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1998-1999 Estimates
A Report on Plans and Priorities

Approved

Hon. David M. Collenette, P.C., M.P.

Minister of Transport

Table of Contents

Section I:

Messages

A. Chairman's message

B. Management Representation Statement

Section II: Agency Overview

A. Mandate, Role and Responsibilities

B. Business Line, Organization and Program Composition

C. Objective

D. Financial Spending Plan

Section III: Plans, Priorities and Strategies

A. Summary of Key Plans, Priorities and Strategies

B. Details by Program and Business Line

Planned Spending

External Factors Influencing the Business Line

Rail and Marine Transportation

Air Transportation

Accessible Transportation

Key Plans, Strategies and Expected Results

Corporate

Rail and Marine Transportation

Air Transportation

Accessible Transportation

Section IV: Supplementary Information

Section I: Messages

A. Chairman's message

It is with pleasure that I introduce the first Report on Plans and Priorities of the Canadian Transportation Agency.

The Canada Transportation Act (the Act), which took effect on July 1, 1996, created the framework for a new regulatory body. The Agency quickly began to develop streamlined processes and guidelines and to create alternatives to regulations, underscoring its role in the Canadian transportation system as a "facilitator" as well as a responsive regulator. We also laid the foundation for the future by developing a mission statement, core values and a strategic plan with the direct involvement of Agency employees and union representatives.

We intend to continue our extensive communication efforts through meetings with various sectors of the transportation industry, familiarization trips, conferences, and consultations with shippers, consumer groups, and provincial and municipal governments. Such initiatives not only increase awareness of the Agency's role but also encourage an exchange of views on parties' rights and obligations under the new legislative framework. We believe this type of active role gives the Agency a strong presence as a contributor to the well-being of the Canadian transportation system.

The Agency is in its second year of operation and faces more challenges, both in developing regulations and applying legislation. For example, we will continue, in consultation with transportation providers and users, to develop voluntary codes of practice to replace regulations, wherever possible.

However, we cannot forget, that as a specialized transportation tribunal, one of our primary roles is to help transportation providers and users resolve matters quickly and effectively without resorting to the courts. We will continue to issue decisions within the 120-day statutory deadline set by the Act, unless the parties agree to an extension.

Technology is evolving rapidly and the Agency is finding innovative ways to do business using technological tools. The Agency's Web site provides quick and easy access to information about the Agency, its decisions, its regulatory projects and other pertinent information.

Canadian transportation is changing quickly and the Agency must remain flexible to adapt quickly to help achieve an efficient and accessible transportation system. We, at the Agency, are committed to this objective.

Marian L. Robson

B. Management Representation Statement

Section II: Agency Overview

A. Mandate, Role and Responsibilities

The Agency performs all the functions vested in it by the Canada Transportation Act and other related legislation such as the Coasting Trade Act, the Railway Safety Act and the Pilotage Act. This includes applying national transportation policy, making regulations and introducing, wherever possible, guidelines and codes of practice. It has all the powers, rights and privileges of a superior court, issuing decisions and orders on matters within its jurisdiction.

In addition, the Agency issues certificates or licences to carriers that wish to enter the rail and air markets. It resolves disputes over transportation rates, service and other matters. It also has a mandate to remove undue obstacles that impede the mobility of persons with disabilities using federally regulated transportation.

While Transport Canada provides policy support to the Minister and regulates transportation safety, the Agency is responsible for the economic regulation of transportation under federal jurisdiction. Working with the Department of Foreign Affairs and International Trade, and Transport Canada, the Agency also acts as the aeronautical authority for bilateral air agreements.

Finally, the Agency has relationships with Revenue Canada concerning the coasting trade exemptions; with the Canadian Human Rights Commission with respect to the transportation of persons with disabilities; and with the Province of Ontario for the regulation of rail transportation within the province.

