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

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Mr. Speaker, I thank my colleague for her question.

Let me reiterate that the installation of voice and video recorders on locomotives is something the Transportation Safety Board of Canada has been calling for for a long time. TSB officials appeared before the Standing Committee on Transport, Infrastructure and Communities to reaffirm their support for this measure and remind us of the critical role that recorders can play not only in helping investigators understand an incident, but also in preventing future incidents.

The TSB has added locomotive voice and video recorders to its Watchlist of key safety issues the transportation system needs to address.

As for the privacy issue, as I mentioned in my speech, Bill C-49 imposes strict limits on how the recordings could be used, and the regulations to be developed will have to take into account the important issue of privacy rights.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Mr. Speaker, I am pleased to have the opportunity to speak today about rail safety in the context of Bill C-49, the transportation modernization act, which proposes to amend the Railway Safety Act. This is an important step in strengthening Canada’s comprehensive approach to rail safety.

I would like to take this opportunity to acknowledge the dedication that the Standing Committee on Transport, Infrastructure and Communities has demonstrated in its thorough analysis of the components of Bill C-49. Improving transportation safety and, in particular, enhancing the safety of the rail transportation system, is a priority for this government.

To this end, the government is proposing to amend the Railway Safety Act to mandate voice and video recorders in the locomotive cabs of federally regulated freight and passenger railways in Canada.

The approach proposed in Bill C-49 builds on the 2016 report from the Transportation Safety Board of Canada which confirmed that data from combined voice-and-video recording systems would help investigators understand the sequence of events leading to an accident and in identifying operational human factor issues, including those that may have been a factor in the accident.

The Transportation Safety Board of Canada also stated in its safety study that, when used proactively as part of a safety management system, the information from voice and video recorders can provide significant benefits to help identify and mitigate risks before accidents occur.

The proposed changes to the Railway Safety Act reflect careful consideration of the best way to maximize safety benefits while safeguarding the privacy rights of railway employees.

In essence, the amendments would require companies to install and maintain voice and video recorders in locomotives but would also establish specific limits on how the recordings can be used.

The result of the proposed legislative requirements would be, first, objective data that would allow Transport Canada, companies, and safety investigators to better understand events leading up to, and during, an accident or incident.

Secondly, the information could also be used in a proactive way, but within very clear limits, to identify safety risks before accidents occur. For example, data would allow Transport Canada to perform trend analysis to inform future safety rules and regulations. Companies could use the data to develop new or improved training programs, to strengthen existing operating procedures, or to establish new ones to address identified safety gaps.

This government understands that the proposed amendments have privacy implications, in particular for operating crews. These implications have been recognized throughout the study of this bill.

I can assure the House that safeguarding the privacy rights of railway employees has been a key consideration in the development of the proposed amendments. This is why Bill C-49 imposes strict and clear limits on the use of the information from video and voice recorders, as well as strict and clear provisions on how information must be handled, all to safeguard the privacy rights of employees.

For instance, any recording used for safety management must be selected through random sampling. Regulations that would follow royal assent will outline objective parameters for random sampling. They will also outline requirements for data protection that companies would be required to comply with, such as standards for encryption, data storage, and retention periods. Companies would also be required to develop and implement policies and procedures to respond to record-keeping requirements and managing access to the information, in particular how they will safeguard against unauthorized access.

During the committee’s study of the bill, one other issue we heard about is the issue of discipline. We heard from parliamentarians and some stakeholders concerns that data from locomotive voice and video recorders might be used for disciplinary purposes. I can assure this House that the fundamental purpose behind the proposed regime is safety. It is not about, nor does it allow for, the monitoring of day-to-day performance of employees. In this context, it is not meant to facilitate disciplinary measures.

However, it is possible that, in certain egregious circumstances shown by the recordings, disciplinary measures might be the most appropriate means to address a serious safety concern. The regulations will define what is meant by egregious circumstances so that this is not left to the discretion of railway companies.

Consultations with stakeholders, including individuals, companies, unions and other interested parties will be an integral part of building the regulations to ensure we get this right. The proposed regime clearly provides that no company shall use or communicate the information that is recorded, collected and preserved unless the use and communication is done in accordance with the law.

As is the current practice, Transport Canada would conduct inspections and audits to monitor compliance with legislative and regulatory requirements. In the event of non-compliance, Transport Canada would have the authority to take appropriate enforcement action, including imposing administrative monetary penalties.

