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.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, it is very telling of the Liberal government when it says that it will make it safer for the public by going after engineers. Year after year, there has been underfunding of site inspections. After the Lac-Mégantic disaster, CP got rid of 500 safety and maintenance workers. Past derailments have been the result of poor track maintenance, poor on-site inspections, and problems with maintenance and oversight. However, the government is telling Canadians not to worry because it will be recording the work of the engineers. These engineers are running massive trains, without backup, because the government made a change, allowing a single driver on a train that could be carrying all manner of volatile combustibles through major cities.

I would like to know this. If public safety is such an important issue and the use of video recorders, which will contravene the Privacy Act, is important, why has the government not added video recorders for senior management at CP and CN? Following cut after cut in jobs, why is the government targeting the people who are doing the front-line work?

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

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

Our government is committed to rail transportation safety. That is why we are moving forward with this measure that takes a reasonable and balanced approach to strengthening rail safety.

I would also like to remind my colleague that representatives of the Transportation Safety Board appeared before the Standing Committee on Transport, Infrastructure and Communities to reiterate their support for this measure and to talk about how important recorders can be in understanding how an incident occurred and preventing future incidents.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, it is my pleasure to speak today on Bill C-49, the transportation modernization bill.

First I would point out that this is another omnibus bill. There are things in here about rail and air traffic safety, and all kinds of different things. This was the government that said it was not going to do omnibus bills. I want to point out that this is another broken promise.

I will spend some of my time talking about rail, and then I will move on to air traffic. As members may know, I am the co-chair for the parliamentary rail caucus. In that role, I interface with associations that work in the railway industry, and I had had an opportunity last week to meet. Of course, rail safety is always a topic of conversation.

The conversation went like this. In terms of rail safety, I asked about their biggest concerns right now. Their biggest concern was not any of the things in this bill. They asked how the government could be talking about transportation modernization when it is legalizing marijuana. It recognizes that it is dangerous for people to drive a vehicle when they are impaired by drugs, so the government has allowed a bill that brings forward mandatory and random testing for car driving. However, people are driving trains, and that is an even bigger hazard, but workplace employers are not allowed to do that kind of mandatory and random testing. That was the concern that they brought forward as being a big deal in rail safety. I would encourage the government to address that concern.

I will speak to some of the things in this bill that are concerning. First, we have heard some conversation today about locomotive voice and video recorders. I know that the Teamsters and Unifor are quite concerned. I am concerned myself. I heard the last member who delivered a speech say that these things would not be used for disciplinary action, and then went on to say that if it were an egregious enough thing, then perhaps that would be the right thing to do. Obviously there is potential for it to be used in that way. I know that the Privacy Commissioner has raised a number of concerns. None of those things appears to be addressed in the bill.

We keep hearing that it will be in the regulations. We have not seen the regulations. It seems that there are a lot of vague, unclear, undefined parts to this bill, which we are supposed to trust that the regulation will address. I am not sure that will happen.

In my own riding of Sarnia—Lambton, we have a number of rail safety concerns that I do not see addressed in this bill. The Minister of Transport had decided that people needed to upgrade the rail crossings, for example. That takes a lot of money. I have one rural part of my riding that has eight rail crossings and 2,300 people. To fix those eight rail crossings to the new standard would be upwards of $5 million, and the 2,300 people are not going to be able to come up with that money.

With the Liberals being so far behind on their infrastructure spending, if they really wanted to modernize and cared about rail safety, I would have imagined they would be spending a lot of money updating the rail crossings across the country. We know that is a place where huge money needs to be spent. Another opportunity that was missed would be to do the high performance rail we have been talking about between Quebec and Windsor. There is zero money in the budget for that. While there is a lot of ideology in this bill, there is no follow-up action in terms of the infrastructure spending.