B. Business Line, Organization and Program Composition

The Agency is a single business line--the Canadian Transportation Agency Program-- which is responsible for processing matters that come under the jurisdiction of the Canada Transportation Act and other related legislation, as they affect rail, air and marine activities within federal jurisdiction. It examines applications, hears complaints and conducts investigations. It administers various competitive access and dispute resolution provisions relating to matters between railways and other affected parties such as shippers, municipalities, utility companies, landowners and other railways. It prepares the maximum rate scales annually for the movements of western grain and undertakes statutory costing activities. It protects the interests of consumers and carriers by ensuring that air carriers operating to, from and within Canada meet certain minimum economic requirements. To this end, it administers an air carrier licensing system, international air agreements and international air tariffs. Consumers interests are also protected through a certificate of fitness system for railways. It is also responsible for ensuring that undue obstacles to the mobility of persons with disabilities are removed from federally regulated transportation services and facilities.

It is divided into four sub-business lines: Members and Regulatory Support, Rail and Marine Transportation, Air and Accessible Transportation and Corporate Management.

The Canadian Transportation Agency exercises its powers through its seven members of which there are a Chairperson, a Vice-Chairperson and five members, and up to three temporary members, all appointed by the Governor in Council. The staff of the Agency is organized into two program branches, a legal and secretariat services branch and a corporate services support branch, the heads of which all report to the Chairperson.

The two program branches, the Rail and Marine Branch and the Air and Accessible Transportation Branch, relate on a modal basis to the regulatory functions of the Agency. Regulatory and administrative support is provided by the Chairperson's Office, Legal Services and Secretariat Branch and a Corporate Management Branch. The Agency headquarters are located in the National Capital Region. It also has personnel in field offices located in 6 different cities throughout Canada mainly for enforcement activities. The organization structure is designed to ensure the effective and efficient delivery of the Canadian Transportation Agency Program.

An organization chart illustrating the organizational structure can be found in the Supplementary Section of this document (see page 13).

C. Objective

The Agency contributes to the attainment of an efficient and accessible Canadian transportation system that serves the needs of shippers, carriers, travellers and other users.

D. Financial Spending Plan

* Reflects best forecast of total planned spending to the end of the fiscal year which includes $35 million relating to final adjustments to subsidy payments that used to be made under the National Transportation Act, 1987 and the Railway Act. Both of these subsidy programs were eliminated with the coming into force of the Canada Transportation Act on July 1, 1996. These statutory payments constitute the final adjustments to the liability that had been incurred prior to that date under both programs and were included in the Agency's 1997-98 Supplementary Estimates.

Section III: Plans, Priorities and Strategies

A. Summary of Key Plans, Priorities and Strategies

B. Details by Program and Business Line

As mentioned above, the Agency is a single business line--the Canadian Transportation Agency Program.

Planned Spending (see Financial Spending Plan Table on page 6)

Objective - The Agency contributes to the attainment of an efficient and accessible Canadian transportation system that serves the needs of shippers, carriers, travellers and other users.

The Agency's environment is best illustrated by examining the sub-business lines of Rail and Marine Transportation, and Air and Accessible Transportation.

External Factors Influencing the Business Line

Rail and Marine Transportation

Under the new Act, the Agency has a key role in the resolution of conflicts between railway companies, their clients and other parties that interact with railways. The Canadian rail industry is part of a highly competitive global marketplace characterized by rail mergers, buyouts and the creation of inter-modal companies, provincial and federal shortline railways and regional railways. As such, the rail industry is under significant pressure to operate efficiently by developing creative solutions to transportation problems. This competitive environment affects the Agency's approach to regulating the industry. The Agency's work may also be affected by recommendations arising from Canada's review of the grain handling and transportation system.

The marine industry is also undergoing change. Marine legislation, for example, is currently being reviewed. Under the proposed Canada Marine Act, the Agency will have new responsibilities with respect to possible charges levied by port authorities.

Air Transportation

Under the new legislation, the Agency continues to protect the interests of consumers, shippers and carriers by ensuring that air carriers meet certain minimum economic requirements.

The air transportation sector is rapidly evolving. Airline alliances, liberalization of market access and multilateralism, code-sharing services and issues involving Canada`s international air transportation policy are all increasing the need to interpret legislation and bilateral agreements. In addition, there is increased pricing activity and a more complex and sophisticated international environment for air transport pricing.

