Bill C-49 (Historical)

Transportation Modernization Act

An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts

This enactment amends the Canada Transportation Act in respect of air transportation and railway transportation.
With respect to air transportation, it amends the Canada Transportation Act to require the Canadian Transportation Agency to make regulations establishing a new air passenger rights regime and to authorize the Governor in Council to make regulations requiring air carriers and other persons providing services in relation to air transportation to report on different aspects of their performance with respect to passenger experience or quality of service. It amends the definition of Canadian in that Act in order to raise the threshold of voting interests in an air carrier that may be owned and controlled by non-Canadians while retaining its Canadian status, while also establishing specific limits related to such interests. It also amends that Act to create a new process for the review and authorization of arrangements involving two or more transportation undertakings providing air services to take into account considerations respecting competition and broader considerations respecting public interest.
With respect to railway transportation, it amends the Act to, among other things,
(a) provide that the Canadian Transportation Agency will offer information and informal dispute resolution services;
(b) expand the Governor in Council’s powers to make regulations requiring major railway companies to provide to the Minister of Transport and the Agency information relating to rates, service and performance;
(c) repeal provisions of the Act dealing with insolvent railway companies in order to allow the laws of general application respecting bankruptcy and insolvency to apply to those companies;
(d) clarify the factors that must be applied in determining whether railway companies are fulfilling their service obligations;
(e) shorten the period within which a level of service complaint is to be adjudicated by the Agency;
(f) enable shippers to obtain terms in their contracts dealing with amounts to be paid in relation to a failure to comply with conditions related to railway companies’ service obligations;
(g) require the Agency to set the interswitching rate annually;
(h) create a new remedy for shippers who have access to the lines of only one railway company at the point of origin or destination of the movement of traffic in circumstances where interswitching is not available;
(i) change the process for the transfer and discontinuance of railway lines to, among other things, require railway companies to make certain information available to the Minister and the public and establish a remedy for non-compliance with the process;
(j) change provisions respecting the maximum revenue entitlement for the movement of Western grain and require certain railway companies to provide to the Minister and the public information respecting the movement of grain; and
(k) change provisions respecting the final offer arbitration process by, among other things, increasing the maximum amount for the summary process to $2 million and by making a decision of an arbitrator applicable for a period requested by the shipper of up to two years.
It amends the CN Commercialization Act to increase the maximum proportion of voting shares of the Canadian National Railway Company that can be held by any one person to 25%.
It amends the Railway Safety Act to prohibit a railway company from operating railway equipment and a local railway company from operating railway equipment on a railway unless the equipment is fitted with the prescribed recording instruments and the company, in the prescribed manner and circumstances, records the prescribed information using those instruments, collects the information that it records and preserves the information that it collects. This enactment also specifies the circumstances in which the prescribed information that is recorded can be used and communicated by companies, the Minister of Transport and railway safety inspectors.
It amends the Canadian Transportation Accident Investigation and Safety Board Act to allow the use or communication of an on-board recording, as defined in subsection 28(1) of that Act, if that use or communication is expressly authorized under the Aeronautics Act, the National Energy Board Act, the Railway Safety Act or the Canada Shipping Act, 2001.
It amends the Canadian Air Transport Security Authority Act to authorize the Canadian Air Transport Security Authority to enter into agreements for the delivery of screening services on a cost-recovery basis.
It amends the Coasting Trade Act to enable repositioning of empty containers by ships registered in any register. These amendments are conditional on Bill C-30, introduced in the 1st session of the 42nd Parliament and entitled the Canada–European Union Comprehensive Economic and Trade Agreement Implementation Act, receiving royal assent and sections 91 to 94 of that Act coming into force.
It amends the Canada Marine Act to permit port authorities and their wholly-owned subsidiaries to receive loans and loan guarantees from the Canada Infrastructure Bank. These amendments are conditional on Bill C-44, introduced in the 1st session of the 42nd Parliament and entitled the Budget Implementation Act, 2017, No. 1, receiving royal assent.
Finally, it makes related and consequential amendments to the Bankruptcy and Insolvency Act, the Competition Act, the Companies’ Creditors Arrangement Act, the Air Canada Public Participation Act, the Budget Implementation Act, 2009 and the Fair Rail for Grain Farmers Act.

Transportation Modernization Act

[Marc Garneau, Liberal, Minister of Transport]

moved that Bill C-49, an act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, be read the second time and referred to a committee.

