A-7-75
Canadian Pacific Limited (Appellant)
v.
Governments of Alberta, Saskatchewan, Manitoba
and Ontario, and the Atlantic Provinces Trans
portation Commission (Respondents)
Court of Appeal, Thurlow, Pratte, Heald, Urie
and Ryan JJ.—Ottawa, January 24, 25, 1975.
Railways—Publication of tariff increasing freight rates—
Canadian Transport Commission ordering reduction by fifty
per cent—Ordering balance of increase postponed for two
months—Order held invalid—Return to Commission for fur
ther consideration—National Transportation Act, R.S.C.
1970, c. N-23, ss. 45, 46, 58, 64—Railway Act, R.S.C. 1970, c.
R-2, ss. 264, 268-270, 274-278.
Canadian Freight Association Tariff No. 1005, filed and
published in accordance with Regulations of the Canadian
Transport Commission, November 22, 1974, increased tolls
effective January 1, 1975. The Provinces of Alberta, Saskatche-
wan and Manitoba applied to the Commission on December 24,
1974, for an order suspending or postponing the effective date
of the tariff and enjoining the carriers from charging the rates
specified. The Railway Transport Committee of the Commis
sion ordered that the tariff was to go into effect with respect to
50 per cent of each increase in tolls and that the remaining 50
per cent was postponed to March 1, 1975. The railway compa
nies obtained leave to appeal to the Court of Appeal, on the
question "whether the Canadian Transport Commission had
lawful authority to make the said order." The Canadian Na
tional Railway Company's appeal was heard at the same time
as that of the present appellant company.
Held, unanimously, that the order should be set aside as
invalid, and, by a majority, that the Commission, on setting the
order aside, should consider whether an order ought to be made
requiring a longer minimum period after the filing and publish
ing of the tariff, before it came into effect.
Per Thurlow J. (Heald and Urie JJ. concurring): What the
Court had jurisdiction to do under section 64 of the National
Transportation Act was simply to determine the legality of the
order under appeal. The Railway Transport Committee had
relied for its authority on section 275(2) of the Railway Act
and section 58 of the National Transportation Act. Neither
those sections nor any other section in the Acts under consider
ation could be read as empowering the Commission to make an
order postponing the effective date of the whole or part of a
tariff that had been regularly filed and published, or to set a
new date for the coming into effect of the whole or part of such
a tariff. But the Commission had power to grant the request of
the Attorney General of Canada by making an order under
section 275(2) of the Railway Act, enlarging the minimum
period after publication of the tariff, even though that might
entail the issue and filing of an amended notice. Upon the
setting aside of the invalid order, the Commission would not be
functus officio, but could and should order whether an order of
a kind contemplated by section 275(2) should be made.
Per Pratte and Ryan JJ., dissenting in part: The order under
appeal should be set aside, but the Commission had no power to
make an order, under section 275(2) of the Railway Act, in
respect of a tariff that had already been properly filed and
published.
APPEAL.
COUNSEL:
H. J. G. Pye, Q.C., and J. M. Duncan for
Canadian National Railway Company.
C. R. O. Munro, Q.C., and G. P. Miller, Q.C.,
for Canadian Pacific Ltd.
A. Garneau and G. W. Ainslie, Q.C., for
Attorney General of Canada.
H. Kay for Government of Alberta.
Gordon Blair, Q. C., and J. Lemieux for Gov
ernments of Saskatchewan and Manitoba.
D. W. Burtnick for Government of Ontario.
J. Davison and L. J. Hayes for The Atlantic
Provinces Transportation Commission.
W. G. Burke-Robertson, Q.C., for Govern
ment of British Columbia.
J. Fortier, Q.C., for The Canadian Transport
Commission.
SOLICITORS:
H. J. G. Pye, Q.C., Montreal, for Canadian
National Railway Company.
C. R. O. Munro, Q.C., Montreal, for Canadi-
an Pacific Ltd.
Deputy Attorney General of Canada for
Attorney General of Canada.
Jones, Black, Gain & Laycraft, Calgary, for
the Government of Alberta.
Herridge, Tolmie, Gray, Coyne & Blair,
Ottawa, for the Governments of Saskatche-
wan and Manitoba.
Ministry of Transportation and Communica
tions for Ontario, Downsview, Ontario, for
Government of Ontario.
McInnes, Cooper & Robertson, Halifax, for
the Atlantic Provinces Transportation Com
mission.
Burke-Robertson, Chadwick & Ritchie,
Ottawa, for the Government of British
Columbia.
J. Fortier, Q.C., Ottawa, for The Canadian
Transport Commission.