I would like to reiterate that mandating on-board recording devices has one purpose and one purpose only: to strengthen the safety of Canada's rail industry for all Canadians, including railway employees. The recordings will help explain what happened after an accident, but, more importantly, they will have the real potential to allow us to identify and address safety concerns in order to prevent accidents from happening.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, today I rise to speak at the report stage of Bill C-49. This bill covers a range of amendments on the transportation sectors.

During my campaign, I heard loud and clear from many of my constituents that people were tired of omnibus bills from the previous government. There was an increased desire for accountability and transparency, yet here we are again discussing an omnibus bill that is moving through this House, with amendments to 13 acts, without giving parliamentarians adequate time for debate.

Because of the broad range of topics in this bill, I will keep my comments to air transportation, CATSA, and will quickly touch on marine transportation.

As many do in this House, I fly often. Over the last several months, we have seen stories of people being dragged off planes, stalled on the tarmac, and having to call emergency services. Too often, settlements are swept under the rug, and the industry continues with business as usual. I think Canadians are fed up. They are tired of waiting on the tarmac endlessly and are tired of overbooking.

The NDP introduced a bill that clearly set out the steps needed to establish a passenger bill of rights. The transport minister supported our bill and could have followed our example by introducing concrete measures to protect airline passengers. For example, when a flight is cancelled, the airline would have to offer passengers a choice between a full refund and re-routing under comparable conditions. Air carriers that failed to comply with this rule would have to pay $1,000 in compensation to every passenger, in addition to the refund. If an aircraft was held on the ground for more than one hour, the airline would have to provide passengers with adequate food, drinking water, and other refreshments. For each additional hour during which the airline failed to comply with that rule, it would have to pay each passenger $100 in compensation.

We also asked the government to implement protection measures immediately instead of delaying them until 2018. However, the minister chose not to propose concrete measures. Instead, he included provisions in the bill. The government sold it to the media and to Canadians as a passenger bill of rights, but that is simply misleading. The minister is delaying what needs to be done by handing over the responsibility for regulations to the Canadian Transportation Agency. When the CTA enacts inadequate regulations, it will give the minister a way out. That is not the political leadership Canadians expect.

What is disappointing is that the Liberals rejected our amendments without studying them, folding under pressure from the airlines.

The facts are clear that flights subject to the European regulations have a cancellation rate of 0.4%, which is four times lower than flights subject to the current Canadian regulations.

We have seen this government continuously abdicate its responsibility for airports. While the federal government does not manage them directly, it is up to the government to ensure a strategic vision, especially in a country as large as Canada. This vision must include every single size of airport, from Pearson to the local airports in my riding.

The communities of Campbell River, Comox, Port Hardy, and Powell River have expressed serious concerns about this continued pursuit of the for-profit privatization of our airports. These airports are essential elements of the social and economic infrastructure in our region. Representing many medium-sized and rural communities, air transportation provides a vital link that connects families and communities and promotes economic growth.

As a representative of the third largest riding in British Columbia, I have landed and taken off from several airports in my region, going to or returning from Ottawa. This is how I get to community events across the riding when travelling to and from this place.

These communities need these services, and as the government continues this privatization creep, they are connecting with me about their concerns. Campbell River recently shared with me that these privatization plans delay much-needed effective action on other issues, such as the burden of federal rents and fees on airlines and air travellers. These stand in the way of more competitive and economical air transportation in Canada.

There is still worse news in this bill regarding remote and rural airports. I think members can understand why I will not be supporting this bill as it stands. Bill C-49 would amend the Canadian Air Transport Security Authority Act. Instead of supporting the growth of regional airports, the government would use Bill C-49 to pass the buck for security screening to regional airports or the municipalities that own them. This policy would hurt rural economies, as the cost of security screening is so high that almost no small airport would be competitive if it had to pay the bill. The government is clearly stepping back from funding and developing regional airports.

Currently, the commissioner of competition has the power to determine whether a joint venture arrangement between airlines is anti-competitive and can subsequently apply to the Competition Tribunal to prohibit the joint venture. However, Bill C-49 would strip this power from the commissioner of competition. If Bill C-49 is adopted, the Minister of Transport would have the final word on proposed joint ventures between airlines. Once an arrangement was approved, the Competition Tribunal would no longer be able to prohibit it.

If Air Canada proposed an arrangement to merge its operations with those of an American company, even if the commissioner found that the agreement would lessen competition among airlines and increase ticket prices for passengers, the minister could approve the arrangement if the minister was satisfied that it was within the public interest. This is why the NDP proposed deleting clause 14 of Bill C-49, as it would expose consumers to unfair increases in airline ticket prices.

