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.

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

I fully understand that the perspective is historic. At the time when production was minimal, that was understandable, but today, it would be unacceptable. Thank you.

My second question is about interswitching and, specifically, the possibility for a railway company to request an interchange to be removed from its list. Subclauses 136.9(1) and (2) of the bill describe the obligations of railway companies to keep up to date a list of the locations of interchanges and a process including a 60-day notice to remove an interchange from that list.

From reading that, my understanding was that, after a 60-day notice, the obligations no longer applied since the time expired. However, in its FAQ last week, Transport Canada notes that the railway companies have other general obligations that they must continue to fulfill beyond the 60 days.

There is an issue with the consistency between Bill C-49 and Transport Canada's FAQ. At the very least, there is a lack of clarity in terms of the general obligations that carriers must fulfill.

[Scott Streiner]

We already have an obligation under the Canada Transportation Act to report annually to Parliament on trends that we see in air traveller complaints, including how many complaints have been filed with respect to service by different airlines. So that's already in the public domain. Bill C-49 would provide additional provisions with respect to the submission of performance information by airlines, and some of that information may well be available to travellers as they make assessments on the airlines with which they wish to book.

[Scott Streiner]

Madam Chair, I trust that the members will understand that as an adjudicator I have to be careful about interpreting legislation that's not yet on the books and on which we don't have an application. Having said that, as I read the bill, it doesn't dictate to the CTA that the traffic must flow in one direction only, so I think we will make that determination and other determinations, if Bill C-49 is passed into law, based on the facts before us and the arguments brought by the parties.

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

Thank you very much.

I feel like my colleague Mr. Fraser. There are many things I would like to ask, but I am going to go to you, Mr. Streiner, and circle back to some of the comments you made in your opening remarks.

You said that perhaps the most significant rail-related change in Bill C-49 is replacement of the CTA's authority to set interswitching distances beyond 30 kilometres and of the competitive line rate provisions with long-haul interswitching. I think it connects quite well with what Mr. Al-Katib said in terms of the angst around interswitching. This would be one of the issues that is raised with me time and time again when I'm meeting with stakeholders around the long-haul interswitching, so some of my questions are based on the conversations with them.

For you, Mr. Streiner, I first want to ask about long-haul interswitching orders and reasonable direction of the traffic. In the bill, clause 136.1 states that an LHI order should be applicable to the “nearest” interchange “in the reasonable direction of the...traffic”. In southern Manitoba, for example, traffic is often moving north to an interchange in Winnipeg, before it moves somewhere down into the lower 48 states. There are, however, closer interchanges at the border, but these are not of the same size or efficiency as the Winnipeg interchanges.

Does Bill C-49 allow for an LHI order to have traffic still move to Winnipeg even if there's a closer but less efficient interchange?

[Murad Al-Katib]

Well, one of the things that are being attempted with the long-haul interswitching solution is to expand that out to various sectors and across the country. There is one glaring criticism at this point of the Bill C-49 provision: the Kamloops-Vancouver corridor is actually excluded from the long-haul interswitching. It's not very clear to me why that is the case, and I think it's certainly something that needs to be looked at. But from the perspective of having it accessible, one thing is that when we did our consultation, the broad 160-kilometre interswitching wasn't being used. It was being used after we filed our report. We couldn't find a single incidence of it being used at the time. That being said, I'm not a fan of remedies just hanging out there for the convenience of shippers. But with a well planned remedy, like the long-haul interswitching, if we can get the CTA to react quickly and to extend that from year to year quickly, I think it's a very effective mechanism, and it is going to inject competition into the system.

[Sean Fraser, Liberal, Central Nova, NS]

Excellent, thank you very much.

I could probably spend an entire day with this panel, so to the extent you can keep your answers short, and I'll try to do the same with my questions, it would be helpful.

First, Mr. Streiner, you mentioned a relative explosion in the number of complaints you dealt with when the public learned that the CTA was there to help. I'm picturing that through a well-publicized process, including these committee hearings and debate in the House of Commons, if C-49 passes, Canadians are going to be very well aware that they have some sort of recourse for the ordinary frustrations that come with travel. Do you have the capacity to deal with a further explosion of complaints? If not, what mechanism can be put in place to give you that capacity?

