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1999-2000 Estimates
A Report on Plans and Priorities

Table of Contents

Section I: Messages

A. Chairman's Message
B. Management Representation Statement

Section II: Agency Overview

A. Mandate, Role and Responsibilities
B. Objective
C. Operating Environment
D. Financial Spending Plan

Section III: Plans, Priorities, Strategies and Expected Results

A. Summary of Priorities and Expected Results
B. Program and Business Line Plans

General
Rail and Marine Transportation
Air Transportation
Accessible Transportation

C. Consolidated Reporting

Section IV: Supplementary Information

Section I: Messages

A. Chairman's Message

It is my pleasure to present the Report on Plans and Priorities of the Canadian Transportation Agency (the Agency).

The Canada Transportation Act (the Act), which took effect on July 1, 1996, created the framework for a new regulatory body. The Agency acted quickly to become a modern day regulator, using regulation only where necessary and establishing itself as a facilitator in the Canadian transportation system. In consultation with transportation providers and users, we intend to continue developing innovative voluntary codes of practice in lieu of regulations, wherever possible. We set the bar high because we want to play an active role in the achievement of an efficient and accessible transportation system.

One of our primary roles, as a specialized transportation tribunal, is to help transportation providers and users resolve matters quickly and effectively without resorting to the courts. When the Agency gets called into a formal dispute, it will continue to issue decisions within the 120-day statutory deadline, unless the parties agree to extend it. However, the Agency has a variety of tools available to help it achieve its mission and strategic objectives. It has and will continue to apply and develop these tools where appropriate.

We see value in acting as a conciliator and facilitator before matters reach the stage of formal dispute. More and more, the Agency will be proactive, will educate, reach out to parties and encourage informal resolution of problems before they escalate and affect the efficient functioning of the transportation system. We will actively develop alternative dispute resolution mechanisms and train our employees to increase our skills base.

Consultations will continue to be an integral part of our efforts to reach out, learn, inform and educate. To assist us in our future activities, we will follow up on the results of a survey conducted in late 1998 on various aspects of rail transportation. Also, we will increase our regional presence through meetings with various sectors of the transportation industry, familiarization trips, conferences, and consultations with shippers, carriers, 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 current legislative framework. They also foster the growing body of informed opinion that is taking shape on how the Act has benefited or constrained various parties.

As one of many players in transportation, we believe that the Agency contributes to the well-being of Canada's transportation system by providing necessary information and appropriate services to those working to improve the system.

 Marian L. Robson
Chairman, Canadian Transportation Agency

B. Management Representation Statement

Section II: Agency Overview

A. Mandate, Role and Responsibilities

The Canadian Transportation Agency (the Agency) was established on July 1, 1996, under the Canada Transportation Act (the Act), as the continuation of the National Transportation Agency. As a quasi-judicial body, the Agency has a multi-faceted role. It is an economic regulator, licensing authority, accessibility facilitator and aeronautical authority. It has the power of a superior court to issue decisions and orders on matters within its jurisdiction. Under the Act and related legislation, it has various powers to help implement the federal government's transportation policy. The relevant statutes and regulations are listed in Table 12 (see page 18).

As the licensing authority for carriers that apply to provide air or rail service in Canada, the Agency ensures that carriers comply with the licensing requirements of the Act and exercises certain powers to regulate fares and tariffs where market forces may not suffice. The Agency also rules on appeals of NAV CANADA user charges.

It can, with the approval of the Governor in Council, make regulations to direct carriers in their dealings with customers. It does so after consulting with industry and the public. The Agency also uses codes of practice and guidelines, when these are more effective.

In addition, it also makes and enforces decisions in response to complaints and applications brought before it. The Agency serves shippers, carriers, consumers and third parties, such as municipalities. When someone with a disability encounters undue obstacles that make it difficult to use the federally regulated transportation network, the Agency can order corrective action to remove those obstacles.

