Potential Abandonment of Rail Corridors:

Report of the Caucus Rail Strategy Committee.

The Urban Environment and Development Committee recommends the adoption of the report (October 21, 1998) from the Commissioner of Urban Planning and Development Services.

The Urban Environment and Development Committee reports, for the information of Council, having:

(1)requested the Commissioner of Urban Planning and Development Services to:

(a)review the feasibility of notifying all Committees of Adjustment that any applications regarding the abandonment of rail corridors, other than spur lines, be held in abeyance until such time as the City has established firm planning policies with respect to the disposition of such corridors; and

(b)develop planning policies to protect rail corridors, and consider the possibility of placing an interim control by-law on the utilization of such corridors;

and submit a report thereon directly to Council for consideration with this matter at its meeting on November 25, 1998; and

(2)requested the Chief Financial Officer and Treasurer to review the taxation policies regarding rail rights-of-way, and explore the feasibility of a transfer to the City and lease back for a nominal sum in order to remove the tax incentive to sell such rights-of-way; and submit a report thereon directly to Council for consideration with this matter at its meeting on November 25, 1998.

The Urban Environment and Development Committee submits the following report (October21, 1998) from the Commissioner of Urban Planning and Development Services:

Purpose:

This report provides comments on the Report of the Caucus Rail Strategy Committee with 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; and

(2)forward a copy of this report and Council's resolution of June 3, 1998, with regard to GOTransit'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 three-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 at 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's policy and actions with respect to rail services. The Caucus Committee's report and a copy of my initial response are attached.

Discussion:

(A)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 three-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:

(1)the Ontario Government:

(a)continue to monitor the railway rationalization process and provide information and technical support to affected industries and municipalities as requested;

(b)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;

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

(d)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; and

(e)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

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

(B)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 with 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 (thetransit 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 three-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 CPBelleville-Don Branch, continue to be listed in the railway companies three-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:

Mr. Rod McPhail, City Planning, Metro Hall Office, 392-8100; Fax: 392-3821.

(Communication dated September 29, 1998, addressed to

Mr. Joe Tascona, M.P.P., Simcoe Centre, from the

Commissioner of Urban Planning and Development Services.)

Mayor Lastman forwarded a copy of the "Report of the Caucus Rail Strategy Committee to my attention for review and comment. I am pleased that the Caucus Rail Committee recognizes the vital importance of passenger and freight rail service to the economic and environmental health of the City of Toronto, the Greater Toronto Area and the Province as a whole.

Your report highlights two critical issues (the extremely short legislated timeframe for governments to consider abandonment/discontinuance options and the high cost of acquiring rail corridors within the City of Toronto) that must be addressed to ensure the protection of existing rail corridors. It is essential that these issues be co-operatively addressed by all levels of government. I welcome your Committee's recommendations to fully explore all practical options for ensuring continuity of adequate commuter services and to consider the option of enacting new legislation to facilitate the purchase of intact abandoned rights-of-way.

City of Toronto staff would be pleased to assist your Committee and provincial staff develop and evaluate alternative solutions to this important issue.

A copy of your report will be forwarded to the City's Urban Environment and Development Committee for consideration at its November 2, 1998 meeting.

(Communication dated May 8, 1998,

addressed to Heads and Members of Councils

from Mr. Joe Tascona, M.P.P., Simcoe Centre.)

After being elected as the Member of Provincial Parliament for Simcoe Centre, I realized that the issue of abandoned rail lines, and shortlines were important issues which many municipalities would be facing. Since the Federal Government passed the Canada Transportation Act 1996 and the Province passed the complementary legislation, the Ontario Shortlines Railways Act, municipalities are now faced with an array of options when one of the major rail carriers abandons a route.

I formed a Committee with other members of the Progressive Conservative Caucus who wished to investigate this issue. We listened with a number of stakeholders, from the major carriers to those advancing alternative uses if the rails are removed. After months of consultation I prepared a report reviewed by both the Committee and the Caucus as a whole. This report reviews the background issues describing why the rationalizing is occurring and different approaches which municipalities can take. The report also makes several recommendations for the Provincial Government's role.

I hope that this report assists you in your dealings with abandoned railways. Remember we are here to help. If you require any further information please feel free to contact my office.

