 100 of the CTA, a “utility line” is defined as a wire, cable, pipeline or other like means of enabling the transmission of goods or energy or the provision of services. In this case, the Agency finds that the storm sewer constitutes a pipeline. The Agency also finds that, as the storm water diversion system is an integral part of the storm sewer, it is necessary to the storm sewer’s operation, and is therefore considered a related work, and part of the utility crossing, subject to subsection 101(3) of the CTA.

[53] In light of the above, the Agency finds that the storm sewer and storm water diversion system constitutes a utility crossing. The Agency will next consider whether it should authorize the construction and maintenance of the utility crossing.

ISSUE 2: IF THE STORM SEWER AND STORM WATER DIVERSION SYSTEM CONSTITUTES A UTILITY CROSSING, SHOULD THE AGENCY AUTHORIZE ITS CONSTRUCTION?

[54] The Agency finds that the parties tried, over a significant period of time to negotiate an agreement relating to the construction and maintenance of the utility crossing, and that they were unsuccessful in doing so. Therefore, pursuant to subsection 101(3) of the CTA, the City seeks an order from the Agency authorizing the construction and maintenance, at the City’s expense, of the utility crossing that is the subject of this application.

[55] The Federal Court of Appeal, in Fafard v. Canadian National Railway Company, 2003 FCA 243, concluded that “[a] suitable crossing is a crossing that is adequate and appropriate for the purposes for which it was intended and installed.”

[56] Detailed engineering drawings were submitted with the application. The Agency notes that there is no disagreement between the parties with respect to the design and method of construction of the utility crossing, or compliance with applicable standards.

[57] Neither SRY nor BC Hydro raised any engineering or safety concerns regarding the utility crossing.

[58] BC Hydro states that certain terms and conditions are necessary in order to ensure that the utility crossing will not compromise its ability to provide service going forward. The Agency notes, however, that BC Hydro provides no substantive submissions indicating that the utility crossing would directly or indirectly impact BC Hydro’s ability to supply electricity.

[59] The Agency therefore finds that the utility crossing at mileage 3.95 of SRY’s Fraser Valley Subdivision is adequate and appropriate, and therefore suitable for the purposes for which it is intended (i.e. diversion of peak rainfall event storm water). Accordingly, the Agency authorizes the City to construct and maintain the utility crossing at its own expense.

[60] The Agency must next consider whether terms and conditions should be included with the Agency’s authorization.

ISSUE 3: IF THE AGENCY AUTHORIZES THE CROSSING, WHAT TERMS AND CONDITIONS, IF ANY, SHOULD BE INCLUDED?

[61] BC Hydro submits that the terms and conditions of the Agency’s authorization should be those set out in the proposed Corridor Licence Agreement that it offered to the City on January 12, 2015. The City objects, however, to those terms and conditions as detailed below.

[62] In its answer to the City’s application, SRY proposed terms and conditions that differed from those that it proposed to the City in an agreement during their negotiations. The Agency will therefore consider SRY’s most recently proposed terms and conditions, which are those that are set out in its reply, as detailed below.

Duration of the utility crossing agreement

[63] In its application, the City states that it is seeking a perpetual agreement with an indefinite term that may only be varied by order of the Agency or by agreement of both parties.

[64] In its proposed Corridor Licence Agreement, BC Hydro seeks a 20-year term with a provision for termination by either party at any time upon 90 days’ written notice. SRY makes no specific submission on the duration of the utility crossing agreement.

[65] In Decision No. 90-R-2007, the Agency found that:

[…] a decision issued by the Agency authorizing the construction of a utility crossing at a specific location remains in effect until such time as the decision is amended or rescinded by the Agency or its successor.

[66] Pursuant to section 32 of the CTA, the Agency has the discretion to review, rescind or vary any decision or order if there has been a change in the facts or circumstances pertaining to the decision or order.

[67] Consistent with the above, as well as with the most recent decisions on this issue, Decision No. 275-R-2015 and Decision No. 274-R-2015, the Agency finds that a decision authorizing a crossing remains in effect unless the decision is amended or rescinded by the Agency. As such, the Agency will not impose any terms and conditions respecting the duration of the utility crossing agreement.

