Asset Retirement Obligations

12 Months Ended

Dec. 31, 2015

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

 Asset retirement obligations

Asset retirement obligations are recorded in “Other long-term liabilities”. The majority of these liabilities are discounted at 6.25%. Accretion expense is included in “Depreciation and amortization” on the Consolidated Statements of Income. 

(in millions of Canadian dollars)	2015			2014
Opening balance, January 1	$	23		$	24
Accretion	1			1
Liabilities settled	(1		)	(1		)
Revision to estimated cash flows	(1		)	(1		)
Closing balance, December 31	$	22		$	23

Upon the ultimate retirement of grain-dependent branch lines, the Company has to pay a fee, levied under the Canada Transportation Act, of $30,000 per mile of abandoned track. The undiscounted amount of the liability was $38 million at December 31, 2015 (2014 – $38 million), which, when present valued, was $19 million at December 31, 2015 (2014 – $20 million). The payments are expected to be made in the 2016 – 2044 period.

The Company also has a liability for a joint facility that will have to be settled upon the facility's retirement based on a proportion of use during the life of the asset. The estimate of the obligation at December 31, 2015, was $21 million (2014 – $21 million), which, when present valued, was $3 million at December 31, 2015 (2014 – $3 million). For purposes of estimating this liability, the payment related to the retirement of the joint facility is anticipated to be made in 30 years.