A decision by the minister to ignore the commissioner's advice could be influenced by political considerations to favour an airline at the expense of consumers. In addition, the bill does not spell out what is meant by the “public interest” as a basis for a decision by the minister to approve a merger of two airline operations. The concept of public interest is so broad that the minister could consider factors that are not in the interest of Canadians but rather in the interest of the shareholders of major airlines.

Bill C-49 would impact two elements in the marine industry. First, the bill would allow foreign-registered vessels to compete unfairly with Canadian shipowners. We are requesting that Canadian-registered vessels continue to have preferential access to government contracts, carriage of goods by container, and repositioning of empty containers. In addition, the government did not consult with stakeholders who would be affected by this measure.

Second, the Canada infrastructure bank would be permitted to provide loans to port authorities. Instead of assuming responsibility for directly funding the development of port facilities, the federal government would transfer that responsibility to private investors. Investors would charge high rates of interest on their loans, and once again, the consumer would foot the bill. The cost of the required return on investment could affect consumers, since many goods transit through ports.

If private investors such as Morgan Stanley acquire port facilities, Canadians would lose control of their port infrastructure. In fact, the government has asked Morgan Stanley to study a port privatization scenario, even though a subsidiary of Morgan Stanley is earning millions by buying and reselling parts of Canadian ports.

The concerns I have raised today were also brought up by our transport critic in committee and in the House. The bill is simply not good for Canadians, and for that reason, I cannot support it.

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, I appreciate my colleague's enthusiasm for this bill. He referred to changes with respect to the air passengers' bill of rights. I wonder what rights he thinks passengers would have on a plane. The bill sets up a policy that discusses events and how someone else would establish the reasons for the events and the compensation to be paid. In the bills of rights in the United States and Europe, there are set standards, and when certain things happen the passengers know what they will receive compensation for. However, Bill C-49 is silent on that, especially as it talks about defining the causes of the problem after they have taken place. I wonder if the hon. member would respond to that particular issue with this piece of legislation.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, it is my great pleasure to be here today to debate this extremely important bill. I want to start by thanking the minister for his work and for the vision that he has shared with Canadians regarding this bill. I also want to thank the Canadians who were consulted and who gave us a lot of information about Air Canada.

The three main topics I want to discuss today are passenger rights, joint ventures and, of course, foreign ownership.

Before I begin speaking on those three points, I want to say that Canadians love to travel. They travel for pleasure, but also for business. When they do travel, they often mention certain areas that they feel we must do better in. One, of course, is the cost. The cost is very high in Canada compared to that in many other countries. It is an area where we need to make some improvements.

Canadian travellers also speak about their rights and ensuring that they are recognized in the many things they face while travelling. If it is simply a matter of delays, knowing the reason behind the delays would be extremely important. If it is overbooking, that is a different story altogether. They are looking for improvement in those areas, and it is obvious that Bill C-49 will answer many of those concerns.

I am the member for Sackville—Preston—Chezzetcook, and in Nova Scotia we have a fabulous airport in Halifax. It is a very important full-service airport in Atlantic Canada. It is always important to remember the importance of these types of companies that generate over $2.7 billion to the economy, which is extremely important for Nova Scotia. It is also important to mention that there are over four million travellers taking flights to and from Halifax. That, in itself, is very impressive.

Let us talk about the air passenger bill. This legislation will address very important issues that Canadians face and that we need to deal with, including consistency between our airline carriers, which is extremely important; passengers' rights; industry or carriers' rights as well; and when there are issues, the compensation. We need to bring some standardization to compensation, because it is not obvious if Canadians are being compensated for some of the challenges they face.

As I indicated earlier, we need to consider denial of boarding, delays and cancellations, baggage that is lost or damaged, tarmac delays, seating with family members or delicate cargo, such as musical instruments, etc. Those are major issues that we need to look at as a government. This bill will help us reach that objective.

Let us look at the issue we had last summer when a flight from Belgium to Montreal was diverted to Ottawa. The passengers stayed on the plane. They were told by the carrier there would be a delay of about 30 minutes. The 30 minutes continued on and on, and at the end of the day had become six hours. Throughout those six hours, the passengers were not able disembark from the plane, and the air conditioning stopped or broke down. They were running out of food and water. These are all critical things that passengers should be able to access at all times. Not being able to do so showed disregard for the passengers and their rights. We need to do something about that.

Not so long ago, we also saw on television a United Airlines flight on which a doctor, again because of a mistake by the carrier, was removed because of overbooking. Who did the overbooking? Again, it was the carrier that was at fault, yet the passenger was the one who was denied his rights. We need to make improvements in that area.