Terms in the agreement on the removal or alteration of the utility crossing

[68] In its proposed Corridor Licence Agreement, BC Hydro seeks a condition stating that upon termination of the agreement, the City is to remove its works and restore BC Hydro’s and other parties’ works within 30 days of BC Hydro’s request to do so.

[69] However, the City is not prepared to remove its works and restore other parties’ works in the manner proposed by BC Hydro.

[70] SRY requests that removal or alteration for any reason be at the City’s expense.

[71] The Agency finds, consistent with its previous decisions (e.g. Decision No. 151-R-2013), that a decision authorizing the construction of a utility crossing at a specific location is final and binding on the parties, unless it is reviewed or rescinded by the Agency. As such, the Agency will not impose any terms and conditions respecting the removal or alteration of the utility crossing.

Imposition of liability, release and indemnity provisions

[72] In its proposed Corridor Licence Agreement, BC Hydro seeks indemnification of BC Hydro, its directors, officers, employees, contractors, invitees and agents from, amongst other things, any losses, legal or administrative action, release of contaminants and negligent acts resulting from the proposed Corridor Licence Agreement.

[73] According to BC Hydro, the City has rejected these proposed terms on the basis that BC Hydro should either assume responsibility for any remedial costs resulting from the construction or failure of the utility crossing, or that the issue should be deferred to later adjudication by a competent authority. BC Hydro submits that the City’s proposal is at odds with the clear preference of the Province’s legislature to protect BC Hydro’s ability to provide electricity in situations where there are land use conflicts involving municipal services.

[74] The City argues that there is no evidence of the Province’s preference as indicated by BC Hydro, and that such a preference cannot be inferred from the legislation. The City submits that there is no conflict in this case, and that if one develops, BC Hydro may seek an order from the Agency varying or setting aside any order that the Agency may have made related to the authorization sought by the City.

[75] The City asserts that the terms and conditions of the Agency’s authorization should be consistent with those ordered by the Agency in recent decisions such as Decision No. 213-R-2015, Decision No. 274‑R‑2015 and Decision No. 275-R-2015, which amongst other things, do not abrogate the City’s statutory and common law immunities, including those under section 288 of the Local Government Act, R.S.B.C. 2015, c.1 (Local Government Act). Section 288 of the Local Government Act provides that a municipality is not liable in any action based on nuisance, or on the rule in Rylands v. Fletcher, if the damages arise, directly or indirectly, out of the breakdown or malfunction of a sewer system or a water or drainage facility or system.

[76] SRY submits that while the Agency did not impose any terms and conditions respecting liability in three decisions issued in 2015 authorizing utility crossings, a review of several decisions issued prior to 2015 reveals that the Agency ordered utility companies to indemnify railway companies for losses unless the cause of the loss, cost, damage, injury or expense could be traced elsewhere. SRY submits that in the absence of compelling reasons to depart from the pre-2015 decisions, the Agency should revert to its long-standing practice of authorizing utility crossings with the following provision:

The utility shall, at all times, indemnify the railway across or along whose railway the utility crossing is constructed, from and against all loss, cost, damage, injury and expense to which that railway company may be put by reason of any injury to persons or damage to property caused by the design, construction, maintenance or operation of the utility crossing as well as against any damage or injury resulting from imprudence, neglect, want of skill of the employees or agents of the utility in connection with the design, construction, maintenance or operation of the utility crossing unless the cause of such loss, cost, damage, injury or expense can be traced elsewhere.

[77] In response to SRY’s submissions, the City argues that SRY is attempting to re-litigate issues that it has already argued and that were already decided by the Agency in Decision No. 213‑R‑2015, Decision No. 274-R-2015 and Decision No. 275-R-2015. The City submits that any authorization granted should be on terms consistent with those decisions. The City maintains that by not imposing provisions related to liability, the Agency has properly preserved the City’s protection under section 288 of the Local Government Act and has not affected other common law defences available to the City.

[78] The City requests that if its protection under section 288 of the Local Government Act is not specifically acknowledged in the Agency’s authorization, there should be nothing in the decision that impinges on that protection. The City proposes that if an indemnity provision is to be imposed by the Agency, the Agency should impose clause 11.3 of Telecom Decision CRTC 2013-618, which states that neither party should be liable for various types of damages.

