Chatham-Kent (Municipality) v Canadian Pacific Railway Company, 2024 ONDR 9

ONTARIO SUPERIOR COURT OF JUSTICE

IN THE COURT OF THE DRAINAGE REFEREE

CITATION: Chatham-Kent (Municipality) v Canadian Pacific Railway Company, 2024 ONDR 9

DATE OF DECISION: 2024-11-15

Court File No.: CV-23-00001165-0000 (Chatham)

B E T W E E N:

THE CORPORATION OF THE MUNICIPALITY OF CHATHAM-KENT

Applicant

• and -

CANADIAN PACIFIC RAILWAY COMPANY

Respondent

• and -

CANADIAN NATIONAL RAILWAY COMPANY, ONTARIO FEDERATION OF AGRICULTURE, RURAL ONTARIO MUNICIPAL ASSOCIATION and the MUNICIPALITY OF LAKESHORE

Intervenor Respondents

ACTING DRAINAGE REFEREE ANDREW C. WRIGHT

HEARD ON THURSDAY, THE 14^th DAY OF NOVEMBER, 2024

ORDER

The Court of the Drainage Referee has fixed this day for a case management video conference for the purpose of identifying parties to this application, determining when any added parties are to provide a supporting affidavit or witness statement material, and such other matters or things as may arise and which the presiding Referee may determine it is expedient to permit. This purpose was based on the circulation of notice to those who may be affected by the determination of a preliminary constitutional question and supplementary preliminary questions arising. The details for the circulation of the notice are to be found in the Order issued on September 19, 2024. The Attorney General for the Province of Ontario is already an intervenor party, and the following have filed Notices of Appearance seeking intervenor party status:

Canadian National Railway Company,

Ontario Federation of Agriculture,

Rural Ontario Municipal Association

The Corporation of the Township of Hornepayne,

Municipality of Lakeshore, and

Alex Miller

and after hearing the submissions of counsel, for the reasons that follow:

THIS COURT ORDERS that

1. The presiding Referee may vary or add to these rules at any time, either on request or as he sees fit. The presiding Referee may alter this Order by an oral ruling, or by another written Order.

2. This Order is supplementary to the November 22, 2023 procedural Order and the September 19, 2024 procedural Order, both of which remain in effect, as augmented by this Order, except as specifically amended by this Order, and the reasons for that previous decision remain extant. In the event of a conflict between Orders, the more recent Order shall prevail.

3. Anything that is required by this Order to be delivered by a party to another or to be filed with the Court shall be delivered directly to the presiding Referee concurrently with delivery to the other party or its filing with the Court.

4. For the purposes of this Order and the reasons therefor, unless the context requires a different meaning:

(a) the “Act”, sometimes referred to as the “Drainage Act”, means the Drainage Act, R.S.O. 1990 Chapter D.17, as amended.

(b) the “Authorizing By-law” means the Municipality’s By-law Number 93-2021 given first and second reading and provisionally passed on March 22, 2021 and finally passed on May 31, 2021, adopting the Engineer’s Report and authorizing the completion of the Shaw Branch Drain in accordance with the Act.

(c) the “Constitution Act” means the Canada Act 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11, as amended,

(d) “CNR” means the Canadian National Railway Company, a “class I rail carrier” for the purposes of the Transportation Act.

(e) “CPR” means the Canadian Pacific Railway Company, a “class I rail carrier” for the purposes of the Transportation Act.

(f) the “Drain” or “Shaw Branch Drain” means the Drainage Act project administered by the Municipality beginning with the Drainage Act process leading up to the completion and adoption of the Engineer’s Report, including rights of appeal to the Tribunal, then the construction of the Drainage Works and thereafter the maintenance and repair of the Drainage Works all of the cost of which to be assessed to and paid for by the owners of lands that use the Drainage Works in accordance with the assessment schedules in the Engineer’s Report.

(g) the “Drainage Works” means the physical infrastructure components of the drainage works to be constructed under the authority of the Drainage Act in accordance with the Engineer’s Report, including a 250mm (10 inch) diameter smooth wall steel pipe across the CPR railway right of way.

(h) the “Engineer’s Report” means the Engineer’s Report on the Shaw Branch of the Facey East Drain issued by Spriet Associates, dated February 19, 2021, and signed by John M. Spriet, P.Eng., including plan and profile.

(i) “Lakeshore” means the Municipality of Lakeshore.

(j) the “Municipal Act” means the Municipal Act, 2001, S.O. 2001, Chapter 25, as amended.

(k) the “Municipality” means The Corporation of the Municipality of Chatham-Kent, the applicant, for itself and as the administrator of the Drainage Act within its territorial limits.

(l) “OFA” means the Ontario Federation of Agriculture.

(m) “OMAFRA” means the Ontario Ministry of Agriculture, Food and Rural Affairs.

(n) the “Railway Safety Act” means the Railway Safety Act, R.S.C., 1985, c. 32 (4th Supp.), as amended.

(o) “ROMA” means the Rural Ontario Municipal Association.

(p) the “Rules” means Regulation 232/15, being the Rules of Practice and Procedure in Proceedings Before The Referee.

(q) the “Transportation Act” means the Canada Transportation Act, S.C. 1996, c.10, as amended.

(r) the “Transportation Agency” means the Canadian Transportation Agency as continued by subsection 7(1) of the Transportation Act.

(s) the “Transportation Agency Rules” means Canadian Transportation Agency Rules (Dispute Proceedings and Certain Rules Applicable to All Proceedings) (SOR/2014-104).