As far as adding to the bill of rights is concerned, we could also look at the question of official languages for Air Canada.

We need to ensure that people who want to use French or English have equal opportunities to do so. This is essential.

That is the important piece with respect to the bill of rights that I wanted to talk about.

We have to keep in mind that the air transportation sector is a challenging one today. There have been many changes. Many people choose to travel by air. It takes a huge capital investment by companies, yet results in a small profit margin. Therefore, we need to find ways to maximize efficiencies. It is already happening to some extent, as there are all kinds of different agreements. However, we need to do more. One approach that would really work well is the joint venture, with two or more companies working together to give better service to Canadians here in Canada and abroad. If a company or various companies want to have a joint venture today in Canada and to amalgamate to offer a better service, they normally have verify this with the Commissioner of Competition. That was the main analysis required. However, we need to look at the wider benefits for Canadians. With Bill C-49, these companies can now make an application to the minister, who would consult with the Commissioner of Competition, but who would also look at the other benefits that Canadians could take advantage of. To some extent, that would be the measurement we would use to make that happen. This process will be much better than what we now have and allow Canadian companies to benefit from global trends and to realize efficiencies. It will also allow Canadian travellers access to a wider range of destinations, provide for easier in-bound travel, increased tourism, and increased flight options. That is another big piece of Bill C-49 that will be very helpful.

With respect to foreign ownership, previously foreign investors were only allowed to own up to 25% of the voting rights. Now they will be able to own up to 49%, putting us in line with many other countries in the world. However, no single investor would be able to own more than 25%, which is crucial, as well as no more than 25% for other carriers as well, which is essential.

We are paying way too much. Many people are travelling across the border to take flights with JetBlue, allowing them to travel from Boston to Florida for $99. We need to do better, because last year five million people crossed the border to take flights in the United States. We need to do better in this area, and we are well on our way with this new bill.

In conclusion, Canadian travellers are a priority for our government, and this transparent new process will allow us to see many changes. We will see smaller airports, such as in Atlantic Canada, Fredericton, P.E.I., Cape Breton, etc., become more important because there will be more choices. With the new provisions for joint venture we will see more flights in smaller rural communities, lower fares, more choices, and improved services and connectivity. This bill is well in line with that. I wonder why it has been so long in coming, because this is extremely important to making us more competitive and ensuring that Canadians have better access to better transportation.

The House resumed consideration of 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, as reported (with amendments) from the committee, and of the motions in Group No. 1.

Report Stage

[Ben Lobb, Conservative, Huron—Bruce, ON]

Mr. Speaker, it is a pleasure to rise today to talk about Bill C-49.

First I would like to talk about a topic that has been mentioned a couple of times already, which deals with the locomotive voice and video recording. Many members of the House have met with Unifor and Teamsters members to discuss some of the issues around the video and voice recording.

The genesis of this has been real accidents through the years, particularly one that occurred in 2012, which killed three people, unfortunately. One of the recommendations was video and voice recording to aid in the critical minutes leading up to an accident. There is already a black box in the unit itself, and people at headquarters can track the movement in real time, such as braking and many other moves that the engineer and conductor would do. However, there are questions on this video and voice data. Who will have control of it? Where will it be stored? How will it be used?

If this data is to be strictly used for purposes of the final 15 minutes, or even one hour, leading up to an unfortunate accident, then I have not heard any issues from the workers. However, the issue they have is on whether the large rail companies would have the ability to use this data as a tool for HR monitoring or surveillance. For somebody who may be working an 18-hour shift, that is not what this is meant for and not what it should be used for.

For a lot of it, the minister has said to leave it up to them and it would be dealt through regulation through the safety board, etc. However, the workers doing the job want a little more clarification on that. Anyone who has ever worked knows that when someone is looking over their shoulder, it is never when they perform their best. The employees are trained and they have tests every year, and these are one of the most complex signage and lighting rules and regulations in the world. Therefore, I think the government needs to take another look at this, talk a little more with Unifor and the Teamsters, and make sure it is doing it right.

I would also encourage the people doing these jobs for companies like CN or CP to come forward. Once the bill is implemented, if they start seeing these video and voice recordings being used for disciplinary or worker surveillance purposes, bring that forward to members of Parliament and their union reps. They are not to be used for that purpose. That is not why the legislation is there.

