When a federal railway company decides to abandon a line, it needs to follow procedures outlined in the Canada Transportation Act. The railway needs to notify the federal government, along with any affected parties, of its plan. It needs to give 12 months’ notice of its plan. It then has to advertise the line, giving interested parties 60 days to come forward. They then have six months to hammer out a deal.
If they don’t reach a deal, the railway must offer to transfer the line to provincial, municipal and district governments, and urban transit authorities whose territory the line passes through. In some cases, the railway must also offer the line to the federal Minister of Transport, Infrastructure and Communities.
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The railway has to offer the line at net salvage value, which is the market value minus the cost of disposing of the line.
These parties have 30 days to accept the railway’s offer to transfer the line. They then have 90 days to agree on the line’s net salvage value. If they can’t agree on the net salvage value, the Agency can determine it. In this case, the Agency’s ruling is binding.
Before accepting a railway’s offer, a government or transit authority can also ask the Agency to assess the line’s net salvage value. In this case, the ruling isn’t binding, and the transit authority or government must pay for the cost of the assessment.
For more information, Google “Guidelines Respecting Net Salvage Value Determination Applications.”
