Transportation agency dismisses NWT’s CN Rail complaint

The Canadian Transportation Agency has dismissed an application by the NWT government in its dispute with CN Rail over a section of damaged rail line between Enterprise and Hay River

The territorial government had sought an order from the transportation agency requiring CN to repair and resume operations on the line, which was damaged by wildfire in 2023.

The NWT government alleged CN was failing to meet level-of-service obligations under the Canada Transportation Act.

While CN repaired the track from Alberta to Enterprise after the 2023 wildfire season, the company decided not to rebuild the approximately 35 km of rail line between Hay River and Enterprise.

At the time, CN cited the cost of repairs and limited traffic on the line, estimating the work would take 12 weeks and cost $16 million.

CN has filed plans to either transfer or discontinue operating the line and expects the statutory process for doing so to be completed by November 28.

Previously, at the request of shippers, CN would transport petroleum products to Hay River, where the NWT government-operated Marine Transportation Services would transfer those products onto barges for delivery to communities.

Since the rail line was damaged in 2023, fuel has been transported by rail to Enterprise then transported by truck to Hay River for barging.

The NWT government has raised issues with this method such as the added labour, time and cost to transport petroleum products, as well as safety concerns related to potential fuel spills and the increased number of trucks on the highway.

The Town of Hay River, Kátł’odeeche First Nation, NWT Association of Communities, NWT Power Corporation, Gwich’in Tribal Council, Inuvialuit Regional Corporation, Li-FT Power Ltd, Vital Metals and Imperial Oil all supported the NWT government’s application to the transportation agency.

CN said nearly all of the freight it moved to or from Hay River before the line was damaged was at the request of two shippers, which it referred to as Shipper A and Shipper B.

Since 2023, the company said, Shipper A had decided it no longer wishes to move freight to or from Hay River, while there was no evidence Shipper B had offered to move freight to or from Hay River.

In a decision released late last month, the Canadian Transportation Agency, which adjudicates disputes about federal transportation, sided with CN.

“It is evident that many parties believe that having the line restored to Hay River will benefit them in future. The evidence also suggests that traffic may be offered for carriage in the future if the line is restored,” the decision states.

However, the agency continued, “service obligations are determined by considering traffic offered for carriage, which does not include speculative or potential traffic.”

The agency noted the NWT government is not a rail shipper and there is no evidence of any other party offering shipping on the rail line since it was damaged.

Requiring CN to repair the line to provide service for just a short period before discontinuing use of the line would be unreasonable, the agency concluded.

Cabin Radio has requested comment from Vince McKay, the NWT’s infrastructure and communities minister. McKay, the MLA for Hay River South, had been vocal in urging CN to repair the line.

A spokesperson for cabinet told Cabin Radio it was aware of the Canadian Transportation Agency’s decision and “should have a statement ready in the next few days.”

Following publication of this article, McKay stated in a Facebook post that he was “obviously frustrated and disappointed” with the transportation agency’s decision. He committed to continuing to “fight for the rail line” highlighting its importance to the safety, economy and cost of living in the North.

CN told Cabin Radio in a statement that while it recognized concerns about not repairing the rail line between Enterprise and Hay River, its decision to discontinue that section of the line was made following a cost analysis and engagement with “local stakeholders” and customers.

“It became clear that the expense required to repair the line was not justified by the level of customer volume in the region,” the company stated.