(t) the “Tribunal” means the Agriculture, Food and Rural Affairs Appeal Tribunal.

Parties and Representation

5. The applicant Municipality is represented by Emily Crawford, a Solicitor in the applicant’s Municipal Solicitor’s office and David Taylor, the Municipality’s Director of Legal Services.

6. The Canadian Pacific Railway Comp was initially represented by Kimberley Potter, and Lily MacLeod, lawyers with the law firm of Fasken Martineau DuMoulin ^LLP, Barristers and Solicitors, and since January 10, 2024, is now represented by Christopher DiMatteo and Anne Drost, lawyers with the law firm of Blake, Cassels & Graydon ^LLP, Barristers & Solicitors.

7. The Attorney General of Ontario as intervenor respondent is represented by Josh Hunter and Maia Stevenson, both Counsel in the Constitutional Law Branch of the Ministry of the Attorney General of Ontario

8. The Canadian National Railway Company is represented by Nadia Effendi and Laura M. Wagner, lawyers in the Toronto office of Borden Ladner Gervais ^LLP.

9. The Ontario Federation of Agriculture is represented by Brendan van Niejenhuis, a lawyer with Stockwoods ^LLP.

10. The Rural Ontario Municipal Association is represented by Stéphane Emard-Chabot and Asangwa Asongwed, lawyers with Sicotte Guilbault ^LLP

11. The Corporation of the Township of Hornepayne is represented by Steven G, Shoemaker of the Wishart Law Firm.

12. The Municipality of Lakeshore is represented by Sheila Handler and Jonathan de Vries, lawyers in the offices of Shillington McCall ^LLP

13. Alex Miller, a self-represented farmer from Thamesville, Ontario.

Parties to be Added as Intervenors

14. The Attorney General of Ontario is added as an intervenor party. The Canadian National Railway Company is added as an intervenor party. The Ontario Federation of Agriculture is added as an intervenor party. The Rural Ontario Municipal Association is added as an intervenor party. The Municipality of Lakeshore is added as an intervenor party.

15. The Corporation of the Township of Hornepayne is not added as an intervenor party, but its counsel will be accorded observer status for future video conference hearings. Alex Miller is not added as a party; however, Mr. Miller is and will be in the future be accorded observer status.

Preliminary Issues

16. As set out in the September 19, 2024 procedural Order, the following preliminary constitutional question and preliminary supplementary questions are to be argued:

(a) Is CPR constitutionally exempt from paying assessments of railway right-of-way land it owns when such assessments have been determined in accordance with and are authorized under the Drainage Act?

(b) If the answer to question (a) is no, then (i) are the Municipality’s expenses of an application to the Transportation Agency to authorize the construction of the Drainage Works across the CPR right-of-way to be charged to the Shaw Branch Drain and assessed to and paid for in accordance with the assessment schedules in the Engineer’s Report, and (ii) do those expenses represent an increase in the cost of the Drainage Works caused by the existence of the works of the CPR railway right-of-way, to paraphrase section 26 of Act, and as such are they to be added to the Special Assessment against the CPR owned railway right-of-way lands?

(c) If the answer to question (a) is no, then (i) are the costs of any works in addition to the Drainage Works required by the Transportation Agency as a condition of an Order authorizing the construction of the Drainage Works across the CPR right-of-way to be charged to the Shaw Branch Drain and assessed to and paid for in accordance with the assessment schedules in the Engineer’s Report and, (ii) do those expenses represent an increase in the cost of the Drainage Works caused by the existence of the works of the CPR railway right-of-way, to paraphrase section 26 of Act, and as such are they to be added to the Special Assessment against the CPR owned railway right-of-way lands?

(d) If the answer to question (a) is no, and the Municipality enters into an agreement with CPR, either of its own volition or as a requirement or condition of an Order authorizing the construction of the Drainage Works across the CPR right-of-way, which agreement requires works in addition to the Drainage Works, (i) are the Municipality’s costs of such additional works to be charged to the Shaw Branch Drain and assessed to and paid for in accordance with the assessment schedules in the Engineer’s Report and, (ii) do those expenses represent an increase in the cost of the Drainage Works caused by the existence of the works of the CPR railway right-of-way, to paraphrase section 26 of Act, and as such are they to be added to the Special Assessment against the CPR owned railway right-of-way lands?

(e) If the answer to question (a) is no, then (i) is any payment required to be made by the Municipality as ordered by the Transportation Agency in connection with an application to the Transportation Agency to authorize the construction of the Drainage Works across the CPR right-of-way or imposed by the Transportation Agency as a condition of the Transportation Agency’s Order authorizing the construction of the Drainage Works across the CPR right-of-way to be charged to the Shaw Branch Drain to be assessed to and paid for in accordance with the assessment schedules in the Engineer’s Report and, (ii) do any such payments represent an increase in the cost of the Drainage Works caused by the existence of the works of the CPR railway right-of-way, to paraphrase section 26 of Act, and as such are they to be added to the Special Assessment against the CPR owned railway right-of-way lands?

(f) If the answer to question (a) is no, and the Municipality enters into an agreement with CPR, either of its own volition or as a requirement or condition of an Order authorizing the construction of the Drainage Works across the CPR right-of-way, which agreement requires any payment to be made by the Municipality, (i) is the amount of such payment to be charged to the Shaw Branch Drain and assessed to and paid for in accordance with the assessment schedules in the Engineer’s Report and, (ii) does such payment represent an increase in the cost of the Drainage Works caused by the existence of the works of the CPR railway right-of-way, to paraphrase section 26 of Act, and as such are they to be added to the Special Assessment against the CPR owned railway right-of-way lands?

