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

[Larry Maguire, Conservative, Brandon—Souris, MB]

Mr. Speaker, I thank the member for his interest in the Brandon airport, which is now complete. It has expanded. It is three times the size it was. It was my pleasure while a member of the government to be able to put some of those funds forward, and I appreciate the fact that it was carried out. I was there with another member from Winnipeg to make sure that they had spades in the ground and got it going a year and a half ago.

It is very important that we have rights for passengers in the airline industry, but I have a great concern in regard to the compensation levels, because the bill would give the Minister of Transport and the Canadian Transportation Agency an open cheque to set monetary compensation for passengers who are affected in this way, rather than having a set fee or set compensation for certain areas. That would be my main concern in that area.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member talked a great deal about wheat and the importance of wheat to our prairie provinces. We will talk about the province of Manitoba once again. In the legislation, we are seeing actions being taken with respect to rail lines. I wonder if the member might provide some comment on how important it is that we get it right in dealing with our rail lines, as our commodity industries need the best system possible.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Mr. Speaker, it is very important that we are able to export the grain we grow on the Prairies. A greater proportion of what we grow is exported than in any other country, virtually.

I am concerned that there are not even going to be committee meetings on Bill C-49 until September, as pointed out by my colleague. The bill would not come into action before July 31, when Bill C-30 dies. Bill C-30 had many sound management tools that could be used to make sure grain could move in a predicable manner. There will be no predictability in the movement of grain as of August 1, and of course, August 1 is the very beginning of the new crop year, when grain will start to be harvested for this year and moved.

I was urging the government to do everything it could to at least get Bill C-49 through. Maybe it could split some amendments by the end of July. However, we are rising shortly, and that is not going to happen. They have indicated that it will not even go to committee until next fall. We do not know when it will pass or how big a priority it will be for the government at that point.

We are very concerned that there will be a gap in the management of the movement of grain off the Prairies in a predictable and safeguarded manner.

[Bradley Trost, Conservative, Saskatoon—University, SK]

Mr. Speaker, it has been a few years since I was last on the transportation committee, I think four or five, if my memory serves me correctly, but I enjoy speaking about these issues. One reason I enjoy talking about them is that in a country as vast as Canada, transportation really matters. Every country has its unique issues, but Canada's would be distinctly different from most countries in the world. Perhaps Australia, the United States, and Russia face some of the same challenges as Canada, but very few other countries in the world would have the exact same problems.

The other thing I find very interesting about the legislation is that it deals with an underlying problem, which is different economically than many issues with which we deal.

Before I discuss that, let me say a few basic words for context about this broad legislation.

Bill C-49, the transportation modernization act, is legislation that we call, for people watching at home, an omnibus bill. Many elements from different areas are put together under one larger theme. We have heard members from various opposition parties point out that not all elements of the bill really fit together. In fact, I suggest the government would have been better off breaking the bill into three, or perhaps even four, pieces of legislation.

A very small element of the bill deals with marine issues. There is a larger element that deals with railway issues, which could have been subdivided into separate legislation to deal with railway safety issues and broader economic railway issues. It also deals with issues related to airlines, consumers, the financing of airlines, foreign ownership rules, and so forth.

In many ways, the government has put together many things that really do not belong in a single piece of legislation, which makes it somewhat difficult to comment on. Some things in the bill are well-intentioned and could possibly be useful and good for the country. Other pieces of the legislation the government should rethink. I will take apart as many elements of the bill in the time allotted to me.

One of the biggest rail transportation issues in Canada is that there is a natural monopoly tendency. That is not caused by the railways through any malice or problem; it is just that there are some very natural realities. To build a railway, a large capital investment is required, making it very difficult for competition. Railways also serve specific geographic areas exclusively. They need to have that natural monopoly. To pay for the underlying capital cost, they need to capture the majority of the market. That, then, leads to a problem of a power imbalance.