[79] As stated in its most recent decisions authorizing utility crossings (e.g. Decision No. 275-R-2015 and Decision No. 274-R-2015), the Agency is of the opinion that liability for negligent acts by either party at railway or utility crossings ought to be determined by the civil courts in the province in which the crossing is situated. The Agency will therefore not impose any terms and conditions with respect to liability.

Terms concerning compensation

[80] BC Hydro requests an annual fee of $350 for the first five years, which may be reviewed each subsequent year. SRY makes no submissions on fees. The City, however, objects to BC Hydro’s position.

[81] In Decision No. 93-R-1995, the Agency stated that:

[...] if the right to cross is established by the exercise of a statutory discretion, the policy of the Agency and its predecessors has been not to provide for compensation where a mere easement is created without any real or appreciable injury or damage to the railway company or its property.

[82] This principle was subsequently endorsed by the Agency on a number of other occasions such as Decision No. 401-R-2002, Decision No. 440-R-2004, Decision No. 90-R-2007 and Decision No. 432-R-2009, which authorized the construction and maintenance of utility crossings without ordering any compensation to the railway company.

[83] The Agency finds that BC Hydro has provided no evidence substantiating any administrative problems it might face as a result of the proposed utility crossing. Accordingly, the Agency finds that compensation in the form of fees payable to BC Hydro is not warranted.

Terms in the agreement on reserved rights

[84] According to the City, BC Hydro requests a term in the agreement stating that the City is subject, subordinated and postponed to every right and interest of BC Hydro as property owner and in respect of its facilities, notwithstanding the dates that BC Hydro exercises its rights as property owner. The City is not prepared to agree to this term. SRY provided no submissions on this term.

[85] The Agency has consistently held that any authorization issued by it is final and binding (e.g. Decision No. 151-R-2013). As such, the authorization will be subject only to review, variance or rescission by the Agency as contemplated by the CTA. The Agency will not impose any terms and conditions respecting reserved rights. BC Hydro is at liberty to seek an amendment of the Agency’s authorization pursuant to section 32 of the CTA, should it see fit to do so.

ISSUE 4: DOES THE AGENCY’S JURISDICTION OVER SRY AND THE LINE OF RAILWAY THAT IT OPERATES INCLUDE JURISDICTION OVER THE LAND ON WHICH THE LINE OF RAILWAY IS LOCATED?

Positions of the parties

[86] BC Hydro argues that the Agency does not have jurisdiction to interfere with lands owned by BC Hydro and which BC Hydro uses to carry out its objects under the Hydro Act. According to BC Hydro, the legislation under which the Agency exercises its jurisdiction has no application to BC Hydro or its lands. BC Hydro further submits that if the Agency could exercise authority over BC Hydro and the BC Hydro lands, that authority would only extend to lands used for the operation of a railway line. In the latter regard, BC Hydro maintains that the bulk of the storm sewer and storm water diversion system would not be located on land used for the operation of a railway line.

[87] BC Hydro argues that in order for the Agency to find that it has jurisdiction over it, the Agency must determine that BC Hydro is a railway company for the purposes of the RSA. BC Hydro points out that the RSA states that the adopted provisions apply to railway companies. BC Hydro claims that it does not fall within the definition of “railway company” for the purposes of the RSA. The RSA defines a railway company as a company that has received an authorization under section 3 of the Railway Act. BC Hydro argues that it does not meet the definition of “company” in section 3 of the Railway Act, and it does not have authorization from the minister under section 3 of the Railway Act to operate a railway in British Columbia. BC Hydro points out that it divested all its railway assets in 1988 and that since that time, it has not owned, constructed or operated, or intended to own, construct or operate a railway. As such, pursuant to subsection 3(1) of the Railway Act, BC Hydro argues that it does not meet the definition of a company, which is defined as a company that owns, constructs or operates or intends to own, operate or construct a railway.

