That's a minor tributary of Etobicoke Creek. It also passes under taxiways and runways at Pearson Airport before joining the main creek itself.
The rail spur was laid out in the very early 1960s, when Bramalea was just getting started, and it was always there (and so was Steeles, which was a two-lane county road then). As there are still several customers who get rail shipments along the spur, it's not going away anytime soon.
Good info as always.
The 'minor' nature of the tributary which is listed as 'East Etobicoke Creek' in TRCA maps doesn't preclude the flooding issue noted above. That remains an issue.
I certainly am not advocating the removal of the spur; I do wonder if the alignment at the south end couldn't be tweaked such that it doesn't cross right at the intersection.