The Province of Saskatchewan is committed to developing and supporting a viable shortline railway network within the Province. The provincial government will work with the private sector and with other levels of government to forge partnerships to support shortline railways by prioritizing investments to maximize economic and social benefits.
Q. What is the province doing to support shortline railways?
A. Rail Services administers three exsisting programs to assist with the development of shortline railways:
1. Study grants to participants to partially cover the costs of undertaking studies or plans to determine the advisability of purchasing ownership of a railway line;
2. Interest free loans to eligible participants who have acquired or intend to acquire ownership of a railway line in Saskatchewan for the purposes of operating the railway line as a common carrier; and
3. A cost share program which provides existing shortlines with financial assistance for capital investment to continue to offer efficient alternatives to local shippers and producers.
Discontinuance
Provincial railway operators may discontinue their rail operations in accordance with the provisions of The Railway Act (Sask). The Act requires a railway operator to provide a minimum of 180 days notice to affected municipalities and shippers of its plan to discontinue service.
The province cannot prevent a railway operator from discontinuing service (as a town could not prevent a drug store or other business from closing). The legislation only requires that notice be given so that shippers can find alternate modes of delivery or so that potential shortline operators can have a chance to provide rail service.
Q. Don't railways have to prove they are ‘economically unviable' before they can discontinue operations?
A. No. The revisions to The Railway Act in 2001 dropped the uneconomical proof requirement and placed emphasis on ensuring that only commercially viable railways are allowed to start-up in Saskatchewan.
Q. Can a railway be dismantled without going through discontinuance?
A. No. A railway's operating authority must be discontinued in accordance with the legislation before the track it operates on can be dismantled. However, a railway operator and owner can apply for discontinuance and begin the dismantling process simultaneously.
Dismantling (Abandonment)
Provincial railways that have discontinued service, or are in the process of discontinuing service, may dismantle and salvage (rip up and sell) their railway track only after they comply with provincial requirements to offer it for sale to other railways and to governments.
A provincial railway cannot simply rip up their track and leave - they must try to sell it. This requirement was intended to allow retention of railways or corridors.
A railway must offer the line for commercial sale for 60 days, if there are no buyers, the railway must then offer the line for sale to the province and to local governments at net salvage value, local governments have 60 days to accept the offer.
If a municipal (or provincial) government wishes to purchase a railway, and no commercial buyers are found, the railway must be offered to the government for not more than net salvage value.
Q. Do provincial railways have to pay out $10 000/mile if they abandon?
A. No. See FAQ on ...$10 000/mile...
Q. Can the province prevent the abandonment/salvage of a provincial railway?
A. No. If a railway follows the requirements to offer the line for sale, the province has no means to prevent the removal of the line.
Q. Can conditions be attached to the abandonment of railways?
A. No. The abandonment process cannot have conditions attached. There is no provision in the Act to add requirements or conditions to the process.
Net Salvage Value
The value of a railway track that is going to be abandoned and sold as salvage is referred to as net salvage value. Provincial legislation requires a railway to offer to sell municipalities any track they wish to abandon for a price not more than net salvage value. Generally, net salvage value is the amount a railway could expect to receive if they paid to dismantle a piece of track and then sold the materials.
Q. Who determines the net salvage value?
A. A local government purchasing a track and a railway company selling the track may not agree on the theoretical net salvage value; in such a case dealing with a federal railway the Canada Transportation Agency can decide the value based on evidence submitted from the respective parties. In the case of a Provincial railway, the Saskatchewan Highway Traffic Board has the authority to determine the Net Salvage Value.
Q. What can be included in determining NSV?
A. NSV can include many things including cost of dismantling the track, cost of shipping to market, income from selling components, costs of restoring road crossings, etc. Each NSV case that is brought to the CTA or Highway Traffic Board for resolution may contain unique components based on the parties' evidence and the Board's decisions.
Clean-Up of Abandoned Right-of-Way
There is no specific federal or provincial legislation requiring clean up or reclamation of a railway right-of-way after operations have been discontinued on the line. However, municipal governments do have some authority to deal with problems as they arise.
Q. What can municipalities do to compel clean up of an abandoned line?
A. There are a number of statutory provisions that give rural municipalities authority to deal with problems on abandoned railway rights-of-way.
Under The Municipalies Act, 2007, rural municipalities have the authority in relation to "refuse and waste control" and in relation to "nuisances" and "untidy and unsightly premises";
Under The Noxious Weeds Act, 1984, rural municipalities have authority to deal with noxious weeds; and
Under The Planning and Development Act, 1983, municipalities can regulate the use to which such lands are put.