_________

Report of the

Caucus Rail Strategy Committee

Prepared by Joseph N. Tascona, M.P.P. Simcoe Centre

Chair of the Caucus Rail Committee

Committee Members

Toby Barrett, M.P.P. Norfolk

Jack Carroll, M.P.P.Chatham Kent

Ted Chudleigh, M.P.P.Halton North

Harry Danford, M.P.P.Hastings-Peterborough

Barbara Fisher, M.P.P. Bruce

Steve Gilchrist, M.P.P.Scarborough East

Bill Grimmett, M.P.P.Muskoka Georgian Bay

John Hastings, M.P.P.Etobicoke Rexdale

Bert Johnson, M.P.P.Perth

Frank Klees, M.P.P.York Mackenzie

Julia Munro, M.P.P.Durham York

Jerry Ouellette, M.P.P.Oshawa,

Dough Rollins, M.P.P.Quinte

Toni Scarica, M.P.P.Wentworth North

Bruce Smith, M.P.P.Middlesex

Joe Spina, M.P.P.Brampton North

Jim Wilson, M.P.P.Simcoe West

Terence Young, M.P.P.Halton Centre

1.0Introduction:

The Caucus Rail Strategy Committee was established to review Ontario Government policy and actions with respect to railway services. The need to do so arose from the concerns of several members regarding constituency issues related to railway services and the use of abandoned railway rights-of-way.

The Committee met on several occasions and received briefings on railway matters from Ministry of Transportation staff and presentations by invited stakeholders. A synopsis of the information gathered and issues discussed was circulated to all Committee members with a questionnaire soliciting input on government strategy and policy direction.

This report presents a background of the current situation with respect to railway services in Ontario. Much of this addresses the discontinuance process which was one of the primary concerns of the members. Also addressed is the acquisition of railway rights-of-way following service discontinuance.

The report then presents a summary of issues which were the main focus of discussions and provides conclusions and recommendations for the government's consideration.

2.0Background:

The railway network in Ontario consists primarily of the two national railways, Canadian National Railways (CN) and Canadian Pacific Railway (CP), with the latter operating in southern and eastern Ontario through its subsidiary, St. Lawrence & Hudson Railway (STL&H). In addition, there are a growing number of regional and shortline railways. The national railways and several of the regional and shortline railways fall within federal jurisdiction. However, most of the shortline railways are within provincial jurisdiction.

2.1National Railways:

CN and CP provide national railway services in Canada as well as in many of the northern U.S. states. They are regulated in Canada by the Canada Transportation Act 1996 and by federal railway safety legislation. They are publicly traded corporations with shares held widely across North America and function as business enterprises. They own and maintain their own track and rights-of-way and own or lease most of their operating equipment.

As with other business enterprises functioning in today's global economy, they are focussed on maintaining their competitive position and on maximizing returns on their investment. Current federal legislation allows the railways to discontinue service on lines they consider marginal or unprofitable after first offering them for sale to potential shortline operators, provincial and municipal governments. There is no longer any consideration of "public interest" in the discontinuance process nor any opportunity for the Province or other parties to focally oppose the withdrawal of rail service. Similarly, there is no longer any federal subsidy program to continue service on unprofitable lines. Both railways are engaged in a process of rationalization which is reducing the total length of trackage in Ontario and the number of railway employees.

2.2Regional and Shortline Railways:

Historically regional and shortline railways have been important in the economic development of Ontario (e.g., Ontario Northland Railway, Algoma Central Railway, Essex Terminal Railway). More recently, as a consequence of national railway rationalization, there has been growth in this segment of the railway industry (e.g., Goderich - Exeter Railway, Huron Central Railway). These railways, operating on tracks and rights-of-way purchased or leased from the national railways, provide some local service, but primarily act as feeders to the national network. Operating with small, flexible, often non-union work forces, they are able to function with lower costs and more focused service than the national carriers they replace.

Regional and shortline railways have similar latitude to that of national railways in discontinuing service after offering lines for sale. Ontario has no programs for subsidizing unprofitable railways.

Many of the newer shortline railways operate within provincial jurisdiction subject to the Ontario Shortline Railways Act 1995, administered by the Ministry of Transportation. Through an interdelegation agreement with the Federal Government, these railways are subject to federal standards of railway safety and are inspected by federal officials.