I would like to talk about one other thing. I have CF Industries in my riding. This is a company that makes fertilizer. I am aware that Fertilizer Canada appeared at committee to testify about this bill and to express their concerns. There is a long-standing principle in the rail business called the “common carrier principle”. It is a principle that shipping companies cannot discriminate or refuse service on the basis of the type of good. One of the things that is used to make fertilizer is ammonia. In the history of the rail industry, they have not had any incidents with ammonia. However, because this bill is bringing exclusions that would impact the fertilizer industry, that will drive them to change to a different mode of transportation, such as trucks, which would mean four times as many vehicles travelling, with a higher incident rate of collision. That actually increases the risk to the public rather than reducing the risk to the public. Again, although the bill is supposed to be about bringing more rail safety, in fact it is doing the opposite.

Fertilizer Canada has asked specially for proposed subsection 129(3) and section 136.9 to be altered so that it is not discriminating against the fertilizer industry, which is 12% of the supply that we use here in Canada and also 80% exported to other countries. It is a big contributor to the trade surplus, $4.5 billion. We ship our fertilizer to 70 countries around the world, and this update to the rail rules will negatively impact that business and increase costs to farmers in Canada. That would be a concern for me as well.

In terms of some of the air traffic changes in the bill, the air passenger rights regime, I have spent about 30 or 35 years travelling around the world, so I have certainly experienced all the outrageous things that can happen to passengers, including delays, cancellations, lost or damaged baggage. I had a flight recently on an airline that was not Canadian, I am happy to say, but my bag arrived with the corner torn right off and I had to replace the luggage myself. There was no compensation for me on that one.

I am not sure that this, although well intentioned, will be able to be easily implemented. For every claim for compensation, it has to be determined whether it was the airline's fault, the government agency's fault, the fault of the weather. That is a huge administrative burden, and that usually means increased costs. Those increased costs typically get passed on to the people who are buying the airline ticket. I have a concern that some of the provisions, although well intentioned, will result in higher airplane ticket fares. We already have some of the highest fares in the world. If I think about flying to Ottawa from Sarnia, it is nearly $1,000. I can fly to Florida out of Detroit for about $200 or $300 Canadian. We are already paying huge fees, and I do not see that the bill is going to address that in any way. I am concerned that the prices will go up.

I have a concern about the foreign ownership increase to 49%. I am concerned with all the changes that the government has introduced, the infrastructure bank, for example, where Liberals want to sell the eight major airports to foreign investors. There is something to be said for national security, for owning and controlling our own assets like airports that are so critical to the country, so I am not a fan of that at all.

The consumer groups and passengers who have been looking for a passenger bill of rights are not happy. The feedback is that they do not think the bill addresses their concerns. It fell short on that as well. In addition, I am a little concerned about the joint ventures phraseology in the bill. Basically, it is taking the authority away from the competition bureaus and giving that authority to approve joint ventures to the Minister of Transport. We have seen the government time and again go without parliamentary oversight, so, for that reason, I am not a fan of that section.

The bill falls short in many different ways. The Liberals need to take their time and go back to the drawing board on this one.

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, one of the themes I keep trying to hit on, being from the eastern part of our country, is that Bill C-49 has changed the rules around transportation on freight rail in a fairly dramatic way. Under a different iteration of legislation that dealt with the transportation on freight, Bill C-30 previously, it dealt only with the ability for shippers of western Canadian grain to move product up to 160 kilometres That was in response to some unique circumstances that arose in 2013. One of the things we see in Bill C-49, by contrast, is a shift towards long-haul interswitching. This would see the ability of shippers in different industries in different parts of the country take advantage of a new regime that stimulates competition around the negotiating table and gives a remedy to captive shippers to make sure they can get a market price.

Does the hon. member support the expansion toward long-haul interswitching, which serves different provinces and different industries, including Ontario?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, the ideology of the long haul is one thing, and I would not be against that, but the number of exclusions in this bill are such that no one can take advantage of them. It used to be, under a previous bill of the Conservative government, that the concerns of western grain farmers were addressed; I believe it was Bill C-30 at the time. That was allowed to sunset by the current government. Then, inadequate measures are put in this bill that are vague and, as I said, include so many exclusions that people cannot take advantage of them. The execution was not acceptable.