The government's transportation policy calls for an accessible, competitive transportation sector that is regulated only when necessary. If market forces alone do not result in fair, reasonable service, the Agency can ensure that transportation users, commercial shippers and individual travellers receive the protection provided for them in the legislation.

The Agency is an economic regulator, while Transport Canada provides policy support to the Minister and regulates transportation safety. Working with Foreign Affairs and International Trade Canada and with Transport Canada, the Agency also acts as the aeronautical authority for bilateral air agreements.

Finally, the Agency works with Revenue Canada on coasting trade exemptions; with the Canadian Human Rights Commission on the transportation of persons with disabilities; and with the Province of Ontario to regulate rail transportation in Ontario.

The Agency exercises its powers through its seven members, appointed by the Governor in Council: a chairperson, a viceBchairperson and five members. The Governor in Council may also appoint up to three temporary members. The Agency comprises four branches: the Rail and Marine Transportation Branch, the Air and Accessible Transportation Branch, the Legal Services and Secretariat Branch, and the Corporate Management Branch. The heads of each branch report to the chairperson.

The two program branches, the Rail and Marine Transportation Branch and the Air and Accessible Transportation Branch, relate to the regulatory functions of the Agency. The Chairman's Office, the Legal Services and Secretariat Branch and the Corporate Management Branch provide regulatory and administrative support. The Agency's headquarters are located in the National Capital Region. The Agency personnel working in field offices in six cities across Canada mainly carry out air and accessibility enforcement activities.

A chart illustrating the Agency's organizational structure can be found in the section IV of this document

B. 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.

C. Operating Environment

The Agency's current form and approach reflect Canadian and international approaches to transportation policy, the federal government's ongoing efforts to revise its role and the way it delivers services; and the global environment in which the Agency and its clients operate.

The Agency administers Canada's transportation policy. Section 5 of the Act states, in part, that transportation is "...essential to serve the transportation needs of shippers and travellers, including persons with disabilities, and to maintain the economic growth and well-being of Canada and its regions....". It further states that this is best achieved under conditions that ensure that Acompetition and market forces are, whenever possible, the prime agents in providing viable and effective transportation services...."

As Agency decisions can affect the international competitiveness of Canadian producers and carriers the Agency must be sensitive to the environment in which its clients operate. Most Canadians agree that our shippers need economical transportation services to help them compete internationally; Canadian carriers require an environment in which they can compete and thrive both domestically and internationally.

Rail and Marine Transportation

The rail industry is part of a highly competitive North American and global marketplace and is under significant pressure to find creative solutions to transportation problems in order to compete efficiently. The Agency therefore must be prepared to adapt to an industry whose structure is changing significantly. Major rail mergers, rationalization, buyouts of rival companies, the creation of inter-modal companies, the proliferation of provincial and federal shortline railways, the emergence of regional railways and the commercialization of transport services affect the Agency's approach to regulating the industry. The economy will dictate whether the Agency will spend more time handling applications for new and improved rail infrastructure or dealing with complaints about existing infrastructure. Two other factors may also affect the Agency's work: the recent trend toward delegating responsibility for transportation systems to other levels of government and the recommendations arising from the Honorable Mr. Justice Willard Z. Estey 1998 review of the grain handling and transportation system.

Similarly the marine industry is changing. For example, the St. Lawrence Seaway has been commercialized and the volume of container transit through Eastern Canada is increasing, affecting other modes of transport used to get goods to market. Under the new Canada Marine Act, the Agency has new responsibilities regarding charges that port authorities may levy. The Minister of Transport has also asked the Agency to conduct a review of specific pilotage issues in Canada to make recommendations to him. This review could affect the way pilotage services is delivered to carriers and the future policy direction of the government.

