October 21, 1998

To:Urban Environment and Development Committee

From:Commissioner of Urban Planning and Development Services

Subject:Potential Abandonment of Rail Corridors

Report of the Caucus Rail Strategy Committee

Purpose:

This report provides comments on the Report of the Caucus Rail Strategy Committee in regard to the potential abandonment of rail corridors.

Financial Implications:

This report does not have any financial implications for the City.

Recommendations:

It is recommended that City Council:

1.support the recommendations of the Caucus Rail Strategy Committee report (attached), in particular the recommendations to fully explore all practical options for ensuring continuity of adequate commuter rail services and the option of enacting legislation to facilitate the purchase of intact abandoned rights-of-way by municipalities and other interested parties, such options to include direct Provincial funding for GO Transit services and provision of additional funding authority to municipalities.

2.forward a copy of this report and Council's resolution of June 3, 1998 in regard to GO Transit's Funding Relationship with the City of Toronto to the Caucus Rail Strategy Committee.

Background:

The Canada Transportation Act, enacted in July 1996 by the government of Canada, makes it easier and significantly shortens the time frame for railway companies to discontinue operations and sell, lease, transfer or abandon rail rights-of-way. The abandonment process described in the Act requires that railway companies: maintain 3-year plans identifying any line where service may be discontinued; give public notice of its intent to sell any specific right-of-way; negotiate first with companies intending to continue rail operations within these corridors; and in the absence of an agreement for continued rail operations offer these rights-of-way to the federal, provincial and municipal governments net salvage value.

In response to this change in federal legislation, Mr. Joe Tascona, M.P.P. (PC - Simcoe County) established the Caucus Rail Strategy Committee to review the Ontario government policy and actions with respect to rail services. The Caucus Committee's report and a copy of my initial response are attached.

Discussion:

1.Caucus Rail Strategy Committee Report:

The Caucus Rail Strategy Committee reports notes that the Canada Transportation Act provides a very short time frame for discontinuance of rail operations. After a rail line has been identified in the 3-year plan for 60 days, there is only a 60 day notice public period to advertise the sale of the line. If there is no acceptable offer from another rail operator, the federal, provincial and municipal governments (in sequence) have 30 days each to indicate their interest in purchasing a right-of-way. It should also be noted that the right-of-way need only be offered to the federal government if the rail line crosses a provincial boundary or goes outside Canada. The Caucus Rail Strategy Committee report also notes that, "Due to the relative high land value in Toronto, funding of such acquisition by the city may be an issue.

The Caucus Committee report recommends that the Ontario Government:

1.continue to monitor the railway rationalization process and provide information and technical support to affected industries and municipalities as requested;

2.document any concerns or problems stemming from the discontinuance process set out in the Canada Transportation Act in preparation for input to the statutory review of that legislation in 2000;

3.bring to the attention of the federal Minister of Transport, any matter related to the discontinuance process requiring more immediate attention and that, in this regard, concern be registered immediately regarding the inadequate statutory time period (30 days) for municipalities to respond to an offer to purchase;

4.closely monitor any discontinuance affecting GO Transit rail services and ensure that all practical options for ensuring continuity of adequate commuter services are explored fully continue to facilitate the purchase of abandoned railway rights-of-way by municipalities and other interested parties and that the option of enacting legislation to facilitate the purchase of intact abandoned rights-of-way be further explored with stakeholders; and

6.Ministry of Finance be encouraged to continue to work with the railways to resolve outstanding property and fuel taxation issues.

2.Comments:

The existing rail corridors are an integral and essential component of the transportation infrastructure serving the City and the GTA. GO Transit currently operates commuter rail service in seven corridors (Lakeshore West, Milton, Georgetown, Bradford, Richmond Hill, Stouffville, and Lakeshore East). The GO Transit rail corridors are also used to a limited extent for freight rail operations. The CP North Toronto (mid-town) and CP McTier (Rexdale) subdivisions, now used exclusively for freight rail traffic, are identified as future commuter rail corridors in the Metro Official Plan. Maintaining and enhancing commuter rail service is essential to accommodate the population and employment growth expected within the GTA over the next 20 years. All estimates indicate that demand for GO Transit service will double over that time period. Any loss or disruption of commuter rail service would have significant adverse impacts on a portion of the 100,000 passengers that currently use GO Transit each day.

In my report of June 1, 1998 to City Council in regard to GO Transit's Funding Relationship with the City of Toronto, I emphasized that the City cannot sustain the level of funding required for the operation, maintenance and expansion of GO Transit services without a significant property tax increase, a reduction in other services, or both. Council considered that report at its meeting on June 3, 1998 and adopted recommendations, among other things, requesting the Province to accept its funding responsibilities for GO Transit (the transit equivalent of the 400 series highways) and authorize new funding sources (e.g. fuel tax, vehicle licence and parking surcharges) for the City and other municipalities.

Exhibit 1 shows the four rail lines within the City identified for abandonment or transfer in CN's and CP's 3-year plans. GO Transit has concluded an agreement with CP for the long term (99 year) lease of the Galt line and the CP Havelock line has been transferred to an internal shortline rail operator. The remaining two lines, CN Newmarket and CP Belleville-Don Branch, continue to be listed in the railway companies 3-year plans but have not been advertised for sale in a public notice. Based on discussions with railway industry representatives there appears to be a consensus that there is surplus freight rail capacity in Central and Eastern Canada (east of Manitoba) and that additional lines will be identified for discontinuance or transfer.

The abandonment of existing rail corridors would impose additional cost on the City and GTA Regions. CN discontinued service on the CN Newmarket subdivision from Bradford to Barrie in 1997 and negotiations for acquisition of the right-of-way are currently ongoing with the local municipalities, including Simcoe County. It is our understanding that the Province is helping to facilitate the negotiations but has indicated that it will not provide funding.

Conclusions:

Council should support the Caucus Rail Strategy Committee's recommendations, in particular the recommendations to fully explore all practical options for ensuring continuity of adequate commuter rail services and the option of enacting legislation to facilitate the purchase of intact abandoned rights-of-way by municipalities and other interested parties. As previously requested by Council, the options considered should include direct Provincial funding for GO Transit services and provision of additional funding authority to municipalities.

Contact Name:

Rod McPhail

City Planning, Metro Hall Office

tel: 392-8100; fax: 392-3821.

Reviewed by:

Paul J. BedfordVirginia M. West

Executive Director and Chief PlannerCommissioner of Urban

Planning City Planning Division and Development Services

RCM/