No. H046/05
For release March 24, 2005

AMENDMENTS TO THE CANADA  
TRANSPORTATION ACT TABLED IN PARLIAMENT

OTTAWA — Transport Minister Jean-C. Lapierre today tabled amendments to the Canada Transportation Act in the House of Commons. The proposed amendments focus on achieving a balance between the interests of consumers, shippers and communities, and those of air carriers and rail carriers, while also addressing the governance regimes for international bridges and tunnels, the Canadian Transportation Agency and VIA Rail.

The Canada Transportation Act came into effect in 1996 to modernize the transportation legislative framework and create the Canadian Transportation Agency, in place of the National Transportation Agency.

"These amendments address key long-term transportation issues in Canada," said Mr. Lapierre. "They will improve the efficiency of the rail and air sectors, enhance competition, help protect the environment and provide a stable framework for investment."

The proposed amendments will strengthen the transportation sector and contribute to a stronger economy. They include:

• A new, modernized and simplified National Transportation Policy Statement;
• New provisions addressing the approval and regulation of international bridges and tunnels;
• A new provision authorizing the Canadian Transportation Agency, on the recommendation of the Minister, to regulate greater transparency in the advertisement of air fares;
• Improvements to, and expansion of, the recourses available to rail shippers, while maintaining the existing running rights provisions;
• Improvements to the policy framework for publicly funded passenger rail services that will help address urban transportation challenges;
• A public interest review process for mergers and acquisitions of all federally regulated transportation services;
• A provision allowing the Canadian Transportation Agency to address railway noise complaints;
• A legislative framework to consolidate the current powers of VIA Rail Canada;
• A reduction in the number of members of the Canadian Transportation Agency, and the integration of the air travel complaints functions into its normal business;
• The addition of security to the list of purposes for which transportation data can be collected, the identification of transportation stakeholders and parties from whom data can be collected, the extension of reporting and reviewing periods; and
• The transfer of the legislative arrangements for railway police from the Canada Transportation Act to the Railway Safety Act.

During the development of these amendments, Transport Canada held wide-ranging consultations with other federal departments; provincial and territorial governments; concerned agencies; and stakeholders.

"These measures represent the culmination of extensive consultation and reflect the substantial contributions made by stakeholders from across the country and across transportation sectors," said Mr. Lapierre. "They set out a clear course and strike the right balance for our transportation system so it is better able to meet the economic, social and environmental challenges of the future."

Backgrounders on the Canada Transportation Act, highlights of the proposed amendments and an environmental impacts statement are attached.

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BACKGROUNDER

CANADA TRANSPORTATION ACT

The Canada Transportation Act came into effect in 1996 and replaced the National Transportation Act, 1987; the Passenger Ticket Act; the Government Railways Act; and elements of the Railway Act.

It modernized and streamlined rail regulation, promoted the formation of short-line railways, ensured that shippers continued to have access to competitive transportation services, eliminated unnecessary regulation in other modes of transport, and placed greater emphasis on commercial decision-making in the transportation sector.

A thorough statutory review of the act was completed in 2001, and the proposed amendments are the culmination of extensive discussions and consultations that are aimed at updating the legislative framework governing significant components of our national transportation system.

Highlights of the proposed amendments to 
the Canada Transportation Act

A new National Transportation Policy

The act’s declaration of a National Transportation Policy provides direction and guidance in the development of policy instruments, such as regulations, programs, strategic directions and investments. This new statement outlines policy principles in a simpler and clearer manner. In particular, it reaffirms established principles and embraces new ones, such as security and the protection of the environment.

New provisions for international bridges and tunnels

There are currently 24 international vehicular bridges and tunnels linking Canada and the United States. These bridges and tunnels carry the vast majority of Canadian trade with the United States and play a vital role in Canada’s transportation system.

The proposed amendments give the Government of Canada the legislative authority required to provide effective oversight of these bridges and tunnels to ensure that the interests of Canadians are protected. They also provide the governor-in-council, on the recommendation of the Minister of Transport, with the authority to approve the construction or alteration of international bridges and tunnels, and to develop regulations pertaining to the governance, maintenance, security and operation of these structures.

The regulations would ensure that structures are safe and secure, that they are maintained so as to maximize their long-term viability, and that they are being operated in a manner that does not impede the efficient and competitive flow of goods and people.

Clarity in airfare advertising

The Canadian Transportation Agency, on the recommendation of the Minister of Transport, would have the authority to make and enforce regulations to require that the advertised price include all costs to the airline for providing the air service. The advertisement would also indicate all fees, charges and taxes collected by the airline on behalf of a government body or airport authority, in addition to the price of an airline ticket for both domestic and international travel.

This would ultimately help Canadians to more readily determine the total cost of their ticket and the terms and conditions that apply to its purchase.

Air Travel Complaints Commissioner

The position of Air Travel Complaints Commissioner was established as a temporary measure in 2000, following the acquisition by Air Canada of Canadian Airlines, to address potential consumer abuses regarding the quality of service during the transition period.

Since then, the market has changed dramatically. Air Canada is no longer the single dominant carrier and no longer the main target of complaints, reflecting the fact that there is competition on most major routes in Canada.

Therefore, the Government of Canada has proposed the integration of the complaints function of the Air Travel Complaints Commissioner into the everyday operations of the agency, and the elimination of the associated semi-annual reporting obligation. The Canadian Transportation Agency would continue to be able to apply the existing informal process in addition to its well established complaints resolution process to respond to air travel complaints.

