On 31 October 2026, the Northwest Territories (N.W.T.) government lost its appeal against Canadian National Railway (CN) in the Federal Court of Appeal after the territory withdrew its demand for track repairs on the wildfire‑damaged Hay River rail line. The case, heard in Edmonton on 28 October, upheld a July 2025 Canadian Transportation Agency (CTA) decision that favored CN. The N.W.T. had previously sought an order for CN to repair a 36‑kilometre section between Enterprise and Hay River, but had instead requested a declaration that CN breached its level‑of‑service obligations under the Canada Transportation Act. The court found no legal error, concluding that CN’s decision not to commence repairs was a factual question and that the agency’s discontinuance timeline was adequate. CN’s estimate that repairs would cost $16 million and take 12 weeks was deemed reasonable, given the lack of traffic demand after the 2023 wildfires. The ruling leaves the Hay River branch, the sole rail link between the N.W.T. and the rest of Canada, out of service, forcing petroleum products to be transported by truck from Enterprise. Infrastructure Minister Vince McKay noted the loss of the rail link increases transportation costs and stresses the northern supply chain, and said the government will review the ruling and continue to engage CN on restoring the line.
Lead
The Federal Court of Appeal in Edmonton dismissed the Northwest Territories (N.W.T.) government’s appeal against Canadian National Railway (CN) on 28 October 2026. The appeal concerned the wildfire‑damaged Hay River rail line, a 36‑kilometre section of CN’s Meander River Subdivision that had been placed on discontinuance after CN failed to secure a project partner. The court upheld a July 2025 Canadian Transportation Agency (CTA) decision that favored CN, and the N.W.T. had withdrawn its repair demand prior to the hearing.
Verified facts
The case was heard by a three‑judge panel, with Justice Peter Pamel delivering the reasons for judgment. The parties agreed on $4,000 in costs. By the hearing, the N.W.T. confirmed that CN had completed the statutory process and filed a formal discontinuance of the Enterprise–Hay River section. The territory no longer sought an order for CN to repair the track; instead it requested a declaration that CN breached its level‑of‑service obligations under sections 113 to 116 of the Canada Transportation Act for the period from August 2024 to the end of the discontinuance process.
The panel found no error of law. The court treated the question of whether CN acted reasonably in not starting repairs as a factual question or a mix of fact and law, noting that appeals under subsection 41(1) of the Act are limited to questions of law or jurisdiction. Two additional grounds failed: the territory’s claim that the CTA miscalculated the discontinuance timeline, and a procedural fairness complaint based on the agency not requiring CN to support its assertions with evidence.
Organizations and responsibilities
• Canadian National Railway (CN): Owner of the Meander River Subdivision; responsible for completing the statutory discontinuance process and for estimating repair costs and timelines. CN estimated repairs would take about 12 weeks, be possible only on unfrozen ground between mid‑April and late October, and cost $16 million.
• Northwest Territories government: Formerly sought repair of the 36‑kilometre section; withdrew its demand and instead sought a declaration of breach of service obligations.
• Canadian Transportation Agency (CTA): Issued a July 2025 decision in favour of CN; set the discontinuance timeline and estimated repair costs.
• Federal Court of Appeal: Heard the appeal and upheld the CTA decision.
Operational and commercial context
The Hay River branch is the sole rail link between the N.W.T. and the rest of Canada’s network. Wildfires in 2023 damaged several sections, and CN repaired about 269 km between High Level and Enterprise between August and October 2023. In February 2024, CN informed the N.W.T. that rebuilding the Enterprise–Hay River section required a project partner, which did not materialise. The section was placed on CN’s three‑year plan and the discontinuance process began in May 2024. The CTA’s ruling that repairs would cost $16 million and take 12 weeks was deemed reasonable because no traffic had been offered after the 2023 damage. Consequently, petroleum products destined for Hay River barges must now be transported by rail to Enterprise and then by truck to their final destinations, increasing transportation costs and straining northern supply chains.
Sources
https://www.railway.supply/n-w-t-government-loses-cn-appeal-after-dropping-hay-river-repair-demand/ – Railway Supply
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