Madam Speaker, there are special moments in a politician's life when we get to do something truly transformative.

May 16, 2017 was one of those moments for me. I had the great pleasure of introducing Bill C-49, the transportation modernization act, which will help bring our government’s vision of a state-of-the-art national transportation system to fruition.

This legislation breathes life into transportation 2030, a strategic plan for the future of transportation in Canada, to promote our government’s agenda for economic growth and job creation.

It fulfills our promise to review the Canada Transportation Act and related legislation. We want to ensure our laws and regulations position Canada to capitalize on global opportunities, thrive in a high-performing economy, and better meet the needs and service expectations of Canadians.

This bill represents a first legislative step to deliver on early Transportation 2030 measures. It consolidates into a single bill some of the essential components required to advance a strategic and integrated plan for our country’s transportation system.

Bill C-49 proposes a range of improvements to better meet the service requirements and overall experience of the Canadian traveller. It aims to create a safe, innovative transportation system that takes advantage of international best practices, opportunities for international investment and contributes to a highly productive Canadian economy.

Bill C-49 focuses on our immediate priorities in the air, rail and marine sectors. It addresses the needs of air passengers for fairer and more transparent rights, the needs of the Canadian air industry for greater investment, the needs of shippers for safer and more efficient rail transportation, and the needs of railways for strengthened trade corridors to global markets.

Specifically, the bill proposes to strengthen air passenger rights; liberalize international ownership restrictions for Canadian air carriers; develop a clear and predictable process for approval of airline joint ventures; improve access, transparency, efficiency, and sustainable long-term investment in the freight rail sector; and, increase the safety of transportation in Canada by requiring railways to install voice and video recorders in locomotives.

Before I explain each of these in greater detail, let me first make clear that action in these areas reflects the priorities identified by Canadians.

We undertook extensive consultations over the past year following the release of Canada Transportation Act review report. We heard from more than 300 Canadian transportation and trade stakeholders, including indigenous groups and the provinces and territories, about how to ensure that the national transportation system continues to support Canada's international competitiveness, trade, and prosperity.

We also heard from individual Canadians in communities, large and small, all across the country regarding their concerns about our transportation system. Canadians have expressed their disappointment with their air travel experiences. I am committed to improving those experiences.

The concerns of Canadians have been highlighted in recent weeks with much-publicized cases of the unacceptable treatment of air travellers both in this country and south of the border. Stories of passengers forcibly removed from flights and other unacceptable industry practices that have significant impact on consumers have made the news headlines.

The bill, if passed, would provide assurance to Canadians that if they choose to travel by air, they would be aware of their rights, and should they feel that their rights have been violated, they would have a clear, simple, and timely mechanism for resolution.

Bill C-49 proposes to mandate the Canadian Transportation Agency to develop, in partnership with Transport Canada, new regulations to enhance Canada's air passenger rights. These new rules would ensure air passenger rights are clear, consistent, and fair for both travellers and air carriers.

I believe that when passengers purchase an airline ticket, they expect and deserve the airline to fulfill its part of the transaction. When that agreement is not fulfilled, passengers deserve clear, transparent, and enforceable standards of treatment and compensation. Under this proposed legislation, Canadians would benefit from a uniform, predictable, and reasonable approach. The details of the new approach would be elaborated through the regulatory process, which would include consultation with Canadians and air stakeholders.

My objective is to ensure that Canadians have a clear understanding of their rights as air travellers without negatively impacting on access to air services and costs of air travel for Canadians. Bill C-49 specifies that the regulations would include provisions regarding the following: first, providing passengers with plain language information about carriers' obligations and how to seek compensation or file complaints; second, setting standards for the treatment of passengers in the case of overbooking, delays, and cancellations, including compensation; third, standardizing compensation levels for lost or damaged baggage; fourth, establishing standards for the treatment of passengers in the case of tarmac delays over a certain period of time; fifth, seating children close to a parent or guardian at no extra charge; and sixth, requiring air carriers to develop standards for transporting musical instruments.

I have been clear that I also intend that the regulations would include provisions ensuring that no Canadian is involuntarily removed from an aircraft due to overbooking. I have issued a challenge to Canada's air carriers on this matter, and that of seating arrangements for minors, that they move to strengthen their practices even before new air passenger rights are finalized.

