Agency not precluded from reviewing reasonableness of charge contained in tariff

Supreme court | Railways

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Agency not precluded from reviewing reasonableness of charge contained in tariff

Peace River Coal (PRC) and Canadian National Railway Company (CNR) entered into confidential contract for shipping coal which specified that fuel surcharge in Tariff 7402 applied when monthly average price of highway diesel fuel equalled or exceeded “strike price”. Soon after parties entered into confidential contract, CNR introduced Tariff 7403, which set higher strike price. However, Tariff 7402 remained applicable to confidential contract and CNR refused to apply higher strike price to PRC’s traffic. Canadian Transportation Agency dismissed PRC’s application under s. 120.1 of Canada Transportation Act, for order varying strike price in Tariff 7402 to reflect higher strike price in Tariff 7403. Pursuant to petition brought by Canadian Industrial Transportation Association under s. 40 of Act, Governor in Council rescinded agency’s decision. On judicial review, Federal Court restored agency’s decision. Federal Court of Appeal set aside Federal Court judgment and dismissed CNR’s application for judicial review of Governor in Council’s decision. CNR’s appeal dismissed. Applicable standard of review of adjudicative decisions of Governor in Council is reasonableness. Governor in Council has particular familiarity in area of economic regulation and transportation law and policy is closely related to Governor in Council’s review function. Governor in Council’s conclusion that party to confidential contract able to bring complaint under s. 120.1 of Act in certain circumstances supported by facts and wording of s. 120.1(1) and reasonable. Act does not preclude agency from reviewing reasonableness of charge contained in tariff applicable to more than one shipper, whether or not incorporated by reference into confidential contract. Governor in Council entitled to conclude that Parliament’s intent in enacting s. 120.1 was to provide measure of protection for shippers; leaving access to s. 120.1 complaint mechanism available to parties to confidential contracts can reasonably be said to be consistent with that intention.
Canadian National Railway v. Canada (Attorney General) (May. 23, 2014, S.C.C., McLachlin C.J.C., LeBel J., Abella J., Rothstein J., Cromwell J., Karakatsanis J., and Wagner J., File No. 35145) Decision at 223 A.C.W.S. (3d) 247 was affirmed.  240 A.C.W.S. (3d) 262.

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