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

Wouldn't it have been possible for Bill C-49 to give an overview of what those regulations could be, so that we would know where we are headed? I think that is relatively clear, since we are among the last countries to implement a passenger bill of rights.

Had we benefited from the experience of others, we would have already implemented certain elements. But the consultation will be based on major philosophical principles or regulatory proposals, which we could improve and completely remove or add new ones.

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

Thank you.

I am asking you this because that bill, which had received the Liberals' support but did not make it through, contained very specific descriptions that are in line with Mr. Emerson's report. It said that the passenger bill of rights should be consistent with or close to what was being done in the United States or in Europe. Most of the measures were very specific. For example, in case of a cancelled flight, the airline company was asked to provide two or three options. Failing to do so, the company would have to pay a fee that was even costed.

With Bill C-49, we are light-years away from that. We are in the philosophy of what the passenger bill of rights should have been. We will go into consultations once Bill C-49 obtains royal assent. So are we not losing precious time, given the work that has been done already and the fact that problems are becoming more and more persistent?

[Scott Streiner]

I assume that your question is with respect to what's proposed in Bill C-49.

[Erin O'Toole, Conservative, Durham, ON]

Thank you very much, Madam Chair.

Thank you to all of our witnesses for being here. I certainly appreciate your testimony today and your participation in a review of our transportation system.

Mr. Emerson, it would be my privilege to ask you a couple of questions. We're at an interesting time in Canada. In your report, the “Pathways” report that you provided to government, which in some ways was the precursor to Bill C-49, you said on a few occasions that the theme of the report was the relationship between trade and our systems of commerce, and our transportation system, and getting those goods to markets in Canada, in North America, and around the world.

You, as a former minister of international trade, would know that we have a unique opportunity in that we're renegotiating and modernizing NAFTA at the same time that we are supposed to be modernizing our transportation networks for the next 30 years.

In your consultations, did you hear a demand, particularly from the air and the trucking side, for the transborder cabotage approach to linking the North American transportation system, and wouldn't this window—of renegotiating NAFTA— which didn't exist when you wrote the report, be an obvious opportunity to integrate the transportation system in North America?

[Murad Al-Katib, President and Chief Executive Officer, Former Advisor, Canada Transportation Act Review, AGT Food and Ingredients Inc.]

Thank you.

I'm Murad Al-Katib. I'm CEO of AGT Food and Ingredients Inc. I had the honour of serving with Mr. Emerson on the Emerson report as well. I was his lead adviser on the grain sector, on the western Canadian rail chapter, as well as on natural resources, including oil and gas and the mining sector. I'm going to bring to you some perspectives not only in that role, but also as president of one of Canada's largest container intermodal shippers. AGT Food is among, maybe, the top five or seven container shippers in the country. We're also the largest class 3 railway in the country now as well, with the purchase of a short-line railway in Saskatchewan.

Let me pick up on a couple of points that were made by my colleagues. One concerns the work we put forward and the work before you now as Bill C-49. For Canada as a trading nation, transportation infrastructure and the interaction of policy with that infrastructure is one of what I would consider to be Canada's most important generational activities. It means taking a look at how we enable the economy to seize the opportunity, as trade continues to grow, particularly to get our products to market, because of the large geographies we have in our blessed country. With these physical distances, the regulation within the system needed to be addressed in a number of areas. I'm going to break them down into bite-sized pieces.

Transparency of the transportation system was a resonating point of our report and a point that continues to resonate within industry. I think that Bill C-49 addresses greatly one of the major criticisms of the system previously. At least now we have a system such that, if these measures are put forward, the railway systems will be not only encouraged but mandated to provide data input to a system. That data will come into the CTA, will be synthesized, will be published, and will allow policy-makers to make more informed decisions instead of attempting to react on the fly. I think data transparency is a very important part. It is something that was demanded by industry, among the recommendations we made, and certainly it is something we see within Bill C-49.