Another point I would like to bring up is that the minister mentioned in his speech or response to a question that he has heard nothing but positive comments. That is obviously not true. There have been consumer groups, air passenger groups, who have expressed “cold comfort”, I think was the quote, for some of the passenger rights on airplanes. Another comment that the minister made, which I think he needs to expand upon, was his reference to the United Airlines incident. There was more than one incident, but specifically he mentioned the one where an individual was dragged off the plane. I do not believe that situation is addressed in the bill. If one is waiting on the tarmac in the airplane for over three hours, I believe it is dealt with, but as far as physically dragging somebody out of an airplane, I do not believe that is dealt with in the bill. He would perhaps like to provide further clarification on that at a later date.

Others also have concerns. I think Air Transat expressed a concern around the joint venture side of things, which is another area that needs to be fleshed out and further examined. With respect to foreign ownership, we always have debates on the proper threshold and amount of capital for a Canadian airline. It is set at 49%, and any individual entity can only own 25%. We will see how that unfolds.

If we are trying to modernize the act, some people would probably think that landing rights should be looked at as well. Over the last nine or 10 years, airlines like Emirates and others have requested more landing spots. Pearson, for example, would be one, and I do not believe that is addressed here either. As far as competition and pricing go for international flights, certainly competition has proven time and time again to bring in the best price and the best service.

The other criticism I have, and I am open to someone else proving me wrong, is the part that deals with the proposed air travellers bill of rights, including with in regard to flight delays, damaged or lost luggage, or passengers being on the tarmac for more than three hours. The bill does not specifically spell out what that compensation would look like. It does mention minimums, but those are left to regulation. I notice this is a recurring theme in some of the bills the government puts forward. Part of this will be gazetted and people will have an opportunity to comment on it, but if the minister feels so strongly about this as one of the key parts of the bill and an election promise, if he has been thinking about and focused on this for a long time, the least he could do is to provide air passengers or flight groups some framework or numbers from which they could work. That is the least he could do.

In addition, we all understand that there will be days like today or a couple of months ago when there were hurricanes in the U.S., and some of that weather came up to Toronto and Ottawa and messed up all the flights. People understand there are going to be adjustments made because of weather and that there is nothing we can do about it. However, from the time they recognize there is an issue, airlines can work with the people. That said, I do know know how we could compensate someone who takes take a week or eight days off and has two of those days messed up, one because of the weather and one because of the airline. From what the minister said, we are going to leave that up to the department and the agency.

Another issue concerns CATSA. A lot of money collected by the government is not put back into security screening at the airport. Anyone who goes to Pearson airport on a Monday morning will know it is pretty treacherous and that the standard of 95% getting through in 10 minutes is certainly not the standard on a Monday morning. It might be that 95% do not get through in 10 minutes and 100% may get through in an hour. If whatever money came in was put back into security, into CATSA, into further screening, these are the types of simple things that we could do to create a modern system to get people through, and to help Air Canada, WestJet, and other carriers deliver on their promises. We also know that in 2021, there will be 69 million travellers coming through, so we want to make sure we have that ready.

The other thing I would like to talk about before my time is up deals with rail and pipelines. The government set up a regulatory regime that makes it almost impossible for pipelines to be built, which in turns puts further stress on the rail lines. In consequence, rail lines are carrying a tremendous amount of oil when they could be carrying a tremendous amount of crops to ports and to markets. With a crop this year in the west within 10% or 12% of being a record, there will again be a tremendous strain on the railway system.

I would like to talk about the long-haul interchange, as other members have also discussed. Some members purport that it is a great thing. However, with the NAFTA negotiations ongoing right now, I question the logic of why the government would give that up when it could have been negotiated in NAFTA.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, simply put, the measures in Bill C-49 do two things. First, it extends the limit to 1,200 kilometres, which opens up the opportunity for a shipper, who would otherwise be captive, to use the rail line that is there but hand off to another company that would give them a better rate or service.

In addition, while the original Fair Rail for Grain Farmers Act focused on the Prairies and the 160-kilometre limit to allow grain to move more effectively, Bill C-49 opens it up to lumber producers and mines. Anyone who needs to ship anything by rail would have more access to competitive rates. The amendment we brought in specifically opens up areas of northern and southeastern British Columbia, as well as northern Quebec, to these better rates.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, it is a building block toward a foundation we need in place in the country to ensure that the whole supply chain, from start to finish, is working efficiently and in a synchronized way. Just as our transport committee studied Bill C-49 to ensure it was meeting the goals and objectives we needed for it, the transport committee will be taking on further action to look at the rest of the supply chain, including the efficiency of our ports. This is something I am looking forward to, particularly in the context of Port Metro Vancouver, which, as we know, is the busiest port in the country. They clearly all have to work together, and that is the objective of our studies.