The bill also proposes that data would be required from all parties in the air sector flow to be able to monitor the air traveller experience, including compliance with the proposed passenger rights approach.

The legislation also proposes to liberalize international ownership restrictions from 25% to 49% for Canadian air carriers, with associated safeguards. For example, a single international investor would not be able to hold more than 25% of the voting interests of the Canadian air carrier, and no combination of international air carriers could own more than 25% of a Canadian air carrier.

I should point out that the policy change would not apply to Canadian specialty air services, such as heli-logging, aerial photography, or firefighting, which would retain international ownership levels of 25%.

Liberalizing international ownership restrictions means that Canadian air carriers, which include all passenger and cargo providers, would have access to more investment capital, which they can use for innovation. This would bring more competition into the Canadian air sector, providing more choice for Canadians and generating benefits for airports and suppliers, including new jobs.

In fact, in the fall of 2016, I exempted from the ownership restrictions of 25% two companies that wanted to enter the Canadian market supported by increased foreign investment. This decision is now permitting Enerjet and Jetlines to pursue their intention to create low-cost carrier services for Canadians. Liberalizing the foreign investment provisions will give Canadians more frequent access to air travel within Canada, and from Canada to transborder and international locations.

Another improvement in the bill is that it proposes a new, transparent, and predictable process for the authorization of joint ventures between air carriers, taking into account competition and wider public interest considerations.

Joint ventures are a common practice in the global air transport sector. They enable two or more air carriers to coordinate functions on specific routes, including scheduling, pricing, revenue management, marketing, and sales.

In Canada, air carrier joint ventures are currently examined from the perspective of possible harm to competition by the Competition Bureau.

Unlike many other countries, notably the United States, Canada's current approach does not allow for the consideration of the wider public interest benefits other than competition and economic impacts. Furthermore, the bureau's review is not subject to specific timelines.

The bill that is before this House proposes amendments that would allow me to consider and approve air carrier joint ventures, where it is in the public interest, taking into account competition considerations. On this latter concern, I would work in close consultation with the Commissioner of Competition to ensure that I am properly informed regarding any concerns that he or she may have with regard to competition. Air carriers that would choose to have their proposed joint ventures assessed through the new process would be given clear timelines for an expected decision.

I am also convinced that providing Canada's air carriers with such a tool would also benefit the air traveller. By joining up networks, air carriers could allow seamless travel to a wider range of destinations and reduce the duplication of functions. For Canadians, this could mean more seamless access to key global markets, easier in-bound travel in support of tourism and business, as well as increasing transiting traffic through our airports, thus increasing flight options.

Globally, airports are making investments in passenger screening to facilitate passenger travel and gain global economic advantages. Canada's largest airports have expressed an interest in making investments in passenger screening, either through additional workforce or technology innovation, and smaller airports have shown interest in obtaining access to screening services to promote local economic development. In the last two years alone, 10 small airports across Canada have requested screening services.

The proposed amendments in the bill would create a more flexible framework for the Canadian Air Transport Security Authority, known as CATSA, to provide new or additional screening services on a cost recovery basis. This would enable industry stakeholders to enter into agreements with CATSA to increase access to screening services at small, low-risk airports.

In turn, this would support our efforts to maintain an aviation system that is both secure and cost effective. It would also strengthen Canadian communities' competitiveness as they attract new commercial routes.

Bill C-49 proposes significant enhancements to increase the safety of the rail sector, too. Once in place, this legislation would build a safer, more secure rail transportation system that Canadians trust.

As a top priority, the legislation would amend the Railway Safety Act to require that railway locomotives be fitted with voice and video recorders. Mandating the installation of the recorders would strengthen rail safety by providing objective data about crew actions leading up to, and during, a rail accident. Beyond that, the requirement would also increase opportunities to mitigate risks and prevent accidents from occurring.

The updated act would not only require companies to install the recorders. It would limit how the recorded data could be used, within strict criteria. For instance, while the Transportation Safety Board would have access to recorded data for post-accident investigations, Transport Canada and railway companies would also have access to the data for proactive safety management, and for following-up on incidents and accidents not investigated by the Transportation Safety Board.

The specific limits on the use of the data are designed to maximize the safety value of this technology while limiting its potential to infringe on employees’ privacy rights.