The following are the reasons for judgment
delivered orally in English by
THURLOW J.: This is an appeal under section 64
of the National Transportation Act from order
No. R-19840 granted by the Railway Transport
Committee of the Canadian Transport Commis
sion on December 31, 1974. A similar appeal by
Canadian National Railway Company against the
same order was heard at the same time.
The order in question was made following the
hearing of an application by the Governments of
the Provinces of Alberta, Saskatchewan and
Manitoba for an order or orders suspending or
postponing the coming into effect on January 1,
1975 of Canadian Freight Association Tariff No.
1005 and all other relevant tariffs and enjoining
the carriers from charging the rates and charges
specified therein. The tariffs in question had been
filed and published on November 22, 1974 and, as
stated therein, were to become effective on Janu-
ary 1, 1975. No question was raised of any failure
by either railway company to comply with any
regulation, order or direction of the Commission
dealing with tariffs in general or these tariffs in
particular or with respect to the issue, filing or
publication of such tariffs.
The operative portion of the order granted reads
as follows:
THE COMMITTEE HEREBY ORDERS:
1. CFA Tariff No. 1005 and all other relevant tariffs to
become effective January 1st, 1975 are to go into effect as
aforesaid as to 50 per cent of each of the increases in tolls
contained therein and the effective date thereof as to the
remaining 50 per cent is postponed until March 1st, 1975.
2. The respondents shall immediately and without delay cause
such amendments to be filed and published as will give effect to
the direction contained in Clause 1; such abridgements of time
or other comparable permissions as are necessary to expedite
the same are hereby granted as No. 5301 dated December 31st,
1974.
3. The applicants and intervenors are to report on a continuing
basis progress in their negogiations and/or discussions with the
respondents to the Executive Director, Traffic and Tariffs
Branch, Canadian Transport Commission.
4. Any breakdown in negotiations or other serious difficulty is
to be reported to the Commission with reasons within 24 hours
of its occurrence.
From an order of the Commission an appeal
may be taken to this Court by its leave, but only
on a question of law or a question of jurisdiction.
In the present case the question on which the
appellants sought and obtained leave to appeal is
"whether the Canadian Transport Commission
had lawful authority to make the said order." On
such an appeal it is not the Court's function to
pass upon the reasonableness or economic impact
of either existing or proposed freight rates or to
decide questions of the appropriateness or timing
of proposed increases in them. What the Court has
jurisdiction to do under section 64 is simply to
determine the legality of the order under appeal.
In making it the Railway Transport Committee
relied for its authority on subsection 275(2) of the
Railway Act and section 58 of the National
Transportation Act. The fact that the Committee
relied on those provisions is not, however, as I see
it, of critical importance. If the necessary author
ity exists under other statutory provisions the order
might be justified as an exercise of such authority.
But while references were made to a number of
other provisions, as well as to the legislative history
of the present statutes, in my opinion, none of such
other provisions would justify the making of the
order. Among such provisions were sections 45 and
46 of the National Transportation Act which
confer on the Canadian Transport Commission in
very broad terms jurisdiction to hear applications
and make orders, inter alia, in respect of any
matter, act or thing that by the Railway Act is
sanctioned, required to be done or prohibited.
While it may be difficult to ascertain the precise
limits of powers so expressed I do not think these
provisions can be held to authorize the making of
orders which would have the effect of contravening
what is particularly provided for in the Railway
Act.
Before reading section 275 it may be useful to
read several other provisions of the Railway Act
relating to freight tariffs which provide the context
in which section 275 appears.
Under the title Tariffs—General Provisions
subsection 268(1) provides that:
268. (1) Every company shall file with the Commission the
freight classification that shall govern its tariffs of tolls and
shall maintain such tariffs of tolls as will, in conjunction with a
freight classification, provide published tolls applicable between
any two points on its line in Canada.
269. (1) The company or the directors of the company, by
by-law or any officer of the company who is thereunto author
ized by a by-law of the company or directors may from time to
time prepare and issue tariffs of the tolls to be charged in
respect of the railway owned or operated by the company, and
may specify the persons to whom, the place where, and the
manner in which, such tolls shall be paid.
(2) The tolls may be either for the whole or for any particu
lar portion of the railway.
(3) A by-law mentioned in subsection (1) shall be filed with
the Commission.
(4) Except as otherwise authorized by this Act, the company
shall not charge any tolls except tolls specified in a tariff that
has been filed with the Commission and is in effect.
(5) The Commission may, with respect to any tariff of tolls
or classifications, make regulations fixing and determining the
time when, the place where, and the manner in which the tariff
shall be filed, published, kept open for public inspection, and
amended, consolidated, superseded or cancelled.
