CN Rail to challenge CTA determination that it breached service obligations

OTTAWA — The Canadian Transportation Agency has determined Canadian National breached its level of service obligations in the Vancouver area late last year, while Canadian Pacific and three other railways did not.

The federal transportation regulator says the country's largest railway breached its obligations by announcing its intention to impose embargoes on wood pulp shipments last September, several months before rail congestion and other challenges emerged in the Vancouver area.

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It says CN imposed the embargoes in December, rather than making "every reasonable effort to deal with those challenges before unilaterally restricting the transportation of the shippers' traffic."

The CTA ordered CN to submit a plan to respond to future traffic surges in the Vancouver area and to avoid, or minimize, the use of embargoes, which it says should be imposed only in exceptional and specific circumstances.

The Montreal-based railway says it disagrees with the CTA's conclusions based on evidence submitted at a hearing in January and intends to challenge the determination before the Federal Court of Appeal.

It says the sole breach identified by the agency was "an appropriate and necessary measure in the circumstances."

Companies in this story: (TSX:CNR, TSX:CP)

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