When we looked at transparency, though, to reiterate both of my colleagues' comments, there was quite a strong desire for ex parte powers of the agency to investigate and be able to look more like a Surface Transportation Board, like a U.S. type of system. We seem to be falling a little bit short on that within this particular round, but we are encouraged as industry, I think, by the type of moves that are being made.

In talking about transparency, I always made the point to industry to be careful what you ask for, because it comes with responsibility. One thing you have to recognize always is that this is a transportation system. Think of it as a supply chain in which each link in the chain is essential for the link directly in front of it and directly behind it. One thing we have in the transportation system is a tendency whereby each link only blames the link ahead of or behind it.

This is a very important element, in that the responsibility of the industry becomes also reliable reporting of our forecasting, reliable reporting of our performance within the system. Efficiency is something that data transparency will drive in the system. I think this is a very important element. This isn't just about railways; it's about each link in the chain.

As that chain continues, fair access to the system is part of what we were looking to see achieved, and I think we made some very good measures in Bill C-49. What we were aiming for in our recommendations was a system whereby the playing field would be levelled to a point that we could encourage commercial agreements.

I think we have to also be very careful. Over-regulation of the transportation industry is a very slippery slope. Over-regulation of our railway system can certainly also have unintended consequences. We have a difficult environment, with long distances, the physical attributes of our terrain, and climate, such that with over-regulation we could actually drive a non-competitive system to become a drag on the economy. But while I say that, I think that fair access to the system and encouraging commercial agreements was really part of the foundation of what we were recommending.

So let's get to some of those.

Shipper remedies were quite strong within Bill C-49. There were a number of moves on the agency's authority to make operational terms within service level agreements more permanent. Reciprocal financial consequences were mandated, which was a major ask of shippers for well over a decade, and which were actually skipped in a number of the previous policy revisions. So it was a very popular move within the shipper community to encourage, then, that when you would sit at the table with your railway on a service level agreement, those operational terms would be defined, reciprocal financial consequences would be mandated by each side, and the agency could then impose those on the parties if they couldn't come to a commercial agreement.

Streamlined dispute resolution mechanisms were key. I think we made some very good progress on those. With regard to the definition of adequate and suitable accommodation, you're probably going to hear a lot about that over the next three or four days, but I do think we've certainly made some very good progress there.

In terms of the overall efficiency piece within the system, long-haul interswitching is also something that there's a lot of angst about in the system, because within the grain industry in particular, with the Fair Rail for Grain Farmers Act, we actually had 160-kilometre interswitching available, hanging there as a shipper remedy that was basically accessible. It was there, and it was extended. That has been sunsetted now, and long-haul interswitching has been introduced as a potential new remedy. I think the angst amongst shippers is from not understanding whether or not it truly can be implemented. Having heard the comments of my colleague Mr. Streiner, I have a level of optimism that in essence shippers will have a chance to apply for 12-month long-haul interswitching, which will involve distances much longer than 160 kilometres, and combining interswitching and the competitive line-haul rates could be an effective mechanism.

It is a new system, and I think that sometimes leads to angst, and as Mr. Streiner has stated, the CTA will be judged by its ability to react and implement. I've also made very strong recommendations to both Transport Canada and the agency to consider expedited renewal processes. So once it is approved for a one-year duration, how do we get the second year and the third year approved on a quicker and quicker basis? Those are service delivery things that I have some optimism about.

In terms of the maximum revenue entitlement, the modernization started within the provisions of Bill C-49 being suggested here, we recommended much broader modernization of the maximum revenue entitlement. There are some first steps that I think are very positive. The container intermodal traffic being excluded and the interswitching revenues being excluded are, I think, common sense provisions, and it made a lot of sense to include those within the modernization. To me, the ability of the railways to reflect individual railway investments was always a ludicrous provision; when one railway invested, that investment was split between the two railways. We've now fixed those. We've fixed out, with the proposals, adjustments to incentivize hopper car investments. These are all positive provisions that still protect the farmer within the MRE and still allow time to see what effect those mechanisms have, but I think they have been very positive.

There are the regulated interswitching rates as well, and then the reduction or the elimination of the minimum grain volumes.