(6) Notwithstanding section 3, the power given by this Act
to the company to fix, prepare and issue tariffs, tolls and rates,
and to change and alter the same, is not limited or in any
manner affected by any Act of the Parliament of Canada or by
any agreement made or entered into pursuant thereto, whether
general in application or special and relating only to any
specific railway or railways, except the Maritime Freight Rates
Act, Term 32 of the Terms of Union of Newfoundland with
Canada, and Part IV of the Transport Act. R.S., c. 234, s. 326;
1966-67, c. 69, s. 49.
270. All tariff by-laws and tariffs of tolls shall be in such
form, size and style, and give such information, particulars and
details, as the Commission may, by regulation, or in any case,
prescribe. R.S., c. 234, s. 327.
Under the title Freight Tariffs subsection 274(1)
provides:
274. (1) The tariffs of tolls that the company is authorized
to issue under this Act for the carriage of goods between points
on the railway are
(a) class rate tariffs;
(b) commodity rate tariffs;
(c) competitive rate tariffs; and
(d) special arrangements tariffs.
276. (1) Except as otherwise provided by this Act all freight
rates shall be compensatory; and the Commission may require
the company issuing a freight tariff to furnish to the Commis
sion at the time of filing the tariff or at any time, any
information required by the Commission to establish that the
rates contained in the tariff are compensatory.
277. (1) The Commission may disallow any freight rate that
after investigation the Commission determines is not
compensatory.
I pause to observe that in general the scheme of
these provisions is to leave it to the railway compa
nies to fix the tolls which they will charge, though
the procedure for filing and publishing the tariffs
of such tolls, as well as the information to be
provided in the tariffs is subject to regulation both
under particular provisions of the statute and by
regulations which may be made by the Commis
sion under the authority of the statute. The scheme
also provides that the only tolls that the company
may charge are those which have been fixed in
accordance with the statutory procedure. There is
no general power vested in the Commission either
to disallow a tariff of tolls or to disallow a tariff
and substitute another therefor. In the particular
situations referred to in section 264 and subsection
265(8) power to disallow and require substitutions
is conferred and in the situation in which subsec
tion 277(1) applies there is power to disallow.
Under section 278 there is a procedure by which a
shipper may apply for relief in a particular situa
tion from tolls, with which he is dissatisfied and
under section 23 of the National Transportation
Act there is also power to require the removal of
prejudicial features in tolls on an appeal therefrom
after the investigation referred to in that provision
has been held. None of these provisions is, how
ever, applicable in the present situation. Nor is
there any general power to suspend or postpone
the coming into effect of tariffs.
I turn now to section 275. It reads:
275. (1) Every freight tariff and every amendment of a
freight tariff shall be filed and published, and notice of the
issue thereof and of cancellation of any such tariff or any
portion thereof shall be given in accordance with regulations,
orders or directions made by the Commission.
(2) Unless otherwise ordered by the Commission, when any
freight tariff advances any toll previously authorized to be
charged under this Act, the company shall in like manner file
and publish such tariff at least thirty days before its effective
date.
(3) A freight tariff that reduces any toll previously author
ized to be charged under this Act may be acted upon and put
into operation immediately on or after the issue of the tariff
and before it is filed with the Commission.
(4) Where a freight tariff is filed and notice of issue is given
in accordance with this Act and the regulations, orders and
directions of the Commission, the tolls therein shall, unless and
until they are disallowed by the Commission, be conclusively
deemed to be the lawful tolls and shall take effect on the date
stated in the tariff as the date on which it is to take effect, and
the tariff supersedes any preceding tariff, or any portion there
of, in so far as it reduces or advances the tolls therein; and the
company shall thereafter, until such tariff expires, or is disal
lowed by the Commission, or is superseded by a new tariff,
charge the tolls as specified therein. R.S., c. 234, s. 333;
1966-67, c. 69, s. 52.
As the power to make regulations respecting the
filing and publication etc., of tariffs is conferred by
subsection 269(5), and power to make regulations
of general application or to give orders or direc
tions in a particular case as to the form, style,
details, etc., of tariffs is conferred by section 270, I
do not regard subsection 275(1) as re-conferring
on the Commission power to make regulations,
orders or directions. I read it as simply saying that
tariffs are to be filed and published, and notice of
their issue and cancellation are to be given, in
accordance with such regulations, orders or direc
tions as have been lawfully made under the au
thority of other statutory provisions. Moreover, it
is apparent from reading section 275 as a whole
that nothing in subsection 275(1) requires that the
filing and publication be made or completed before
the tariff becomes effective.