Accessible Transportation

In the past few years, there has been steady progress to render the Canadian transportation system more accessible for persons with disabilities. In keeping with the government's policy to look at alternatives to regulations, the Agency will continue to develop voluntary codes of practice and guidelines in consultation with the industry and consumers. In addition to responding to Agency initiatives, the industry has taken its own steps to address the changing nature of the market. In fact, the leisure and tourism industries have all recognized that Canada's aging population will result in more people with loss of mobility, vision or hearing. As they focus on the elderly as an untapped market, the industries are paying more attention to customers with disabilities.

Key Plans, Strategies and Expected Results

Corporate

In the spring of 1997, the Agency finalized its mission statement, core values and strategic plan. This plan has four main themes: the role of the Agency, internal and external communications, the working environment and work processes. The implementation of this plan has begun and will continue to guide the Agency's activities.

Key strategies and results include:

• as a quasi-judicial tribunal, to reach decisions independently through a process that demonstrates integrity and fairness to all parties;

• to ensure its clients are fully aware of its mandate, as well as their rights and obligations under the Act and other related legislation;

• to remain responsive to clients, within its legislated mandate, through open, timely and respectful communication; and

• to provide the highest level of expertise and quality in its work.

A communication strategy has been developed and will evolve as the Agency responds to the needs of those affected by the new regulatory environment. We will continue to consult with industry associations, provincial, regional and municipal governments and other federal departments on Agency activities. The Agency has produced brochures and guides on its mandate, as well as on the rights and obligations of interested parties under the Act. To complement these publications, the Agency will continue to attend industry trade shows, seminars and conferences. Through these activities, the Agency will continue to promote greater awareness of its work, keep up with new trends in transportation and understand the changing needs of its clients.

The use of information technology is another important component of the communications strategy. Plans to ensure that current systems meet the Year 2000 challenge are well underway. Increasingly, the Agency will use its web site to disseminate information and to receive comments from the industry and the travelling public. Finally, in response to requests from industry to automate processes wherever possible, the Agency has begun several initiatives that should save clients both time and expense.

All government departments and agencies are active in many horizontal initiatives such as La Relève, the Modernization of Comptrollership and the Financial Information Strategy. These types of initiatives will influence all business lines of organizations. The Agency has and is taking action to respond to them. During 1998-99, for example, as part of La Relève, the Agency expects to develop a set of core competencies linked to a training and development plan for its employees as well as a succession plan. This will help ensure that the Agency provides the highest level of expertise to its clients while providing developmental and career opportunities to its employees.

Rail and Marine Transportation

The Agency has a Memorandum of Understanding with the Province of Ontario with respect to intra-provincial rail transportation. Assistance will continue to be available for other provinces wishing a similar arrangement. The Agency will also continue assuming its role as facilitator and mediator in the rail and marine modes and administer dispute resolution mechanisms on such matters as rail infrastructure, railway interswitching access and rates, competitive access, running rights, level of service and marine pilotage.

The Act currently requires the Agency to develop an annual rate scale for the movement of western grain to export locations. It will consequently continue to devote resources to this function and all the pertinent peripheral activities such as the financial analysis, cost methods and determinations, audits and monitoring of rail freight data. Where this is appropriate and consistent with the Agency's other responsibilities, there may be, during 1998, opportunities for the Agency to share its expertise with the review of Canada's grain handling and transportation system being carried out by the Honourable Mr. Justice Estey.

The Agency will also have to develop its new dispute resolution role under the proposed Canada Marine Act. Under this Act, it may determine upon complaint if there is unjust discrimination with respect to any fee that may be levied by the port authorities to be created by that Act.

Air Transportation

The Agency is responsible for air carrier licensing and the administration of bilateral air agreements and air tariffs. It will continue to administer these in an efficient and effective manner to protect the interests of consumers, shippers and carriers. The Agency will also continue to respond to oral and written consumer complaints about various services provided by air carriers.

In 1998-99, the Agency will assume a new role with respect to appeals. Under the Civil Air Navigational Services Commercialization Act, the Agency can review appeals from air carriers about new charges imposed by Nav Canada. Decisions, which are final and binding, will be made within 60 days after an appeal is filed.