We've made some good progress, I think, and I'm looking forward to being here over the next hour to answer your questions and to give our perspective as you need.

Thank you, Madam Chair.

[David Emerson, Former Chair, Canada Transportation Act Review Panel, As an Individual]

Thank you, Madam Chair, and honourable members. I'm appearing here not really on behalf of anybody except myself. I headed up a transportation review, some two and a half to three years ago, of the Canada Transportation Act. Much of what I have to say will reflect some of the conclusions of that report.

In the interest of disclosure, I also serve as the chairman of the board of Global Container Terminals, which is in the transportation space, as you know. I am not speaking on behalf of that organization; I'm speaking on my own behalf here today.

I'll just read a statement into the record.

Never before has the triangulation of trade, transportation, and technology been so central to Canada's economic success. We are a small trading nation spread out over a massive and diverse geography. Canada has to get transportation right, in the interest of our competitiveness and of future generations of Canadians. Getting it right requires that we recognize the massively complex, tightly integrated, multimodal, and international nature of the transportation system. It's increasingly a system that is in constant motion, 24 hours a day, seven days a week.

In 2014, as I alluded to, I chaired a committee charged with conducting a wide-ranging review of the Canada Transportation Act and related matters. Some 56 recommendations came out of the report, plus over 100 sub-recommendations. An overarching theme in the report was the need for better, more timely decision-making adapted to the evolving nature of today's trade, transportation, and logistics networks.

Many recommendations have been or are being acted upon, at least in spirit, by the government of the day, for example, elevated priority to infrastructure investment, including development of financing mechanisms and a more systematic database on the state of Canada's infrastructure; an increase in the foreign ownership limit for Canada's airlines; recapitalization plans for the Canadian Coast Guard; greater and more comprehensive focus on the transportation needs of Canada's north; a serious move to separate passenger rail lines and operations from freight in the high-density corridors of Ontario and Quebec; a major funding initiative to continue developing Canada's transportation and trade corridors; enhanced rights for air travellers—Mr. Streiner was alluding to that in his remarks—and strengthened standards for travellers with disabilities.

The core of the CTA review was a recognition that there are no magic fixes or silver bullets, and that getting it right involves improving governance. By that we mean establishing frameworks for decision-making that are better adapted to the massive complexity of the modern transportation system and its millions of users and service providers. Getting it right means recognizing that transportation crosses all sectors of the economy, all parts of the country, and virtually all parts of government and public policy. In few areas is the so-called whole-of-government approach more critical to our long-term future. Getting it right also means that the regulator, the CTA, Transport Canada, and other agencies, have the information, the mandate, and the tools to deal in real time with a massively complex and dynamic system.

Bill C-49 includes some significant steps to improving the information base to enable better decisions, improve dispute resolution, and generally enhance the regulatory framework. However, in my view, more is needed. Perhaps the most glaring omission in the context of Bill C-49 is the continuation of the reactive, one-at-a-time, complaint-driven approach of the CTA. I believe the agency needs the mandate and capacity to anticipate and deal with issues before they become systemic crises. Dealing with one complaint at a time when many complaints are symptoms of a broader malaise is simply not effective.

Similarly, the agency needs the power to self-initiate investigations. Where there is real and substantial evidence of an emerging problem, the agency needs the own-motion power to self-initiate an investigation, and it should have the ability, where practical, to initiate mitigating or preventive measures. None of this should detract from the ultimate authority of the minister and Parliament to direct the agency, but it should enable better, more timely decisions that lubricate the transportation system in support of better service to the travelling and shipping public.

Getting it right also requires the establishment of robust governance frameworks for organizations created and empowered by government to run various aspects of the transportation system. Airport authorities, for example, were set up 25 years ago to recapitalize and operate Canadian airports. In general this has worked very well, but the governance arrangements need to be refreshed. Airports are for the most part local monopolies with de facto powers of taxation. I note airport improvement fees, for example, buried on airline tickets, tepid accountability to the public, and no real shareholder to hold boards and management to account for the way in which capital is deployed. Similar arguments could be made about port authorities. For the most part there are no legislated guiding principles spelling out public interest considerations. Authority relationships with tenants and customers are important aspects of the public interest, yet there is no clear guidance against abusive pricing power or limiting preferential arrangements with tenants that may undermine the common user principles that are so critical to well-run public facilities. Also, should authorities be permitted to go into business in competition with their own tenants, for example?

