Ms. Pamela Fraser is a shareholder in the Canadian National Railway Company. She has commissioned this website to alert her fellow shareholders about serious, longstanding, and ongoing governance problems at CN Railway ahead of the company’s annual shareholder meeting on April 27, 2021. Ms. Fraser requests her fellow shareholders to advance specific actions and reforms at that meeting and beyond. Ms. Fraser details these actions and reforms in Section 3 below. The governance problems that gave rise to these reform proposals arose from the company’s ownership and handling of the company’s privately controlled, CN Police Service. In order to address these problems, Ms. Fraser submitted two shareholder proposals that can be found at pages 88 and 89 of the 2021 management circular.
In the course of submitting and discussing her shareholder proposals with representatives of the CN Railway Board of Directors, Ms. Fraser became aware of broader risks and governance problems arising from the company’s ownership of the CN Police Service. These risks and governance issues pose significant threats to shareholder value and CN Railway’s reputation. Section 9 below lists the 9 major risks arising from CN Railway’s ownership and control of the CN Police Service in Canada and the United States.”
In addition to seeking her fellow shareholders’ support for her two proposals in the 2021 circular, on this website Ms. Fraser details these risks arising from the corporate governance issues surrounding the CN Police Service. Finally, on this website Ms. Fraser also presents remedial actions that CN Railway’s shareholders should take to mitigate the risks she uncovered, address the underlying governance problems, and hold the company’s leadership accountable.
The business and reputation risks in question arise from the status of the CN Police Service as a corporate subsidiary of CN Railway. Even though CN Police Service officers are public servants who enforce the criminal law in Canada and the United States, they are also employees of CN Railway as a for-profit corporation. In Canada, this corporate policing model arises from Sections 44 and 44.1 of the Railway Safety Act which does not require independent civilian oversight of the railway police forces.
Private ownership and control of a cross-border police force that operates without independent oversight already poses significant business and reputational risks to CN Railway and its shareholders. The written law that allows this arrangement does not address the further web of complications that arise from actually operating such a police force. Further, the manner in which CN Railway’s management and board of directors have handled the CN Police Service has worsened the already significant risks of owning a private cross-border police force. Given the nature of CN Railway’s cross-border operations, these risks extend to the legal, political, national security, customs and immigration, trade, commercial, diplomatic, civil rights, human rights, and reputational arenas.
CN Railway’s board of directors and corporate management have worsened the above risks by treating the CN Police Service as a mere corporate subsidiary that is not independent from the private corporation as a whole. This is important because police officers swear an oath to uphold the administration of justice. They must be free from any other obligations or loyalties that could undermine that oath. By managing the CN Police Service as an instrument of corporate policy, management has undermined the integrity of the police force and enhanced the risks that already existed in owning the CN Police Service.
Also, contrary to the Board of Director’s assertions at pages 88 – 89 of the 2021 circular, historically, the CN Police Service has conducted police investigations into fatalities and serious injuries that have happened on the company’s watch. On this website, Ms. Fraser provides specific examples and documents that the CN Railway Board of Directors disregarded when they recommended that shareholders vote against her proposal. The Board’s statement is misleading. Ms. Fraser asks her fellow shareholders to not renew the mandate of any board member or member of the executive management that signed off on the resulting recommendation.
CN Railway’s management has long been aware of the underlying risks and governance issues with the CN Police Service. In fact, Ms. Fraser raised these with CN Railway’s Board and proposed the solutions that would significantly mitigate the risks. However, the Board failed to acknowledge that risks even existed, let alone commit to addressing them.
This website provides supporting information and documents about the business and reputational risks that the current incarnation of the CN Police Service poses to shareholder interests. This site also alerts shareholders to the corporate governance problems that have accumulated from management and the board of directors’ failure to address them. Ms. Fraser also presents the urgent and necessary reforms that CN Railway’s shareholders should take to mitigate the ongoing risks, to hold management accountable, and to bring CN Railway’s corporate governance firmly into 21st Century. Implementing these necessary reforms should start and continue beyond CN Railway’s annual shareholder meeting on April 27, 2021. CN Railway’s shareholders, especially the largest shareholders, have the capacity, ethical imperative, and personal interest in publicly advancing the reforms that Ms. Fraser proposes.
By suggesting specific reforms to the CN Police Service, Ms. Fraser takes no issue with the CN Railway Police Service officers and civilian staff. As far as she is aware, these individuals perform their duties professionally and with integrity. The real problem lies with the corporate structure in which they operate, and the corporate leadership that controls them without any independent civilian oversight. Therefore, the reforms that Ms. Fraser proposes to address the business risks and governance issues associated with the CN Police are designed to protect these personnel’s jobs, benefits, and entitlements.
Specifically, Ms. Fraser’s bid for CN Railway to transform the CN Police into a private security company would maintain the current personnel in their jobs with the same salaries, benefits, and entitlements. The only change would be their inability to exercise criminal law powers on behalf of a private enterprise in the United States and Canada. See the section on alternatives for further details.
Ms. Pamela Fraser is a shareholder in CN Railway. Although she has a financial interest in the company, it was her personal background and unrelated loss that placed her on the path of discovering the business risks and governance issues that she raises on this website. This section briefly provides Ms. Fraser’s personal background and the events which inspired her to raise her concerns with her fellow shareholders. These concerns not only affect the financial interests of CN Railway’s shareholders. They also undermine the ethical investing principles and social values that are important to many of CN Railway’s shareholders, customers, the public, and other stakeholders.
Ms. Fraser is a Canadian citizen of Métis heritage. Her Cree-ancestors came down from Hudson’s Bay in the 1850’s, to settle in various Northern Ontario communities. Growing up, Ms. Fraser was always aware of the sacrifices that railroading families made and the tragedy of many losing their lives or limbs on the job. In the past, it was accepted that the railway industry was inherently dangerous, and these tragic outcomes were unavoidable. However, as regulatory and safety standards have advanced in recent years, so, too, has the understanding that all fatalities and serious injuries are avoidable. So, when Ms. Fraser’s 33-year-old son, Dylan Paradis, died on the job while working for CP Railway in the Field, British Columbia (“BC”) derailment on February 4, 2019, it was a complete shock. For all the deceased workers’ families, the tragedy was heart breaking.
Initially, Canada’s public police forces, including the Royal Canadian Mounted Police, (“RCMP”), had deferred the police investigation of such incidents involving CP Railway to the CP Police Service. The same applies for the CN Police Service. For example, see the documents at Appendix B at page 48. These are Saskatoon Police Service’s disclosure regarding the 2015 death of Kevin Timmerman. See also Appendix C, which are communications between Ms. Fraser’s counsel and the Canadian Association of Chiefs of Police (CACP). The CACP declines to answer whether their members can investigate private railway companies that own corporate police forces, or why the CACP accepts the membership and sponsorship of these companies. After public outrage and nearly two years later in December 2020, the RCMP launched a criminal investigation into the Field, BC derailment that killed Dylan and his two fellow crew members. That investigation is ongoing.
In Canada and other mature democracies, police forces are supposed to be independent from all outside parties including the governments and municipalities that fund them. No politician or other entity may interfere with, direct, or obtain access to any part of a criminal investigation. However, as reflected in the records hyperlinked in the previous paragraph, this is not how the CN Police Service has worked since CN Railway was privatized in 1995.