[Vance Badawey, Liberal, Niagara Centre, ON]

Mr. Speaker, I would like to ask my colleague how Bill C-49 contributes to the overall strategic plan, in the broader picture, with respect to the minister's most recent announcement on transportation 2030.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, the efficiency of our systems means dollars, absolutely Those dollars are quite often passed on to the farmers, because they are price takers. As well, there is the damage to our reputation that we suffer when we cannot deliver our goods and services on time to our international customers. Therefore, it makes all the sense in the world for Bill C-49 to lead toward the more transparent sharing of performance data.

As well, there are provisions I did not talk about that would allow Bill C-49, through the rail companies, to ensure there could be investments in additional capacity. Our rail hopper fleet is wearing out. We need the railways, and perhaps government as well, to contribute to the refurbishment of that fleet with more efficient cars. That is all included in Bill C-49, so that everyone is paying their fair way in order to get an efficient system that would prevent the kinds of issues my hon. friend raises.

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

Mr. Speaker, I am looking at Bill C-49 and seeing what essentially looks like some missed opportunities to do more to rationalize the relationship between shipping by rail and shipping by sea.

I have a specific point that I want to raise and get the member's thoughts on, and we can perhaps get back to this with other legislation. We have very poor communication and advance planning. The hon. member mentioned better information from the grain growers to know when they are able to ship. However, when they are able to ship by rail, there is often not sufficient capacity.

We then have large container ships coming into the Port of Vancouver. They have as many as four separate compartments that they need to fill with grain. They will hang out in the Port of Vancouver, come in and fill one hold, and then they have go out and wait again. Where they tend to wait are in legal anchorages, for which the Gulf Islands receives no compensation for the use of the space, or the annoyance and inconvenience of the noise and the lights. They wait in anchorages in my riding and in the riding of the member for Nanaimo—Ladysmith until they can go back to the Port of Vancouver.

This is inefficient, costly, and an annoyance. I wonder if Transport Canada could not do more to create better planning, which would be an advantage to the shipper and the grain grower, and certainly an advantage to people living adjacent to those areas where container ships are backed up and waiting. That is due to the inefficiencies of our loading and unloading in the Port of Vancouver and connectivity to the trains that deliver the grain.

I hope the question is not too complex for my hon. colleague. I am sure he is familiar with the problem as well.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, I appreciate the opportunity to provide some comments on the transportation modernization act, Bill C-49.

As a member of the Standing Committee on Transportation, Infrastructure and Communities, I want to start by applauding the work of all of my colleagues on the committee. We dedicated a full week in early September to studying the bill, hearing key witnesses, and working through a clause-by-clause analysis that produced well-considered, well-debated and productive amendments.

While Bill C-49 contains important aspects in marine and air travel services, notably, as my colleague from Mississauga—Streetsville just commented on, the creation of our air passenger bill of rights, I would like to focus my comments on the freight rail provisions. Modernization in this area was, in my view, an important step forward to creating equity for shippers across Canada, while balancing our national interest in ensuring a healthy rail sector.

Bill C-49 would ensure that service agreements establish, as much as possible, equal performance obligations between rail companies and their customers, better conflict resolution, and mechanisms. Therefore, balance is vital. Our producers, shippers, and others need reliable rail service to meet their obligations to customers at home and around the world. In the case of our international customers, it is critical that Canada, as a trading nation, build and protect a reputation as a reliable trading partner.

At the same time, we have to acknowledge that our class 1 rail services, CN and CP, must have the financial ability to maintain and modernize their capital assets across this vast and geographically-challenging nation. As we think about the struggles we had as a nation to see our railways built in the first place, we have to recognize that despite those challenges our country presented, our shippers enjoy among the lowest rates in the world.

Bill C-49 seeks to achieve equity and balance in three important areas: first, by creating a more competitive environment for shippers and producers across Canada when it comes to shipping rates, especially for those who were otherwise captive customers of one rail company; second, by creating service level agreements that establish a level playing field; and, third, by creating measures to improve transparency in the business relationship between the railways and their customers through a more transparent sharing of performance data and service capacity forecasts.

Creating a more competitive environment for otherwise captive customers involves a mechanism known as “interswitching”. Therefore, in response to my friend from Central Nova, here are more details on that.

Simply put, Canada has for years allowed customers within 30 kilometres of a transfer point between rail lines to have one company hand off its shipments to another if that other company offers better rates. The government sets the rate a rail company receives for transferring cars to another carrier, a rate that includes an allowance for the capital investments that the rail company requires for the line's state of good repair and improvement.