[88] To support its position that BC Hydro remains subject to the RSA, the City argues that Order‑in‑Council 1708 (which made sections 4 and 7 of the Railway Act, 1960 applicable to BC Hydro) and Certificate No. 4293 (which made the crossing provisions of the Railway Act, 1960 applicable to BC Hydro), remain in force. BC Hydro disputes this argument, however, stating that sections 4 and 7 of the Railway Act, 1960 are continued under sections 3 and 5 of the Railway Act and that those sections are still applicable to BC Hydro whether Order-in-Council 1708 is in force or not. BC Hydro also disputes that Certificate No. 4293 is still applicable to it; stating that Certificate 4293 was subsequently transferred to SRY.

[89] BC Hydro maintains that the RSA and the adopted CTA provisions were not intended to, nor did they, confer on the Agency jurisdiction to interfere with lands owned by BC Hydro, which BC Hydro uses to carry out its objectives under the Hydro Act. BC Hydro relies on subsection 32(1) of the Hydro Act which states as follows:

Despite any specific provision in any Act to the contrary, except as otherwise provided under this Act, the authority is not bound by any statute or statutory provision of British Columbia.

[90] BC Hydro argues that the Province has not made BC Hydro subject to the RSA, and that by not listing it as a statute that applies to BC Hydro, the Province ensured that existing limitations on municipalities’ ability to affect BC Hydro’s operations would survive notwithstanding the adoption of the RSA.

[91] SRY supports BC Hydro’s position on the issue of the Agency’s jurisdiction over BC Hydro, stating that as BC Hydro is not a railway company under British Columbia law, it is not subject to the RSA, under which the Agency derives its authority.

[92] The City, however, argues that nowhere in the RSA, the adopted CTA provisions or the agreements entered into pursuant to the RSA is there either an express or implied limitation on the Agency’s jurisdiction as it relates to BC Hydro or any railway right of way owned by BC Hydro.

[93] The City submits that even if one accepts BC Hydro’s interpretation of the Hydro Act, it is clear, pursuant to section 3 of the Railway Act, that BC Hydro must comply with the RSA and is consequently subject to the RSA, the adopted CTA provisions and the Agency’s jurisdiction.

[94] The City argues that by continuing to own the railway right of way and by reserving rights in its favour under its agreement with SRY to, amongst other things, control crossings and allow others to cross or occupy the railway right of way, BC Hydro is considered an operator for the purposes of subsection 3(6) of the Railway Act.

[95] The City submits that prior to the Agency having jurisdiction, BC Hydro was subject to the legislative scheme and was routinely a party to proceedings and applications related to crossings. The City provides examples, such as a 1971 approval of an application by the Minister of Commercial Transport concerning Westcoast Transmission Company Limited’s request to lay and maintain a pipeline under the BC Hydro railway. The City adds that the statutory right of the Minister to approve crossings and the right to cross a railway right of way with Ministerial approval, along with the right to have crossing applications adjudicated, applied regardless of who owned the railway or railway right of way. The city asserts that the RSA was never intended to abolish or erode these statutory rights or to change the legislative scheme as it relates to BC Hydro.

Analysis and findings

[96] The facts of this case are unique. This would appear to be the first time that there has been a disputed crossing involving this railway line since it was privatized in 1988, and certainly since the Agency has been delegated the authority to determine these applications involving provincial railways in British Columbia. While in other applications the Agency has been faced with circumstances involving a railway operated by one company over lands owned by another, in this particular case the owner of the land is arguing that it is not a railway company.

[97] It is unlikely, when enacting sections 100 and 101 of the CTA, that Parliament had in mind the facts of this case. It is likely that Parliament assumed that the land over which the railway was being operated was owned by the same company that was operating the railway. The Agency is therefore required to apply the relevant statutory scheme to a situation that Parliament may not have envisaged, that is, where the land over which a railway is being operated is owned by a company that is itself not otherwise subject to Agency jurisdiction.

[98] BC Hydro is steadfastly maintaining its opposition to the City’s proposed utility crossing unless the City agrees to its terms, even though there is already an existing utility crossing in the form of a concrete culvert at mileage 3.95 that will be incorporated into the new proposed work, if authorized. It is unfortunate that a crown corporation and a municipal authority have not been able to come to an agreement to run what is essentially a second water pipe under the SRY track, which nobody disputes is in the public interest.