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, my colleague made a comment that is of interest to me. She mentioned the sunset clause or reviewability. One thing a lot of the witnesses talked about was the time frame for reviewing this after having been implemented for two or three years, and a sunset clause, neither one of which are in the bill. This is critically important when making such a massive change.

I wonder what the member's opinion might be on the idea of reviewability and a sunset clause.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, certainly it is more important to get the bill right in the beginning. I do not want a flawed bill being put in place and then reviewing it three or four years down the road. I am not opposed to reviewing bills. I want to make sure that the one put in place to begin with is not flawed, or is not so vague that all of the details are left to the regulations that will be under the direction of the Minister of Transport, with no parliamentary oversight. That is what I would be opposed to.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, the hon. member mentioned a small town in her riding that has five rail crossings. Like her riding, there are six railway crossings in my riding of Nepean. For them to have grade separation, the total budget required is in the range of $500 million.

She mentioned that the budget requirement in her riding is about $5 million. Is the member aware of the rail safety improvement program that is currently available for improving rail crossings?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, I am aware of the fund and had recommended that we get some money out of it, but was refused. The problem for this part of my riding is that if the rail crossings are not upgraded, the roads will be closed, which would isolate the community totally. This is a case where 2,300 people cannot possibly afford it, and the government has refused to provide the money. I do not understand why the government has refused to provide the money when the member opposite and his party are so far behind in their infrastructure spending. I would be happy to help them out. We are very good in Sarnia—Lambton in executing projects. I spent 32 years in engineering and construction and can say that the riding could help the Liberal government spend infrastructure money, which I believe was the whole point of going into deficit in the first place.

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Mr. Speaker, I am pleased to follow my esteemed colleague. I think many of us in the House look forward to putting great projects forward for infrastructure funding consideration as we move forward.

It is a privilege for me to address the House today on Bill C-49, the transportation modernization act. I am pleased to have the opportunity to speak about the key measures the bill that propose to ensure Canada's freight rail system remains among the most efficient in the world.

As the chair of the Standing Committee on Transport, Infrastructure and Communities, I want to thank all committee members for their diligent work in reviewing this important legislation. The co-operation we had at committee from all parties at the table in reviewing Bill C-49 and ensuring it was the best it could be was a real tribute to the members who were there. Everyone's co-operation was very much appreciated.

As a result of that spirit of collaboration, the amendments to the bill will strengthen Canada's freight rail policy framework and maintain the delicate balance that Bill C-49 is meant to achieve.

Our freight rail system is a critical component of the Canadian economy. It directly creates and sustains thousands of Canadian jobs, while connecting Canadian businesses to international and domestic markets. Over $280 billion worth of goods move through our rail system every year, underscoring its major contribution to our economic well-being, something that is very much taken for granted by others.

Canadians are dependent on a reliable rail system to move their products to market across this vast land. A guiding principle for our legislation has been to sustain the commercial orientation that has allowed our system to rank among the most efficient and Canadian rates to be among the lowest in the world. Canada's economic growth and future prosperity is dependent on preserving our national advantage.

For this reason, in May 2017, the government introduced Bill C-49 to support a transparent, fair, and efficient freight rail system that would meet the long-term needs of Canadian shippers and facilitate trade and economic growth for the benefit of all Canadians. The bill aims to deliver outcomes aligned with the government's long-term transportation vision, including fair access for shippers, a more efficient, competitive rail system, greater transparency, and sustainable investments.

The bill would introduce a number of fair access measures to help balance the playing field between shippers and railways. While we support the commercial orientation of our rail system, we recognize that the remedies are required when commercial agreements cannot be reached. These are not easy things to accomplish.

