Attorney-General of Quebec v. Canadian Pacific Railway Co.

ABBOTT J.:-This is an appeal by leave, from Order No. 114705 of the Board of Transport Commissioners dated June 12, 1964, apportioning the cost of construction of a deviation of a highway and the closing of a subway under the tracks of the respondent. Inter alia, the said order had the effect of dismissing the application of the appellant, the Minister of Roads of the Province of Quebec, for a contribution from the Railway Grade Crossing Fund under s. 265 of the Railway Act, R.S.C. 1952, c. 234, towards the cost of the said work. No appeal has been taken against that part of the said order directing the respondent to pay $5,000 towards the cost of the said work and to close the subway at its own expense.

By Order No. 33284 dated January 8, 1923, upon application of the Village of Pont Rouge in the County of Portneuf, Province of Quebec, the Board of Railway R.C.S.

[19651 Commissioners for Canada ordered the railway company to construct a subway under its tracks to eliminate a level highway crossing in the said Village.

OGEEEC In 1958 the County of Portneuf, finding the subway inadequate for highway traffic, applied to the Board of Transport Commissioners for an order authorizing the enlargement of the subway. The railway company submitted that instead of the subway being enlarged it should be closed and the highway diverted some five hundred feet, to pass under a nearby railway bridge which crossed the Jacques Cartier river.

The Department of Roads of the Province, having taken over from the County the responsibility for the highway, agreed to this proposal, and asked the Board to authorize the project. The Department estimated the cost of the diversion at $113,190, and it asked that this be paid 50 per cent by the Railway Grade Crossing Fund, 15 per cent by Canadian Pacific Railway Company and the remainder by the Department of Roads, with costs of maintenance of the new road to be the responsibility of the Department.

By Order No. 111583 dated June 28, 1963, the Board authorized the Department of Roads to construct and maintain the said deviation of the highway, and reserved the question of allocation of cost for further consideration and order of the Board.

In subsequent correspondence between the parties and the Board upon the question of allocation of cost the railway company stated its willingness to contribute the full value of the benefit that it would receive from the project. This benefit consisted of relief from the future cost of maintenance of the subway that was to be closed, which the railway company estimated at a capitalized amount of $5,000. In this correspondence the Board also questioned its own authority under s. 265 of the Railway Act to authorize a contribution to the project from the Railway Grade Crossing Fund, but as this point did not involve the railway company the respondent made no submissions thereon. The matter of apportionment of the cost of the project was set down for public hearing and heard by the Board in Quebec City on May 5,1964.

On June 12, 1964, concurrently with Order No. 114705 Which is the subject of this appeal, Deputy Chief Commissioner Dumontier delivered reasons for judgment concurred et al.

in by Commissioner Woodard. After an examination of the C.P.R.

relevant facts, the nature of the project, the provisions of Abbott J. s. 265 and the arguments of the parties, he held, (1) that he was unable to find in the Railway Act the power and jurisdiction to authorize a grant from the Railway Grade Crossing Fund and (2) that the offer of the railway company to contribute $5,000 representing the value of its relief from the cost of future maintenance of the subway was fair and reasonable, and that the remainder of the cost should be paid by the Department of Roads.

Leave to appeal to this Court was granted by Hall J. upon the following question of law:

"Did the board of Transport Commissioners for Canada err in holding, as it did by its judgment of June 12, 1964, that it had neither the power nor the jurisdiction under section 265 (1) (b)

of the Railway Act to authorize a grant from the Railway Grade Crossing Fund towards the cost of the work authorized by its Order 111583?"

The relevant portions of s. 265 of the Railway Act are as follows:

265. (1) The sums heretofore or hereafter appropriated and set apart to aid actual construction work for the protection, safety and convenience of the public in respect of crossings shall be placed to the credit of a special account to be known as "The Railway Grade Crossing Fund", and shall, insofar as not already applied, be applied by the Board in its discretion, subject to the limitations set forth in this section, solely towards the cost, not including that of maintenance and operation, of (a) work actually done for the protection, safety and convenience of the public in respect of existing crossings at rail level, (b) work actually done in respect of reconstruction and improvement of grade separations that are in existence at crossings upon the R.C.S.

A-I- The sole issue in this appeal is whether the highway diversion referred to, was an improvement of an existing grade separation within the meaning of s. 265 (1) (b) of the Railway Act.

Under the provisions of ss. 39 and 266 of the said Act, the Board is vested with exclusive authority to authorize grade crossing changes and to apportion the cost of making such changes.

The "Railway Grade Crossing Fund" consists of monies voted from time to time by Parliament. The Fund was established to provide financial assistance to the railways and to local authorities towards the cost of the construction, reconstruction and improvement of grade crossings, required for the protection, safety and convenience of the public and made necessary by changing traffic conditions. Within the limits set by the Act the contribution, if any, to be made out of the Fund to the cost of a particular work, is fixed by the Board.

In the present case the existing subway facilities at Pont Rouge admittedly had become inadequate. The diversion proposed by the railway company was more efficient and less costly than it would have been to enlarge the existing underpass. In my opinion this diversion is an improvement of an existing grade separation within the meaning of s. 265 (1) (b) and that in consequence the Board is empowered to authorize a grant from the Railway Grade Crossing Fund towards the cost of the work authorized by its Order No. 111583.

I would allow the appeal and answer the question submitted in the affirmative. That portion of Order No. 114705 requiring that the cost of constructing the work in question