2.3Freight Services:

Except for three shortline railways dedicated to short passenger tours, all railways in Ontario provide freight service. Railways under federal jurisdiction are required by the Canada Transportation Act to "accommodate" traffic offered by shippers adjacent to their lines. The price of freight services are the product of negotiation between shippers and the railways. However, there are regulatory mechanisms for arbitration and/or access to the services of a competing railway when a shipper and carrier cannot agree on service prices.

The primary users of railway freight services in Ontario are automotive assembly plants, petroleum and chemical industries, forest product industries, the mining industry, the steel industry, and the agricultural industry (corn, wheat, soybeans, fertiliser). The railways' intermodal services (truck trailers or containers moved between major centres) are also a significant and growing business.

Shippers generally select truck transportation, rather than railway freight services for hauls of less than 800 kilometres and many industries, particularly manufacturers of secondary products, ship exclusively by truck. Truck service now accounts for 70-80 percent of freight movement in Ontario, and is usually selected for its service characteristics which are often better suited to today's low inventory and "just in time" replenishment practices than rail freight services.

2.4Passenger Services:

Intercity railway passenger services in Ontario and across Canada are provided by VIA Rail, a federal Crown agency, chiefly on infrastructure owned by CN and CP. VIA Rail owns and operates its own equipment. Regional railway passenger services are also provided by Ontario Northland and AlgomaCentral Railway.

The Federal Government provides annual capital and operating subsidies for VIA Rail and also provides subsidies for certain services of Ontario Northland and Algoma Central Railway. Federal subsidies to VIA Rail have been steadily reduced over the past five years and rail passenger funding is expected to continue to decline. The Ontario Government, through the Ministry of Northern Development and Mines, also subsidizes Ontario Northland rail passenger services.

GO Transit, established in 1967, has been a provincial agency responsible for commuter rail services in the Greater Toronto Area. Effective January 1, 1998, it was transferred to the municipalities it serves.

Passenger services are provided at the discretion of VIA Rail and GO Transit. Decisions are influenced by ridership and the availability of government funding.

There are also several short tourism railways offering seasonal local passenger tours on tracks which they own or lease. Frequently these operate with volunteer labour and use historic equipment which has been restored by local railway enthusiasts. There are no provincial programs for funding such enterprises.

2.5Railway Rationalization:

Rationalization has resulted in the creation of a dozen or more shortline railways since 1995. Eight of these new railways are licensed under the Ontario Shortline Railways Act, 1995. The remainder are within federal jurisdiction. Generally, rationalization has developed so that industries dependent on railway freight services have been able to continue to receive services either through shortline creation or the retention of a rail spur connection to a mail line. In a few cases, shippers have had to switch to truck service. In only one documented case was a small shipper required to either close or relocate. Several communities which no longer have railway services continue to maintain an industrial base served exclusively by truck transportation (e.g., Owen Sound, Orillia, Lindsay).

In one particular case - Bruce Energy Centre (Kincardine) - representations have been made that reinstatement of railway freight service is a necessary element to support proposed local industrial development. However, availability of rail freight service is only one of several essential criteria cited by development proponents. Energy prices are a key issue.

As rationalization becomes more pervasive, shippers and municipalities are being obliged to become more proactive in developing local solutions to retain rail services which may be, at best, only marginally profitable for shortline operation. Shippers and municipal governments in Guelph, Orangeville, Barrie, and Collingwood are engaged actively in the assessment of, and/or proceeding with, the purchase of lines that would otherwise be discontinued. Port Colborne and Nepean already own railway lines which support freight service to local industries.

Rail passenger services have yet to be adversely affected by rationalization. However, in two locations in Ontario, VIA Rail has been obliged to purchase lines which CN would otherwise have abandoned as they were no longer required for freight services - Chatham/Windsor and Smith'sFalls/Ottawa. Similar situations will develop respecting GO Transit if the national railways proceed with discontinuance plans on lines now carrying GO trains (e.g., Bradford-Toronto).

2.6Abandoned (Discontinued) Railway Rights-of-Way:

Under both current federal and Ontario railway legislation, the Province and municipalities have the opportunity to purchase railway lines and the right-of-way within the discontinuance process for "net salvage value", if no commercial short line operator has expressed interest. If the "net salvage value" cannot be agreed upon by the parties there are regulatory mechanisms for a value to be established. Should the Province or a municipality purchase a line under these provisions they may, instead of operating it as a railway, remove the track and convert it to other uses.