In this context what subsection 275(2) appears
to me to do is to require that whenever a tariff
advances a toll previously in effect the company
must file and publish it for a minimum period of
thirty days prior to its coming into effect, unless
otherwise ordered by the Commission. The whole
subject matter of this subsection is the manner and
time period of the required filing and publication
of tariffs which advance existing tolls and the
power of the Commission under it to order other
wise must, as I see it, be limited to the same
subject matter. It follows in my opinion that the
effect of the exception in its context is not to
confer a general power on the Commission to
make any order that it may consider expedient but
simply a power to order a different manner of
filing and publishing a tariff from that called for
by subsection 275(1) and to reduce the thirty day
period or absolve the company from filing or pub
lishing the tariff in advance of its coming into
effect. The language of the subsection is, in my
opinion, also broad enough to authorize an order
to increase the minimum period prescribed by the
subsection but I do not think it can be read as
empowering the Commission to make an order
postponing the effective date of the whole or part
of a tariff which has been regularly filed and
published or to set a new date for the coming into
effect of the whole or part of such a tariff.
That, however, is what paragraph 1 of the order
under appeal purports to do as to 50 per cent of
the proposed increase. The other paragraphs of the
order, in my opinion, are simply incidental to
paragraph 1, paragraph 2 for the purpose of
regularizing the result contemplated by paragraph
1, and paragraph 3 and 4 to exert some persuasive
force on the railway companies to negotiate with
the respondent Provinces as the Commission
wished them to do. The substance of the whole of
the order is not that of an order relating to the
manner and minimum period for the filing and
publication of a tariff and in my opinion it is not
authorized by the subsection. On this point I agree
with the submission of counsel for the appellant
that such an order would be one applying to the
filing and publication of the tariff as a whole
which had been filed and not to some new tariff or
tariffs not then in existence pertaining to 50 per
cent of the increases in the tolls and the fixing of
the date for the coming into force of such new
tariffs would have been left to the railway compa
nies. I am also of the opinion that paragraphs (3)
and (4) are open to the further objection that the
Commission had no jurisdiction to order anyone to
report on the progress of negotiations in such a
situation. Nor is there anything in section 58 of the
National Transportation Act or in section 48 of
that Act, to which reference was made in the
Commission's reasons, which would support the
order. It follows in my opinion that the order
should be set aside.
The matter, however, does not end there. While
the applications to the Commission asked for an
order suspending or postponing the coming into
effect of the tariffs, which was relief that the
Commission was not authorized to grant, under
section 58 of the National Transportation Act the
Commission could grant any relief within its
powers which it considered appropriate, whether
asked for or not, and counsel for the Attorney
General of Canada has asked that the matter be
referred back to the Commission to consider
whether an order under subsection 275(2) should
be made requiring a larger minimum period for
filing and publishing the tariff before it comes into
effect. The answer of counsel for the appellant to
this is that an order under subsection 275(2) made
after the filing and issuing of notice of the tariff in
accordance with the regulations then in effect
would retrospectively affect rights of the appellant,
which had become vested, to charge the tolls from
the effective date stated in the tariff and that
subsection 275(2) should not be construed so as to
authorize the making of an order having such
retrospective effect. He also submitted that the
wording of subsection 275(4)
... where a freight tariff is filed and notice of issue is given in
accordance with this Act and the regulations, orders and
directions of the Commission ....
refers to regulations, orders and directions in effect
at that time and not to orders which may be made
afterwards.
In my opinion it begs the question to say that an
order under subsection 275(2) would operate
retrospectively in derogation of vested rights if it
were made after a tariff has been filed and notice
of its issue has been given in accordance with the
Act and the regulations, etc., of the Commission,
for the question is whether an order under subsec
tion 275(2) made after the filing and notice is an
order within the meaning of subsection 275(4) in
accordance with which the filing and notice must
comply. If it is such an order, no right could
become vested until it was complied with or, to put
it another way, any vesting of rights would never
have become absolute but would at all times have
been liable to be defeated by the making of an
order under subsection 275(2). The critical ques
tion is thus whether subsection 275(4) refers to
such an order.