Like many Canadians, before her son Dylan died, Ms. Fraser was unaware that Sections 44 and 44.1 of Canada’s Railway Safety Act empowered private railway corporations to own and control their own police forces. Neither did she know that, based on how the scheme actually works, these privately owned police forces asserted their authority to criminally investigate the very corporations that employed them.
Until the Field, BC disaster, Canada’s public police forces had simply allowed them to do so, claiming that this is what the Railway Safety Act required. Only after her son, Dylan, died in 2019 did Ms. Fraser learn that CP Railway’s own private police force had investigated the workplace death of her son and his two co-workers. The CP Police Service never told her about its findings and reportedly closed the investigation without taking any action against the corporation or its civilian personnel. This is how Ms. Fraser became aware that private railway companies with their own police forces could criminally investigate and exonerate themselves.
Although Ms. Fraser’s personal tragedy as a mother made her aware of the issue of corporatized railway policing in the Canada and United States, her interests as an investor compelled her to file two shareholder proposals regarding the CN Police Service, executive and managerial bonuses, and workplace safety at CN Railway. CN Railway is not responsible for Dylan’s death because he worked for a competitor railway company. However, like many shareholders who hold stakes of all sizes, Ms. Fraser expects good, transparent, lawful, and ethical governance from all the companies she invests in. These requirements are non-negotiable for her, and indeed many major shareholders of CN Railway have expressed the importance of these values. Thus, the idea of CN Railway owning a police force that exercises criminal law powers against Canadians and Americans, and that has no public oversight is neither ethical nor sustainable.
Worse, as evident in Appendix B, at page 48 of the Saskatoon Police Service’s disclosure and Appendix C it is evident that the CN Railway Board’s assertion that the CN Police Service does not investigate fatalities and serious injuries is untrue. As discussed in a subsequent section, how CN Railway’s management and Board of Directors have handled the CN Police Service over the years poses serious, ongoing, and growing risks to shareholder value. These risks should galvanize CN Railway’s shareholders to vote in favor of Ms. Fraser’s two shareholder proposals, and to advocate for the additional governance reforms she is proposing.
Based on the information she provides on this website Ms. Fraser requests the following of her fellow CN Railway shareholders:
Despite the broader steps and reforms that Ms. Fraser seeks in the above sections, the two shareholder proposals that shareholders will vote on during the April 27, 2021 annual shareholder meeting focus on the following objectives:
Throughout this website, readers will find numerous references to Kevin Timmerman and Scott Holmes. These individuals’ relationships with CN Railway are at the center of the misrepresentations that the Board of Directors made when it recommended that shareholders vote against Ms. Fraser’s proposal on the independence of the CN Police.
Kevin Timmerman was an employee of CN Railway who died in 2015 while working at the CN Railway yard in Saskatoon. On the day he died, police officers from the Saskatoon Police Service, the RCMP, and the CN Police Service attended the scene. After a discussion, they decided that the CN Police Service should take over the investigation. The CN Police Service did so. Through a freedom of information application, the Saskatoon Police released a redacted version of its file on Kevin’s death to his daughter, Kaity Timmerman, and his ex-wife, Lori Desrochers. The CN Railway Board was aware that the CN Police force had taken over the investigation into Kevin’s death before they asserted that CN Railway had (undisclosed) policies to prevent this very scenario.
Mr. Scott Holmes was a former employee of CN Railway that the company accused of fraud. The CN Police Service laid criminal charges against Mr. Holmes in 2010-2011. The CN Railway corporation also engaged in civil litigation against Mr. Holmes regarding the same issue. Even though as a statutory police force, the CN Police was supposed to be operationally independent from CN Railway as a corporation, this did not happen. Instead, CN Railway’s management used the CN Police Service to help advance the company’s private civil litigation against Mr. Holmes. CN Police Service officers testified to this effect under oath, and in a court of law.
Mr. Holmes’ counsel wrote a letter to various authorities and attached copies of the court transcript. His letter discusses why CN Railway management’s conduct was unlawful and reprehensible. No private person or party should ever wield criminal powers for any reason, let alone for advancing private interests. Leveraging police resources and powers in this manner is unlawful. Ms. Fraser raised these transcripts with CN Railway’s Board before they released the shareholder circular. The Board did not deny or refute the authenticity of the transcripts or the substance of the CN Police officer’s testimony. Instead of acting to determine the veracity of what could be interference with a criminal investigation and an abuse of power, the Board released the 2021 shareholder circular (p. 89) asserting that the CN Police Service is independent. By stating that the undisclosed policy came into effect in 2014, the Board neglected to mention what abuses may have occurred before 2014.
Further, the Board’s representatives, Ms. Cristina Circelli and Mr. Sean Finn, told Ms. Fraser and her counsel by phone on January 13, 2021 that the CN Police Service had never been abused. When Ms. Fraser raised Timmerman’s case in later communications, they provided no explanation for why the CN Police service had taken over the investigation into his death. Neither did they reverse their position that the CN Police had never been abused. The Board’s carefully worded language misrepresents through both semantics and omissions.
That is why on April 27, 2021, the CN Railway Board of Directors and management must provide shareholders with full disclosure about the Timmerman and Holmes cases, to reconcile those case with their comments in 2021 circular. Three critical questions that the Board and management must answer are: a) Can they confirm that the CN Police Service has never exercised police jurisdiction over an investigation into a death or serious injury that has occurred during the company’s operations (before and after 2014)? b) Can the Board and management confirm that the CN Police Service has never asserted, or accepted, jurisdiction over deaths or serious injuries involving the company to the exclusion of public police forces? and c) Why did the Board fail to disclose the company’s policy of the independence of the CN Police Service, even after Ms. Fraser asked for it at least five times?
The CN Railway Board’s answers to these and the other questions in Section 12 of this website are important for shareholders. They need these answers to decide how to vote on Ms. Fraser’s proposals and whether to support the other initiatives she is advancing.
Contrary to CN Railway’s Board of Directors’ recommendation at pages 88-89 of the 2021 management circular, the CN Police Service has historically taken over the criminal investigation of deaths and serious injuries arising from the company’s operations.
One example is the case of Kevin Timmerman’s death at the CN Railway in Saskatoon in 2015. Attached is a freedom of information disclosure that the Saskatoon Police Service provided to Kevin’s ex-wife Lori Desrochers and Kevin’s daughter Kaity Timmerman. The Saskatoon Police disclosure shows that the RCMP and the Saskatoon Police both allowed the CN Police Service, a wholly-owned subsidiary of CN Railway, to take over the criminal investigation into Kevin’s death.
The Kevin Timmerman case is the norm, rather than the exception, to how the CN Police Service handles workplace deaths that occur during the company’s operations. Canada’s public police forces have invariably denied jurisdiction or deferred these investigations to the railway corporation’s own police forces. See correspondences in which the RCMP denies jurisdiction. See also correspondences with the Canadian Association of Chiefs of Police (“CACP”), Canada’s largest association of police chiefs. In these communications the CACP refuses to answer whether its member police forces can even investigate private railway companies.
The CACP also refused to disclose whether the CN Police Service and the CP Police Service chiefs are members of the CACP. More troubling, the CACP refused to explain why in 2019, months after the CP Railway Field, BC disaster, CP Railway apparently sponsored the CACP’s 2019 annual conference. The CACP even posted CP Railway’s flyer that proudly announced this sponsorship. The flyer is available here or here.