Alternatively, if neither the Province nor municipalities purchase a line once its service has been discontinued, the railway may remove or sell the track assets and dispose of the property. This provides an opportunity for the Province, municipalities, or other interested parties to purchase the right-of-way for other uses (hiking, snowmobile trails, bike paths, etc.).

Railway legislation which prevailed prior to July 1996 had no explicit provision for provincial or municipal purchase. However, the railways have, in the past, followed a protocol of offering the lands to federal, provincial and municipal governments in succession. In the absence of government interest, they then sell parcels of land to abutting landowners.

Ontario, which at one time had allocated funds for purchasing abandoned railway rights-of-way for alternative uses, currently has no ongoing program for purchasing such property. However, through an interministerial committee, the Province facilitates purchases by other interested parties.

In the U.S., the National Trails Systems Act provides a legislative framework for rights-of-way to be purchased, notwithstanding any opposition from adjacent landowners. Some states have similar legislation to facilitate preserving land to specific use including railway rights-of-way (e.g.,California Land Banking Act). While such U.S. legislation facilitates right-of-way preservation by public agencies or the private sector, it does not provide public funding. There is no comparable federal or Ontario legislation.

2.7The Provincial Role:

Ontario supported the Federal Government in its introduction of the Canada Transportation Act, 1996. Combined with the privatization of CN, it has resulted in a more efficient national railway industry focused on serving its primary customers in accessing national and transborder markets.

Ontario's companion legislation, the Shortline Railways Act, has enabled shortline entrepreneurs to establish local railway businesses, simply, safely, and with minimal regulatory costs and process. Coupled with Bill 7, the Labour Relations and Employment Statue Law Amendment Act 1995, which removed labour succession rights when an activity moves from federal to provincial jurisdiction, this legislation has been instrumental in ensuring continued efficient rail service to a growing list of Ontario communities.

The Ministry of Transportation (MTO) continues to monitor the railway rationalization process and provides advice and guidance to affected industry and municipalities as requested. Usually such advice relates to federal and Ontario legislation, regulatory process and the experience of other parties. Currently both MTO and the Ministry of Economic Development, Trade and Tourism are represented on a Steering Committee, chaired by the Town of Orangeville, supporting a consulting assignment to assess the technical and market potential of the railway line between Streetsville and Orangeville. The role of Ministry staff on such committees is to provide technical rather than financial support.

MTO also chairs the interministerial committee on Abandoned Railway Rights-of-Way (ARROW) which facilitates the acquisition of abandoned rights-of-way by interested parties.

The Ministry of Finance is addressing railway concerns regarding property taxes on railway rights-of-way (Bill 149) and is also reviewing property tax issues on railway lands ancillary to and supporting activity on the rights-of-way (e.g., railway years). Fuel taxation is also an issue that should be reviewed to ensure that the railways can be competitive with the trucking industry.

3.0Issues:

Several issues emerged in the course of committee discussion and from presentations by stakeholders. Primarily, these are related to the consequences of rationalization. However, a railway stakeholder, in a presentation, also raised taxation issues relevant to railway profitability.

3.1Municipal/Local Industry Role:

In drafting the Canada Transportation Act, federal legislators likely under-estimated the degree of municipal interest in participating in the preservation and/or purchase of lines under the discontinuance process. Similarly, they may have over-estimated municipal ability and resources to address these matters within the statutory time limits.

Although municipalities and shippers have advance notice of railways' three-year discontinuance plans, in practice, within the terms of the legislation, parties may have only 60 days' notice of the commencement of the discontinuance process. However, even with that notice, industries and municipalities often anticipate that the railway will receive an acceptable offer from a shortline operator and it is only when the time for offers has expired and during the 60-day period when the line is offered to the Province and the municipality, that serious study of the situation commences.

Municipal staff and elected councils lack the resources to address a potential investment in, and/or the operation of, a railway in such a short time. Frequently consultants must be engaged and the requisite funding approved by council before any meaningful analysis commences. This alone requires several weeks. Thorough analysis and an eventual decision require several more weeks or months. This issue has been a concern particularly in Guelph, but also has arisen in Barrie, Collingwood and, most recently, Orangeville.

Fortunately both CN and CP, sometimes following MTO representations, have accommodated communities showing serious interest in investing in the retention of rail services by deferring the final stages of the discontinuance process. However, they are under no statutory obligation to do so and there is no assurance that they will be co-operative in all cases.