(g) If the answer to question (a) is no, then (i) are the Municipality’s expenses of this application to be charged to the Shaw Branch Drain and assessed to and paid for in accordance with the assessment schedules in the Engineer’s Report and, (ii) do those expenses represent an increase in the cost of the Drainage Works caused by the existence of the CPR railway right-of-way, to paraphrase section 26 of Act, and as such are they to be added to the Special Assessment against the CPR owned railway right-of-way lands?

(h) If the answer to question (a) is no, then is the Municipality prohibited by sections 106 and 107 of the Municipal Act, 2001 from paying or reimbursing, directly or indirectly, CPR for the amount of any Drainage Act assessments that CPR is required to pay or from exempting CPR from paying such Drainage Act assessments?

17. A future case management video conference hearing will be convened to address the preliminary constitutional question and supplementary preliminary questions enumerated in paragraph 16 above. The scheduling of the exchange of facta and the setting of the start time and duration of such hearing will be determined by the presiding Referee after the intervenor parties have filed affidavits as contemplated by paragraph 18, after any reply affidavits have been filed as contemplated by paragraph 19 and after cross-examinations have taken place as contemplated by paragraph 20.

Record for Preliminary Constitutional Questions and Supplementary Questions

18. The added intervenor respondents may provide affidavits to supplement the evidence already part of the record as described in the Exhibit List referred to in paragraph 26 below. The intervenor respondents will deliver any supplementary affidavits to the other parties and to the presiding Referee on or before Friday, January 31, 2025.

19. The Municipality, CPR, and the Attorney General of Ontario may each provide evidence in reply to the affidavits provided by the intervenor respondents. The Municipality, CPR, and the Attorney General will deliver any reply affidavits to the other parties and to the presiding Referee on or before Friday, February 28, 2025.

20. There will then be a video conference hearing to cross-examine on the affidavits filed by the parties. The dates for cross-examinations will be fixed by the presiding Referee in consultation with the parties. At the time of the cross-examination hearing, the order in which evidence will be given will be as follows:

(a) The CPR will call as witnesses all whose affidavits CPR provided in response to the application, being Exhibits 8 and 9, as well as any reply affidavits provided as contemplated by paragraph 19 above; those witnesses will give evidence based on the affidavits by reaffirming or correcting their affidavits and then be subject to cross-examination and questions from the presiding Referee. Cross-examination will be by the Municipality, OFA, ROMA, Lakeshore and the Attorney General for Ontario, in that order; CPR will have the opportunity for re-examination.

(b) CNR, the only intervenor respondent aligned in interest with CPR, will call as witnesses all whose affidavits that party provided as supplementary affidavits as contemplated by paragraph 18 above; those witnesses will give evidence based on the affidavits by reaffirming or correcting their affidavits and then be subject to cross-examination and questions from the presiding Referee. Cross-examination will be by the Municipality, OFA, ROMA, Lakeshore and the Attorney General for Ontario, in that order; CNR will have the opportunity for re-examination.

(c) The Municipality will call as witnesses all whose affidavits the Municipality provided in support of the application, being Exhibits 4, 5, 6, 7 and 10, as well as any reply affidavits provided as contemplated by paragraph 19 above; those witnesses will give evidence based on the affidavits by reaffirming or correcting their affidavits and then be subject to cross-examination and questions from the presiding Referee. Cross-examination will be by CPR, CNR and the Attorney General for Ontario, in that order; the Municipality will have the opportunity for re-examination.

(d) Intervenor respondents aligned in interest with the Municipality will call as witnesses all whose affidavits that party provided as supplementary affidavits as contemplated by paragraph 18 above; those witnesses will give evidence based on the affidavits by reaffirming or correcting their affidavits and then be subject to cross-examination and questions from the presiding Referee. The order in which the intervenor respondents will proceed to call witnesses will be as follows:

(i) the Ontario Federation of Agriculture,

(ii) the Rural Ontario Municipal Association,

(iii) the Municipality of Lakeshore, and

(iv) the Attorney General of Ontario.

Cross-examination of the witnesses of the intervenor respondents aligned in interest with the Municipality will be by CPR, CNR and the Attorney General for Ontario, in that order; in each case, the intervenor respondents calling the witness will have the opportunity for re-examination.

21. Submission by the parties at the time of future case management video conference hearing referred to in paragraph 17 above will proceed in the same order as specified in paragraph 20 above with CPR having an opportunity for reply submissions.

22. A party who has provided an affidavit referred to in paragraph 20 above must have the person who signed the affidavit attend the hearing for cross-examination unless the party notifies the presiding Referee at least seven (7) days before the hearing that the affidavit evidence is not part of their record.

Future Case Management Conferences

23. After the Court of the Drainage Referee has decided the preliminary constitutional question and supplemental questions arising and has ordered the Municipality to make an application to the Transportation Agency for authorization for the Shaw Branch Drain to cross the CPR railway right-of-way as contemplated by the Engineer’s Report, the hearing of this application in the Court of the Drainage Referee will then be adjourned sine die, but the presiding Referee will remain seized and, if necessary, future case management video conferences may be scheduled to address:

(a) Scheduling pre-hearing production and exchange of documents, including affidavits or witness statements for expert witnesses and affidavits or evidence summaries for other witnesses.