At the moment, there is no practical mechanism of appeal for possible abuse of power over tenants and/or customers. An aggrieved party can't even appeal to the CTA because the agency is not empowered to deal with it, and appealing to the minister is generally not practical. There are many mandated entities outside of government. They operate across different modes of the transportation system and with arrangements that are generally spelled out in ground leases, bylaws of the entities or some other form of contractual arrangement. Many of these governance issues were highlighted in the CTA review.

Again, decision making in the world of transportation, where thousands of service providers interact to serve millions of customers and shippers, is all about governance. A healthy, vibrant, global, competitive transportation system requires clear accountabilities in combination with strong checks and balances. The Canada Transportation Act should spell out the principles of good governance to be applied to regulatory bodies as well as non-governmental facility operators and service providers. The act should also include the formal requirement for ongoing renewal of a national transportation strategy. The concept of a decennial review is archaic and it should be done away with in favour of an evergreen process.

Thank you, Madam Chair and honourable members. I look forward to our discussion.

[Scott Streiner, Chair and Chief Executive Officer, Canadian Transportation Agency]

Thank you, Madam Chair.

Thank you to the committee for the invitation to appear before you today.

The Canadian Transportation Agency is Canada's longest-standing independent and expert regulator and tribunal. Established in 1904 as the Board of Railway Commissioners, the CTA has evolved over the years in its responsibilities as Canada has evolved, its transportation system has evolved, and its economy and society have evolved.

Today the CTA has three primary mandates. The first is to help ensure that the national transportation system runs smoothly and efficiently. This includes dealing with rail shipper issues, rail noise and vibration complaints, and challenges to port and pilotage fees.

Our second core mandate is protecting the fundamental right of persons with disabilities to accessible transportation services.

Our third core mandate is providing consumer protection to air travellers.

Among the CTA's most important activities in recent years is the regulatory modernization initiative. Launched in May 2016, this initiative is a comprehensive review of all regulations the CTA administers to ensure they are up to date with business models, user expectations, and best practices in the regulatory field.

Over the next 10 minutes, I would like to speak about how Bill C-49 will affect the CTA's roles and how, if and when it is passed, we will implement those elements for which we will be responsible.

I would like to note that my observations are offered from the perspective of the arms-length organization that has primary responsibility for day-to-day administration of the Canada Transportation Act.

The Minister of Transport's principal source of public service policy advice is Transport Canada, and I would defer to the minister and his department with respect to questions regarding the policy intent of the bill's various sections.

I will structure my remarks around two key elements of Bill C-49: air passenger protection and mechanisms for addressing rail shipper matters.

Air travel is an integral part of modern life. Usually it's uneventful, but when something goes wrong, the experience can be frustrating and disruptive, in no small part because as individual passengers we have little control over events.

Bill C-49 mandates the CTA to make regulations establishing passengers' rights if their flights are delayed or cancelled, if they are denied boarding, if their bags are lost or damaged, if they are travelling with children or musical instruments, and if they experience tarmac delays of more than three hours. This is a significant change.

The current regime simply requires that each airline develop and apply a tariff: written terms and conditions of carriage. The CTA's role as it stands right now is to assess whether an airline has properly applied its tariff and whether the tariff's terms are reasonable.

We have said it's important that air passengers' rights be transparent, meaning that they can be found easily by travellers; clear, meaning that they are written in straightforward, non-legalistic language; fair, meaning that they provide for reasonable compensation and other measures if something goes wrong with the flight; and consistent, meaning that travellers facing similar circumstances are entitled to the same compensation and measures.

Last fall we launched public information efforts to help make travellers aware of the recourse available to them through the CTA if they have a flight issue that they are not able to resolve with an airline. We did so because we believe that for remedies created by Parliament to be meaningful, the intended beneficiaries have to know that those remedies exist.

