CN Rail refuses to pay drainage fees; AMO considers legal action

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The battle to get CN Rail to pay its share of drainage projects may be heading to the courts.

Warwick Township and Plympton-Wyoming – which have been leading the charge to get CN to pay – say the company has flatly refused to pay outstanding bills or any future bills despite attempts to explain the situation in person to senior rail officials.

The Drainage Act is one of the oldest pieces of legislation in Ontario, passed in 1859. Once a municipality decides to move ahead with a new drain, it follows a formula laid out in the act to assign costs to those who receive the most benefit from the new infrastructure.

Up until 2021, CN Rail had paid any costs assessed to the company under the act. But in 2022, CN Rail – which is now owned by multiple US investors including the Bill and Melinda Gates Foundation – refused to pay any charges saying as a federally regulated business it is not subject to provincial legislation.

Warwick is waiting for about $160,000 and CN has $80,000 outstanding in Plympton-Wyoming. They’re not alone. The Association of Municipalities of Ontario says the company owes about $1.5 million for new drain construction and maintenance across the province. AMO added about $2.7 million worth of drainage projects are in limbo because of CN’s refusal to pay.

Both the Ontario Ministry of Agriculture Food and Rural Affairs and AMO have backed the call for CN to pay up.

Warwick Mayor Todd Case and Plympton-Wyoming Mayor Gary Atkinson had recently met with CN Rail officials to talk about the issue. Wednesday, they were told the company is not about to change its position.

Atkinson is frustrated. “We’ve been very generous and with our time for them and we tried to lay everything out …you owe us money for what the work that’s already been done,” he says adding CN Rail needs to recognize it will pay for work in the future as well.

Case was a little more blunt. “It’s outrageous that CN Rail thinks it is above the law and that their financial burden should be borne by our rural community members,” he says in a news release.

Atkinson and Case say municipal drains are essential rural infrastructure which support sensible transportation, sustainable agriculture and development in rural Ontario. The lack of cooperation from CN, and refusal to pay for completed projects, is unlawful and is withholding millions of much-needed dollars from helping develop rural Ontario municipalities.

Atkinson says AMO is now “talking about” taking CN to court over the issue.