Legal Brief for March, 2020

Who Regulates Railways In Canada?

The issue of rail traffic in Canada has been much in the news in Canada the last few weeks as a result of various rail line blockades across Canada by groups supporting the Wet'suwet'en First Nation in British Columbia in their opposition to the Coastal GasLink Pipeline Project. The focus of the rail blockades, and of the increasing resentment towards them from many quarters, has been the federal government rather than any of the provincial governments, with the exception of the B.C. government.

The reason for this is that most, but not all, railways in Canada are subject to regulation by the federal government and not the provinces. The original basis for federal government jurisdiction was set out in sections 91 and 92 of the British North America Act of 1867, which was the statute of the British House of Commons which established the Dominion of Canada. Railways which meet one of the following criteria are automatically subject to federal government regulations:

1. they operate in more than one province;

2. they operate from the United States and cross the U.S.-Canada border;

3. they are owned, controlled, leased or operated by an entity which is under the jurisdiction of the federal government;

4. they have been declared by the federal government to be "a work for the general advantage of Canada or of two or more provinces."

The largest railways in Canada are Canadian National Railway (CN Rail) and Canadian Pacific Railway (CP Rail). Both of those railways easily qualify under both of the first two criteria. There are currently a total of 32 railways in Canada which are subject to federal regulation. Some of these have exotic names, a few samples of which include the Wabush Lake Railway, the Maine Central Railway and the Goderich-Exeter Railway. Many of these small railways have in past years taken over branch lines of CN Rail or CP Rail which had been declared redundant or uneconomic by those carriers, but which have a local economic rationale which businesses in the area wish to protect and promote. The federal government rail regulations are administered through the department of Transport Canada.

Whatever your feelings or opinions about the actions of the Wet'suwet'en First Nation or the pro's and con's of the Coastal GasLink Pipeline Project, hopefully the blockades of the rail lines that has been ongoing can be resolved without any violence or further inflammation of what has become a serious national issue which cuts across many sectors and segments of Canadian economic and political life.