[99] It may be that BC Hydro is no longer a “railway company” within the meaning of the RSA, and that it may now enjoy a general immunity under subsection 32(1) of the Hydro Act; however, the Agency finds that it has jurisdiction to determine the application and that this Decision is binding on all parties, including BC Hydro.

[100] Section 100 of the CTA defines a ‘utility crossing” as “the part of a utility line that passes over or under a railway line” [emphasis added]. The Agency therefore has jurisdiction to authorize the construction of a suitable utility crossing that can, by this very definition, pass under the railway line. The Agency is of the opinion that this provides the Agency with express statutory jurisdiction over both the railway line (railway infrastructure) and the land that necessarily supports that railway infrastructure. This jurisdiction over the crossing is therefore express and irrespective of the ownership of the land. Even if the Agency were to find that this jurisdiction is not expressly stated in these provisions, it would be by necessary implication to protect the integrity of the statutory scheme that governs railway crossing disputes. The Agency’s order authorizing the crossing would necessarily extend to the owner of the land even if the owner is not a railway company or not otherwise subject to Agency jurisdiction.

[101] The Province allowed BC Hydro to retain ownership of land over which a railway has been in continuous operation for over 100 years. BC Hydro knew or ought to have known that there are many existing crossings over the BC Hydro lands and that there will likely be future crossings over it. BC Hydro also ought to have known that owning land over which a railway is operated would carry with it certain obligations. One of these obligations is to allow for crossings. BC Hydro appears to be aware of this obligation, in that it has in the past been subject to crossing authorizations. Therefore, BC Hydro should not be surprised that railway crossing applications would continue to be addressed despite the fact that it is no longer operating the railway in question. It is difficult to accept BC Hydro’s position that it can retain ownership of land over which a railway has been in operation for this amount of time and not be subject to the attendant regulatory scheme involving crossings.

[102] The Province elected to adopt the crossing provisions of the CTA and to delegate to the Agency the authority to administer these provisions on its behalf. The Province also decided to privatize the railway line in 1988 and yet allow BC Hydro to retain ownership of the land. The Province is deemed to act rationally and consistently. The Province’s decision to privatize the railway line in 1988 has to be understood in the context of the 2006 delegation to the Agency. When the Province delegated this authority to the Agency it was meant to apply to all provincially-regulated railway companies, including SRY. Had the Province intended that the Agency’s jurisdiction to authorize crossings would not extend to the railway operated by SRY, then it could have exempted the railway line from the delegation. The Province did not do this, which would support the view that the delegation was meant to apply to the railway line, including BC Hydro’s land. To exercise this jurisdiction in this case in no way impairs the Province’s decision to privatize the railway without divesting title to the lands.

[103] There is more at stake in this application than the proposed work. Were the Agency to accept BC Hydro’s position, there would be a number of unacceptable consequences.

[104] If the Agency were to accept that it does not have jurisdiction over BC Hydro in this case, there would be a regulatory vacuum. In its answer dated July 3, 2015 to the Agency’s questions set out in Decision No. LET-R-38-2015, BC Hydro confirmed its position that there is no court, tribunal or other body that has any jurisdiction to impose an agreement on it in connection with the proposed work. BC Hydro also indicated that the City would be unable to expropriate the land necessary to proceed with the proposed work. Therefore, it would appear that the City would have no recourse in the absence of Agency jurisdiction.

[105] According to BC Hydro, because it no longer operates the railway, the Agency can authorize the crossing but BC Hydro’s subsequent permission is required. To accept BC Hydro’s position in this regard would mean that the Agency’s decision would be nugatory, in the sense that it would be of no force or effect given that the landowner’s consent would still be required. It would give to BC Hydro a power of veto over every road and utility crossing over the entire length of the railway right of way, an absolute power. It potentially precludes the authorization and construction of any new crossings, whether utility crossings or road crossings, or changes to existing crossings, presumably until at least 2064 when the Fraser Valley Corridor Licence expires.

[106] To put BC Hydro’s position another way, while the Agency can authorize the crossing, this would not necessarily mean that the crossing could be built. BC Hydro could refuse to allow the construction to occur on its land even if a crossing had been authorized. It could not have been the intent of the legislature to create such a vacuum. This also demonstrates how BC Hydro’s view of the process is inconsistent with the statutory scheme that contemplates that the parties will negotiate before applying to the Agency, rather than applying to the Agency and then negotiating after the authorization has been obtained.