It is unclear why Canada’s police chiefs would accept the sponsorship of any private corporation, particularly one whose activities involved workplace deaths that the CACP’s member police forces had the duty to investigate. However, the CACP’s refusal to even answer whether its police members have the jurisdiction to investigate the parent companies of two of its CACP members speaks volumes. It affirms the reality that the CACP views CN Railway and CP Railway as peers and never as subjects of police investigations because the companies own CACP member police forces.
In light of the above, it is apparent that the Board of Directors’ claims about how the CN Police Service works are untrue (see page 89 of the 2021 circular to shareholders). This is apparent from how public police forces have deferred death investigations to private railway police forces, the CN Police Service’s investigation into Kevin Timmerman’s death while working for CN Railway, and management’s apparent abuse of the CN Police Service in the Scott Holmes matter. Indeed, it is apparent that the CN Railway Police Service has asserted policing jurisdiction into other incidents involving CN Railway, to the exclusion of public police forces. Alternatively, the CN Police Service has persistently accepted jurisdiction over its parent company when public police forces have ceded that jurisdiction to them. Either possibility does not resolve the Board of Director’s misleading statements that the CN Police Service never investigates the company, and that the police force has always been operationally independent of CN Railway’s corporate management.
All this is significant because under the Westray amendments to Canada’s Criminal Code, workplace deaths can give rise to criminal charges against employers. Therefore, when a worker dies on the job, that employer, who is the primary party of interest, cannot be involved the criminal investigation of their own actions. Because the CN Police Service is a wholly owned subsidiary of CN Railway and its police officers answer to corporate management, CN Railway has been criminally investigating itself.
This is why Ms. Fraser asks her fellow shareholders to join her in replacing all Board members and members of management who signed off on the Board’s statement discouraging CN Railway’s shareholders from voting in support her CN Police Service proposal. It is also the same reason she is inviting CN Railway’s shareholders to replace the CN Police Service with the more effective private security and contract policing alternatives that she is advancing. These alternatives will greatly minimize the risks and exposure that CN Railway faces from owning and controlling a cross-border police force that has no public oversight body in Canada or the United States.
Many Canadians assume that the Transportation Safety Board (“TSB”) criminally investigates all railway deaths, serious injuries, and other incidents. This is a widespread and serious misconception. The TSB does not have any criminal jurisdiction. Section 7(2) of the law that governs the TSB prevents its investigators from making any findings of fault against the transport companies they regulate, including criminal fault.
In fact, after a TSB investigator recommended a criminal investigation into the Field, BC disaster in which Ms. Fraser’s son died, the TSB publicly disavowed and criticized him for doing so. Further, after Ms. Fraser contacted the TSB trough her lawyer, the TSB repeatedly refused to answer whether its incident investigators are protected by whistleblower laws, including Canada’s Public Servants Disclosure Protection Act. This law protects whistleblowers who disclose wrongdoing in the federal public sector and should apply to incident investigators. But despite numerous queries, the TSB refused to answer Ms. Fraser’s questions about whether TSB investigators had whistleblower protection by this law. The TSB also refused to explain if investigators such as Mr. Crawford were protected by that law when the TSB publicly criticized him and allegedly disciplined him.
Based on the TSB’s responses to Ms. Fraser, this means that, in Canada, the TSB’s investigators who have the technical expertise to review fatal incidents and serious injuries are muzzled from finding fault or making criminal referrals. Further, the independent police forces that could conduct such criminal investigations have declined jurisdiction or simply allowed the railway companies’ own police employees to investigate these incidents. So, how do victims of workplace deaths and serious injuries get independent criminal investigations? The answer is that they don’t. At least, they did not until December 2020 when the RCMP started the Field, BC investigation, the first independent criminal investigation of a Canadian railway company that had its own police force.
The self-policing model under Sections 44 and 44.1 of the Railway Safety Act means that the railway companies have criminally investigated and exonerated themselves in hundreds of railway-related deaths and serious injuries in Canada over the last decade. All the Canadian police forces that Ms. Fraser contacted, including the RCMP, confirmed that they had never investigated any railway company for these deaths, or for potential criminal liability under the Westray amendments to the Criminal Code. These amendments were made to address employers’ potential criminal liability for workplace deaths. Nevertheless, Canada’s public police forces have deferred all criminal investigations of railway fatalities and serious injuries to the police forces that the railway companies own and control.
For example, see correspondences with the RCMP, Saskatoon Police Service, and the Canadian Association of Chiefs of Police (“CACP”). The CACP even declined to take a position on whether the association believes that private railway companies can criminally investigate themselves. The Ontario Provincial Police conceded that it had jurisdiction to investigate railway incidents but has never investigated, or criminally charged, any railway company for deaths and serious injuries in Ontario.
Even if the railway companies are not criminally liable in many or any of these cases, the self-policing model is still problematic. It relegates the CN Police Service into an in-house corporate department that is not independent from the company as a whole. Therefore, when this police force investigates its own company, does so competently, and exonerates it, such investigation will have no credibility. It also creates the legal risk that the CN Police Service officers who investigated in good faith may be exposed to potential criminal liability. That is because they are company employees who are legally indistinct from the corporation; their involvement in any investigation into the company, while working for the company, could be characterized as a suspect interfering in a criminal investigation through its own employees.
Even if CN Railway’s shareholders have no ethical concerns about corporate self-policing, this business model poses significant risks for the CN Police Service officers and the civilian officers who direct and oversee them. Hence, it is urgent that CN Railway replaces the CN Police Service with the private security and contract policing alternatives that Ms. Fraser is advancing.
The same corporate policing model that prevails in Canada’s railway industry also operates in the United States. Ms. Fraser is unaware of whether the same self-investigation model prevails there. However, other corporate railway police departments in the United States have the same power to enforce the criminal law just like any other public police force. For example, see the websites of the Union Pacific Police Department and the BNSF Police department, which belong to the two largest railroad companies in the United States.
The law in the United States does not prevent the Federal Railway Administration (US equivalent of the TSB) from making criminal referrals to the office of the Inspector General. However, according to the Inspector General, historically, such referrals have rarely happened. Therefore, it appears that the problems of corporate self-policing have also endured in the United States for some time. Nevertheless, given the rise of Environment, Social, and Governance (“ESG”) values, socially responsible investing, and the Canadian RCMP’s recent decision to start exercising criminal jurisdiction over Canadian railway companies, the self-policing model is destined for extinction. At the very least, developments in Canada will spark discussions about whether the same problems exist in the United States, and whether America’s public police forces will follow the RMCP’s lead.
Ms. Fraser encourages CN Railway shareholders to seize the initiative and shape the inevitable reforms to the CN Railway Police instead of being subjected to them. CN Railway’s shareholders face significant reputational risk if they resist such reforms. The same would apply if shareholders failed to actively advance such reforms despite being aware of the serious problems arising from corporate policing and self-policing. Ms. Fraser’s proposed reforms of converting the CN Police into a private security company and engaging in contract policing agreements will provide effective alternatives to the current situation. These proposed reforms will allow CN Railway to continue protecting its operations and personnel while addressing the numerous risks arising from CN Railway’s continued ownership of the cross-border CN Police Service.