If commodities can be shipped by means other than railways, for example, oil can be shipped by pipeline or perhaps trucking is better for other commodities, that is not a problem. However, for certain commodities and situations, rail may not be available. That is where a problem tends to result and get argued about when it comes to rail transportation.

In highly competitive markets where a lot of commodities enter and exit and product substitution is easily done, etc., there is no call for the government to get involved because there are few issues with the market. No monopoly is ever naturally total or pure, but to some degree railways in our country have those sorts of issues.

That has therefore caused a long history of the governments of Canada regulating, subsidizing, and interfering in the rail transportation industry, particularly in the west. If we look at the population centres of eastern Canada, they are much closer to the United States and commodities can be trucked. In that case, there is a considerable amount of competition.

That tends to be the underlying issue the government has to deal with whenever it deals with rail transportation issues.

In a previous Parliament, there had been some issues on grain transporting in the Prairies due to bottlenecks. Some of this was perhaps due to the railways, some of it perhaps due to weather issues, and the large crop in western Canada. The previous government put in some adjustments, which allowed shippers to use the railway system within 160 kilometres. This is a bit of a simplified interpretation. They were allowed to use the existing railways, and have the right, to ship their grain and other commodities to the United States and then connect.

It is this interconnection that is being discussed. It used to be 30 kilometres and was then extended to 160 kilometres. For those in places like Regina who needed to ship their grain and CN, CP could not get it out, they could then get them to ship it to the United States at which point a railway like Burlington Northern would have the option to ship the grain. As has been noted, that is coming to an end.

What the government has suggested is changing the rules to introduce something it is calling long haul interchangeability rights, eliminating this 160 kilometre rule.

This is very similar to what has already been in the legislation before and has not been used. If the government is putting in a new provision but it is almost identical to something that has been in the legislation since the 1990s but has not been used, what is the purpose? What is the government trying to accomplish?

The government will have to deal with this at committee. Why is it eliminating something that has helped eliminate a bottleneck situation and going back to an older system that has not worked well. That is my first criticism and question for the government.

The second thing I want to point out, particularly with the rail issues, is that I do not see anything the government is doing in this to bring down the costs. Service is important, and commodity shippers in western Canada have told me they are willing to pay more if they can get timely and accurate services. That is very good. Ultimately, time is money when shipping products.

I am failing to see where the government is dealing with ways to make the regulatory process quicker and smoother. In fact, most of the legislation seems to add more layers onto it. I understand it goes back to that underlying problem, the natural monopoly and how to dealt with it. We often deal with it through regulation.

There is a second question I would like to put to the government. With the rail situation and the added costs that will soon come through the carbon tax, which will ultimately hurt the producers, the shippers, and other Canadians involved, how will it do things to lower the costs?

Finally, there are elements in the bill which personally interest me and many of my constituents. They are around the creation of a passenger's bill of rights. In many ways, this sounds very good. As someone who flies a lot, and most western Canadian members of Parliament joke that our third office is an airplane, I am very familiar with problems airlines can have.

My question is this. What has been costed and how will this cost be passed on to the customer? Costs for airline flights in Canada are some of the highest in the world. We all have a major concern with that. If our businesses are going to grow, if we are going to have better connection and the ability for places like Saskatoon, where I come from, to move out and do business in the world, we need costs to be dealt with.

Therefore, these are the basic questions. Why is the government taking away something that has worked and replacing it with something that has been tried and seems to be wanting? Where is the government's ability to bring down costs, both for railways and air passengers? Also, how is it going to simplify the regulatory burden?

These are questions the government needs to deal with when the bill goes to committee. The Liberals would have been wiser if they had split the legislation into smaller bills so we could deal with it in more bite-sized pieces.

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, it might be surprising to the member that we are on the same kind of ground. We want to achieve the same kind of impact for Canadians.

We tried to take an integrated and collaborative approach to this kind of legislation. The response from the actual stakeholders and experts has really been positive.

