Feds decision keeps CN debate 'even'

Regardless of how the issue eventually turns out, the federal Surface Transportation Board made the only logical choice Monday when it rejected Canadian National Railway's request for an early decision on only the transportation merits of its proposal to merge with the EJ&E.

CN filed a request in August for the transportation panel to rule separately on the two chief components of the decision - its merits in terms of addressing regional transportation needs and its effect on communities and the environment. The railway argued that without a decision this fall on at least the transportation portion of the merger proposal, the deal would fall through because it includes a December deadline and the owner of EJ&E is not willing to renew.

CN said that its proposal was "win win," because it allowed their deal to proceed while also allowing the approval process to continue.

But that was never a very realistic view of things. For one, if the STB ruled against the transportation merits, the effect on the EJ&E merger would presumably be no different from what CN says would happen if the ruling were delayed - the deal would die.

But beyond that, the presumption of CN's logic seemed to be that the government would approve the transportation merits, and the environmental impact hearings would simply be a lengthy addendum to the process.

The STB ruling affirms that there's more to this business than that. The transportation and environmental components of the merger decision are intrinsically linked to the ultimate value of the proposal. They both deserve a thorough review, and they both need to be part of the overall consideration of the merger.

That is not to say the proposal itself should be summarily discarded. To the contrary, even a year after the merger was first announced, there is still plenty of room for discussion of specific benefits it could bring overall to offset the clear disruptions it would cause in many communities.

But that discussion needs to have room to grow, and it needs to be held in a setting that does not presume either approval or disapproval.

Assuming a favorable response from the STB, the CN plan unquestionably would have framed the debate from the rail company's point of view. Suddenly, instead of studying whether the merger should be allowed to proceed, the focus would be on making opponents prove why it should not proceed, and that is a very important distinction.

The STB's response emphasized that the precedent is well-established to consider merger approvals in a two-step process, with final decisions left to await the completion of an environmental review.

Perhaps, the government is to be scolded for waiting so long to begin the reviews - CN did, after all, first announce the merger in October 2007. It was not unreasonable to expect that action could be taken more than a year later.

But the process is what it is, and however slow the machinery of government, it must always allow for complete and thoroughly objective examination of any proposal that promises so profound an effect on daily life - for good or ill - as the EJ&E takeover.