Q. Do municipalities have any liability if an abandoned right-of-way is in a dangerous condition?
A. Generally speaking, no. The responsibility for the right-of-way remains with the owner and/or occupier of the land. Even if a municipality has the authority to require the owner of a right-of-way to remedy a dangerous condition, the municipality is not obliged to exercise that authority and cannot be held civilly liable should it choose not to exercise that authority. Having said this, municipalities are encouraged to utilize the authority they have to require owners to remedy unsafe conditions, particularly if the owner has the means to do so.
Crossing Maintenance
The responsibility for doing the work to maintain railway/road crossings in safe condition lies with the railway. The costs for required maintenance, however, are to be shared by the railway and the road authority.
The allocation of these costs (between a provincial railway and road authority) may be determined by agreement between the two parties or, in case of dispute, be determined by the Highway Traffic Board. Either party may bring a dispute before the Board if negotiations do not result in an agreement.
Crossing maintenance costs can include all costs for inspection and maintenance of crossing protection and costs for replacing or repairing crossing surfaces.
Q. What about Board Orders for the crossing?
A. Board Orders issued to federal railways have no jurisdiction over provincial railways and are therefore void.
Q. Road Authorities never had to pay for crossing surfaces before, is this new?
A. Provincial railways have always had the ability to request cost sharing on crossings, however many railways were not aware of this or chose not to charge for it. If both parties agree, the status quo can be left in place and no agreement is required.
Q. Does this mean a road authority can now be billed for some work by the railway with no warning?
A. No. If a railway or road authority wishes to change the present or previous cost sharing arrangement they must negotiate a new agreement. If an agreement can't be reached, the Board can be called on to allocate costs.
Q. Is the cost of installing lights and bells covered in part by the government as in the case of federal railways?
A. The province does not have a fund to contribute toward the cost of installing crossing protection. All costs must be covered by the road authority and/or the railway.
Fencing
Livestock fencing along railway right-of-way may be required by the railway to protect the train operations or it may be desired by the adjacent landowner to keep their livestock contained. The costs for building, repairing and maintaining livestock fencing may be determined in accordance with the provisions of The Line Fence Act.
Concerns over train safety should be addressed to the Railway Inspector.
Any livestock wandering at large on railway property are the responsibility of the livestock owner in accordance with The Stray Animals Act, and in the case of an animal damaging a train; the animal's owner is liable.
There is no requirement in the provincial or federal railway acts for a railway to construct or maintain livestock fencing.
Q. How does The Line Fence Act work?
A. The Line Fence Act states that if only one landowner is maintaining livestock on their property that party is responsible for maintaining any line fence separating them from another landowner. The costs of initially constructing a fence are split in accordance with whoever benefits from the fence.
In the case of a dispute, arbitrators are selected and they determine the allocation of fencing costs.
Q. How long does arbitration take? How much does it cost and who pays?
A. Arbitration under The Line Fence Act is case specific, the amount of time required for an arbitrated decision and the resulting costs of hiring an arbitrator will vary with each case.
Q. Federal railways had an obligation to provide fencing - doesn't this carry over?
A. No. The Railway Safety Act relieved federal railways of the legal requirement to provide fencing in 1996. There was, therefore, no obligation to carry over when shortlines began development in the province.
Level of Service
The Railway Act requires a provincial railway to accommodate, where reasonable, the receiving, moving and delivery of traffic for shippers. Any shipper having concerns or complaints regarding the level of service provided by a provincial railway should contact Rail Services for information and assistance or make a formal application to the Highway Traffic Board.
Q. What level of service is the railway required to provide?
A. The Act contemplates ‘reasonable' levels of service - this will vary on a case-by-case basis depending on such circumstances as the railways costs to provide service, the number of cars to be moved and the rates to be paid to the railway. The Highway Traffic Board will determine a reasonable level of service in the case of a dispute.
Q. Can a shipper demand a specific location and service?
A. Yes, however the costs to provide that service may increase depending on the conditions
Final Offer Arbitration (FOA)
Shippers and railways can negotiate shipping or delivery practices and rates as private agreements. If the shipper and railway find they cannot come to a negotiated arrangement they can request final offer arbitration of the agreement by the Highway Traffic Board.
Final Offer Arbitration requires the shipper to submit a proposed service plan and rate structure, the railway then responds by submitting their proposed rate structure. An arbitrator will then select one of the rate structures.
Q. How long does the FOA take?
A. Final Offer Arbitration must be completed in 30 days after the start of arbitration.
Q. How much does FOA cost?
A. Parties to Final Offer Arbitration split the cost of hiring an arbitrator and of contracting experts or administrative assistance if required by the arbitrator.
Federal vs. Provincial Railways
Federal railways (which are under the jurisdiction of Transport Canada and the Canadian Transportation Agency) are authorized by the Agency and have one or more of the following characteristics:
- cross provincial or international border,
- service a port,
- are declared ‘for the general interest' of Canada through legislation',
- are not independent of a federal railway.