On this point the language of subsection 275(4)
appears at first reading to support the appellant's
contention. But if his contention is correct, as a
practical matter, it is only the railway company
that can ever apply for an order under subsection
275(2) as it alone knows what increases it will
propose to put into effect, and when, and after the
tariffs have been filed and notice of them given it
will be too late for anyone else to secure an order
requiring a longer period. That seems to me to be a
conclusion which on its own account ought to be
avoided, if it can be, by any reasonable interpreta
tion of the statute but also because it appears to
me to thwart the scheme of sections 45 and 46 of
the National Transportation Act under which the
Commission is given jurisdiction to inquire into,
hear, and determine a request for and make any
order that by law it is authorized to make or
give—which, in my opinion, includes an order
under subsection 275(2) increasing the minimum
period—on an application by or on behalf of any
interested party, or, under section 48, of its own
motion. It appears to me to involve no strain on the
natural meaning of the language of subsection
275(4) to read the expression "where a freight
tariff is filed and notice of issue is given in accord
ance with the Act, and the regulations, orders and
directions of the Commission" as meaning filed for
the period of time required by the Act, regulations,
orders, etc. I am accordingly of the opinion that
the Commission has power to make an order under
subsection 275(2) enlarging the minimum period
mentioned therein after the tariff has been filed,
etc., even though, as filed, it states an effective
date which will have to be altered by the company
to an extent sufficient to permit of compliance
with the order. That may entail the issue and filing
of an amended notice but I do not regard that as a
matter of critical or practical importance.
I have had some doubt as to whether, since the
January 1st, 1975 effective date stated in the tariff
has passed, an order could now be made under
subsection 275(2) but since the Commission had
before it prior to that date the application of the
Provinces, on which it could have granted an order
of the kind contemplated by subsection 275(2), it
appears to me that upon the setting aside of the
order which was made, the Commission will not be
functus officio but can and should consider wheth
er an order of a kind contemplated by subsection
275(2) should be made.
I would allow the appeal and certify to the
Commission that it is the opinion of the Court that
the order under appeal is invalid and should be set
aside and that upon setting it aside the Commis
sion can and should consider whether an order of a
kind contemplated by subsection 275(2) ought to
be made.
No costs should be awarded to any party.
* * *
The following are the reasons for judgment
delivered orally in English by
PRATTE J.: I agree with my brother Thurlow
that the appeal should succeed and that the order
of the Commission should be set aside. However, I
do not share his opinion that the Commission had,
when it disposed of the respondent's application,
and that it still has, the power to make an order
under section 275(2) of the Railway Act in respect
of the tariff filed by the appellant.
In my view, section 275(2), when it is read in its
context and against its historical background, does
not authorize the making of an order in respect of
a tariff that has already been filed. If that section
were to be interpreted otherwise, it would lead to
the result that a tariff, filed and published on the
date prescribed by the statute, could later be
declared by the Commission to have been filed and
published too late and, for that reason, deprived of
any effect. Such a result I consider to be
unacceptable.
For these reasons I would only allow the appeal
and certify to the Commission the opinion that the
order under appeal was made without jurisdiction
and should be set aside.
* * *
The following are the reasons for judgment
delivered orally in English by
HEALD J.: I have read the reasons of my brother
Thurlow. I agree with those reasons and concur in
the disposition which he proposes to make of sub
ject applications.
* * *
The following are the reasons for judgment
delivered orally in English by
URIE J.: I agree with the conclusions reached by
my brother Thurlow as well as his reasons there-
for, and concur in the disposition of the appeal
proposed by him.
* * *
The following are the reasons for judgment
delivered orally in English by
RYAN J.: I agree with my brother Thurlow J.
that Order No. R-19840 granted by the Railway
Transport Committee of the Canadian Transport
Commission on December 31, 1974 should be set
aside.
I do not agree, however, that the matter should
be referred back to the Commission to consider
whether an order under subsection 275(2) of the
Railway Act should be made requiring a longer
minimum period for filing and publishing the tariff
before it comes into effect.
The effective date of the tariff in question is the
date fixed by Tariff No. 1005 which was filed and
notice of issue given in accordance with the Rail
way Act. It was not suggested that at the time of
filing there was any failure to comply with any
applicable regulation. There was also no submis-
sion that at the time of filing any order of the
Commission had altered the filing period of at
least thirty days before the effective date of the
tariff. The question now is whether the Commis
sion, acting on the application of the Governments
of the Provinces of Alberta, Saskatchewan and
Manitoba, which application was made on Decem-
ber 24, 1974, could have made an order extending
the minimum filing period of at least thirty days.
The effective date of the tariff was January 1,
1975, the date specified in Tariff No. 1005. I find
it difficult to see how, at that stage, the Commis
sion could have made an order requiring filing and
publication at a time which would extend beyond
the date at which the tariff was in fact filed. The
only order, it seems to me, that the Commission
could have made at that time to give effect to the
objects sought by the applicant Governments
would have been the sort of order that it did make,
an order postponing the effective date. I do not
find in subsection 275(2) or elsewhere in relevant
legislation any authority to make such an order.
I would therefore allow the appeal and certify to
the Commission our opinion that Order No.
R-19840 was made without lawful authority.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.