Railway noise complaints

A large number of Canadian communities are home to railway operations and disputes can often arise over railway noise between residents of these communities and railway companies. While citizens adversely affected by noise from railway operations can make a formal complaint to the company or seek civil action through the courts, no federal body is mandated to regulate railway noise.

Proposed changes to the act authorize the Canadian Transportation Agency to review noise complaints and, if required, order rail companies to make changes to reduce unreasonable noise when constructing or operating a railway or rail yard. The agency must be satisfied that the parties were unable to reach a voluntary settlement of the dispute on their own.

Shipper protections

Rail policy reform over the last 35 years has focused on reducing government regulation and increasing reliance on market forces. However, market forces are not always sufficient to achieve the best results and while the Canada Transportation Act includes a number of shipper protection provisions to address potential abuses, some provisions are being clarified and improved.

The proposed amendments drop the requirement for the Canadian Transportation Agency to be satisfied that a shipper would suffer substantial commercial harm before it grants a remedy, as it is an unwarranted barrier to regulatory remedies. They also clarify the agency’s authority to prescribe maximum inter-switching rates, which would allow shippers and railways to negotiate lower rates. The obligation of a shipper to have an agreement with a connecting carrier before requesting a regulated rate from the agency would be dropped.

The option of final offer arbitration would be extended to groups of shippers seeking a common solution to rates and conditions, such as incidental services and to ensure that anyone subject to railway tariffs is eligible to apply for this recourse.

While a cap on railway grain revenues protects western Canadian grain shippers, the calculation of the cap would be adjusted in the event of a disposal of government hopper cars to take into consideration changes in maintenance costs. Railways would be required to publish a list of rail sidings available for grain producer car loadings and provide a 60-day notice before removing them from operation.

Improved framework for passenger rail services

Public transportation services are becoming increasingly important to help address environmental challenges such as urban congestion, and to improve our quality of life. The proposed amendments provide the Canadian Transportation Agency with the authority to decide matters such as compensation and the use of railway facilities or services when publicly funded passenger service providers cannot negotiate a commercial agreement. Agreements of this type would be made public.

The amendments would also expand the provisions on railway line transfers and discontinuances to cover rail corridors in urban areas that could be used for urban transit purposes.

Transportation mergers and acquisitions

Currently, the Canada Transportation Act provisions to review mergers and acquisitions apply only to the airline industry. Proposed amendments would expand the scope of revisions to include all transportation undertakings of significant size under federal jurisdiction. This would mean that the Minister of Transport would have the ability to review public interest issues arising from merger or acquisition proposals, as they related to national transportation.

The Commissioner of Competition would continue to examine competition issues.

Where a concurrent public interest review is requested by the Minister of Transport, opportunities would be given to the proponent, the Commissioner of Competition, and the Minister to reach agreement regarding the final structure and conditions of the transaction, including consent arrangements, before the Minister makes recommendations to Cabinet

Transportation data and reporting requirements

Transportation data are important in the design and assessment of transportation policies and programs and provide a better understanding of changes within the Canadian transportation market. The proposed amendments to the collection of data add security to the purposes for which the Minister of Transport can collect data. They identify stakeholders and parties from whom information can be obtained. Under the proposed legislative changes, administrative penalties would be enforced if reporting requirements are not met. These amendments also provide an extension to the reporting and reviewing periods.

VIA Rail legislation

VIA Rail’s mandate is to manage and provide a safe and efficient passenger rail service in Canada. The proposed amendments endorse and confirm VIA Rail’s continued existence, as well as its mandate, structure, powers and operations for inter city passenger rail services in Canada. Any future changes to the VIA Rail legislation would require Parliamentary approval.

Appointments of board members, the chairman, and the president and chief executive officer, would continue to be made by the governor-in-council, and all current appointees would continue to serve until the end of their terms.

March 2005

BACKGROUNDER

ENVIRONMENTAL IMPACTS STATEMENT

The Canada Transportation Act provides strong support for the Government of Canada’s vision of a safe, secure, efficient and environmentally responsible transportation system. Environmental protection is an explicit objective of the new National Transportation Policy declaration, which reflects the increased importance that Canadians and their government have placed on a sustainable transportation system.

In general, the proposed amendments to the Canada Transportation Act provide a broad framework for decision-making. A strategic environmental assessment, conducted as part of the development of the proposed amendments, indicates that environmental benefits can be anticipated from potential activities and decisions undertaken according to the broad guidance provided by the amended legislative framework. Extensive consultations with industry stakeholders have demonstrated significant support for several provisions that would advance environmental objectives, including new powers to address railway noise complaints and measures to support the provision of public transportation services.

Proposed amendments to the Canada Transportation Act’s National Transportation Policy declaration specifically include the principle of respect for the environment. This declaration will direct the development of policy instruments and provide guidance to both the Canadian Transportation Agency and the courts as they exercise their discretion in their interpretation of the provisions of this legislation.

In addition, certain provisions regarding issues such as the construction of international bridges and tunnels, the preservation of urban rail corridors, and railway noise, may yield positive and quantifiable environmental impacts. These provisions would likely be used to produce positive action and the possibility of measurable environmental benefits.

The proposed amendments to the Canada Transportation Act reflect the Government of Canada’s commitment to address the need to preserve the natural environment for current and future generations.

March 2005