The Federal Court of Appeal has dismissed a legal challenge intended scrap CN Rail’s $250-million logistics hub project in Milton, Ont.

A three-judge panel’s unanimous ruling found that the federal government’s decision to let CN build the terminal despite “significant adverse environmental effects” was reasonable, the Canadian Press reported.

A Federal Court of Appeal judge had allowed CN to continue building the hub, pending the court’s final decision that has now been reached. CN won a stay of proceedings of a lower court’s March ruling that nixed the project and required the federal government to reconsider it.

The Halton Region, its four municipalities and the Halton Region Conservation Authority took CN and Ottawa to court in an effort to overturn the federal government’s 2021 approval of the project.

In nixing the project, the lower court cited health concerns related to air quality tied to diesel-powered truck and train traffic, the Canadian Press reported.

According to the wire service, the appeal court found that the federal government approved the development project — with more than 300 conditions attached — after giving due consideration to human health protection and complying with environmental legislation.

The project is located next to an exiting CN facility in Milton and designed to double the company’s rail capacity in the Halton region. It will house an inter-modal facility that transfers shipping containers to semi-trucks from trains in Milton, which is part of the Greater Toronto Area.

In a statement, Milton Mayor Gordon Krantz said he was “disappointed” with the ruling, and CN is proposing a project “in the wrong place,” the Canadian Press reported.

Krantz also contended that the project will cost the town about $70 million in development charges and lead to a property-tax hike to $7.4 million in lost non-residential taxes.

Doug MacDonald, CN’s executive vice-president and chief marketing officer, said previously that the project is fundamental to the federal government’s goal to make the Canadian transportation system more affordable to Canadians.

The project’s opponents one more legal option. They could attempt appeal the decision in the Supreme Court of Canada.

Photo: CN Rail