In 2013-14, we saw a record prairie grain crop, followed by one of the worst winters in Canada's history. Faced with service shortfalls by our railroads, the previous government expanded the interswitching limit to 160 kilometres, clearing the way for more captive grain shippers in the Prairies to access other rail services, including lines in the U.S. While it appears no shipper actually used the full 160 kilometre limit, the ability to shop for better rates led to improved performance by our railways, both in services and rates.

Bill C-49 introduces “long-haul interswitching”, a 1,200 kilometre limit open to all rail customers, except in two corridors where CN and CP both provide services, those being the Quebec City to Windsor corridor and from Kamloops to Vancouver. In our study of Bill C-49, I was pleased to introduce an amendment to the exclusion corridors that opened up long-haul interswitching to producers and shippers in northern Quebec, as well as both north and southeast of Kamloops in British Columbia.

Bill C-49 would take interswitching, a mechanism that in a limited way provides a competitive shipping rate for grain producers in the Prairies, and make it available in a big way to mines, mills, manufacturers, and producers across Canada.

Bill C-49 would also correct a long-standing inequity between the rail lines and their customers. Until now, a rail company has been able to penalize shippers for delays in loading or unloading cars, but there has been no reciprocal penalty against the railway for failing to provide the agreed to number of cars at the agreed to time.

When we think of the costs involved in keeping a ship waiting in Vancouver harbour for a train to arrive, not to mention the reputational damage we suffer when we do not deliver to customers on time, establishing equitable performance obligations between shippers and the railways makes sense. That is what Bill C-49 will do.

Finally, shippers and rail companies will more properly share responsibilities for the efficient and timely movement of goods. They will do this by accepting the consequences of non-performance in service agreements through reciprocal penalties.

Recognizing that issues will arise in negotiating and performing commercial agreements, Bill C-49 amends the Canada Transportation Act, allowing the agency to provide confidential, informal, low-cost, and expedient dispute resolution assistance. This has the potential to spare rail companies and their customers from the need to pursue expensive and time-consuming remedies. Similarly, access will be expanded to a summary, paper-based final offer arbitration process as a way to resolve disputes. Formerly this was available only when the freight charges involved were less than $750,000. Bill C-49 increases the threshold to $2 million, making this process available to more small and medium-sized shippers.

In our standing committee's study of Bill C-49, and previous studies, witnesses consistently called for more transparency in the performance data that the railroads release. This is important to ensuring that service standards are kept. This, of course, is of interest to producers and shippers because it allows them to fulfill contracts with customers. It also opens the way for them to collaborate more effectively in the management of the rail-based supply chain. The government is also keenly interested in this data because our reputation as a reliable trading partner is of national importance.

Bill C-49 will require the railroads to provide timely waybill information on the shipments they carry. This is data that shippers can reference in their negotiations for service agreements and rates with the rail companies. The data will also be used by the Canadian Transportation Agency to set the interswitching rates that the rail companies will be paid to move shipments to transfer points. Canada's two national railways have extensive operations in the United States, where they have been required to provide waybill data for some time, so this measure in Bill C-49 will put Canadian shippers on an even playing field.

As well, in the interest of transparency, CN and CP will also see new requirements to report in advance on any plans to close rail sidings or connection points, or to abandon sections of track.

Finally, referring back to the importance to farmers, shippers, and Canada's trade reputation of having reliable grain shipments, Bill C-49 will require the railways to provide a report before the start of a crop year which assesses their ability to meet their grain movement obligations. Then, before October 1, the railways will have to review the state of the year's crop and forecasts for the upcoming winter, and provide the government with its contingency plan to move grain in the event we see another scenario like the one we faced in the winter of 2013-14.

Bill C-49 has been an exercise in listening to some long-standing issues in Canada's freight rail system; considering, debating, and refining long-sought measures to make the system more equitable; and achieving a balance that will preserve the health of our rail sector while improving performance for our producers and shippers. It has sought a win-win result, with the greatest win being for Canada itself as the source of high-quality products and resources, and as a reliable and trusted trading partner in the world.

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, I note my colleague's remarks focused primarily on the air passengers bill of rights. I know the member sat through many days of testimony as one of my committee colleagues. I would like to ask about a different portion of the bill.

I know the member is from Ontario. When it came to transportation for freight rail, one of the key features of the bill was long-haul interswitching. Previously, a regime was in place that pertained only to the transportation of western Canadian grain. Bill C-49 would expand to different industries and different parts of the country. Being from a different part of the country, does the member see the value in this extended long-haul interswitching as opposed to the simple regime that was in place simply for western Canadian grain previously?