(b) Identifying the number and nature of witnesses to be called by each party at a hearing of the merits.

(c) Estimating the amount of time required for the hearing of the merits.

(d) Setting the commencement date for the hearing of the merits.

(e) Making provisions about access to and login credentials for participants in the hearing.

(f) Providing for service by personal service, registered mail or electronically (unless a statute or the Referee requires another method of service).

(g) Dealing with such other matters or things as may arise and which the presiding Referee may determine is expedient to permit.

Video Conference Protocols

24. For case management video conferences and the hearing on the merits to be conducted by video conference, the following provisions shall apply:

(a) The parties shall provide the presiding Referee the names and e-mail addresses of those who will be on hand at the video conference hearing; that includes counsel, any witnesses, and those giving instructions to counsel.

(b) Parties and those with a recognized interest in the proceeding, including news media, will be provided by the presiding Referee with access credentials, including a password, to log into the video conference at the appointed time.

(c) Parties are responsible for arranging to have their witnesses join the Zoom meeting to give their evidence at the time directed by the presiding Referee.

(d) Once logged on, the person will be held in a waiting area pending authorization by the presiding Referee to join the hearing.

(e) Parties intending to call a witness will ensure that the witness has a holy book (Bible or Koran) or an oath-taking article (such as an eagle feather) at hand if they are to be sworn to give evidence; a holy book is not required for a witness who affirms.

(f) Before giving testimony, each witness shall affirm to the presiding Referee orally that they are alone in the room and that they are not relying on any undisclosed document, such as speaking notes. Witnesses are not permitted to testify with others present in the room or to use undisclosed documents without the approval of the presiding Referee.

(g) For those joining the hearing to simply observe without participation, their microphone will be muted during the hearing conference.

(h) Those joining the hearing will need a device equipped with a webcam and a microphone and access to a reliable internet connection with adequate bandwidth; the device should always be plugged in to ensure that the battery does not run low.

(i) A smartphone may only be used at the discretion of the presiding Referee; the use of a smartphone is discouraged due to potential disruptions, such as incoming calls and messages, and the risk of running out of battery.

(j) Those joining the hearing will normally be alone in their location; if they are not, the presiding Referee may require such other persons to leave the room during the proceeding. There is an ongoing obligation to inform the presiding Referee if they are joined by someone else during the proceeding.

Documents and Exhibits

25. Because case management video conferences and the hearing on the merits are to be conducted by video conference, protocols concerning the entering of exhibits are warranted and the following apply in that connection:

(a) A document, including a plan or photograph, to be relied upon at a hearing must be identified as an exhibit.

(b) To be identified as an exhibit, the document must be provided to the presiding Referee and to all other parties at least 2 days in advance of the video conference hearing at which it is to be presented as an exhibit; the presiding Referee may abridge this time.

(c) The presiding Referee will decide whether to enter the document as an exhibit and, if it is allowed, the presiding Referee will assign an exhibit an alpha/numeric identifier.

(d) Once the document has been entered as an exhibit, the party that introduced the exhibit shall, within 3 business days following the conclusion of the video conference hearing, file an electronic copy of the exhibit with the court via the One-Key portal and, when doing so, shall identify Court File No.: CV-23-00001165-0000 (Chatham) and the exhibit identifier assigned by the presiding Referee; a copy of the e-mail of transmittal shall be provided to the presiding Referee.

(e) Court Orders, the application, notices of motion, facta, case law, legislation and compendiums of authorities will not be marked as exhibits though Court Orders, the application, notices of motion and facta should be filed with the court and item 25(d) above applies mutatis mutandis.

26. At the time of this Order, the following documents are part of the record:

Notice of Application issued July 6, 2023

No.: 1

The Engineer’s Report on the Shaw Branch of the Facey East Drain issued by Spriet Associates, dated February 19, 2021, and signed by John M. Spriet, P.Eng., including plan and profile (the “Engineer’s Report”).

No.: 2

Municipality of Chatham-Kent By-law No.: 93-2021 provisionally adopted on March 22, 2021, and finally passed on May 31, 2021, adopting the Engineer’s Report

Order issued by Acting Referee Andrew Wright on November 22, 2023 providing for the production of documents by the Municipality and the exchange of affidavits by the parties.

No. 3

Notice of Constitutional Question issued by CPR on January 31, 2024

No. 4

Affidavit of Alex Miller sworn March 20, 2024, together with two Exhibits A and B

No. 5

Affidavit of John M. Spriet, P.Eng., sworn March 27, 2024, together with 14 Exhibits A through M

No. 6

Affidavit of Blaise Chevalier sworn April 2, 2024, together with 36 Exhibits A through JJ

No. 7

Affidavit of Sid Vander Veen, P.Eng. sworn April 2, 2024, together with five Exhibits A through E

No. 8

Affidavit of Rheal Lemelin sworn June 27, 2024

No. 9

Affidavit of Jack Carello sworn July 4, 2024, together with 26 Exhibits A through Z

No. 10

Affidavit of Blaise Chevalier sworn September 6, 2024, together with 7 Exhibits A through G

Order issued by Acting Referee Andrew Wright on September 19, 2024 providing for the giving of notice to potential intervenor parties

27. The documents that have exhibit numbers will retain their exhibit numbers through the case management hearings and hearing(s) on the merits of this case. New exhibits will be identified by the next ensuing exhibit number and be added to the list as the hearing(s) progresses.