The Western Grain Elevator said, “We're thankful that Minister Garneau and Minister MacAulay understand just how fundamental this is to grain farmers and the industry...This is an important day for...grain shippers.”

Cereals Canada said, “Cereals Canada Applauds Grain Transportation Policy...The policy announced today will provide that accountability when enacted in legislation.”

From the Pulse Canada and Canadian Special Crops said, “On the whole, the Government has identified the core issues that need to be addressed and we see opportunities to engage...A great deal of consultation has been undertaken.”

I have more, but my question for the hon. colleague is this. Why not send this to committee so we can hear from these experts and stakeholders?

[The Deputy Speaker, Conservative, Bruce Stanton]

I will use this occasion to remind hon. members, even when another hon. member's name appears in a quote or citation in the course of a member's remarks, to change up the name to the member's title or riding name. This works well, and it is the right way to do it.

The member for Saskatoon—University.

[Bradley Trost, Conservative, Saskatoon—University, SK]

Mr. Speaker, we are coming up to the mid-point of the government. We are likely to have, but not guaranteed, a prorogation where everything gets restarted and reset in the fall. However, if we send the bill to committee, there are ways of reviving it.

My suggestion earlier in my speech was that the government, instead of putting this out as one bill, was to put it out in four smaller pieces of legislation. This would have allowed the government to get the rail piece of the bill out sooner and get it done. As my colleague, the member for Brandon—Souris pointed out, it would prevent the legislative gap that was about to happen.

Therefore, if this is such a priority, and I agree it is, why did the Liberals not get started on it earlier? Why did they not break it down into smaller pieces where the urgent items could be dealt with and the less urgent items could then be debated more fulsome?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, one of the concerns I have about the bill is the amount of things we have in it.

It is clear that the passenger bill of rights does not have any minimums or maximums with regard to identification of penalties, fines, or expectations for passengers. Regulations can set these things, but having no guidance at all from Parliament appears to be a weakness, especially when the European Union and the United States have at least hard targets for their legislative body to be involved.

What is my colleague's position on at least having some directional targets set by the legislative body versus leaving it all to regulations?.

[Bradley Trost, Conservative, Saskatoon—University, SK]

Mr. Speaker, the member has a good point, and this is one of the things that would be discussed at committee.

If, and this is as big if, we are going ahead with these penalties, it would be wise to have the elected representatives give some sort of a framework rather than have it purely be done by regulation. I understand regulation can be more flexible, but the framework to the regulators should be given by the elected officials. This tends to be the democratic process, and I suspect that will be looked at when the bill comes to committee.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I am pleased to be splitting my time with the member for Elmwood—Transcona.

In a previous Parliament, the member for Elmwood—Transcona was Bill Blaikie, who was a good friend of mine. I had the pleasure of spending some time with him in regard to a number of issues, including transportation.

The Winnipeg area is a gateway to much of the west and the United States. Ironically, my riding of Windsor West is the same. Transportation plays a key part in not only our economy, but also in the social and cultural makeup of civilization. Trade creates relationships, opportunities, entrepreneurship, and some of the hard industries.

When we were fighting for a new border crossing in Windsor, what I really appreciated about Bill was his understanding of the transportation issue.

I can tell members who were not in the House when Bill Blaikie was a member that he was a giant, quite literally. When he was coming to Windsor, I asked people what he was like, and a friend of mine said, “Well, he hasn't met a sandwich he didn't like.” I was to pick him up at the airport, and I pulled up in a two-door Cavalier. This giant of a man was standing there. When he got in the car, the first thing he asked was whether the seat would go back. I replied, “Unfortunately, it is all the way back.” He travelled with me in that car with his knees in his face for a long time.

Bill's first observation in my riding was on the border crossing. Transport trucks were lined up all the way down Church Road, one stacked after the other. He told me that in Winnipeg those things were called trains. Hundreds of transport trucks cross that particular border. As I said, I will be splitting my time with the new member for Elmwood—Transcona, and he has the same pedigree with respect to transportation.