Air Transportation

The air transportation sector is evolving rapidly. Airline alliances, liberalization of market access, multilateralism, code-sharing services and other developments are all increasing the need to interpret legislation and bilateral agreements. The Agency acts as the Aaeronautical authority" for Canada and administers the 67 bilateral air agreements now in place. The Minister's ongoing review of international passenger charter policy will probably result in changes to the current regulatory framework. In addition, pricing activity is increasing and the international environment for air transport pricing is becoming more complex and sophisticated.

Under current legislation, the Agency protects the interests of consumers, shippers and carriers by ensuring that air carriers meet certain minimum economic requirements.

Accessible Transportation

In the past few years, there has been steady progress in making the Canadian transportation system more accessible to persons with disabilities. In keeping with the government's policy to find alternatives to regulations, the Agency will continue to develop voluntary codes of practice and guidelines in consultation with industry and consumers. As well as responding to Agency initiatives, carriers have taken their 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 impaired mobility, vision or hearing. As it focuses on elderly people as an untapped market, the industry is paying more attention to customers with disabilities.

The United Nations General Assembly has declared 1999 the International Year of Older Persons. The purpose of the year is to foster international awareness of the importance of senior's role in society and the need for inter-generational respect and support. Canada's senior population is among the fastest growing in the world. It will account for close to 23 percent of all Canadians by the year 2041 as compared to 12 percent today. This demographic shift will alter the economic, social and cultural fabric of our country.

D. Financial Spending Plan

* Reflects best forecast of total planned spending to the end of the fiscal year.

Section III: Plans, Priorities, Strategies and Expected Results

A. Summary of Priorities and Expected Results

B. Program and Business Line Plans

The Agency is a single business line-the Canadian Transportation Agency Program.

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

Priorities and Expected Results

General

Deregulation proceeded hand-in-hand with a reduced government presence in transportation operations. For example, the government has privatized airports, the air navigation system and the St. Lawrence Seaway. Today, the industry that the Agency regulates differs substantially from the industry of 10 years ago. As a result, the Agency must be flexible, responsiveCand pragmatic. It must also act quickly and decisively.

The Agency is a specialized transportation tribunal. Its primary role is still that of an economic regulator but it now uses regulatory tools when necessary and encourages parties to resolve disputes wherever possible. The Agency will continue to reach decisions independently through a process that demonstrates integrity and fairness to all parties.

The Act contains statutory deadlines within which the Agency must issue decisions. The Agency must deal with all cases within 120 days unless the parties agree to an extension. As a result disputes are resolved quickly without resorting to the courts. The Agency is committed to providing a structured process that resolves certain issues completely, within reasonable time frames, thus contributing to the well-being of the transportation industry.

However, the Agency also sees value in acting as a conciliator and a facilitator before parties reach the formal dispute stage. It will continue to develop alternative methods for resolving disputes to avoid long proceedings.

Over the next few years, adapting its processes and guidelines and creating alternatives to regulation will remain the Agency's overall priorities. This focus underscores the Agency's evolving role as a conciliator and facilitator, as well as a responsive regulator, in the Canadian transportation system. The Agency will work toward its goals by using open communications and by providing quality service. It will measure its success by tracking the number of initiatives it undertakes and by using feedback from those it interacts with in the transportation industry.

The Agency's work force accounts for some 80 percent of its total expenditures. Like other departments and agencies that reduced staff significantly under Program Review, the Agency has had to change its human resources focus from reducing staff to restoring vitality in its organization. Through the Strategic Plan initiative, management and employees have identified crucial areas that needed attention, such as competency profiles for the Agency and succession planning focused on a continuous learning environment to ensure quality in program delivery. The provision of quality services is one of the Agency's core values, which underpin all Agency initiatives and actions.

Section 53 of the Act allows the Minister to appoint no later than July 1, 2000 a person or persons to conduct a comprehensive review of the operation of the Act. This review must be completed within one year. Where appropriate, the Agency will have opportunities to share its expertise to support this review. It will do so by providing any information that may be useful, including information it has accumulated during its own assessment of the operations of the legislation, as required in section 42 of the Act.

