Drainage cash dispute with CN Rail heading to hearing

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Warwick Mayor Todd Case is hopeful a hearing at the Canadian Transportation Agency could force CN Rail to pay municipalities for projects under the Drainage Act.

Todd Case and his counterpart in Plympton-Wyoming, Gary Atkinson, have been pushing CN Rail to settle up outstanding charges under the Drainage Act one of the oldest pieces of legislation in Ontario, passed in 1859. It prescribes a formula to assign costs to those who receive the most benefit from the new infrastructure.

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

That’s left both Warwick and Plympton-Wyoming in the hole. Warwick is owed $160,000 and Plympton-Wyoming has billed CN $80,000 which is still outstanding. They’re not alone.

The City of Sarnia has also put off a project on Mandaumin Road because CN Rail will not pay the $250,000 it owes under the Drainage Act. CN Rail hopes to settle the matter at a CTA hearing.

The Rural Ontario Municipal Association – ROMA- is seeking legal intervener status in a dispute. The organization says over 30 municipalities across the province are owed money by CN.

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.

“Railways are essentially asking Ontario’s property taxpayers to foot the bill for project costs that should be covered by large, wealthy corporations,” said ROMA Chair Robin Jones.

“Railways are harming the very communities that produce the goods they move across the province.

“Federally regulated industries must be held to the same standards as all property owners, including following local laws, bylaws and regulations.

“CN is creating a false conflict between municipal and provincial laws, and federal regulations,” Jones added.

Case, who hopes to meet with the federal transportation minister with Plympton-Wyoming Mayor Gary Atkinson in the near future, says Ontario is in a unique situation. It’s the only province with a system which regulates who pays for drainage work. CN looks at the other provinces and says it doesn’t provide cash for drainage work there, so it shouldn’t have to in Ontario either.

“We were getting arguments like that they were ridiculous arguments, my opinion. They say that we put our own infrastructure and well, that’s fine. You put your own culverts in. But where does the water go?”

Case is pleased ROMA is taking up the fight and he and officials in Plympton-Wyoming will be following the hearing closely. But the move has left him frustrated by the continuing delay.

“This is their way, my opinion of them trying to buy time and trying to get around and having to live up to the responsibility of the Ontario Drainage Act, and it’s all what it’s doing is prolonging the process.”

Case adds he’s not prepared to leave the issue alone. “We’re not going to let it rest until we are paid the monies were owed.”