CN Railway’s ownership of the CN Police Service threatens to derail the company’s bold move to outbid its biggest Canadian competitor, CP Railway, for the Kansas City Southern Railway Company. The paragraphs below explain why CN Railway’s current ownership of the CN Police Service poses a substantial and unacceptable risk to the KCS Railway deal and other future initiatives. Any deal already faces significant regulatory hurdles in a process that must be managed with sensitivity and a resolute aversion towards unnecessary risks. CN Railway should not sacrifice such opportunities by clinging to a corporate policing entity that is reputationally precarious, and whose utility can be replaced by the more effective alternatives in Section 10 of this website. As detailed below, regulators and other stakeholders are unlikely to favour a Canadian corporation expanding its criminal law enforcement powers and infrastructure in the United States through mergers and acquisitions.
As a company that operates in the United States, CN Railway’s leadership has a duty to explore all commercially viable opportunities to enhance shareholder value through mergers, acquisitions, joint ventures, and strategic partnerships in the United States. These initiatives always involve the scrutiny of regulators and stakeholders on both sides of the border. Given the potential impact of such cross-border initiatives in a competitive industry that involves extensive operations in both countries, the regulatory hurdles tend to be significant. Proposed mergers and acquisitions are subjected to rigorous and process-intensive approval processes, often by multiple authorities. The more complex, extensive, and sensitive the industry, the greater the approval hurdles CN Railway will face.
The approval of any proposed mergers and acquisitions also involves, or touches upon, different laws and regulations. Concerns that include homeland security, competition, trade concerns, human rights, civil rights, environmental issues, and other matters of broader public interest. The complex nature of the railway industry tends to trigger regulatory concerns across all these areas. Any merger, acquisition, joint ventures, or strategic partnership that CN Railway is, or may, consider shall be reviewed for its impacts across many of these areas.
Given this context, CN Railway’s ownership, control, and handling of the CN Police Service pose significant threats to cross-border expansions and business opportunities in the United States. American authorities are unlikely to approve the cross-border expansion of a Canada-based company that directly controls a police force that exercises the criminal law against American citizens and entities. It is unlikely that American authorities will approve any mergers and acquisitions that entrench a foreign-based corporation’s power to encroach on the country’s sovereign right to enforce its criminal laws against its own citizens.
Further, the American public is unlikely to approve of a private, Canada-based company policing its own conduct and operations which involve numerous trains making thousands of trips across the Canada-United States border every year. The national security, customs, and immigration enforcement consequences of privatizing any aspect of cross-border policing are profound. The Canadian government is keenly aware of the cross-border risks of commercial operations. See the “Working Internationally” and “Denying Access at the border” sections of this Government website. Although the CN Police Service does not preclude the jurisdiction of Canadian and United States border authorities, all powers over cross-border traffic and operations must remain exclusively with such authorities. It is unlikely that the Canadian and American public approves of a private corporation policing any part of their respective countries’ homeland security, immigration, and customs enforcement.
The above is notable because the CN Police Service reports directly to CN Railway’s corporate management and not an independent civilian oversight body. Further, CN Railway’s Chief of Police, Mr. Stephen Covey, is based in Canada and also carries the corporate-sounding title of “Chief Security Officer”. This indicates a hybrid status between a police officer who swore an oath to exclusively serve the administration of justice, and a corporate executive with a duty to serve the company’s private business interests.
If Chief Covey is Canadian citizen, then he is a foreign citizen directing and operating a CN Police Service that enforces criminal law powers in the United States. Further, Chief Covey answers directly to CN Railway’s corporate management and board of directors in Canada, not a civilian oversight body in the United States.
CN Railway’s shareholders can mitigate the business risk that owning and operating the CN Police Service presents for future mergers, acquisitions, and other expansions in the United States. Transforming the CN Police Service into a private security company and entering into contract policing arrangements with public police forces will greatly mitigate this business risk. CN Railway’s shareholders, especially its largest ones, should urge CN Railway’s management to implement these reforms in both Canada and the United States. Ms. Fraser is open to other alternatives but the continued existence of the CN Police Service in its current cross-border incarnation is unsustainable and unacceptable.
CN Railway’s shareholders have too much at stake to risk the ambitious acquisition of the KCS Railway Company. Given the nature and geographic dispersion of both companies’ operations, such a unique opportunity is unlikely to later remerge if lost. Ms. Fraser asks her fellow CN Railway shareholders to consider what is more important. Do they what CN Railway to be the most formidable railway company in the USMCA region? Or, do they wish to forego that status by ceding this merger to a competitor? Whichever company lifts its law enforcement foot from treading on American sovereignty and stops enforcing the criminal law against Americans is likelier to secure this merger. If successful, that merger will produce other positive multiplier effects. These effects will pay disproportionate dividends into the indefinite future. The alternatives that Ms. Fraser poses to the CN Police Service are more aligned with realizing that future than the current corporate policing model (See Section 10 for alternatives ). The following subsections identifies other significant risks that are currently undermining that bright future.
“CN Railway’s continued ownership of the cross-border CN Police Service poses a grave risk to the company’s potential mergers, acquisitions, joint ventures, and strategic partnerships in the United States.”
As a company that operates in the United States, CN Railway’s leadership has a duty to explore all commercially viable opportunities to enhance shareholder value through mergers, acquisitions, joint ventures, and strategic partnerships in the United States. These initiatives always involve the scrutiny of regulators and stakeholders on both sides of the border. Given the potential impact of such cross-border initiatives in a competitive industry that involves extensive operations in both countries, the regulatory hurdles tend to be significant. Proposed mergers and acquisitions are subjected to rigorous and process-intensive approval processes, often by multiple authorities. The more complex, extensive, and sensitive the industry, the greater the approval hurdles CN Railway will face.
The approval of any proposed mergers and acquisitions also involves, or touches upon, different laws and regulations. Concerns that include homeland security, competition, trade concerns, human rights, civil rights, environmental issues, and other matters of broader public interest. The complex nature of the railway industry tends to trigger regulatory concerns across all these areas. Any merger, acquisition, joint ventures, or strategic partnership that CN Railway is, or may, consider shall be reviewed for its impacts across many of these areas.
Given this context, CN Railway’s ownership, control, and handling of the CN Police Service pose significant threats to cross-border expansions and business opportunities in the United States. American authorities are unlikely to approve the cross-border expansion of a Canada-based company that directly controls a police force that exercises the criminal law against American citizens and entities. It is unlikely that American authorities will approve any mergers and acquisitions that entrench a foreign-based corporation’s power to encroach on the country’s sovereign right to enforce its criminal laws against its own citizens.
Further, the American public is unlikely to approve of a private, Canada-based company policing its own conduct and operations which involve numerous trains making thousands of trips across the Canada-United States border every year. The national security, customs, and immigration enforcement consequences of privatizing any aspect of cross-border policing are profound. The Canadian government is keenly aware of the cross-border risks of commercial operations. See the “Working Internationally” and “Denying Access at the border” sections of this Government website. Although the CN Police Service does not preclude the jurisdiction of Canadian and United States border authorities, all powers over cross-border traffic and operations must remain exclusively with such authorities. It is unlikely that the Canadian and American public approves of a private corporation policing any part of their respective countries’ homeland security, immigration, and customs enforcement.
The above is notable because the CN Police Service reports directly to CN Railway’s corporate management and not an independent civilian oversight body. Further, CN Railway’s Chief of Police, Mr. Stephen Covey, is based in Canada and also carries the corporate-sounding title of “Chief Security Officer”. This indicates a hybrid status between a police officer who swore an oath to exclusively serve the administration of justice, and a corporate executive with a duty to serve the company’s private business interests.