3.2Acquisition of Abandoned (Discontinued) Railway Rights-of-Way:

There is no formal or statutory process covering the purchase of railway rights-of-way nor any obligation for governments or other parties to preserve them for current and/or future potential uses as linear properties. Potential current uses include paths and trails. Future uses include corridors for pipelines, communications, and the potential reversion to a railway.

Lack of legislation or a clearly defined policy for acquisition is seen by some as an impediment to the preservation of a transportation/communication resource. However, in some specific situations there has been strong local opposition to the preservation of a right-of-way which may provide opportunity for unauthorized access to adjacent land and the potential for unlawful activity in locations not easily policed or supervised. Abutting landowners often would prefer to acquire the adjacent land themselves.

Municipalities often have an interest in purchasing local railway rights-of-way, but less interest in funding extensive acquisitions beyond local or urban boundaries. Co-ordinating municipal interest to preserve a lengthy corridor has proven problematic in at least one case (Bruce Energy Centre, Kincardine).

In Toronto, the issue of the acquisition and alternative use of potential discontinued lines has arisen. These corridors, in some cases, are now used by GO Transit and have the potential for continued use by that agency or for other transportation services. Due to the relative high land value in Toronto, funding of such an acquisition by the City may be an issue. Pressure may be exerted on the Province to assist in funding. However, to do so may be perceived as a precedent to be raised by other communities seeking funding for similar purposes.

3.3Railway Taxation:

Right-of-way property taxes have been identified by the railways as a significant element in the profitability of the railways generally, and of specific lines in particular. Taxation can be a key factor in influencing the commercial viability of low traffic density shortlines. Right-of-way property is currently assessed based on the assessment of adjacent property and as municipalities undertake reassessment, railway taxes have escalated significantly.

4.0Conclusions:

The Committee, in drawing conclusions, is mindful of the fact that the current legislative and regulatory framework for railway rationalization has been in place for less than two years, and several of its provisions are untested. The railways, industry, and affected communities are still in a process of developing effective working relationships within that framework as specific transfers and discontinuances take place.

The fact that no serious dislocations have occurred to date is reassuring, but several critical negotiations and assessments are under way and outcomes at this point are uncertain. The communities of Collingwood, Barrie, Guelph, and Orangeville are making significant progress towards ensuring continuity of rail freight services for key local industries. Their experience shows clearly that municipalities can rise to the challenge of participating in developing options to ensure the continuity of railway services. However, that experience also shows that significant time is required for the requisite analysis and through communication and negotiation among the parties. Certainly, should the national railways adhere strictly to the statutory time limits within the discontinuance process for offering lines to governments (30 days for each level), it is unlikely that any municipality would be in a position to participate in purchasing a railway line.

Developments respecting ongoing discontinuances and shortline transfers need to be monitored continually in order to ensure that the process works fairly with regard to industry and community interests. Information on legislation, regulation and experience continues to be required by additional municipalities as they are affected.

The Committee is pleased that the current railway discontinuance process in federal legislation gives municipalities the right to purchase railway tracks and rights-of-way for continued railway uses or for other purposes. Alternatively, municipalities can, following service discontinuance, purchase right-of-way property from the railway for any use. Concerns about achieving consensus among municipalities and adjacent landowners regarding preservation of intermunicipal corridors have been noted. However, it seems difficult to address this issue in any general or universal way. Clearly circumstances, needs and local preferences will vary among specific situations and resolution on a case-by-case basis among affected parties and interests may continue to be the best option.

The United States' approach of enacting legislation to facilitate the purchase of intact abandoned rights-of-way may be an alternative deserving further exploration.

Providing for continuity of GO Transit rail services on lines being discontinued is a critical issue. Again, such situations will need to be examined on their individual merits. Similarly any perceived need for expansion of GO Transit rail service should be assessed as opportunities arise. Investment in such rail lines by governments or transportation agencies must be carefully evaluated, taking into account alternative commuter service options. As GO Transit becomes a municipal responsibility it is anticipated that municipal governments will take a lead in such evaluations.

Issues relative to property taxes raised by the railways appear to have some importance in affecting railway profitability and investment decisions. The Committee notes that these are being reviewed and addressed by the Ministry of Finance.