28. The documents listed are intended to reflect those things which would normally be filed in court or which would be used in the course of the hearing; it does not include but does not intend to dispense with routine items such as appearances, affidavits of service required by the court staff for filings such as the application, appearances, any motions and routine affidavits of service for supporting affidavits.

29. If counsel or a witness intends to rely upon case law, other than the cases listed in paragraph 26 or legislation, other than the Act, copies must be provided to the presiding Referee and to all other parties at least 2 days in advance of the video conference hearing at which it is to be referred to; the presiding Referee may abridge this time.

General Matters

30. When any document is required or permitted to be served, it shall be served by personal service, registered mail or electronically (unless a statute or the Referee requires another method of service) and shall be sent to:

(a) the party’s representative, if any;

(b) where the party is an individual and is not represented, to that party directly, where that party has provided an address for service and/or an e-mail address;

(c) where that party is a corporation and is not represented, to the corporation directly, to the attention of an individual with apparent authority to receive the document.

31. For the purposes of this Order, unless otherwise ordered, Andrew C. Wright, Acting Drainage Referee, shall be regarded as the presiding Referee.

32. No adjournments or delays will be granted before or during the hearing except for serious hardship or illness.

33. Costs of the day are reserved to the final disposition of this matter.

Dated at London this November 15, 2024.

____________________________________ Andrew C. Wright Acting Drainage Referee

REASONS

1. The Order to which these reasons are attached is part of an evolving case management and procedural Order. It consolidates previously issued Orders, includes currently operable provisions, and eliminates matters that have been completed or are no longer necessary.

2. Words and phrases defined in the Order have the same meaning when used in these reasons. When in these reasons reference is made to the “Order”, it is a reference to the Order to which these reasons are attached.

3. At this stage, the parties have exchanged documents and provided affidavits supporting and responding to the application. There has yet to be cross-examination on the affidavits.

4. From the evidence provided, it appears that the Engineer’s Report contemplates relatively minor, petition-based Drainage Works that involve lowering and increasing the capacity of the existing drain crossing of railway right-of-way lands owned by CPR. CPR was made aware of the proposed drainage works but elected not to participate in any of the proceedings under the Drainage Act; in particular, CPR exercised none of its appeal rights under the Drainage Act, and the time for doing so has long since passed.

5. CPR relies upon the Constitution Act as the basis of its position that only the Transportation Agency has authority to authorize the crossing of the railway right of way without CPR’s agreement. CPR has served a Notice of Constitutional Question, which has been entered as Exhibit No.: 3. The Notice of Constitutional Question calls into question the constitutional applicability and operability of numerous sections of the Act and the Authorizing By-law.

Intervenors

6. As a result of the Notice of Constitutional Question, the Attorney General for the Province of Ontario has sought and been granted intervenor party status. Resulting from the giving of notice of this application and of the preliminary constitutional question and supplementary preliminary questions in accordance with the procedural Order issued on September 19, 2024, the following have sought to be added as intervenor parties:

Canadian National Railway Company,

Ontario Federation of Agriculture,

Rural Ontario Municipal Association

The Corporation of the Township of Hornepayne,

The Municipality of Lakeshore, and

Alex Miller.

7. It should be mentioned that the notice given pursuant to the procedural Order issued on September 19, 2024 gave the opportunity to observe the proceedings to those who requested observer status. More than a dozen asked for and have been accorded observer status. They have been provided with login credentials and admitted to the Zoom video conference hearing with muted microphones.

8. A week prior to the time of the November 14, 2024 case management video conference hearing, the presiding Referee asked the Attorney General for Ontario and each of those seeking intervenor party status to identify

(a) their interest, public or private, in the application or its result,

(b) their position with respect to the preliminary constitutional question and supplementary questions,

(c) how they plan to contribute to the court’s understanding of the issues and

(d) whether they intend to file evidence upon which they intend to rely, including any supporting affidavits and, if yes, how much time they may require to do so.

9. The counsel for the Attorney General of Ontario advised that:

(a) Ontario’s interest in the application is public;

(b) Ontario’s position on the preliminary constitutional question is that the assessment provisions of the Drainage Act are a valid provincial law of general application that neither impairs any vital or essential part of CPR’s federal undertaking nor conflicts with any federal statute. CPR, therefore, is not constitutionally exempt from paying assessments under the Drainage Act associated with its railway lands. Ontario takes no position on the supplementary questions;

(c) Ontario intends to contribute to the Court’s understanding of the preliminary constitutional issue by providing legal submissions on the relevant constitutional caselaw and on the statutory interpretation of the Drainage Act and relevant federal legislation;

(d) Ontario does not intend to file evidence on the preliminary constitutional issue.

The Attorney General for Ontario takes no position on the status of the other proposed intervenors.

10. Counsel for the Canadian National Railway Company advised that

(a) CNR’s interest in the application is public and is similar to CPR’s in that CNR believes that Ontario’s Drainage Act, in its entirety, is constitutionally inoperative and inapplicable vis-à-vis CPR or CNR or to their railway lands.

(b) CNR’s position is aligned with CPR’s position; CNR takes the position with respect to the preliminary constitutional questions:

(i) The provincial Drainage Act is constitutionally inapplicable to federal railways by virtue of the doctrine of interjurisdictional immunity because it impairs the core of the federal power over federal undertakings, including interprovincial railways; and

(ii) The Provincial Drainage Act is constitutionally inoperative with respect to federal railways by virtue of the doctrine of federal paramountcy because it creates operational conflict with and frustrates the purpose of the federal scheme as set out in the Transportation Act and the Railway Safety Act.