If Chief Covey is Canadian citizen, then he is a foreign citizen directing and operating a CN Police Service that enforces criminal law powers in the United States. Further, Chief Covey answers directly to CN Railway’s corporate management and board of directors in Canada, not a civilian oversight body in the United States.
CN Railway’s shareholders can mitigate the business risk that owning and operating the CN Police Service presents for future mergers, acquisitions, and other expansions in the United States. Transforming the CN Police Service into a private security company and entering into contract policing arrangements with public police forces will greatly mitigate this business risk. CN Railway’s shareholders, especially its largest ones, should urge CN Railway’s management to implement these reforms in both Canada and the United States. Ms. Fraser is open to other alternatives but the continued existence of the CN Police Service in its current cross-border incarnation is unsustainable and unacceptable.
“CN Railway’s operation of the CN Police Service poses the risk of increased regulatory and reputational risks on both sides of the Canada-US border.”
CN Railway’s corporate ownership of a police force that operates on both sides of the US-Canada border will attract increasing regulatory and public scrutiny on both sides of the border. This scrutiny will increase in light of the RCMP’s December 2020 decision to open a criminal investigation into CP Railway for the Field, BC derailment that killed three of that company’s rail workers. The RCMP’s decision to finally open a criminal investigation into the company was a watershed moment in railway policing in North America. After having deferred such investigation to the company’s own CP Police Service, the RCMP’s newfound recognition of its criminal jurisdiction is irreversible. It sets a precedent that represents significant regulatory risks to railway corporations that have allowed or directed their police officers to lead such investigations into the company’s fatalities and serious injuries.
With independent police scrutiny comes broader regulatory scrutiny to which CN Railway is likely to be subjected to going forward. Continuing with the current framework of corporate police ownership and self-investigation that is reflected in the case of Kevin Timmerman is simply not worth it for shareholders.
In fact, CN Railway shareholders should note that the CP Police Service had initially conducted the police investigation into the Field, BC derailment when it happened in 2019. This only changed after a former CP Police officer and whistleblower who was involved in that investigation publicly accused CP Railway of a corporate coverup regarding the company’s investigation into its own actions relating to the derailment. These allegations are currently the subject of the RCMP’s criminal investigation and are still to be proven in court.
Regardless of how the Field, BC investigation ends, it should be apparent to CN Railway’s shareholders that the self-policing and self-investigation models are no longer viable. Even the perceived existence of such a business model poses significant regulatory and reputational risks in both Canada and the United States. By exercising any police powers to investigate or even collaborate in criminal investigation, the CN Police Service and its parent CN Railway, could be seen as either covering up or interfering with a criminal process. CN Railway would thereby attract needless regulatory and criminal law scrutiny. This is likely given the blurred distinction between CN Police Service officers’ duties as public servants who are also employees who report to CN Railway’s corporate leadership.
As public scrutiny around private policing grows, Canadians and Americans will increasingly call for the elimination of the current self-policing model. Regulators on both sides of the border will be unable to ignore their citizens’ increasing awareness that they are subject to the criminal law enforcement powers of private corporations that are based in Canada. Under such circumstances, it is best for CN Railway to lead the necessary reforms than to be subjected to them. The RCMP’s criminal investigation of the fatal Field, BC derailment is the first domino that will trigger and entrench the new norm of independent railway policing.
Ms. Fraser encourages her fellow CN Railway shareholders to embrace, rather than resist, this new norm. CN Railway should do so by abandoning the criminal law enforcement business, focusing on its core business mandate, and adopt the private security and contract policing alternatives to corporate policing that Ms. Fraser is advancing.
“CN Railway’s operation of the CN Police Service poses the risk of increased regulatory and reputational risks on both sides of the Canada-US border.”
CN Railway’s corporate ownership of a police force that operates on both sides of the US-Canada border will attract increasing regulatory and public scrutiny on both sides of the border. This scrutiny will increase in light of the RCMP’s December 2020 decision to open a criminal investigation into CP Railway for the Field, BC derailment that killed three of that company’s rail workers. The RCMP’s decision to finally open a criminal investigation into the company was a watershed moment in railway policing in North America. After having deferred such investigation to the company’s own CP Police Service, the RCMP’s newfound recognition of its criminal jurisdiction is irreversible. It sets a precedent that represents significant regulatory risks to railway corporations that have allowed or directed their police officers to lead such investigations into the company’s fatalities and serious injuries.
With independent police scrutiny comes broader regulatory scrutiny to which CN Railway is likely to be subjected to going forward. Continuing with the current framework of corporate police ownership and self-investigation that is reflected in the case of Kevin Timmerman is simply not worth it for shareholders.
In fact, CN Railway shareholders should note that the CP Police Service had initially conducted the police investigation into the Field, BC derailment when it happened in 2019. This only changed after a former CP Police officer and whistleblower who was involved in that investigation publicly accused CP Railway of a corporate coverup regarding the company’s investigation into its own actions relating to the derailment. These allegations are currently the subject of the RCMP’s criminal investigation and are still to be proven in court.
Regardless of how the Field, BC investigation ends, it should be apparent to CN Railway’s shareholders that the self-policing and self-investigation models are no longer viable. Even the perceived existence of such a business model poses significant regulatory and reputational risks in both Canada and the United States. By exercising any police powers to investigate or even collaborate in criminal investigation, the CN Police Service and its parent CN Railway, could be seen as either covering up or interfering with a criminal process. CN Railway would thereby attract needless regulatory and criminal law scrutiny. This is likely given the blurred distinction between CN Police Service officers’ duties as public servants who are also employees who report to CN Railway’s corporate leadership.
As public scrutiny around private policing grows, Canadians and Americans will increasingly call for the elimination of the current self-policing model. Regulators on both sides of the border will be unable to ignore their citizens’ increasing awareness that they are subject to the criminal law enforcement powers of private corporations that are based in Canada. Under such circumstances, it is best for CN Railway to lead the necessary reforms than to be subjected to them. The RCMP’s criminal investigation of the fatal Field, BC derailment is the first domino that will trigger and entrench the new norm of independent railway policing.
Ms. Fraser encourages her fellow CN Railway shareholders to embrace, rather than resist, this new norm. CN Railway should do so by abandoning the criminal law enforcement business, focusing on its core business mandate, and adopt the private security and contract policing alternatives to corporate policing that Ms. Fraser is advancing.
“CN Railway’s operation of the CN Police Service poses the risk of increased regulatory and reputational risks on both sides of the Canada-US border.”
CN Railway’s corporate ownership of a police force that operates on both sides of the US-Canada border will attract increasing regulatory and public scrutiny on both sides of the border. This scrutiny will increase in light of the RCMP’s December 2020 decision to open a criminal investigation into CP Railway for the Field, BC derailment that killed three of that company’s rail workers. The RCMP’s decision to finally open a criminal investigation into the company was a watershed moment in railway policing in North America. After having deferred such investigation to the company’s own CP Police Service, the RCMP’s newfound recognition of its criminal jurisdiction is irreversible. It sets a precedent that represents significant regulatory risks to railway corporations that have allowed or directed their police officers to lead such investigations into the company’s fatalities and serious injuries.
With independent police scrutiny comes broader regulatory scrutiny to which CN Railway is likely to be subjected to going forward. Continuing with the current framework of corporate police ownership and self-investigation that is reflected in the case of Kevin Timmerman is simply not worth it for shareholders.