Canada's freight rail system is a cornerstone of our economy. Bill C-49 would strengthen the freight rail policy framework to foster greater transparency, balance, and efficiency in the Canadian rail system. The proposed improvements would provide fair access through stronger remedies for shippers on service and rates, promote increased efficiency of the rail transportation system, encourage long-term investments in the railway network, and deliver improved data on rates and service.

As I committed last fall, fair access measures would allow for reciprocal financial penalties in service-level agreements to ensure that railways are held accountable for service failures. They would improve access to and end the timelines of the Canadian Transportation Agency processes to settle service and rate disputes. The new measures would ensure the agency offers informal dispute resolution options and guidance to shippers. The legislation would also broaden eligibility for rate remedies, benefiting small and medium-sized shippers, and allow an arbitrator's decision to apply for two years instead of only one.

We would also create a new mechanism called long-haul interswitching. This would be available to all captive shippers in all regions of the country and all sectors. It would introduce competitive alternatives for their traffic and better position them in negotiations for service options and rates. Other measures would modernize the methodology to calculate the maximum revenue entitlement in order to promote long-term investments in the rail system. Among other things, these improvements would better recognize railway investments, including in hopper cars.

The bill would also make it easier for the agency to update regular interswitching rates so that they adequately compensate railways for interswitching costs. As well, Canadian National's single shareholder restrictions would be relaxed from 15% to 25%.

To enhance transparency and level the playing field, the amendments would require large railways to report some performance, service, and rate data relevant to their Canadian operations. Transport Canada would have the authority to publicly report rate trends.

In the context of these advancements for the freight rail system, the short-term measures in the Fair Rail for Grain Farmers Act would be allowed to sunset as scheduled. With Bill C-49 we are taking important steps to ensure that the right conditions are in place for a successful winter season in the grain handling and transportation system this year and for years to come.

These are not the only ways we propose to improve trade and global markets. Bill C-49 would also amend the Coasting Trade Act to enhance marine transportation as well.

The proposed amendments would allow vessel owners to reposition their owned or leased empty containers between locations in Canada using vessels of any registry. This is something the Shipping Federation of Canada began asking for as far back as 2009. Extending the repositioning of empty containers to all ship owners would support industry's request for greater logistical flexibility and also would help address the ongoing shortage of empty containers for export purposes.

Equally important is Bill C-49's focus on marine-related infrastructure. The legislation proposes amendments to the Canada Marine Act that would allow Canadian port authorities and their wholly owned subsidiaries to access Canada infrastructure bank loans and loan guarantees. As members are aware, the bank would be responsible for investing in key infrastructure projects. Enabling port authorities to access the bank would support investments in key trade-enabling infrastructure, creating the conditions for companies and communities to build, expand, and thrive.

I am proud to table Bill C-49, the first legislative step toward making Transportation 2030 a reality. I trust I can count on the support of all parliamentarians to seize its immense potential, and to pass these measures as soon as possible.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Speaker, I recognize that the air passenger bill of rights is a key part of the legislation, as highlighted in a tweet that the minister put out on Twitter when he introduced the bill.

In the legislation, the Minister of Transport is being given the authority to set the compensation rates for the air passenger bill of rights. How much does the minister think is an appropriate penalty for a delayed flight? Why is this amount not included in the legislation? Why is the Minister of Transport the only person the Canadian Transportation Agency should consult before setting the compensation regime the government envisions?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Madam Speaker, as I said in my speech, we will mandate the Canadian Transportation Agency to give us the specifics of the passenger bill of rights.

They will do this by consulting with Canadians, with the airlines, and looking at practices in other countries, so that they can come up with a bill of rights that is not only fair for passengers but also for the air carriers, and that takes into consideration what other countries are doing.

The Canadian Transportation Agency will prepare this, and they will work with Transport Canada to set the final bill of rights, which will be in position in 2018.

[Robert Aubin, NDP, Trois-Rivières, QC]

Madam Speaker, I thank the minister for his speech. It is not easy to ask him just one question about an omnibus bill that affects nearly every area of transportation. However, I would like to know more about this air passengers' bill of rights because, not so long ago, when the minister was sitting on this side of the House, he voted in favour of a bill on a passengers' bill of rights.

That bill was introduced by the NDP and contained specific measures in all areas, including cancelled flights, overbooking, wait times on the tarmac, and so on. I therefore expected the minister to build on that bill that he supported when introducing his own passengers' bill of rights. However, there is nothing to his bill of rights. It is completely lacking in substance.