This piece of legislation is important for transportation in many respects. I am going to focus on the airline passenger bill of rights aspect, which is something I personally have been trying to move in Parliament for a number of years.

I am sure that all members know that Canada lags when it comes to this. The European Union and the United States in particular have had a passenger bill of rights for some time. For Canada not to have one is a good example of our lack of consumer protection.

Canada is very unique when it comes to a lack of protection and the influence of those things on our pocketbooks. New Democrats have worked on a variety of issues, with the most recent one getting a lot of attention being the unlocking of cell phones. I worked on this with Rogers at one point in time. Rogers was the first company to unlock cell phones. That would be normal and expected behaviour, and at no cost to the consumer. The CRTC ruled that consumers would have a reasonable expectation of this, because it is normal practice in most countries around the world. For us to be treated differently is a drag on our economy and a drag on our capacity to compete.

An airline bill of rights affects passenger travel, and passenger travel is also business travel. Say, for example, a business traveller has been ripped off or not been treated properly or did not get to a destination, that individual would have something to fall back on. If we are spending so much of our time trying to figure out rules and regulations and fairness, and there is nothing more than a dog's breakfast out there, with people fighting for decency, for anything, from a bit of nourishment to proper compensation, they are wasting their time, energy, and resources. Airline travel then becomes an uncompetitive part of our economy.

Canada needs to think about consumer protection. If we do not have some kind of protection, it is a drag on our capabilities. We will be out of sync with our competitors and our partners, be it the United States or the European Union or whoever else when it comes to these types of things.

This act unfortunately includes several things. The Conservatives were very good at bringing a healthy repertoire of omnibus bills to the House of Commons, and we debated those bills on a regular basis. To some degree, I have to give the Liberals credit. Given that we have had so few bills coming forth, when they do come forward, they are omnibus bills on steroids. They are pumped up with several different aspects that we would not have seen in the past. They have augmented this type of practice.

In this bill, we should be discussing the passenger bill of rights on its own—for the reasons I have noted in the precursor—with respect to the competitiveness of our economy, let alone sincere fairness. If one has ever sat on the tarmac before, one sometimes has to wait three or four hours and cannot even go to the washroom, which is unhealthy to begin with, not to mention the spillovers we have seen in the past. We should be thinking about those small issues when we are talking about other things in this bill.

The Canada Transportation Act is being amended in this bill, as is foreign ownership of airlines. We are talking about an industry that has had quite a colourful past. Its current characterization of ownership has a full cast of characters in unknown quantities, to say the least. That is dependent upon a series of things, and we are shedding some control of ownership, which is worthy of a debate.

What is interesting with respect to the Railway Safety Act is where Canada stands with railway and railway safety. I was a former transportation critic for this party, and we worked on the railway safety review. There were a number of things that were never implemented. However, just because we are built on a railway system and have had some great advances, we should keep this example in mind when we compare ourselves to other countries. While we are still struggling to find high-speed rail, Uzbekistan is beating us on that. I can say that bleeds through the entire process with respect to rail safety in this place, because that is what it looks like.

I am a former municipal city councillor. One of the things I have learned in the House of Commons, and in my previous representation, is that there is city council, the provincial legislature, the federal legislature, then we have the Lord, and then the rail companies. It seems that is essentially the pecking order with respect to being a representative and dealing with the complications of rail safety, which are very significant, not only for workers, but also for the men and women who live around the rail lines and interact with them. For example, with respect to hazardous materials, the transportation between Canada and the U.S. is significant.

We also have the Coasting Trade Act, the Canada Marine Act, and the western grain transportation act that are all affected by this bill.

We have now moved closure on this bill, and instead of seeing this done properly, it will be done altogether. I do not want to be too hard on the previous government, but the reality of omnibus bills is that they do not go through the full vetting process that is necessary. It has not been cast in terms of a political advantage or political commentary for the Liberals or the Conservatives, the reality is that legislative bodies, like our committees, are supposed to go through individual legislation because we can enhance it. Even if we do not agree with the legislation and what it has done, we often find mistakes and other problems. Hence, the previous government ran into several different problems in the court system because bills did not go through the proper channels and the full vetting that is necessary.