Section 42 requires the Agency to submit an annual report to the Governor in Council, through the Minister. The Agency must report on applications submitted to it; its findings on those applications; its assessment of the operation of the Act; and any difficulties it has observed in administering the Act. The Agency's annual report was tabled in the House of Commons on June 17, 1998.

The Agency will continue to assess the operation of the Act. To do so, it will survey and consult with carriers; industry associations; provincial, regional and municipal governments; travellers; transportation users; and other federal departments. The result of this process will be twofold. First, it will ensure Agency clients are fully aware of the Agency's mandate, as well as their rights and obligations. Second, it will provide information that should help policy makers improve Canada's transportation system.

Rail and Marine Transportation

The Minister of Transport has asked the Agency to review outstanding pilotage issues stipulated in the Canada Marine Act (CMA). These include areas such as the certification of masters and officers, the training and licensing for pilots, compulsory pilotage area designations, dispute resolution mechanisms and measures taken in respect of financial self-sufficiency and cost reduction. The Agency will conduct ongoing consultations by convening two national meetings of interested parties and several public consultations in all four regions Pilotage authorities, representatives of the pilots, the shipping industry, shippers and provincial governments will participate in these consultations. The Agency will submit a final report to the Minister no later than September 1, 1999.

The Agency will continue developing its new dispute resolution role under the Canada Marine Act. Under that legislation, if the Agency receives a complaint about a fee levied by a Canada Port Authority created by the legislation, it may determine whether the fee constitutes unjust discrimination. This complaint mechanism will also apply to fees levied by the Federal Bridge Corporations responsible for the maintenance and operation of the Jacques Cartier and Champlain bridges in Montreal and the Seaway International Bridges.

The Agency has signed a memorandum of understanding with the Province of Ontario under which it may administer the law respecting railway crossings in relation to persons who operate railways in the province. It is also holding discussions with New Brunswick, Nova Scotia, Alberta and British Columbia to establish similar agreements. Such initiatives prevent duplication between provincial and federal regulatory authorities.

The Agency will continue to facilitate and mediate in the rail and marine modes and help resolve disputes on such matters as rail infrastructure, the transfer and discontinuance of rail lines, railway interswitching access and rates, competitive access, running rights, level of service and marine pilotage.

In its 1997 Annual Report, the Agency identified several challenges in the operation of the Act and indicated that it intended to explore these issues in more depth in the coming year. In late 1998, the Agency engaged an independent polling firm to conduct a survey to determine opinions about the operation of specific railway provisions in the Act and also to provide feedback on the effectiveness of the Agency's operation. A broad cross-section of shippers and carriers and all levels of government participated in the survey. Results of the survey will be analysed and will assist the Agency in its future relationships with transportation providers, users and regulators.

Also, the Agency will await the government's decisions concerning the Honorable Mr. Justice Willard Estey's review of the grain handling and transportation system and their possible effect on some of the Agency's functions.

Air Transportation

The Agency is responsible for air carrier licensing and air tariffs. It will continue to administer these efficiently and effectively to protect the interests of consumers, shippers and carriers. On the domestic front, the minimal financial test required under the Act, ensures that new carriers have sufficient funds to cover start-up costs for a period of 90 days and that air carriers have adequate liability insurance.

It also prohibits the sale of services that the Agency has not yet licensed. These provisions help protect consumers by minimizing disruptions in service and the risk that a carrier's insurance is invalid.

The Agency will participate as a member of the Canadian negotiating team for air bilaterals. The team is led by Foreign Affairs and International Trade Canada and also includes Transport Canada. The Agency is the aeronautical authority for Canada in the implementation and administration of international air agreements. The Agency also regulates international air charter services in accordance with government policy. These activities are designed to support efficient, competitive and economic air services by a Canadian industry able to compete internationally under fair and reasonable terms.

