The Municipality of Chatham-Kent brought an application under the Drainage Act for an order authorizing the construction of a municipal drain across a Canadian Pacific Railway (CPR) right-of-way.
CPR raised a constitutional question, arguing that as a federally regulated railway, it is constitutionally exempt from paying Drainage Act assessments under the doctrines of interjurisdictional immunity and federal paramountcy.
The Acting Drainage Referee held that the Drainage Act assessments do not trench on or impair the core of federal railway jurisdiction, as they are a cost allocation mechanism rather than a regulatory interference with the physical structure or operation of the railway.
The Referee also found no operational conflict or frustration of purpose between the Drainage Act and the federal Railway Safety Act, applying the principle of cooperative federalism.
The Referee ordered the Municipality to apply to the Canadian Transportation Agency for authorization to cross the railway right-of-way, while confirming that CPR remains liable for its assessed share of the drainage works costs under the Drainage Act.