My question is twofold. As a member of the House of Commons, how can I vote for or against something that is not really there, and what does the minister mean when he tells airlines that, in the meantime, he would like them to respect the spirit of the law, which has absolutely no substance?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Madam Speaker, I simply want to tell my colleague that he will have many opportunities to ask questions when the bill is examined in committee. I hope that we will have many interesting witnesses who will answer our questions.

Of course, we have said from the beginning that the bill would give the Canadian Transportation Agency the mandate to prepare a bill of rights based on consultations. I am not autocratic enough to think that I have all of the answers regarding this bill of rights. Consultations will be held. The Canadian Transportation Agency will do that work and present us with the results of those consultations later this year. That is when we will be able to define the exact parameters of the compensation that my colleague asked about.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I appreciate the chance to speak on this debate for the transportation modernization bill. I recognize that it deals with many aspects of transportation, reflecting in some cases recommendations from the expert panel on transportation created under the previous government and chaired by David Emerson.

We see approaches to improving passenger experience, quality of experience, and passenger rights on air transit, but all the references to rail are for grain and freight. My question to the minister, before diving into the details of this bill as it relates to movement of goods by rail and movement of people by air, is on whether we have abandoned the movement of people by rail. When will we see a modernization bill to bring VIA Rail into the same status that Amtrak has, with a legislated framework, so that we can have passenger rail for the 21st century?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Madam Speaker, my colleague will know that transport is a vast domain. It covers rail, the marine side, the air side, the movement of cargo and freight, and it also covers people.

I was very careful to point out that Bill C-49, the transportation modernization act, is but a first step in transport 2030. I encourage her to read my document, “Transportation 2030”, because we touch on all sorts of other things, including the one that she brought up, which is passenger rail.

That is something we are working on. We cannot do everything in one shot, but I will let the member know that we are working on passenger rail.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I want to applaud the minister on this initiative. I think we have all been horrified by pictures of a doctor being dragged out of a plane against his will when there was an overbooking in the United States, about families being separated on flights in Canada, with children being told they could not fly with their parents, and one member of a family being bumped off a flight.

I have a question for the minister. We all understand that there are maximums in compensation that differ from airline to airline, but will these regulations also consider setting a minimum amount of compensation, as well as the maximums, related to someone being dislodged from a flight?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Mr. Speaker, the intention is that when we talk about compensation, we will be establishing minimum levels of compensation. In other words, it cannot be below that, though it could certainly be higher. For example, where there is an overbooking situation and there has to be a seat freed, or more than one seat, there may be a certain amount of negotiating that will take place for one passenger to agree to offer a seat to someone else. However, there would be a minimum compensation. The maximum is not at this point something we are going to include in the passenger bill of rights.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Mr. Speaker, we heard a moment ago from the member from the Green Party on the movement of goods by rail. Of course, VIA Rail might be important. If we could perhaps get some of our oil cars off of the rail and into the pipelines, that would be a great start.

Talking specifically to the interswitching, the minister mentioned that the current arrangement is going to be sunsetted. I am wondering if he could speak about what the grain elevator associations and farm groups have said about the changes. They looked at the maps and said this is what they need, and now it looks as though there has been an arbitrary 30-kilometre distance put into this. I am curious about what types of things he has been told by those organizations.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Mr. Speaker, my colleague I think is referring to the regulated interswitching that has always been in place and which will continue to be in place, for 30 kilometres. Nothing has changed from that point of view. What we have done is extended interswitching to 160 kilometres, with long-haul interswitching which goes out to 1,200 kilometres and which addresses all captive shippers. The grain industry is extremely important in this country. I know that. I have met with lots of farmers and shippers. It is 10% of what the trains carry. The other 90% very often represents resources that are important to Canadian provinces and communities, but they are captive because they are on the end of one line.

We are extending long-haul interswitching not just to the western provinces, but to all of Canada and to all sectors, so whether it is a forestry product or a mining product that happens to be in a captive shipper situation, they will have better access at more competitive rates. This is the whole plan. We are trying to come up with a long-term solution, not just a solution that will be a band-aid for a few years, but something that is long term and applies to all of the sectors. The reaction of the shippers up until now has been positive.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I am pleased to rise this evening to debate Bill C-49, the transportation modernization act, at second reading.

