The Canadian Transportation Agency says the City of Ottawa may have breached its duty as a rail line owner when it dismantled a section of tracks near Prince of Wales Bridge in order to build a new entrance to Bayview Station.

In a letter to the city Wednesday, the agency said the the city must show cause, explaining how it wasn't a breach of duty, by June 28.

The directive comes after a complaint from Moose Consortium Inc., a group that has had ambitions of offering rail services to outlying communities in Quebec and Ontario.

Moose Consortium had told the agency last summer that the city had dismantled about 240 metres of the Ottawa River Line between Bayview Station and the Prince of Wales (POW) Bridge. The agency said it also learned that the city "is constructing a permanent structure on the railway right-of-way that would create an obstruction and prevent future railway operations over the POW Bridge into Quebec."

City confirms part of tracks removed in February

City staff confirmed in February to agency staff that part of the tracks had been removed to construct the new west side entrance to the Bayview Station.

But the agency said the city, as owners of the rail line, had an obligation to notify the agency if it planned to discontinue it or a portion of it.

"If a railway company wishes to be relieved of these statutory obligations, the CTA provides such a mechanism in the form of the transfer and discontinuance provisions," the agency wrote.

"Once the railway company has complied with all steps of this mandatory statutory process, it may discontinue operating the line and has no further obligations in that regard."

This didn't appear to have happened, the agency wrote.

The agency said the city must, in its response to the allegations, address the operability of the Ottawa River rail line, including over the bridge, and "its plans for the line's ongoing maintenance and eventual use," the agency wrote.

The city has been renovating existing transit stations and building new ones as it prepares to shift from buses to light rail transit.

The multi-billion-dollar project has had delays, most notably after a sinkhole formed over a rail tunnel in the city's downtown, but city staff insist the project will be ready for sometime in 2018.