The decision to grant a Federal Certificate of Fitness is solely within the discretion of the Canadian Transportation Agency.
Provincial railways, which are under the jurisdiction of Saskatchewan, consist of any "land, track and structure on which a train may be operated", within the Province of Saskatchewan and not holding a Federal Certificate of Fitness.
Provincial railways are not subject to any federal railway legislation, but must comply with all provincial legislation.
Q.What's the difference between a federal and provincial railway?
A. Federal railways are subject to federal jurisdiction (the Canada Transportation Act and the Railway Safety Act), are inspected by federal inspectors and are not subject to any provincial laws or regulations. To become a federal railway the owners must apply to the Canadian Transportation Agency and meet the required criteria.
Provincial railways do not meet the criteria for becoming federal railways (or they would have to register as federal). They are subject to all provincial and municipal laws and regulations and are authorized, supervised and inspected by the province.
"...$10 000/mile for 3 years..."
The Canadian Transportation Act requires any federal railway that discontinues service on a grain dependent branchline pay to the affected municipalities a sum of $10 000/mile each year for three years to compensate those municipalities for loss of service. If a federal railway sells a branchline to a provincial railway company to continue operations, the payment is not required.
There is no equivalent requirement for provincial railways; in developing the legislation it was determined through consultation that putting such a requirement on provincial railways would cause undue hardship and prevent new provincial shortlines from being established in the province.
Railways that were sold or abandoned prior to 2000 by a federal railway were not required under legislation to make any payments.
Q. Has the $10 000 ever been paid out?
A.Yes, 7.7 miles of CN branchline near Battleford were abandoned in 2000 and CN paid the required compensation over 3 years. Another example is the 27.7 miles CP abandoned from Bengough to Willow Bunch that CP was required to pay the $10,000 per mile over 3 years.
Q. Do provincial railways have to pay this when they abandon track?
A. No. There is no provincial requirement for a compensation payment.
Tax Concessions
Municipalities may grant property tax concessions to any property owner within their jurisdiction. Tax concessions may include:
Exemption from taxes, in whole or in part, for one year by bylaw, Partial or complete exemption by agreement for up to 5 years,
Adjustment of mill rate factor applicable to a class of assessment,
If a property is exempted for "economic development" by agreement, the RM does not have to make up the loss to the school boards.
Railways are assessed for property tax purposes in accordance with Saskatchewan Assessment Management Agency (SAMA's) guide. This guide places differing values on different classes of railways based on their gross tonnage movements in the previous year. The majority of provincial railways move relatively low tonnages and are designated as Class 5 Railways that are assessed at a theoretical net salvage value (not to be confused with net salvage value as determined by the Highway Traffic Board for sale to governments.) SAMA has determined a theoretical net salvage value for Class 5 railways using a process similar to the one used by Rail Services for NSV estimates.
Trans-Canada Trail Foundation (TCT)
The Trans-Canada Trail Foundation is a non-profit organization with the goal of developing a multi-use trail across the country. In 1999, the Foundation received a donation from CPR and CNR consisting of almost 900 km of abandoned right-of-way. Since this time, some of this abandoned right-of-way has been converted into trails for hiking, snowmobiling, or cycling; a large portion to the right-of-way. has been left undeveloped. Any concerns about the state of the undeveloped right-of-way should be addressed to the Foundation or to the local municipalities, which have legislative powers that may be used to enforce the maintenance of this property.
Q. Can TCT be forced to clean-up the donated right-of-way received from Federal Railways?
A. There are various avenues that can be used to require TCT depending on the condition that needs to be ‘cleaned up':
Noxious Weeds refer to The Noxious Weeds Act, 1984
Waste/refuse control refer to The Municipalities Act, Section 8(1)(b)
Nuisance/unsightly untidy property refer to The Municipalities Act, Section 8(1)(b)
Regulatory
Guides and Standards to The Railway Act were developed to assist stakeholders in complying with the Act. Extensive consultations with stakeholders were undertaken in developing the Guides and Standards.
Q. Why are the provincial regulatory instruments different from federal regulations?
A. Through consultation, the province found that provincial railways generally preferred ‘made-in-Saskatchewan' regulations and guides that reflect the character of the provincial railways, the diverse operations, the lower traffic volumes, and low risk of road traffic conflicts.
Exemptions (from The Railway Act)
Any provincial railway may apply to the Minister of Saskatchewan Highways and Infrastructure for exemption from any portions of The Railway Act. Guidelines for exemptions have been developed and can be reviewed to determine appropriate exemptions. Exemptions are typically granted upon request at the time of application for an authority from the minister.
Railways may be granted partial or complete exemptions from the Act, in accordance with the guidelines.