The bill could simply be renamed the transportation omnibus act for the number of different bills being amended, with many of changes being more than just technical in nature. The Air Canada Public Participation Act, the Canada Transportation Act, the CN Commercialization Act, the Railway Safety Act, the Canadian Transportation Accident Investigation and Safety Board Act, the Canadian Air Transport Security Authority Act, the Coasting Trade Act, the Canada Marine Act, the Bankruptcy and Insolvency Act, the Competition Act, the Companies' Creditors Arrangement Act, the 2009 Budget Implementation Act, and the Fair Rail for Grain Farmers Act are all being amended.

How this squares with the Liberal election promise not to use omnibus legislation is beyond me. Do not get me wrong, I am not complaining about an omnibus bill, just the fact that the Liberals did and then made a promise they knew they would not keep. Furthermore, when I introduced a motion in transport committee last week calling on the committee to write to the Minister of Transport and his government House leader to ask them to split the bill into the following sections, rail shipping, rail safety, air, and marine, to provide an enhanced and possibly expedited scrutiny, every single Liberal member voted against it without even a single comment as to why.

I found this vote particularly ironic, as it was the Liberal member for Niagara Centre who raised the idea of expediting the passage of the bill in the first place, in order to provide grain farmers with a greater amount of certainty as they negotiate contracts for future shipping seasons.

The more measures that a bill contains, the more time it takes to provide adequate scrutiny. Separating the bill would be the easiest way to facilitate expedited passage, and thus my motion calling on the bill to be split into several parts.

Unfortunately, Liberal members were unwilling to split the bill into these natural divisions. This does not inspire confidence that when the bill eventually does reach committee, the Liberal Party members will be open to any amendments. While Bill C-49 is supposed to be the Minister of Transport's legislative response to the 2015 Canada Transportation Act review led by the Hon. David Emerson, it would appear that what we have before us is a bill that is designed to change the channel from some of the bad news that keeps piling up for the Liberals.

The government's communications strategy for this legislation has overwhelmingly concentrated on the air passenger compensation regime that is being introduced, and not the other very consequential measures. Here is what the Minister of Transport posted on his Twitter feed as he introduced this legislation, “These air passenger rights will ensure that travellers are treated like people, not just a number.”

Like many members here, I travel a lot and only have positive things to say about all the employees working for the airlines and at our airports. Of course, on occasion, flights do not go as we hope, but the Minister of Transport appears to be willing to pit passengers against airlines rather than fixing the structural problems in Canada's aviation regime.

This legislation does not spell out what the compensation regime will be, just that there will be one. The bill states that after consulting with only the Minister of Transport, the Canadian Transportation Agency will make regulations concerning carriers' obligations toward passengers. However, for even greater clarity, subsection (2) of proposed section 86.11 states that the Canadian Transportation Agency must comply with any instruction from the minister with regard to setting regulations concerning carriers' obligations to passengers.

What this means is that the Canadian Transportation Agency is tentatively responsible for setting what financial penalties a carrier would have to pay to the passenger in the case of a service breach, unless the minister is dissatisfied with the level of prescribed compensation that the CTA decides is appropriate, in which case he or she can dictate what that level of compensation will be.

It is noteworthy that the agency will, by law, only be allowed to consult with the Minister of Transport concerning the setting of these regulations, and not with consumer advocate groups, airlines, airports, Nav Canada and other stakeholders in the sector.

I do not understand what the purpose of consulting only the minister is. If the Canadian Transportation Agency is to be an arm's-length organization, this legislation clearly diminishes its independence. If the minister will not allow the agency to independently set the parameters of the passenger compensation regime, he should just spell out in legislation what it will be and let members of Parliament and stakeholder groups decide whether this is a good proposal or not.

If this legislation were truly aimed at reducing the cost of travel for the passenger, while increasing service and convenience, the minister would immediately lobby to have the government's carbon tax, which will make every single flight more expensive, withdrawn. He would reform the air passenger security system, which was universally identified as a major irritant for all passengers during the Canada Transportation Act review by all the organizations that participated in the process.

While it would be preferable to have the sections of the bill dealing with air and rail examined as stand-alone pieces of legislation, I can only surmise that the government's complete mismanagement of the House's agenda has led us to the point where an omnibus transportation bill is what we have in front of us today. At least we have finally begun debating something in the transport sector, now that we are two years into the government's mandate. So far, the only achievement the minister has to show in terms of legislation is the act to amend the Air Canada Public Participation Act.