In fact, CN Railway shareholders should note that the CP Police Service had initially conducted the police investigation into the Field, BC derailment when it happened in 2019. This only changed after a former CP Police officer and whistleblower who was involved in that investigation publicly accused CP Railway of a corporate coverup regarding the company’s investigation into its own actions relating to the derailment. These allegations are currently the subject of the RCMP’s criminal investigation and are still to be proven in court.
Regardless of how the Field, BC investigation ends, it should be apparent to CN Railway’s shareholders that the self-policing and self-investigation models are no longer viable. Even the perceived existence of such a business model poses significant regulatory and reputational risks in both Canada and the United States. By exercising any police powers to investigate or even collaborate in criminal investigation, the CN Police Service and its parent CN Railway, could be seen as either covering up or interfering with a criminal process. CN Railway would thereby attract needless regulatory and criminal law scrutiny. This is likely given the blurred distinction between CN Police Service officers’ duties as public servants who are also employees who report to CN Railway’s corporate leadership.
As public scrutiny around private policing grows, Canadians and Americans will increasingly call for the elimination of the current self-policing model. Regulators on both sides of the border will be unable to ignore their citizens’ increasing awareness that they are subject to the criminal law enforcement powers of private corporations that are based in Canada. Under such circumstances, it is best for CN Railway to lead the necessary reforms than to be subjected to them. The RCMP’s criminal investigation of the fatal Field, BC derailment is the first domino that will trigger and entrench the new norm of independent railway policing.
Ms. Fraser encourages her fellow CN Railway shareholders to embrace, rather than resist, this new norm. CN Railway should do so by abandoning the criminal law enforcement business, focusing on its core business mandate, and adopt the private security and contract policing alternatives to corporate policing that Ms. Fraser is advancing.
“CN Railway’s operation of the CN Police Service poses the risk of increased regulatory and reputational risks on both sides of the Canada-US border.”
CN Railway’s corporate ownership of a police force that operates on both sides of the US-Canada border will attract increasing regulatory and public scrutiny on both sides of the border. This scrutiny will increase in light of the RCMP’s December 2020 decision to open a criminal investigation into CP Railway for the Field, BC derailment that killed three of that company’s rail workers. The RCMP’s decision to finally open a criminal investigation into the company was a watershed moment in railway policing in North America. After having deferred such investigation to the company’s own CP Police Service, the RCMP’s newfound recognition of its criminal jurisdiction is irreversible. It sets a precedent that represents significant regulatory risks to railway corporations that have allowed or directed their police officers to lead such investigations into the company’s fatalities and serious injuries.
With independent police scrutiny comes broader regulatory scrutiny to which CN Railway is likely to be subjected to going forward. Continuing with the current framework of corporate police ownership and self-investigation that is reflected in the case of Kevin Timmerman is simply not worth it for shareholders.
In fact, CN Railway shareholders should note that the CP Police Service had initially conducted the police investigation into the Field, BC derailment when it happened in 2019. This only changed after a former CP Police officer and whistleblower who was involved in that investigation publicly accused CP Railway of a corporate coverup regarding the company’s investigation into its own actions relating to the derailment. These allegations are currently the subject of the RCMP’s criminal investigation and are still to be proven in court.
Regardless of how the Field, BC investigation ends, it should be apparent to CN Railway’s shareholders that the self-policing and self-investigation models are no longer viable. Even the perceived existence of such a business model poses significant regulatory and reputational risks in both Canada and the United States. By exercising any police powers to investigate or even collaborate in criminal investigation, the CN Police Service and its parent CN Railway, could be seen as either covering up or interfering with a criminal process. CN Railway would thereby attract needless regulatory and criminal law scrutiny. This is likely given the blurred distinction between CN Police Service officers’ duties as public servants who are also employees who report to CN Railway’s corporate leadership.
As public scrutiny around private policing grows, Canadians and Americans will increasingly call for the elimination of the current self-policing model. Regulators on both sides of the border will be unable to ignore their citizens’ increasing awareness that they are subject to the criminal law enforcement powers of private corporations that are based in Canada. Under such circumstances, it is best for CN Railway to lead the necessary reforms than to be subjected to them. The RCMP’s criminal investigation of the fatal Field, BC derailment is the first domino that will trigger and entrench the new norm of independent railway policing.
Ms. Fraser encourages her fellow CN Railway shareholders to embrace, rather than resist, this new norm. CN Railway should do so by abandoning the criminal law enforcement business, focusing on its core business mandate, and adopt the private security and contract policing alternatives to corporate policing that Ms. Fraser is advancing.
“CN Railway’s operation of the CN Police Service poses the risk of increased regulatory and reputational risks on both sides of the Canada-US border.”
CN Railway’s corporate ownership of a police force that operates on both sides of the US-Canada border will attract increasing regulatory and public scrutiny on both sides of the border. This scrutiny will increase in light of the RCMP’s December 2020 decision to open a criminal investigation into CP Railway for the Field, BC derailment that killed three of that company’s rail workers. The RCMP’s decision to finally open a criminal investigation into the company was a watershed moment in railway policing in North America. After having deferred such investigation to the company’s own CP Police Service, the RCMP’s newfound recognition of its criminal jurisdiction is irreversible. It sets a precedent that represents significant regulatory risks to railway corporations that have allowed or directed their police officers to lead such investigations into the company’s fatalities and serious injuries.
With independent police scrutiny comes broader regulatory scrutiny to which CN Railway is likely to be subjected to going forward. Continuing with the current framework of corporate police ownership and self-investigation that is reflected in the case of Kevin Timmerman is simply not worth it for shareholders.
In fact, CN Railway shareholders should note that the CP Police Service had initially conducted the police investigation into the Field, BC derailment when it happened in 2019. This only changed after a former CP Police officer and whistleblower who was involved in that investigation publicly accused CP Railway of a corporate coverup regarding the company’s investigation into its own actions relating to the derailment. These allegations are currently the subject of the RCMP’s criminal investigation and are still to be proven in court.
Regardless of how the Field, BC investigation ends, it should be apparent to CN Railway’s shareholders that the self-policing and self-investigation models are no longer viable. Even the perceived existence of such a business model poses significant regulatory and reputational risks in both Canada and the United States. By exercising any police powers to investigate or even collaborate in criminal investigation, the CN Police Service and its parent CN Railway, could be seen as either covering up or interfering with a criminal process. CN Railway would thereby attract needless regulatory and criminal law scrutiny. This is likely given the blurred distinction between CN Police Service officers’ duties as public servants who are also employees who report to CN Railway’s corporate leadership.
As public scrutiny around private policing grows, Canadians and Americans will increasingly call for the elimination of the current self-policing model. Regulators on both sides of the border will be unable to ignore their citizens’ increasing awareness that they are subject to the criminal law enforcement powers of private corporations that are based in Canada. Under such circumstances, it is best for CN Railway to lead the necessary reforms than to be subjected to them. The RCMP’s criminal investigation of the fatal Field, BC derailment is the first domino that will trigger and entrench the new norm of independent railway policing.
Ms. Fraser encourages her fellow CN Railway shareholders to embrace, rather than resist, this new norm. CN Railway should do so by abandoning the criminal law enforcement business, focusing on its core business mandate, and adopt the private security and contract policing alternatives to corporate policing that Ms. Fraser is advancing.