Q. Our business has some rail, but we are not a railway - I should be exempt! Do I have to do anything?
A. The Railway Act encompasses all rail in Saskatchewan that does not operate with a Federal Certificate, so any company with ANY rail is technically a railway and subject to the Act. Recognizing that many organizations have very little rail business and pose no safety threat to the public, the province has provided a means to exempt those operations.
However, to be exempted you must apply to the province and provide some basic information. There is no cost to apply. If you meet the exemption guidelines, the Minister of Saskatchewan Highways and Infrastrucutre will officially exempt your operation. If you fail to apply for an exemption, you will be operating in violation of the Act and could be subject to fines.
The Exemption of Railway Guide has been developed to assist you in determining whether you qualify for exemption. If you are uncertain or have questions, please contact Rail Services.
Accident/Incident
Accidents and incidents on provincial railways must be reported to Rail Services within timelines prescribed in the guide. Rail Services will investigate accidents and make recommendations based on the investigation to improve safety of provincial railways.
The definitions of accidents and incidents and the reporting requirements can be found in the Accident and Incident Reporting Guide. The prepared accident/incident report forms may be used for reporting.
Q. Why do I have to report accidents?
A. The Ministry uses accident and incident reports to determine if an accident investigation is required and to bring attention to systemic problems that can be fixed or mitigated. Also, the information is shared between the provinces and the federal government for statistical analysis.
Fire Prevention
The Railway Act requires provincial railway companies to maintain their right-of-way free of combustible materials and to take any measures necessary to prevent fire and the spread of fires.
Concerns regarding potential fire hazards on railways should be addressed to the Rail Services Branch.
Trespassing
Trespassing on railway property is a major concern in many urban areas with provincial railways running through them. Ongoing efforts by the railways to prevent trespassing include education, signage and, in some locations, fencing. The problem, however, remains as trespassers can be very industrious in their efforts to access rail property. In the end, trespassing is under the jurisdiction of local law enforcement agencies and trespassers may be fined or jailed when caught.
Jurisdiction
The Railway Act applies to all non-federally prescribed rail in the province. The Act contains provisions to ensure:
- The legitimacy of proposed provincial railway operations,
- The safe operation of railways,
Reasonable rates and service levels for shippers on provincial railways, - Provincial railways cannot be abandoned without other potential operators or municipal governments having the opportunity to purchase the line and continue operations, and
- Costs associated with the railway are fairly allocated between affected parties.
The Act does NOT have provisions:
- Have any jurisdiction over the operation of federal railways.
- Control use or condition of property of a discontinued and abandoned railway.
- Determining joint freight rates on moves over provincial and federal railways, except for the provincial section.
- To allocate costs for livestock fencing.
Any members of the Shortline Advisory Unit can answer any questions or concerns about The Railway Act.
Sidings
Railway sidings, loading track, elevator track or other auxiliary track on provincial shortlines are included in the provisions for discontinuance and dismantlement. Similarly, auxiliary track on federally prescribed railways comes under provincial jurisdiction whenever it is determined by the railway to be unnecessary for their operation. In either case, the railway must offer the line for sale in accordance with The Act before dismantling it.
Q. How can I prevent abandonment and removal of a siding or elevator track?
A. When a federal railway decides to abandon a siding, it falls under provincial jurisdiction, the same as a provincial railway. The Railway Act requires railways to offer to sell track before dismantling it; if you find out a federal railway is planning to abandon and remove a siding or elevator track and you wish to purchase the track for producer loading, etc. contact Rail Services. Rail Services will assist you by providing technical information on the purchasing process and guidance on the development of purchase options for your consideration with your legal counsel.
Start-Up
When a section of a railway becomes available interested local producer groups often look at the possibility of purchasing the track. There are many variables to consider when looking at the viability of establishing a short line railway.
Q. Where can I get information on what to do to establish a shortline.
A. Rail Services provides technical assistance, advisory services and facilitation to any group interested in starting up a short line. We are available to assist you with general information on any rail operation, dealing with the Canadian Transportation Agency, Transport Canada and dealing with the federal railways. An outline for establishing a short line railway and the process for application under The Railway Act to acquire and operate a railway are two documents that are available for your information. You may also contact Rail Services directly for assistance and information.
Government Financial Assistance
The Province of Saskatchewan, through The Railway Line (Short Line) Financial Assistance Regulations, have made funding available to eligible groups meeting the criteria for application to support selected provincial railway projects. Applications to the Minister of Saskatchewan Highways and Infrastructure requesting financial assistance can be made for:
- Interest free loans to participants who have acquired or intend to acquire ownership of a railway line in Saskatchewan for the purposes of operating the railway line as a common carrier and
- Study grants to participants to partially cover the costs of undertaking studies or plans to determine the advisability of purchasing ownership of a railway line.
Q. Where can I get information on applying for financial assistance?
A. Rail Services can answer your questions and assist you with an application for financial assistance.