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Mr. Speaker, on May 16, the Minister of Transport introduced Bill C-49, the transportation modernization act, to bring our government's vision of a state-of-the-art national transportation system to fruition.

All Canadians want their transportation system to be safe and secure, green and innovative, while supporting economic growth and the creation of jobs for Canada's middle class. Bill C-49 meets all of these objectives, as well as the government's commitment to develop a fair, accessible, reliable, and efficient transportation system for 2030 and beyond.

One very important element of the bill is the proposal for strengthened air passenger rights, which would be reinforced by regulations. As more Canadians use their air transportation, thanks to increased services and lower fares, recent events at home and abroad have demonstrated the need for strengthened rights for air travellers. Canadian travellers want to know that when they purchase an airline ticket, the air carrier will, in fact, provide the services they have purchased. If the air carrier cannot deliver the purchased services, then the traveller must be provided with a certain standard of treatment and, in some cases, the traveller must receive compensation from the air carrier.

Canadian travellers also expect that they should not have to fight to get the service for which they have paid. As such, air passenger rights must be easy to understand and apply consistently to all airlines, domestic and international. They must apply to all flights from and within Canada and benefit all travellers.

Should Bill C-49 receive royal assent, the Canadian Transportation Agency will be mandated, in collaboration with Transport Canada, to develop a set of clear regulations to ensure a consistent framework for air passenger rights applicable to all carriers. As our government is committed to ensuring this regulatory process moves forward in an open and expeditious manner, further consultations will take place with stakeholders throughout Canada.

The regulations would enshrine standards of care and compensations in a variety of situations faced by air travellers. They would address some of the more frequent irritants, such as providing passengers with clear and concise information about air carriers' obligations and how to seek compensation or file complaints; establishing standards of treatment for passengers in cases of denied boarding, delays, and cancellations, including compensation for inconvenience in situations of overbooking; standardizing compensation levels for lost or damaged baggage on both domestic and international flights; developing clear standards for the treatment of passengers in the case of tarmac delays; ensuring children under 14 years of age are seated in proximity to a parent or guardian at no extra charge; and requiring air carriers to define their policies on the carriage of musical instruments.

Canada is not alone in legislating or regulating specific practices of the airline industry by establishing a framework of passenger rights. Other countries have developed guidelines or regulations to ensure that passengers receive a standard level of treatment for compensation when their flights are delayed or cancelled. This government, however, is committed to establishing air passenger rights that would make our country a world leader in how such irritants would be to be addressed.

For instance, under the regulations that would be developed for air passenger rights, provisions would be included to ensure that no passengers could be involuntarily removed from an aircraft after they boarded as a result of overbooking. If the airline cannot find a volunteer to give up his or her seat, it will need to pay compensation to remedy the inconvenience it has caused. The Minister of Transport has made this commitment and the government intends to fulfill.

Bill C-49 seeks a balanced approach as it relates to air passenger rights, one that would ensure the passenger would be treated fairly, but also one that would allow the air carrier to operate its business in a manner such that it could remain competitive and profitable. For example, the legislation clearly outlines that the requirement for compensation would be utilized only in instances where the air carrier would be directly responsible for the denial of boarding, delay, or cancellation of the flight. While recognizing that overbooking is a standard practice which allows air carriers to keep ticket prices low, passengers who are denied boarding should receive fair compensation when this occurs. This level of compensation would be clearly enshrined in regulations.

This government, however, recognizes that air carriers operate in a complex environment and that there are significant costs associated with safety and security, both in the air and on the ground. Increased competition and pressure from consumers for lower ticket costs have also resulted in a more complex business model for air carriers. There are also factors that are outside an air carrier's control, such as weather and medical emergencies, that may result in a flight being delayed or cancelled. We recognize that these factors must be taken into account when developing an air passengers bill of rights.

In cases where a flight is delayed for reasons beyond an air carrier's control, such as weather delays, passengers have a right to be provided a standard level of treatment, including ongoing communication by the air carrier.

Further, Bill C-49 also contains provisions to increase data collection from air carriers and others in the air travel sector. This would allow the government to measure air carriers' compliance with the regulations and to take corrective action if needed. Both government and air carriers can learn from these data, allowing for decisions to be based on solid evidence.

Should Bill C-49 receive royal assent, Canadian travellers can look forward to strengthened provisions that will better protect their rights. These passenger rights will ensure that Canadians are entitled to a world-leading standard of treatment and compensation.

For these reasons, I ask my hon. colleagues to support Bill C-49 to ensure air passenger rights for Canadians.