The results of these efforts combined with the Minister of Transport's and media's focus on air travel issues have been dramatic. Between 2013-14 and 2015-16 the CTA typically received about 70 air traveller complaints per month. Over the last year, since we started our public information efforts, that number has risen to 400 complaints per month. And over the last week alone we have received 230 air traveller complaints. That is to say that in one week we have received one-third as many complaints as we used to receive in an entire year.

This jump suggests that the need for assistance has always existed and once Canadians knew that the CTA is here to help, they began turning to us in far greater numbers.

If and when Bill C-49 is passed the CTA will move quickly to develop air passenger rights regulations. Our goal will be to balance, on the one hand, the public's high level of interest in air travel issues and desire to shape the rules with, on the other hand, the expectation that those rules will be put into place quickly. To strike this balance we will hold focused, intensive consultations over a two to three-month period with industry, consumer rights associations, and the travelling public using both a dedicated website and in-person hearings across the country. Once in force, the new air passenger rights regulations will give Canadians travelling by air greater and long overdue clarity on their rights and what recourse is available to them.

Let me turn now to the second main component of Bill C-49: changes to the provisions dealing with relations between freight rail companies and shippers.

Facilitating these relations has been a key part of the CTA's mandate from the beginning. That reflects both the fundamental importance of the national freight rail system to Canada's prosperity, and the enduring concern among shippers about what they see as an equal bargaining power between them and the small number of railway companies on whom they depend to move their goods.

The CTA has observed that, notwithstanding these concerns, shippers make relatively limited use of the remedies available to them under the law. If this is because good-faith commercial negotiations are producing mutually satisfactory agreements across the board, that is excellent news. But if it is because the cost and effort involved in accessing the remedies are perceived to outweigh the likely benefits, or because of challenges with how these remedies are structured, the provisions in question may not be fully realizing their objectives.

We have also noted that there is relatively little information available about the performance of the freight rail system. This paucity of information affects the effective functioning of the market and evidence for decision-making, and stands in contrast to the situation south of the border.

The freight rail elements of Bill C-49 have the potential to address some of these issues. Amendments related to rate arbitrations, service level arbitrations, and level of service adjudications may help recalibrate the cost-benefit analysis that shippers make when considering whether to access recourse mechanisms. The the requirement that railway companies submit more data and that the CTA publish performance statistics online may help fill information gaps.

Perhaps the most significant rail-related change in Bill C-49 is the replacement of both the CTA's authority to set general interswitching limits beyond 30 kilometres and of the competitive line rate provisions with a new mechanism called long-haul interswitching. The CTA's role with respect to long-haul interswitching will be to order that the requested service be provided if an application is made and certain conditions are met, and to establish the rate for that service.

The bill gives the CTA 30 business days to receive pleadings from parties and to make these determinations. We've already begun to develop a process to ensure that we can meet that extremely tight timeline. We know that the parties will be watching our decisions on long-haul interswitching closely. Those decisions will be based on the criteria that Parliament ultimately adopts and on the CTA's analysis of facts before us, because as a quasi-judicial tribunal and regulator, what guides us is nothing more and nothing less than the law and the evidence.

Before concluding, I would like to mention one item that is not contained in Bill C-49: extension of the CTA's ability to initiate inquiries on its own motion.

The CTA already has this authority for international flights—and most recently used it to undertake an inquiry into some of Air Transat's tarmac delays. That case shows how relevant the authority—

[The Chair, Liberal, Judy Sgro]

We will reconvene meeting number 67 on Bill C-49. We have with us now in this next segment the Canadian Transportation Agency as well as the Honourable David Emerson.

It's nice to see you again, David.

We also have AGT Food and Ingredients.

I'll turn the floor over to whoever would like to go first.

Mr. Steiner, go right ahead. Thank you very much for coming this afternoon.

[Kathleen Fox]

We've talked about the foreign rail. There are several in air, one in marine, and then there are two multi-model, one of which we've talked about, which is the slow progress in addressing TSB recommendations by TC. But we're here specifically about the C-49 provisions for the LVVR, which is one of the 10 items on our current watch-list.