5.0Recommendations:

The Committee recommends as follows:

That the Ontario Government continue to monitor the railway rationalization process and provide information and technical support to affected industries and municipalities as requested.

That the Ontario Government 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.

That the Ontario Government bring to the attention of the federal Minister of Transport, any matters 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.

That the Ontario Government 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.

That the Ontario Government 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.

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

The Urban Environment and Development Committee also submits the following Motion which was adopted, without amendment, by the Council of the City of Toronto at its meeting held on June 3, 4 and 5, 1998:

Moved by:Councillor Ashton

Seconded by:Councillor Pantalone

"WHEREAS GO Transit is a regional rail network that is vital for the urban development and environmental sustainability of the GTA and provides the transit equivalent to the 400series highways, the operation, maintenance and expansion of which continues to be funded entirely by the Province;

WHEREAS the Province of Ontario has mandated that the City of Toronto must provide $53 million to fund 49.9 percent of the annual budget for GO Transit but 83percent of GOTransit users commute daily from outside the City of Toronto;

WHEREAS GO Transit recently announced service improvements for express routes from the 905 regions which negatively affect residents of the City of Toronto;

WHEREAS GO Transit staff have identified the need for $1.1 billion of capital expansion required to meet the demands of growth over the next 20 years;

NOW THEREFORE BE IT RESOLVED THAT, in accordance with Subsection8.1(4) of the Toronto Area Transit Operating Authority Act 1997, the City of Toronto exercise its right to formally request a review by the Provincial Minister of Transportation of the City of Toronto's funding allocation for GO Transit;

AND BE IT FURTHER RESOLVED THAT the Minister also be requested to consider immediate resumption of full funding for GO Transit by the Province;

AND BE IT FURTHER RESOLVED THAT the Minister of Transportation reaffirm the Government of Ontario's position of user pay by reallocating GO Transit costs based on the proposed new allocation formula outlined in the report dated June1, 1998, from the Commissioner of Urban Planning and Development Services, entitled 'GO Transit's Funding Relationship with the City of Toronto', and that the report be adopted."

Disposition:The foregoing Motion was adopted, without amendment.

Council subsequently adopted, without amendment, the report dated June 1, 1998, from the Commissioner of Urban Planning and Development Services, entitled "GO Transit's Funding Relationship with the City of Toronto", embodying the following recommendations:

"It is recommended that:

(1)Council request the Province to accept its funding responsibilities for GO Transit, and treat the operation, maintenance and capital expansion of inter-regional transit in the same way as the 400 series highways;

(2)if the Province does not alter its decision to discontinue Provincial funding of GO Transit, Council strongly oppose the funding formula set by the Province and support the alternative formula put forth in Exhibit 2 of this report for funding the operating, maintenance and rehabilitation deficit for GOTransit;

(3)Council request the Province, through appropriate legislative changes, to empower the City, all GTA Regions and Hamilton-Wentworth to establish new sources of revenue, including fuel taxes, and surcharges on parking and vehicle licenses;

(4)Council request the Federal Government, in preparing its plan to meet Canada's environment commitments in accordance with the Kyoto agreement, to address ways and means of improving public transit services, particularly commuter rail service, in the Greater Toronto Area and other large urban centres;

(5)Council seek the endorsement of the Province, and of the GTSB upon its formation, for the alternative funding formula, and request the Mayor, Chair of the Urban Environment and Development Committee, and appropriate City staff to present the City's position to Provincial and Federal officials; and

(6)the City Clerk forward copies of this report to the Provincial Ministers responsible for Municipal Affairs and Housing, Transportation, and Environment; Federal Ministers for the Greater Toronto Area, Environment, and Transport; AlanTonks (GTSB Moderator); GOTransit; and the Regions of Durham, Halton, Peel, York and Hamilton-Wentworth, for their consideration."

(A copy of each of the following attachments to the foregoing report dated October 21, 1998, from the Commissioner of Urban Planning and Development Services, has been forwarded to all Members of Council with the agenda of the November 2, 1998 meeting of the Urban Environment and Development Committee, and a copy thereof is also on file in the office of the City Clerk:

(i)Exhibit 1; and

(ii)a communication dated August 7, 1998, addressed to Mr. Joe Tascona, M.P.P., SimcoeCentre, from Mayor Mel Lastman, City of Toronto.)