“CN Railway’s operation of the CN Police Service poses the risk of increased regulatory and reputational risks on both sides of the Canada-US border.”
CN Railway’s corporate ownership of a police force that operates on both sides of the US-Canada border will attract increasing regulatory and public scrutiny on both sides of the border. This scrutiny will increase in light of the RCMP’s December 2020 decision to open a criminal investigation into CP Railway for the Field, BC derailment that killed three of that company’s rail workers. The RCMP’s decision to finally open a criminal investigation into the company was a watershed moment in railway policing in North America. After having deferred such investigation to the company’s own CP Police Service, the RCMP’s newfound recognition of its criminal jurisdiction is irreversible. It sets a precedent that represents significant regulatory risks to railway corporations that have allowed or directed their police officers to lead such investigations into the company’s fatalities and serious injuries.
With independent police scrutiny comes broader regulatory scrutiny to which CN Railway is likely to be subjected to going forward. Continuing with the current framework of corporate police ownership and self-investigation that is reflected in the case of Kevin Timmerman is simply not worth it for shareholders.
In fact, CN Railway shareholders should note that the CP Police Service had initially conducted the police investigation into the Field, BC derailment when it happened in 2019. This only changed after a former CP Police officer and whistleblower who was involved in that investigation publicly accused CP Railway of a corporate coverup regarding the company’s investigation into its own actions relating to the derailment. These allegations are currently the subject of the RCMP’s criminal investigation and are still to be proven in court.
Regardless of how the Field, BC investigation ends, it should be apparent to CN Railway’s shareholders that the self-policing and self-investigation models are no longer viable. Even the perceived existence of such a business model poses significant regulatory and reputational risks in both Canada and the United States. By exercising any police powers to investigate or even collaborate in criminal investigation, the CN Police Service and its parent CN Railway, could be seen as either covering up or interfering with a criminal process. CN Railway would thereby attract needless regulatory and criminal law scrutiny. This is likely given the blurred distinction between CN Police Service officers’ duties as public servants who are also employees who report to CN Railway’s corporate leadership.
As public scrutiny around private policing grows, Canadians and Americans will increasingly call for the elimination of the current self-policing model. Regulators on both sides of the border will be unable to ignore their citizens’ increasing awareness that they are subject to the criminal law enforcement powers of private corporations that are based in Canada. Under such circumstances, it is best for CN Railway to lead the necessary reforms than to be subjected to them. The RCMP’s criminal investigation of the fatal Field, BC derailment is the first domino that will trigger and entrench the new norm of independent railway policing.
Ms. Fraser encourages her fellow CN Railway shareholders to embrace, rather than resist, this new norm. CN Railway should do so by abandoning the criminal law enforcement business, focusing on its core business mandate, and adopt the private security and contract policing alternatives to corporate policing that Ms. Fraser is advancing.
“CN Railway’s operation of the CN Police Service poses the risk of increased regulatory and reputational risks on both sides of the Canada-US border.”
CN Railway’s corporate ownership of a police force that operates on both sides of the US-Canada border will attract increasing regulatory and public scrutiny on both sides of the border. This scrutiny will increase in light of the RCMP’s December 2020 decision to open a criminal investigation into CP Railway for the Field, BC derailment that killed three of that company’s rail workers. The RCMP’s decision to finally open a criminal investigation into the company was a watershed moment in railway policing in North America. After having deferred such investigation to the company’s own CP Police Service, the RCMP’s newfound recognition of its criminal jurisdiction is irreversible. It sets a precedent that represents significant regulatory risks to railway corporations that have allowed or directed their police officers to lead such investigations into the company’s fatalities and serious injuries.
With independent police scrutiny comes broader regulatory scrutiny to which CN Railway is likely to be subjected to going forward. Continuing with the current framework of corporate police ownership and self-investigation that is reflected in the case of Kevin Timmerman is simply not worth it for shareholders.
In fact, CN Railway shareholders should note that the CP Police Service had initially conducted the police investigation into the Field, BC derailment when it happened in 2019. This only changed after a former CP Police officer and whistleblower who was involved in that investigation publicly accused CP Railway of a corporate coverup regarding the company’s investigation into its own actions relating to the derailment. These allegations are currently the subject of the RCMP’s criminal investigation and are still to be proven in court.
Regardless of how the Field, BC investigation ends, it should be apparent to CN Railway’s shareholders that the self-policing and self-investigation models are no longer viable. Even the perceived existence of such a business model poses significant regulatory and reputational risks in both Canada and the United States. By exercising any police powers to investigate or even collaborate in criminal investigation, the CN Police Service and its parent CN Railway, could be seen as either covering up or interfering with a criminal process. CN Railway would thereby attract needless regulatory and criminal law scrutiny. This is likely given the blurred distinction between CN Police Service officers’ duties as public servants who are also employees who report to CN Railway’s corporate leadership.
As public scrutiny around private policing grows, Canadians and Americans will increasingly call for the elimination of the current self-policing model. Regulators on both sides of the border will be unable to ignore their citizens’ increasing awareness that they are subject to the criminal law enforcement powers of private corporations that are based in Canada. Under such circumstances, it is best for CN Railway to lead the necessary reforms than to be subjected to them. The RCMP’s criminal investigation of the fatal Field, BC derailment is the first domino that will trigger and entrench the new norm of independent railway policing.
Ms. Fraser encourages her fellow CN Railway shareholders to embrace, rather than resist, this new norm. CN Railway should do so by abandoning the criminal law enforcement business, focusing on its core business mandate, and adopt the private security and contract policing alternatives to corporate policing that Ms. Fraser is advancing.
CN Railway has at least two alternatives that mitigate the risks of privately owning the CN Police Service. First, CN Railway should transform the CN Police Service into a private security company. Second, CN Railway should engage the contract policing services of public police forces (to the extent necessary). These alternatives address the significant and indeterminate risks of owning a private police force, and the commercial uncertainty that comes with it. These alternatives also account for the job security interests of the current CN Police Service personnel and the general public.
CN Railway can still protect its operations by transforming the CN Police Service into a private security company: the CN Security Service. This would be a private security company that would conduct the core functions that CN Police Service is currently responsible for.
For example, under Ontario law, private investigators and security guards can carry firearms. Under the Private Security and Investigative Services Act, 2005, S.O. 2005, c. 34, private investigators and security guards can obtain warrants to enter premises for a vast array of reasons and use reasonably necessary force. Further, the Act makes it unlawful for persons interacting with private investigators and private security guards to obstruct these officials’ activities, and imposes an obligation on relevant persons to produce certain materials on request from these officials. Private investigators and security guards can also call upon police officers to assist with matters such as executing warrants.
After private security guards detain suspects or thwart the commission of a crime, they do not carry out any criminal law enforcement tasks such as laying criminal charges. Instead, they hand over any suspects and evidence to law enforcement officers, such as municipal police forces and the RCMP. These public police forces then handle any criminal investigations, charges, and prosecutions in conjunction with public prosecutors.
This separation of duties between private security guards and public police/prosecutors reflects and affirms the principle of police independence (para 29) and the rule of law. It is the system in which the vast majority of private enterprises in Canada and the United States operate. This includes airlines, trucking companies, and other businesses that have similarly complex, extended, and cross-border supply lines.