CNR does not take any position with respect to the supplementary questions.

(c) CNR intends to provide legal submissions with respect to the preliminary constitutional question in this proceeding, including relevant case law as well as statutory interpretation, including detailed legislative history with respect to the provincial Drainage Act, the Transportation Act and the Railway Safety Act. CNR will provide a different perspective than the Attorney General of Ontario, which proposes to make legal submissions on these issues to argue for the constitutionality of the provincial Drainage Act. CNR will also provide a different perspective than all other proposed interveners, which represent rural municipalities, farmers, and a local landowner.

(d) CNR intends to file evidence on the preliminary constitutional issue and asks to be allowed until January 31, 2025, to make that filing.

CNR takes no position on the status of the other proposed intervenors.

11. Counsel for the Ontario Federation of Agriculture (the “OFA”) advised that

(a) OFA represents the interests of agricultural sector participants, primarily farmers, both in their private interest side and in the public interest side, which are impacted by the drainage regime that's in place in the Province. It's from the potentially disruptive effect of completely exempting under the constitution the CPR and the CNR from the drainage system in this Province.

(b) OFA will take the position that the answer to the preliminary constitutional question is no. There is no constitutional exemption, nor has there ever been. At this time OFA takes no position on the supplementary questions.

(c) OFA can contribute its broader perspective Province-wide outside the boundaries of Chatham Kent and its unique circumstances. That perspective concerns the significance of the drainage regime, both historically since before confederation and in modern times, to the productivity of the agricultural sector within the Province. This includes historic jurisdictions going back to Upper Canada and its neighbouring provinces and territories. The intention is to illustrate and put into historical context the importance of the drainage regime as it has stood, why it is that way, what the significance of that is, all leading to the conclusion that it is inherently and inextricably of a local and intensely local and private nature.

(d) OFA proposes to file evidence mostly of an historical nature and asks to be given to the end of January 2025 to file that affidavit material.

OFA takes no position on the status of the other proposed intervenors.

12. Counsel for the Rural Ontario Municipal Association (“ROMA”) advised that

(a) ROMA’s interest is public in that it represents many of the 270 predominantly rural Ontario municipalities with less than 10,000 residents, numerous of which have been informed since 2020 by CPR, CNR and VIA Rail that the federal railways are no longer paying municipal drainage costs.

(b) ROMA shares and adopts the position taken by the Attorney General for the Province of Ontario and will be arguing the doctrine of paramountcy or inter-jurisdictional immunity.

(c) ROMA will argue that the CPR’s position is untenable under contemporary constitutional law principles. It will also submit that cooperative federalism has functioned well for the better part of a century under the Drainage Act regime and that the alternative advocated by the CPR would have devastating consequences.

(d) ROMA wishes to file evidence upon which it will rely in its arguments. This will include data and findings from its membership surveys on their struggles with federal railways. ROMA asks for 60 days to file this evidence.

ROMA takes no position on the status of the other proposed intervenors.

13. Counsel for The Corporation of the Township of Hornepayne advised that it is a very small Township where cost apportionment and cost contribution from the founding entity, with only 1,000 resident taxpayers, are integral to its survival and to the ratepayers’ ability to afford to live there, with its population decreasing in any event. There is a direct and indirect correlation between the Township and CNR with respect to its concerns relating to this matter. However, counsel could not say whether Hornepayne had any Drainage Act assessments that CNR had not paid. He didn’t think there were, but he would try to find out. He was unable to get that information before the end of the video conference hearing on November 14, 2025. As a result, counsel for Hornepayne was unable to establish that his client had any interest in the preliminary constitutional question or the supplementary preliminary questions. Hornepayne will not, therefore, have intervenor party status.

14. Counsel for the Municipality of Lakeshore (“Lakeshore”) advised that

(a) Lakeshore’s interest is public, as it is a municipality and the issue of whether a railway may be required to pay assessments under the Drainage Act with respect to its lands directly affects the financial burdens not only of other property owners assessed under the Drainage Act, but Lakeshore itself and, by implication, its ratepayers.

(b) Lakeshore shares and adopts the position taken by the Attorney-General for the Province of Ontario.

(c) Lakeshore will be able to contribute to the hearing by making legal submissions on the history, interpretation, and practical application of the Drainage Act and on constitutional issues.

(d) Lakeshore may file brief affidavit evidence documenting that, as of July 2024, there were approximately $97,000 in unpaid costs assessed under the Drainage Act against CPR and other railways with respect to drainage works within Lakeshore’s municipal jurisdiction. CPR has refused to pay costs assessed against it on the grounds that the Drainage Act cannot apply to it.

Lakeshore takes no position on the status of the other proposed intervenors.

15. Alex Miller is the petitioner for the Shaw Branch Drain. He has sworn one of the affidavits filed by the Municipality in support of its application. During the November 14^th hearing, it became clear that Mr. Miller wants to be heard on the record in the form of his affidavit, but he is otherwise content to be an observer. He will be afforded observer status for video conference hearings in the future but will not have intervenor party status.

16. Counsel for the applicant Municipality is content that all of the proposed intervenors be accorded that status except for CNR. Her submissions were that CNR could add little that CPR was not able to provide to assist the court.

