CN Rail versus District of West Vancouver: Another Corporate Cash Grab?

The front page headline in Thursday’s Vancouver Sun caught my attention: “CN fights West Vancouver Over Centennial Seawalk.” CN Rail is demanding $3.7 million dollars in annual rent from the district of West Vancouver for public use of the seawalk built on the CN right-of-way to celebrate Canada’s Centenary 50 years ago. Since the district has refused to pay such a sum, CN has terminated its lease on the property, and started a lawsuit against it in the B.C. Supreme Court.

CN wants a judge to declare that their termination is lawful, that the seawalk, gazebo, gardens and parking spots built by the district trespass on the railroad corridor and must be removed, and that the district (and presumably the public) must be restrained from further use of the right-of-way. Oh yes, they are also asking for damages for arrears of rent.

The district has responded by applying to the federal Canadian Transportation Agency which resolves public transportation disputes. The district says that nothing is owed to CN Rail at all because of the long public use of the right-of-way, the lack of any damage to CN’s property, and the district’s ongoing and expensive enhancement of the shoreline which provides added protection to CN’s tracks at no cost to the corporation. To settle the matter, the district has offered an annual rent of $12,500.00, indexed to future inflation. Apparently, that’s not good enough for CN Rail who want a rental value based on the very expensive real estate in the area.

My Vancouver rental “cottage” is very close to the seawalk and the gazebo in dispute. I have written about the seawalk in prior posts, and am one of the thousands of locals who use the seawalk every day. The 1.7 kilometre seawalk may be the single most popular attraction on the entire Vancouver North Shore. Tourists and residents from all over the Lower Mainland flock to the short walk along the seashore that links Dundarave Pier with John Lawson Park, Ambleside Park, and the Capilano River to the east. Beside the seawalk is a separate “dog run,” unique in the area, which allows dogs to pace their owners leash-free without interfering with other users of the seawalk, including many seniors with mobility issues.

I only have “the facts” as set out in the newspaper article, taken from documents filed by the district. Here’s the history. When the seawalk was built in the 1960s, the government-owned Pacific Great Eastern Railway also owned the right-of-way. The PGE became BC Rail, also owned by the government. In 2004, the B.C. government sold its railway operation to CN Rail but retained ownership of the right-of-way which it then leased on a long-term lease to CN.

I gather that the government-owned railway must have leased the right-of-way to the district when the seawalk was first built. The district paid an annual rent beginning at $25 and increasing to $300. BC Rail requested rent increases up to $9,523 in 1999, but the district paid nothing at all after 1994. BC Rail made no further demands for any payment after 1999. When CN Rail purchased the rail line in 2004, it would have taken its own lease subject to the pre-existing lease to the district. Apparently CN Rail made no demands for rental payment from the district until September 2015 when their officials met with the district “to regularize the lack of a written agreement, deal with compensation and risk allocation.”

Without the benefit of hundreds of hours of costly legal advice which, undoubtedly, CN Rail has available and which the district will have to incur on behalf of the taxpayers, the issue seems pretty straightforward to me.

Why is CN Rail doing this? It seems that CN Rail wants to play hardball with the district of West Vancouver like CP Rail did for fifteen years with the city of Vancouver over its abandoned Arbutus Corridor which runs for nine kilometres from False Creek to Marpole on the south side of the city. There, residents had used the right-of-way as a community trail and created community gardens which CP Rail then bulldozed as leverage to force the city into buying the property. CP initially said that the land was worth $400 million. The city ultimately paid CP $55 million to buy it. 

But the Arbutus Corridor situation is entirely different from the West Vancouver seawalk. There, CP Rail actually owned the land, no trains had run on the right-of-way for fifteen years, and no public money was spent to enhance the value and use of the right-of-way. Here, the right-of-way is still owned by the province. The railroad and the seawalk have co-existed for nearly fifty years. I have no idea how much the district of West Vancouver has spent on the seawalk, its protection and amenities but it must be a lot. The seawalk is stunning and the anti-erosion enhancements have been substantial.

Who is CN Rail? CN Rail is the largest railway in Canada, with 32,831 kilometres of track extending from coast to coast and even into the United States (both to the Gulf of Mexico and to Alaska). According to the internet, the largest individual shareholder of CN Rail in 2014 was Bill Gates. The latest internet CN Rail Ownership Summary shows that the largest institutional investors in CN Rail are the Royal Bank of Canada, Massachusetts Financial Services, the Wellington Management Group, the Bank of Montreal and TD Asset Management In. The President and C.E.O. of CN Rail is Luc Jobin. He joined CN Rail as a senior executive in 2009, responsible for, among other things, “strategic planning.”

Some strategy. The court and/or the Tribunal should throw the Greedy Grouts out of court, and impose all possible legal costs against CN Rail and in favour of the district. What’s CN going to do? Impound all the cars from the parking spots? Tear down the gazebo? Bulldoze the seawalk? Their position is ridiculous, if not shameful, and will only serve to waste scarce public resources better spent on something else. What kind of corporate citizenship is that?

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4 comments

  1. Bill

    interesting.
    The City of White Rock pays upwards of $200,000 per year to Burlington Northern Railway.for use of their right of way. This money comes from parking revenues. I’m sure West Vancouver has a bit more money than White Rock.

    • Marion

      Maybe, but does Burlington Northern Railway own the right-of-way? If not, maybe the city of White Rock has overpaid? Or maybe Burlington National Railway actually has a written agreement with the city and over the years has always made demands for payment which the city has paid?

      When I was growing up and we always went to White Rock, the parking along the tracks was free. At some point, paid parking was put into effect. Now I know why. Maybe the city of White Rock had bad legal advice in the old days?

      In West Van, the parking is the least of the issue. It’s the seawalk, the erosion improvements, the gardens and the gazebos that the city has paid for and which have improved the right-of-way which is key.

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