A second alternative for replacing the CN Police Service is a contract policing agreement with the RCMP or other public police forces. Contract policing involves retaining a dedicated complement of public police officers who focus exclusively on protecting the company’s operations. However, the contract police officers will not be employees of CN Railway, but of the public police forces that employ them. This resolves CN Railway’s current problem of owning an in-house police force that answers to the very management whose actions it must often investigate.
A contract policing approach would end the CN Police Service’s risky private/self-investigation model. In the event of a death, serious injury, or other incident in the course of CN Railway’s operations, there would be no question about CN Railway owning and controlling the investigating police force. Notably, the RCMP’s website cites the following benefits of its contract policing services:
The last bullet point above deserves special attention. Given the RCMP’s previous position that it had no jurisdiction over railway incidents, and the fact that the TSB does not have any criminal jurisdiction, this means that for decades, CN Railway has been solely exercising Canada’s sovereignty over the country’s rural and remote regions. This includes CN Railway’s sovereignty over aboriginal peoples in those remote and other areas where CN Railway has tracks, infrastructure, and operations. This situation eventually changed in December 2020 when the RCMP finally asserted criminal jurisdiction over the criminal investigation of the Field, BC derailment that occurred in a remote location. Nevertheless, CN Railway’s shareholders should be concerned that they have been shouldering the risks, responsibilities, and liabilities, of sovereign control in Canada and likely the United States. Adopting a contract policing model would surrender these duties and risks to public law enforcement authorities that are designed to assume them.
The contract policing model would also allow CN Railway to secure its operations and personnel without placing extra policing burdens on public police forces. Under the contract policing model, CN Railway would pay for the recruitment, training, deployment, and accompanying logistics for any public police officers it contracts. Thus, CN Railway can add policing capacity without placing any undue burden on taxpayers. It may take some time to secure the full complement of contract police forces. However, this should not pose any problems if CN Railway retains all its current police personnel under the new security company.
Given the contract policing option that provides for both the police independence and cross-border police coverage, there is no justifiable reason why CN Railway must own and control its own police force. In light of all the risks discussed on this website, this is a better alternative to CN Railway privately owning and controlling a police force. Ms. Fraser trusts that similar contract policing agreements are also possible for CN Railway’s operations in the United States.
The CN Police Service personnel should not worry about job losses from the transformation of the CN Police Service into a private security company, or from contract policing arrangements. Under these arrangements, CN Railway’s security personnel will retain the same salaries, seniority, benefits, and retirement plans as CN Police Service officers currently enjoy. Given that CN Railway’s management has already asserted that its officers do not conduct criminal investigations of deaths and serious injuries, the loss of criminal law powers should be irrelevant to the officers. As discussed above, these powers are unnecessary because private security companies can conduct the bulk, if not the totality, of the “bread and butter” work that the CN Police Service currently does. Therefore, the transformation of the CN Police Service to the CN Security Service will be a “jobs-neutral” approach that eliminates the liabilities and risks of owning a cross-border police force.
CN Railway’s management and Board must address the following questions arising from their handling of Ms. Fraser’s shareholder proposals and the CN Police Service in general.
CN Railway’s 25 largest shareholders below have the greatest capacity to address the governance issues and risks arising from the company’s ownership of the CN Police Service. All these shareholders have made public statements declaring their commitment to Environmental, Social, and Governance (“ESG”) investment standards. Ms. Fraser requests that these shareholders demonstrate their commitment to ESG values by calling on the CN Railway leadership to address the risks arising from the company’s ownership of the cross-border CN Police Service. Specifically, CN Railway’s top 25 shareholders should do so by publicly calling for the company’s management to start the process of converting the CN Police Service into a private security company and adopting a contract policing model.
Ms. Fraser also asks CN Railway’s top 25 shareholders to publicly hold the CN Railway’s leaders accountable for their misstatements about the CN Police Service in the 2021 circular. These shareholders can do so by voting against the renewal of any mandates of Board and executive members who approved the release of the relevant statement at page 89 of the 2021 circular. CN Railway’s top 25 shareholders should also entrench accountability into the company’s DNA. This should happen by publicly calling for the new CN Railway Board of Directors to appoint an independent law firm to investigate the CN Railway’s ownership, control, and reported abuses of the CN Police since the privatization of CN Railway in 1995.
The table below lists CN Railway’s top 25 shareholders, their percentage stakes in the company, and hyperlinks to website where they declare their ESG and ethical investing principles. All these statements are consistent with Ms. Fraser’s calls for urgent reforms to a system which is currently creating needless business risks and jeopardizing shareholder value.
| File Name | Download | |
|---|---|---|
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a). |
CN Rail Shareholder Proposal Package – December 4th 2020 |
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b). |
Correspondence with CN Railway Lawyers - Shareholder Proposals - December 15 2020 to January 22 2021 |
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c). |
Letter to CN Railway - Pamela Fraser Shareholder Proposal Phone Discussion Followup - Attachments Included (7) - Jan 21 2021 |
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d). |
Letter from Jean Marc Huot - Counsel to CN Railway - Allowing Shareholder Proposals for inclusion in Proxy Circular - Feb 4 2021 |
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e). |
February 8th 2021 - LETTER TO MR. JEAN MARC HUOT REGARDING MS. PAMELA FRASER'S SHAREHOLDER PROPOSALS FOR 2021 MANAGEMENT CIRCULAR |
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f). |
Correspondence with CN Railway Counsel regarding policing policy - February 17 2021 |
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g). |
Letter from Jean Marc Huot – Counsel to CN Railway – February 26th 2021 – Response to Inquires regarding Policy |
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h). |
Letter to Jean Marc Huot – Counsel to CN Railway – March 1st 2021 – Response to Inquires regarding Policy |
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i). |
Letter to Jean Marc Huot – Counsel to CN Railway – March 2nd 2021 – Response to Inquires regarding Policy |
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j). |
Letter to Jean Marc Huot – Counsel to CN Railway – March 12th 2021 – Response to Inquires regarding Policy |
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k). |
Letter from Jean Marc Huot – Counsel to CN Railway – March 23rd 2021 – Response to Inquires regarding Policy |
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l). |
MS. Pamela Fraser’s CN Railway Shareholder Proposals – CN Railway Board recommends to vote ‘NO’ – March 24th 2021 Proxy Circular. |
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m). |
Correspondence with RCMP regarding their interactions with Railway Police Forces |
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n). |
Saskatoon Police Service (Canada) Investigation Freedom of Information disclosure regarding the death of Kevin Timmerman at CN Railway - May 20, 2020 |
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o). |
Letter to the Ontario Provincial Police + Reply regarding that police force’s jurisdiction and history of investigating railway fatalities and other incidents |
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p). |
Letter to Canadian Association of Chiefs of Police requesting that they revoke membership of private railway police forces (Request ignored) – March 3rd 2021. |
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q). |
Letter to CACP requesting that they remove membership of Railway Police – March 3rd 2021 |
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r). |
Saskatoon Police Service rejects request to Investigate CN – Lori File – 2021-April 13 – ltr to Runyowa Law |
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s). |
Appendix A – Canadian National Railway Shareholder Proposal Correspondence |
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t). |
Appendix B – Interactions with RCMP, Saskatoon Police Service, and Ontario Provincial Police regarding Jurisdictional Issues with Railway Police |
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u). |
Appendix C -Communications with Canadian Association of Police Chiefs regarding Railway Police |
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v). |
The Canadian Association of Police Chiefs online post of CP Railway’s sponsorship of the Chiefs’ 2019 annual conference. |