Let us talk about Bill S-2, an act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another act. This was first introduced by the government's representative in the Senate 13 months ago and passed third reading in the Senate on February 2. The minister claimed that Bill S-2 was a priority in his speech to the Montreal Chamber of Commerce in November 2016, yet it has not been touched since.

On May 12, just days before the introduction of the legislation we are debating today, the Minister of Transport introduced the oil tanker moratorium act, a bill that his own officials conceded would only impact the future development of Canada's oil sands and no other activity in northern British Columbia. Equally concerning about this oil tanker moratorium, which could be renamed the oil pipeline moratorium, is that there is considerable support among first nations on B.C.'s coast for energy development opportunities, but the wishes of these first nations are being ignored. For the Liberals to move forward with this tanker moratorium without properly consulting coastal first nations is extremely hypocritical.

The Liberals go to painstaking lengths to emphasize the amount of consultation they undertake, but it is becoming more and more apparent that their interest in consulting is about being told what they want to hear and not about listening to differing views. If anyone needs further proof that Bill C-48 was introduced only for political purposes, it is that this moratorium has been introduced as a stand-alone bill and not as part of this omnibus package we are debating today.

The Minister of Transport's silence and inaction on critical and time-sensitive transport issues, especially rail transport, is leading to uncertainty for both shippers and the railroads, which both want certainty as they negotiate shipping rates for the season.

That is why over the past several months I have asked many times whether the government intends to renew the sunsetting measures in Bill C-30 before they expire on August 1, 2017. The response I have been given time and time again is that the government recognizes the urgency to get this done and that legislation is forthcoming. Unfortunately, the Liberals have made a muck of this, and the key measures in Bill C-30 will sunset before any replacement legislation can receive royal assent and become law.

Last week in the transport committee, a Liberal member moved a motion calling on the committee to begin its consideration of this bill, Bill C-49, in September, before the House begins sitting, to expedite the study of the sections of the bill that deal with the shipping of grain. While Conservatives have no objection to considering this legislation in September before the House returns from the summer break, government members fail to realize that our producers needed them to turn their attention to this months ago, as the measures will sunset on August 1 of this year. At best, there will be a two-and-a-half-month gap between when the measures in Bill C-30 sunset and replacement legislation is in place.

By the time this legislation has passed, the majority of contracts for this year will have been negotiated with the law in flux. Because of the government's mismanagement of the legislative agenda, these popular measures will sunset without replacement, and shippers will be the worse off.

This is important to note, because for a combination of reasons, including a lack of rail capacity, preparedness by railways and shippers, weather, and the size of the crop, western Canada's 2013-14 grain crop did not get to market in a timely manner. Consequently, the previous Conservative government introduced Bill C-30, which gave the Canada Transportation Agency the power to allow shippers access to regulated interswitching up to 160 kilometres, mandated that CN and CP both haul at least 500 tonnes of grain per week, and introduced a new definition of adequate and suitable service levels. With this extension, the number of primary grain elevators with access to more than one railroad with the extended interswitching limits increased from 48 to 261.

These measures were met with universal support from the members of the shipping community, because even if they did not use interswitching, they could use it as a tool to increase their negotiating position with the railways, as the shippers knew exactly how much the interswitch portion of the haul would cost them.

At the same time, the government announced that the Canada Transportation Act statutory review would be expedited, and it began a year early to provide long-term solutions to the grain backlog of the 2013-14 shipping season and other problems in the transport sector within Canada. The hon. David Emerson, a former Liberal and Conservative cabinet minister, was tasked with leading the review. This review was completed in the fall of 2015 and was on the Minister of Transport's desk shortly before Christmas. The minister then tabled this report in mid-February 2016 and promised wide consultations on the report. As the key measures of Bill C-30 were going to sunset on August 1, 2016, and parliamentarians were hearing from the shipping community that it would like to see these extended, Parliament voted in June 2016 to extend those provisions for one year.

In the fall of 2016, the Standing Committee on Transport, Infrastructure and Communities undertook a study of Bill C-30 and held a number of meetings on the merits of these measures and whether they should be allowed to sunset. We were assured that if we lived with this extension, these issues would be dealt with by August 1, 2017.

