The ruling states that the federal government failed to grapple with whether Canadian National Railway Co.'s planned facility in Milton, Ont., will have a harmful effect on human health, particularly through its impact on air quality.

The decision sets aside the green light issued by cabinet in January 2021 and sends the $250-million project backto Ottawa for reconsideration.

In the planning stage for years, it would see CN double its existing line and build a hub for containers to be loaded onto trucks from rail cars and vice versa in Ontario's Halton Region.

The facility would be used around the clockby diesel-powered trucks making 800 round trips per day as well as four trains hauled by locomotives also running on diesel, which contains toxic pollutants, the judgment notes.

CN said Monday it is still reviewing the decision, but that the rail-and-truck hub would be a critical piece of infrastructure in Canada's busiest region.

The Montreal-based company also pointed out that federal authorization was subject to an extensive environmental review process, resulting in an approval that laid out 325 conditions to protect the community and the environment.

“The Canadian government has stated its commitment to addressing supply chain issues and improving Canada’s transportation system to make life more affordable for Canadians, this project is fundamental to that effort,” said CN's chief marketing officer Doug MacDonald in a statement.

Prior to the government's thumbs-up, an expert review panel concluded that the rail facility would likely have a harmful environmental impact on "human health as it relates to air quality," Judge Henry Brown said in his ruling Friday.

However, neither cabinet nor then-environment minister Jonathan Wilkinson considered or referred to that finding in their decisions — "inexplicably," Brown wrote.

"The cabinet’s failure to meaningfully grapple with the project’s significant direct adverse environmental effects on human health is a fundamental flaw in the cabinet’s justification decision," he said.

The court case pitted the federal government and CN Rail against Halton Region and its four municipalities as well as the Halton Region Conservation Authority.

“Our concerns about the health and safety of our residents have been heard loud and clear and we are very pleased with the court’s decision,” said Halton chair Gary Carr in a release.

This report by The Canadian Press was first published March 4, 2024.

Companies in this story: (TSX:CNR)

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