The Agency is also participating in international areas, including the Facilitations (FAL) Committee of the International Civil Aviation Organization (ICAO). Agency staff currently chair the FAL Facilitation Panel, as well as Canada's National Facilitation Committee. Staff efforts to promote Canada's position on accessible transportation matters have been particularly successful in these two arenas.

There are two major regulatory projects currently underway:

A) Revisions to the Air Transportation Regulations

The Agency has solicited comments from interested parties on proposed amendments to Part III (International Charters) of the Air Transportation Regulations (ATR). This consultative process, which responds to the government's commitment to reduce regulation, also includes relatively minor changes to other Parts of the ATR. The proposed changes, published in Part I of the Canada Gazette on October 11, 1997, are designed to simplify existing regulations within the context of the International Air Charter Policy. In so doing, they will allow scheduled and charter air services to compete equally and fairly for the leisure travel market.

The proposed changes received a great deal of unfavourable media attention in December 1997, based on a mistaken perception that the changes were designed to increase regulations of charter flights. Many additional comments were received as a result. Based on all the comments received during the consultation process, the Agency will revise the proposed regulatory changes. The revised proposals will be forwarded through the Minister of Transport to the Special Committee of Council (SSC) for Governor-in-Council approval.

B) New Regulations concerning Designated Provisions for Administrative Monetary Penalties

The Agency is currently consulting on an Administrative Monetary Penalties system. In July 1997 proposed draft regulations were widely distributed to interested parties seeking comments and input.

The proposed system includes a series of graduated penalties based on the frequency and seriousness of the offence, with the initial step in the process being a warning letter. With this new proposal, the Agency will continue in its enforcement program to emphasize those areas that pose the greatest risk to the travelling public such as flying without a licence or without appropriate liability insurance. The Agency has been informally discussing proposed procedures with all parts of the industry before starting the formal regulation-making process.

These proposed regulations will be given pre-publication in Part I of the Canada Gazette following Governor-in-Council approval of revisions to the Air Transportation Regulations noted above.

Accessible Transportation

The Agency removes undue obstacles to persons with disabilities from all transportation modes under federal jurisdiction. To that end, it will continue to investigate and resolve complaints about undue obstacles.

The Agency will also continue to develop codes of practice and guidelines as alternatives to regulation. It will continue, for example, to make extensive use of its Accessibility Advisory Committee. This committee, which comprises groups representing persons with disabilities, industry, manufacturers and other government departments, has been instrumental in developing voluntary codes of practice. In addition, the Agency will work with other ad-hoc consumer industry groups.

The Agency will also monitor the industry's application of voluntary codes and recommendations. This will allow the Agency to assess the effectiveness of the voluntary approach which it adopted a few years ago.

Education of the travelling public, including liaison with travel agents, is another priority. There is much to be gained by ensuring that persons with disabilities have timely access to accurate travel information.

Finally, the Agency will continue to participate in the work of the International Civil Aviation Organization (ICAO) with respect to accessibility standards for international air services.

Section IV: Supplementary Information

Table 1: Spending Authorities - Summary Part II of the Estimates

n\a: not applicable

Personnel Information

Table 2: Organization Structure - Canadian Transportation Agency Program

Responsibility for Planned Spending by Program and Business Line for 1998-99

Table 2.1: Planned Full Time Equivalents (FTEs) by Program and Business Line

Table 2.2: Details of FTE Requirements

Additional Financial Information

Table 3: Summary of Standard Objects of Expenditure

Table 4: Program Resources by Program and Business Line for the Estimates Year

Table 5: Transfer Payments by Program and Business Line/Activity

* Both of these subsidy programs were eliminated with the coming into force of the Canada Transportation Act on July 1, 1996. These statutory payments constitute the final adjustments to the liability that had been incurred prior to that date under both programs and were included in the Agency's 1997-98 Supplementary Estimates.

n/a: not applicable

Table 6: Net Cost of Program for 1998-99

Other Information

Table 7: Listing of Statutes and Regulations

Statutes and Regulations Currently in Force

* The provisions of the Interpretation Act provide that, although these enabling statutes were repealed, their provisions still must be applied to all matters pending before the Agency at the time of repeal. Several matters are presently outstanding (transitional 1995, c. 17, s. 27)

* See note on previous page