The current government seems to have built upon that and pumped up its legislation to include even more. We will see this go to committee, and there will be a cluster of different things that will require testimony. I can tell members that we will have testimony that overshadows many different departments, from many different witnesses, and it will likely come back as a giant muddle and mess. At the end of the day, we will be dealing with this again.

I know that my time is coming to an end here. However, in conclusion, I want to impress upon the members that Canadians have spoken loud and clear about the passenger bill of rights. The EU has some models and targets that it has reached, and we have proposed that they should be part of our legislation. The United States also has that.

Let us not just think about the inconvenience of a passenger being delayed, but let us also think about our economy and capabilities, and the time management we have as individuals, who should have a good contract. When we purchase a ticket, we should at least receive a product that is similar.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, I am proud of the bill, for a couple of reasons. As a licensed pilot and a long time trainspotter, it has all my interests in one place.

The railways in this country were built around the concept of building local monopolies. They are spaced out by certain distances for a reason. They were set up that way so that each company would have their territory.

I think it is very important for us to be modernizing it in the way we are doing here, and allowing these interchanging rules to be far improved to increase the competition.

I wonder if the member would agree with that general sentiment.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, the fact is that the railway companies historically, when building this country, received unprecedented, even corrupt types of beneficial practices.

In fact, when we go back and look at, not just Canada, but also North America as well, there were whole practices in the United States, political as well as business, that looked at the interests of individuals and the accumulation of wealth. Sadly, these are some of the things we have to correct as part of our culture and heritage. I think of the types of labour we used on building our railways in particular.

I think that changes how I feel, and I think many feel the same. It is about time we realized that our land and our infrastructure are the predominant domain of Canadians, and the use of them is a privilege. The privilege should be respected.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, anyone who listened to the speech by my colleague from Windsor West would know that comes from a position of knowledge. I had the opportunity to serve with him on the industry committee, and I respect his opinion.

He talked about the importance of the bill and getting it right in respect to Canadian competitiveness. Both his community and mine rely on a good transportation system as far as competitiveness, particularly for the automotive industry.

I am wondering if he could answer why it is so important that we get this right and that we give the time to study it properly, relative to our competitiveness internationally. I wonder if he could comment on how important it is to get this right.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I appreciate the intervention from the member for Oshawa, who is very well versed in the complications and challenges of the automotive industry. He well understood that on committee, and as a parliamentary secretary. For example, the movement of goods and services for supply, be it just-in-time delivery, but also the final products and how interrelated they are, multimodal, are very critical.

When we have the hearings related to the bill—and he was right to caution us on this—we will get a crossover of a lot of different things that are important. However, they may not get the heightened attention and the specific details they need. For example, a simple thing we would think would be easy to do is a rail tunnel between Windsor and Detroit. However, it does not allow for triple stackers for the automotive industry. For years, we have not been able to do proper shipments because the expansion of it is not there. If they run it through there, certain cargo may get destroyed. It is simple things like that.

We can only imagine constituencies like Oshawa that are still obviously very integrated to the auto industry. They need to make sure that transportation is an efficiency attraction for the investment, not a detraction, if the rail and other types of services do not provide for the easy and expedient access that they deserve.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, I also want to second the comment from the member for Oshawa, in terms of the member for Windsor West and the great knowledge he shares around consumer rights and protections. He has fought for capping merchant fees, for a gas ombudsman, and wireless competition to lower fees for consumers.

In the bill, it talks about raising the cap on foreign ownership from 25% to 49%, which was a recommendation in the Emerson report that the Liberals are supporting. However, the University of Manitoba research reports submitted in relation to the Emerson report concluded that there is no reliable evidence of a link between raising the foreign ownership cap and boosting competition. Would the member speak about that?