17. Counsel for CPR did not have instructions to make submissions about the proposed intervenors. Now that he has heard the submissions of the proposed intervenor parties, he asked for time to seek and obtain instructions.

Reconsideration of Preliminary Constitutional Question and Supplementary Questions

18. By letter dated and delivered electronically three days before the November 14, 2024, video conference case management hearing, counsel for CPR asked for a reconsideration of the form of the preliminary constitutional question.

19. Some context is required. The form of preliminary constitutional question and of the supplementary preliminary questions was established by an Order issued Thursday, September 19, 2024 following a case management video conference hearing held on Wednesday, September 18, 2024. The preliminary constitutional question and the supplementary preliminary questions were embedded in the Notice that was given of the case management video conference to be held on November 14, 2024. That Notice was sent to all 444 Ontario municipalities and all railways operating in Ontario to give them an opportunity to participate in the debate about the preliminary constitutional question and the supplementary preliminary questions.

20. By letter dated August 13, 2024, a month before the September 18^th case management video conference, the presiding Referee sent to counsel for the Municipality and for CPR a draft of the Notice. That draft Notice included the preliminary constitutional question and the supplementary preliminary questions. It was provided to counsel as the basis for discussion at the time of the September 18, 2024 case management video conference hearing.

21. Counsel for the Municipality had some changes to propose, and they were rejected for the reasons set out in paragraph 30 of the reasons attached to the September 19, 2024 procedural Order.

22. Counsel for CPR submitted that the Drainage Act, in its entirety, is constitutionally inoperative and inapplicable vis-à-vis CPR and proposed the following preliminary constitutional questions:

(a) Is Ontario’s Drainage Act and Municipality’s By-Law No. 93-2021 enacted pursuant to the Drainage Act, in whole or in part, constitutionally inapplicable to CPR by reason of the doctrine of inter-jurisdictional immunity?

(b) Is Ontario’s Drainage Act and the Municipality’s By-Law No. 93-2021 enacted pursuant to the Drainage Act, in whole or in part, constitutionally inoperative in relation to CPR by reason of the doctrine of federal paramountcy?

23. That proposal was not accepted for the reasons set out in paragraphs 32 and 33 of the reasons attached to the September 19, 2024 procedural Order.

24. What is now proposed by CPR as of November 11, 2024 for the preliminary constitutional question is:

Are the assessment of costs provisions of the Drainage Act, and the related aspects of the Municipality’s By-Law No. 93-2021, in whole or in part invalid, inapplicable or inoperative?

25. This question, as it is proposed, is not limited to CPR or its railway lands. As proposed, the constitutional question is a precursor to submissions from CPR that the assessment of costs provisions of the Drainage Act are constitutionally ultra vires in the Province of Ontario. As such, everyone, including CPR, is constitutionally exempt from paying such Drainage Act assessments. When this was put to Mr. DiMatteo by the presiding Referee, Mr. DiMatteo said his intention was that the question was to be limited to the Authorizing By-law, and he verbally proposed alternative variations on the language to restrict the scope of the question to the Shaw Branch Drain crossing of CPR railway as contemplated by the Engineer’s Report. That is too narrow. The preliminary constitutional question is generic. It asks about Drainage Act assessments of railway lands.

26. Counsel for the Municipality submitted that, after circulating the preliminary constitutional question and the supplementary preliminary questions to over 440 municipalities and more than a dozen railways, now is not the time to change the questions. CPR had an opportunity to make submissions about the questions in September 2024 and did so without success. It is now too late to try again.

27. Counsel for the Attorney General for Ontario submitted that endless “wordsmithing” of the questions will not change what is before the Court of the Drainage Referee nor the submissions which will be made by the parties.

28. The CPR proposal does not specify which sections of the Act are to be regarded as “costs provisions of the Drainage Act”, but whatever CPR says the “costs provisions of the Drainage Act” are, CPR’s submissions as to their constitutionality can be made in the context of the preliminary constitutional question and the supplementary preliminary questions.

29. There will be no change to those questions as framed in the Notice circulated in accordance with the September 19, 2024 procedural Order. And what was said in paragraphs 32 and 33 of the reasons attached to the September 19, 2024 procedural Order about what CPR then proposed as constitutional questions are re-iterated as follows:

30. With respect, the preliminary constitutional question enunciated in paragraph 14 above and the supplemental preliminary questions set out in paragraph 16 above are embedded in the questions proposed by CPR. When addressing the more focused preliminary constitutional question enunciated in paragraph 14 above and the supplemental preliminary questions set out in paragraph 16 above, CPR will be able to make all the same submissions it would have made in response to the questions as proposed by CPR.

31. But the answers to the more focused questions will inform any decision about authorizing a crossing of the CPR right-of-way by the Drainage Works, whether by the Transportation Agency, this Court of the Drainage Referee, or any other permitting authority. This Court of the Drainage Referee has the jurisdiction and authority to decide the preliminary constitutional question enunciated in paragraph 14 above and the jurisdiction, perhaps exclusive jurisdiction and authority to decide the supplemental preliminary questions set out in paragraph 16 above of these reasons. It is important that any decision-maker considering authorizing a crossing of the CPR right-of-way by the Drainage Works be alive to and informed by the answers to these questions. It is also important for the parties to have answers to these questions, as their respective future courses of action about this case will be influenced by the answers to these questions.