[107] The crossing provisions are in place for a reason, which is to provide a mechanism to parties when they are unable to reach an agreement, so that they can have recourse to an independent body that can authorize the crossing. To accept BC Hydro’s position would mean that the Agency could not authorize the construction of a road or a utility crossing involving the SRY railway right of way land owned by BC Hydro within the Fraser Valley Corridor between New Westminster and Chilliwack. Moreover, according to BC Hydro’s own position, there is no other tribunal, court or body that could do so. The Agency does not accept that its jurisdiction is limited in the manner in which BC Hydro suggests.

[108] The Agency’s ability to authorize a suitable crossing of a railway is important. In A Demers, Laprairie v. Grand Trunk Railway Co. (1920), 31, C.R.C. 297, the Board of Railway Commissioners stated the following:

In going through the territory of any village, town or city railways should not be an obstacle to the expansion of the residential districts on either side of the track, because such an expansion is to everybody’s advantage, railway companies included. The crossing over and under railway tracks of wires and pipes needed for the ever‑increasing forward movement, should be facilitated as far as possible.

It is true that the Railway Companies are the owners of their right-of-way; but if they have certain rights as proprietors, there are also certain duties incumbent upon them as such. For instance, they are bound to suffer all easements arising from the nature of things and the laying of the land such as arise from drainage, new road crossings, pipes for water or sewage, electrical installations, etc.

I need not say that all such installations must be made under the direction of the proper authority, due care and consideration being given to vested rights and public safety.

[109] BC Hydro points out that its mandate is to provide electricity and power throughout the Province, and that it is given the necessary power and protections to ensure that it is able to fulfill its mandate. However, BC Hydro has not identified how the authorization and construction of road or utility crossings would interfere with its mandate. Moreover, BC Hydro has not identified how any concerns it may have in relation to this mandate could not be duly considered and determined by the Agency in the context of an application for an authorization.

[110] The Agency therefore concludes that it has jurisdiction to authorize the crossing in this case and that the Agency’s Decision will be binding on the parties, including BC Hydro.

ISSUE 5: SHOULD THE AGENCY GRANT SRY’S REQUEST TO DISMISS THE APPLICATION?

[111] SRY, in its answer to the application, submits that if the Agency assumes jurisdiction over the licensed area, the Agency should dismiss this application because, according to SRY, no agreement between BC Hydro and the City has been reached that would allow the project to proceed. SRY argues that the dismissal would allow time for such an agreement to be reached and for the alignment of the terms and conditions between the Agency’s authorization and the agreement.

[112] The City disagrees with SRY’s position but states that even if the Agency finds that it does not have jurisdiction over BC Hydro and the BC Hydro lands in whole or in part, then the proper remedy is to approve the City’s application, subject to the City obtaining permission from BC Hydro.

Analysis and findings

[113] Given that the Agency found above that it has jurisdiction to determine the application in a manner that is binding on the parties, including BC Hydro, the Agency does not accept SRY’s position that the application should be dismissed. Therefore, as this decision is not subject to any subsequent approval from BC Hydro, the Agency denies SRY’s request to dismiss the City’s application.

CONCLUSION

[114] For the reasons stated above, the Agency finds that it has jurisdiction to authorize the utility crossing requested by the City in a manner that is binding on all parties, including BC Hydro.

[115] Therefore, pursuant to subsection 101(3) of the CTA, the Agency authorizes the City, without payment of any fees to BC Hydro or SRY, to construct and maintain, at the City’s expense, the utility crossing at mileage 3.95 of the Fraser Valley Subdivision, in the corporation of Delta, in the province of British Columbia, as shown on the drawings dated November 26, 2014 and attached as Schedules A, B, C and C.1 to the application.

[116] There will be no terms or conditions imposed with respect to the removal or alteration of the utility crossing, reserved rights or liability.

[117] This Decision remains in effect unless it is amended or rescinded by the Agency.

Member(s)

William G. McMurray
Stephen Campbell
P. Paul Fitzgerald
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