Decision No. 190-R-2005

April 1, 2005

April 1, 2005

APPLICATION by Tshiuetin Rail Transportation Inc. pursuant to section 91 of the Canada Transportation Act, S.C., 1996, c. 10, for a certificate of fitness for the proposed freight and passenger rail operations between Emeril, Newfoundland and Labrador (mileage 225.3) and Schefferville, Quebec (mileage 359.2) of the Menihek Subdivision.

File No. R 8005/T4


On February 18, 2005, Tshiuetin Rail Transportation Inc. (hereinafter Tshiuetin Rail) applied to the Canadian Transportation Agency (hereinafter the Agency) for the certificate of fitness as set out in the title.

Tshiuetin Rail will acquire, through an asset purchase, the rail line of the Quebec North Shore & Labrador Railway Company between Emeril (mileage 225.3) and Schefferville (mileage 359.2) of the Menihek Subdivision.

Subsection 90(1) of the Canada Transportation Act (hereinafter the CTA) provides that no person shall construct or operate a railway without a certificate of fitness. Section 87 of the CTA defines a railway, in part, as a railway within the legislative authority of Parliament.

Subsection 92(1) of the CTA provides that the Agency shall issue a certificate of fitness for the proposed construction or operation of a railway if the Agency is satisfied that there will be adequate liability insurance coverage for the proposed construction or operation as determined in accordance with the Railway Third Party Liability Insurance Coverage Regulations, SOR/96-337.

Therefore, in order to obtain a certificate of fitness pursuant to section 92 of the CTA, an applicant must demonstrate that the certificate applied for relates to a railway that is within the legislative authority of Parliament.

In this case, the Agency notes that Tshiuetin Rail proposes to operate a railway in both of the provinces of Newfoundland and Labrador and Quebec.

The Agency finds that Tshiuetin Rail is subject to federal jurisdiction by virtue of paragraph 92(10)(c) of the Constitution Act, 1867 as its proposal includes the operation of a railway which connects, or crosses the borders of a province.

With respect to the adequacy of the insurance coverage, the Agency has reviewed the material filed and is satisfied that there will be adequate third party liability insurance coverage, including self-insurance, for the proposed freight and passenger rail operations by Tshiuetin Rail.

The Agency's review of Tshiuetin Rail's financial capability to self-insure for the amount of the deductible was based on the Contribution Agreement dated September 1, 2004 between Her Majesty the Queen in right of Canada and Tshiuetin Rail and the Addendum to the Agreement dated March 14, 2005.

Accordingly, pursuant to subsection 92(1) of the CTA, the Agency shall issue a certificate of fitness to Tshiuetin Rail permitting it to operate a railway for the proposed freight and passenger rail operations between Emeril, Newfoundland and Labrador (mileage 225.3) and Schefferville, Quebec (mileage 359.2) of the Menihek Subdivision.

Tshiuetin Rail shall provide to the Agency a signed copy of the renewed Contribution Agreement between Her Majesty the Queen in right of Canada and Tshiuetin Rail prior to the commencement of train operations.

Tshiuetin Rail shall also provide to the Agency a copy of its audited financial statements on an annual basis.

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