The vast majority of the testimony heard was supportive of maintaining the 160-kilometre regulated interswitching limit at committee, which is why the committee's first recommendation was the following:

That the Canadian Transportation Agency retain the flexibility provided under the Canada Transportation Act by the Fair Rail For Grain Farmers Act to set interswitching distances up to 160 km, in order to maintain a more competitive operating environment for rail shippers with direct access to only one railway company.

Anyone who has read this bill will know that the government ignored the committee's main recommendation. At some point during this debate, I hope to hear from Liberal members on the transport committee about whether they believe that the government was right to ignore the committee's recommendations, and if so, whether the entire committee study was just a waste of time.

Basically, what the government is proposing with this legislation is to replace the 160-kilometre interswitching limit with the creation of a new long-haul interswitching tool that would be in effect between Windsor and Kamloops on hauls of up to 1,200 kilometres, or up to 50% of the length of the entire haul. Shippers would be charged the regulated interswitching rate for the first 30 kilometres of the haul and then a Canada Transportation Agency-determined rate, which would be determined on a case-by-case basis based on the price of a similar haul, for the remainder of the distance to the interswitch point. Shippers would only be able to interswitch at the first available interswitch point within the zone.

What the government has done is take a little-used existing remedy, called a competitive line rate, and rename it long-haul interswitching.

Under a competitive line rate, a shipper could apply to the agency to set the amount of the competitive line rate, the designation of the continuous route, the designation of the nearest interchange, and the manner in which the local carrier would fulfill its service obligations. We know from history that this remedy was infrequently used because of the prerequisite that the shipper first reach an agreement with the connecting carrier, and the two main carriers effectively declined to compete with one another through CLRs. What we do not know is what the difference will be at a practical level between this new long-haul interswitching and the existing competitive line rates.

Like competitive line rates, long-haul interswitching is a much more complicated system for shippers to use, and the jury is still out on whether this will achieve the minister's stated objective of improving rail access for captive shippers. When Bill C-30 was first introduced, there was universal support among shippers for the extended interswitching. So far, very few organizations I have spoken to can say that this tool is better.

In conclusion, this much is certain: the key measures in Bill C-30 will be allowed to sunset on August 1, before this legislation receives royal assent. The Liberals have had nearly a full year to get new legislation in place but failed to do so, and shippers will suffer the consequences.

Canada remains one of the most expensive jurisdictions in which to operate an airline, and it is about to become even more so with the imposition of a national carbon tax. This bill does nothing to address the systemic cost issues, which are passed on to passengers, that were identified by the Transportation Act review. As has been the case with almost everything with the current government, optics trump everything, and this bill exemplifies that.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would have liked to have put this question to the minister, but I did not get the opportunity. I also had the pleasure of serving on the committee with the hon. member. Of course, she participated in the very long, intensive review on rail safety. I am sure she recalls when the minister used to stand in the House and say, “Rail safety is our number one priority”, yet that is exactly the measure that is not included at all in this legislation, nor have we seen a single measure tabled in this place to respond to our unanimous report.

What I am deeply troubled by is that the Liberals have hand-picked one of the measures that was highly contentious, which has to do with recorders. There was some concern that this information, if made available to the rail companies, would be used against the employees. However, what they have not dealt with is the issue of rail fatigue, which, according to the workers, is the real concern.

I wonder if the member could speak to whether she shares my concern that we have seen absolutely nothing come forward, apart from this one rather prejudicial measure, to address serious concerns across this country about rail safety.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I want to thank my hon. colleague for her question and for the work she did while she was on the transportation committee. I believe she was the member who was pushing for the committee to set in place a timeline for us to conduct the review of Bill C-30 to ensure that we were not bumping up against the deadline that we now seem to be bumping up against.

Definitely, rail safety was one of the first studies we undertook, when we were first elected, as part of our first session.

What is really interesting is that there have been a number of studies and very little action on the studies the committee has undertaken. As the member noted, the minister has stood up many times saying that rail safety is his number one priority. I find it somewhat curious that the ink was barely dry on the government's announcement that it would begin the review of the Railway Safety Act when it included a measure like the LVVR measure in this act, when it was about to launch a review of the Railway Safety Act. I do not know if this is by design or default, but it seems a somewhat incoherent approach to all matters in the transportation file.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, at the beginning of her speech the member was referencing all of the different transportation aspects the bill touches on. Knowing that we have an integrated transportation network within Canada and we are moving toward a transportation 2030 integrated strategy, is there one type of transportation that you would like to see removed from this discussion, such as air transportation?