CNR v Sarnia Transportation Agency Proceeding

30. I am going to digress to refer to a case before the Transportation Agency that CNR brought to the court's attention.

31. In April 2023, CNR filed an application with the Transportation Agency pursuant to the Transportation Act and the Railway Safety Act seeking an order apportioning the costs for improvements to drainage works on CNR’s right of way being proposed by the City of Sarnia. In its response, Sarnia submitted that the Drainage Act governed rather than the Transportation and Railway Safety Act. While the facts and context are different than this application, the preliminary constitutional question in this proceeding is analogous to what was in issue before the Transportation Agency.

32. Faced with the Drainage Act response from Sarnia, CNR filed a Notice of Constitutional Question to the effect that CNR questioned the constitutional validity, applicability or effect of the Drainage Act. CNR submitted that the provincial Drainage Act is inapplicable to CNR by virtue of the doctrine of inter-jurisdictional immunity, and the Drainage Act is inoperative with respect to CNR by virtue of the doctrine of federal paramountcy.

33. Because of the Notice of Constitutional Question, the Attorney General of Ontario was able to and did intervene to defend the applicability of the Drainage Act. This Court was advised that the Transpiration Agency did not give anyone notice of its Sarnia proceeding and that ROMA’s request for intervenor status was denied.

34. The Transportation Agency’s decision remains under reserve.

35. I wish to reiterate what I said in paragraphs 38 and 39 of the reasons attached to the September 19, 2024 procedural Order in which the Municipality was ordered to give notice of this application and of the preliminary constitutional question and the supplementary preliminary questions to over 440 Ontario municipalities and more than a dozen railways operating in Ontario.

36. As previously indicated, assuming, without deciding, that the Transportation Agency has the jurisdiction and authority to do so, I have concluded that the Transportation Agency has expertise borne of knowledge and experience with railways and administrative resources that the Court of the Drainage Referee does not and that, therefore, the Transportation Agency is in a much-preferred position to ensure that any municipal drain crossing of a railway will not compromise the railway right-of-way or rail traffic using the right-of-way or put at risk the safety and security of the public and personnel, or the protection of property and the environment. So, notwithstanding its reservations about the Transportation Agency’s jurisdiction, I will direct the Municipality to make an application to the Transportation Agency for such authorization. While it is for the Transportation Agency to determine its own process and procedures, I commend to their consideration the giving of notice of the Municipality’s application to Ontario municipalities and the operators of railways and the giving of an opportunity to intervene as I am doing with respect to the application and the preliminary issue questions. With the benefit of input from a representative cross-section of the stakeholders, the Transportation Agency also has an opportunity to establish a template form of application for municipalities and a decision which will provide future guidance to municipalities and railway owners and operators.

37. For municipalities, an appearance before the Transportation Agency is foreign territory, so it would be beneficial if Transportation Agency members and staff were to educate and inform municipal participants about the protocols and procedures of the Transportation Agency. It may well be that, after the disposition of the Municipality’s application, there will be many more municipal applications for municipal drain interference with or by railway rights-of-way, and it will be advantageous for all participant stakeholders if there is an understanding of a straightforward process to follow. The crossing by the Drainage Works of the CPR railway right-of-way, in this case, does not appear to be technically challenging, but that may be different in other locations in other municipalities, and it would be advantageous for the Transportation Agency to have a well-defined path to get to a resolution for the benefit of both the railways and the drainage authorities.

Proceedings After Decision on Preliminary Constitutional and Supplementary Questions

36. Once the preliminary constitutional question and the supplementary preliminary questions arising have been decided by the Court of the Drainage Referee, as mentioned previously, notwithstanding its reservations about the Transportation Agency’s jurisdiction, the Municipality will be ordered to make an application to the Transportation Agency for authorization for the Shaw Branch Drain to cross the CPR railway right-of-way as contemplated by the Engineer’s Report. The hearing of this application in the Court of the Drainage Referee will then be adjourned sine die, but I will remain seized.

37. The hearing may resume at the request of any party

(a) If it is determined by the Transportation Agency or a court of competent jurisdiction that the Transportation Agency lacks jurisdiction and authority to sanction the crossing by a municipal drain of a railway right-of-way or

(b) if the Transportation Agency refuses to consider the Municipality’s application or fails within a reasonable time to exercise its authority to decide on the Municipality’s application or

(c) if there is some aspect of the Engineer’s Report or the Drainage Act as it applies to the Shaw Branch Drain, which requires interpretation or clarification.

38. If it is necessary for the hearing to resume, the presiding Referee will pick up where it was left with a pre-hearing case management conference to address the following:

(a) Scheduling production of documentation by the parties and examinations for discovery.

(b) Scheduling pre-hearing production and exchange of documents, including affidavits or witness statements for expert witnesses and affidavits or evidence summaries for other witnesses.

(c) Establishing an issues list.

(d) Identifying the number and nature of witnesses to be called by each party.

(e) Estimating the amount of time required for the hearing.

(f) Setting the commencement date for the hearing.

(g) Making provisions about access to and login credentials for participants in the hearing.

(h) Providing for service by personal service, registered mail or electronically (unless a statute or the Referee requires another method of service).

(i) Dealing with such other matters or things as may arise and which the presiding Referee may determine is expedient to permit.

39. If no request is made for the resumption of the hearing and the Municipality’s application to the Transportation Agency is finally disposed of, this application may be settled as the parties agree. If I have not heard from the parties about how this application is to be dealt with by the end of 2025, I will convene a video conference after that date to receive a status report from the parties.

at London this November 15, 2024.

____________________________________ Andrew C. Wright Acting Drainage Referee