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.

[David Rheault]

In our submission before the panel, this is a point that we made, that you have to have a direct interest to be entitled to file a claim. That's a principle that we submitted to the CTA review panel. This principle is included to a certain extent in Bill C-49, and we're comfortable with that, although we have proposed some amendments to give it more clarity.

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

Okay.

You've also stated in your submission that changes would be required to the definition of “Canadian” in Bill C-49 to ensure that the policy objectives underlining the new foreign ownership rules are met. Can you tell us more about that? How would you want to see that definition change?

[David Rheault]

I'm sorry if I didn't express myself clearly.

Basically what we said is that the way the balance will be struck will depend on what the regulation is and at what level of compensation and in which circumstances you will apply it. What we say in our submission is that you have to be conscious, when you establish those levels, that they might have an impact on competitiveness.

When Bill C-49 was tabled, all public statements from the minister were clear that the intent was not to put at stake the competitiveness of the air industry. This is a message that is well noted by us, because we operate in a very complex and competitive environment and we want to make sure that the regulations that will implement Bill C-49 take that message into account.

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

I'm going to see whether I heard you correctly.

You believe that Bill C-49 does strike the right balance in terms of continuing to ensure that there is a competitive advantage for your airlines.

[David Rheault]

No, we don't believe that. What we basically say in our submission is that we are in a very competitive environment, which is worthwhile, yet the principle of Bill C-49 to have some established compensation and a certain regime also has to take into account the broader issue of the competitiveness of the industry.

This is a submission we would be making in the consultations for the drafting of the regulation, because we believe that the regulation should take into account also the competitiveness of the industry and the circumstances in which these regulations should be applicable when you compare them with what has been done in other jurisdictions.

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

Wow. I didn't realize it was my turn already. Thank you very much for that.

I want to ask a question of Air Canada.

In your submission, on your last page in your conclusion, you state:

Air Canada, therefore urges caution and asks the government to strike a balance with the implementation of Bill C-49 so as not to put Canada or Canadian airlines at a competitive disadvantage.

Do you believe that Bill C-49 has done this?

[David Rheault]

To answer that question with respect to Bill C-49, I think the review regime that is proposed for joint ventures is very positive. This can help to develop Canadian infrastructure and develop new gateways through Canada to open our country to the world and enhance the movement of passengers and goods.

[Vance Badawey, Liberal, Niagara Centre, ON]

That's a good point. I'll put out the request that you folks go back, and when we take this to the next level—pass Bill C-49—start looking at satisfying some of the recommendations that are contained within the strategy overall and at how the airline industry can integrate data, or logistics and distribution of goods globally, or even the movement of people. How can you participate and as an enabler add to Canada's being better positioned because we have that proper transportation infrastructure in place?

Thank you for that.

[Vance Badawey, Liberal, Niagara Centre, ON]

Good. That's a careful answer. Thank you.

Going to the business part of it, right now, as I mentioned earlier in this dialogue from the past few days, we've been teasing out not only those issues having to do with Bill C-49, but ultimately ways that Bill C-49 can contribute to the broader national transportation strategy, especially the strategy that has been outlined by the minister—the trade corridors strategy not only for moving goods but also moving people globally.

How do you see this bill, from the standpoint of your industry, being integrated with other methods of transport in the movement of people and goods to better position Canada with respect to that resource being available to the consumer, to the customer, whether it be business or the daily traveller?

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I thank you for coming out tonight. I don't want to necessarily get into what's happened. I want to get more into what's going to happen moving forward.

Two of the themes we've really concentrated on in the last couple of days have to do with both safety as well as business. How do we become more of an enabler for you to be more competitive and to add more value and better service to the customer?

I want to start off with the safety part first. We talked with the rail industry about video-voice recorders. You obviously know what's happening there with Bill C-49 and what it's recommending.

My question to you is with what you have now in your industry, which is not necessarily a video recorder but a voice recorder, do you find that with that in place—and although it's not accessible, I get that, but it can be, if you really wanted it to be with new technology—you can use the voice recorders when it comes to safety, when it comes to prevention of and when it comes to reaction to?

Have flight recorders, voice recorders, served or would the airlines request further capacity or capabilities with those flight recorders?

[Martin Shields, Conservative, Bow River, AB]

With Bill C-49, do you see an increase in that cost to the passenger at the end?

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

Thank you. I'm certainly interested in receiving your brief and your recommendations.

In the one minute I have left, I will turn to the representatives from WestJet.

At the Trois-Rivières regional airport, which is located in a municipality I represent, there have been plans for charter airlines heading south. However, it was impossible to carry them out because the security measures were not available. Those measures could have been available had the associated costs been paid, as mentioned in Bill C-49.

Do you agree with this double standard for airports, meaning that some have the services covered, while others have to pay for them?

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

We can agree that it is not always a team effort. The commissioner has an advisory role.

I will now turn to you, Ms. Pavlovic. I quite agree with you that Bill C-49 does not have a passenger bill of rights, but outlines the general principles that might lead to the creation of one.

In your opening remarks, you said that there were omissions, even in the general principles that must guide the Agency in its consultations. What aspects are missing from Bill C-49?

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

Thank you, Madam Chair.

My thanks to all the guests for joining us this evening.

Many aspects of Bill C-49 bother me, some of which deal with the air component.

My first question is for the Air Canada officials, not as a way to single out the company, but because the example I have in mind directly concerns them.

A few years ago, a joint venture agreement between Delta and Air Canada was being negotiated, if memory serves, and it was blocked by the Commissioner of Competition. The Commissioner of Competition ensures the safety of consumers and travellers. If the commissioner says that this agreement is not in their best interests, I'm fine with that.

In Bill C-49, the role of the Commissioner of Competition becomes advisory and the minister may decide to override his recommendations for reasons he deems valid. Does this mean that it would be possible to establish joint venture agreements—to which I'm not fundamentally opposed—that the minister deems valid, but the Commissioner of Competition does not?

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

In my last minute and a half, I'll pose this question, and if you don't get time to answer it fully, I'll come around to it in another round of questioning. I'll pose it to both of you.

With an eye on the consumer, what other measures could the government have included in Bill C-49 that would have helped or lowered the overall cost of flying in Canada?