As well, the Agency will continue participating in international areas, including activities of the International Civil Aviation Organization (ICAO). Agency staff currently chair Canada's National Facilitation Committee and participate in the activities of ICAO's Facilitation, Fares and Rates and Air Transport Regulations Panels. The Agency coordinates facilitation activities between Departments concerned to ensure that the objective shall be to adopt, subject to Canadian laws and regulations, all practicable measures to facilitate the movement of aircraft, crews, passengers, cargo and mail.

The Agency will be responding to oral and written consumer complaints about air carriers' services. In most cases, the carrier has complied with legislation, and the traveller's dissatisfaction arises because he or she is unaware of all the terms and conditions of carriage set out in tariffs. To assist and inform travellers, the Agency offers a brochure entitled Fly Smart.

In 1998, the Agency assumed a new role with respect to appeals. Under the Civil Air Navigational Services Commercialization Act, the Agency can review appeals from air carriers and aircraft operators concerning new or increased charges imposed by NAV CANADA. It must make its decisions, which are final and binding, within 60 days after an appeal is filed.

The Agency will carry on with its Enforcement Program to ensure that air carriers and terminal operators subject to federal jurisdiction respect legislative and regulatory requirements.

Accessible Transportation

Within all transportation modes under federal jurisdiction, the Agency can remove undue obstacles to the mobility of persons with disabilities. 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. To do so, it will continue to consult frequently its Accessibility Advisory Committee. This committee, which comprises groups representing persons with disabilities, industry, manufacturers and other government departments, has worked closely with the Agency in developing voluntary codes of practice. For example, in the spring of 1999, the Agency will publish a code of practice on ferry accessibility that will establish accessibility criteria for large ferries operating between provinces.

In addition, the Agency will work with ad-hoc consumer-industry groups formed specifically to help it implement the recommendations of its "Communications Barriers" Report. Those recommendations are aimed at removing communications obstacles that persons with sensory disabilities face when they travel by air.

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 that it adopted a few years ago and to determine future actions.

Education of the travelling public, which includes 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. The Agency will conduct a survey to determine whether people who received its publication, Air Travel Guide for Persons with Disabilities, found the guide useful.

It will conduct another survey to determine the main problems persons with disabilities still face when they are travelling. The survey results will provide invaluable information and should guide future Agency's initiatives to increase the accessibility of the Canadian transportation system.

The United Nations General Assembly has declared 1999 the International Year of Older Persons. The Agency will be actively participating in the activities surrounding this year's events. Reaching out and informing older Canadians of services which will enable seniors to travel with greater confidence, is key to the Agency's inclusive approach to removing undue obstacles from Canada's transportation system.

Finally, the Agency will continue to participate in the work of ICAO with respect to accessibility standards for international air services.

C. Consolidated Reporting

Two major regulatory projects are currently underway:

The following table describes the Agency's efforts towards Year 2000 readiness.

Section IV: Supplementary Information

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

Personnel Information

 Table 2.2: Planned Full Time Equivalents (FTEs) by Program and Business Line

Table 3: Capital Projects Information - NOT APPLICABLE TO THE AGENCY

Additional Financial Information

Table 4: Summary of Standard Objects of Expenditure

Table 5: Program Resources by Program and Business Line for the Estimates Year

 Table 6: Transfer Payments by Program and Business Line/Activity

Table 7: Revenue by Program - NOT APPLICABLE TO THE AGENCY

Table 8: Net Cost of Program for 1999-2000

 Table 9: Revolving Fund

Table 10: Loans, Investments and Advances by Program and Business Line

Table 11: Tax Expenditures

- THE ABOVE THREE TABLES ARE NOT APPLICABLE TO THE AGENCY

Other Information

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

Postal Address:

Canadian Transportation Agency
Ottawa, Canada K1A 0N9

Web site: www.cta-otc.gc.ca

Annual Report 1997 (covering the period January 1 - December 31, 1997)

Contacts for Further Information