In our consultations, we heard that remedies could be too complex, lengthy, or costly for all shippers to pursue. For this reason, the bill would improve access to and shorten the timelines of the Canadian Transportation Agency processes to settle service and rate disputes. This would result in more balanced outcomes for stakeholders and more timely and accessible remedies, something we heard from many people who came before the committee. Governments continue to have a very extensive process of forms to be filled out and applications to be submitted here and there, which makes it very difficult for a lot people when they try to achieve their goals.

This legislation would also provide clarity to shippers and railways by defining what “adequate and suitable” rail service meant. In our consultations with freight rail stakeholders, we often heard about uncertainty regarding a railway's service obligations. Bill C-49 would clarify that a railway would have to provide shippers with the highest level of service that could reasonably be provided in the circumstances, taking into consideration various factors, including the railway's obligations under the Canada Transportation Act. This would be a major help to all shippers.

The bill would strengthen competition to help create a more balanced and also efficient freight rail sector by introducing a new competitive access measure called “long-haul interswitching”. Long-haul interswitching will give captive shippers across regions and sectors of Canada access to a competing railway at a rate set based on comparable traffic. The committee has proposed adjustments to long-haul interswitching that will provide captive shippers across sectors in British Columbia, Alberta, and Northern Quebec with access to a remedy. These changes would maintain the long-haul interswitching's important balance between giving shippers competitive options and preserving network investment and efficiency for the benefit of all shippers.

During consultations leading up to Bill C-49, we also heard that shippers did not have enough information from railways on the location of functional interchanges. To address this concern, Bill C-49 would require railways to list their interchanges. Railways would also be required to provide advance notice of their plans to remove an interchange from this list, something that could have a tremendous impact on shippers and on local communities.

The committee has proposed to extend the notice period from 60 days to 120 days to allow shippers sufficient time to file and obtain a level of service ruling against the removal of an interchange, if necessary. As well, the committee has proposed an amendment that would require railways to notify the agency of an interchange removal to ensure shipper concerns would be adequately considered and reviewed.

Furthermore, Bill C-49 would greatly improve transparency throughout Canada's freight rail system. The availability of accurate and timely information is necessary to ensure the effective operation of a commercially oriented rail system. The bill would require railways to provide service and performance information on a weekly basis in line with what they provide in the United States about their American operations. This information would be made publicly available to all freight rail stakeholders on the Canadian Transportation Agency's website.

As well, railways would be required to provide rate data to Transport Canada, which could be shared in aggregate form with shippers. This rate data would also be used by the Canadian Transportation Agency to help calculate long-haul interswitching rates.

The committee has also proposed amendments that would ensure this data is provided in a more timely way to all rail stakeholders. The changes would require railways to begin reporting on service and performance metrics in 180 days rather than a year, and would require railways to submit metrics five days after each reporting period rather than two weeks. Furthermore, the committee has proposed that the Canadian Transportation Agency publish the data on its website within two days of receiving it.

Finally, Bill C-49 would help encourage investment in the freight rail system, which is critical to encouraging its long-term growth. For example, the bill would modernize the maximum revenue entitlement regime by making adjustments to incentivize hopper car investments and reforming its methodology to better reflect individual railway contributions.

As well, the bill would relax Canadian National Railway's majority shareholder ownership limit to facilitate investment in a network that is critical to Canada's economic performance. The committee has introduced a minor technical amendment that would make this change effective upon royal assent, allowing CN to more easily attract capital from its majority shareholders.

The measures in Bill C-49 would position Canada's freight rail system to compete globally for years to come. The proposed amendments that the committee has made will advance our government's goal of strengthening fair access, efficiency, transparency, and, very important, investment in Canada's freight rail system.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, the member she said that the government spoke with freight stakeholders. That raises a concern for me. It did not speak with stakeholders from the agriculture sector.

Producers I have spoken with over the last few months are concerned with Bill C-49 and the fact that it does not entrench the Fair Rail for Grain Farmers Act, which our Conservative government enacted in 2015. This policy would ensure that grain growers had access to rail transportation when they had a real glut from huge harvests such as the one 2013-14. We are seeing this again in a lot of the western Canada provinces, with a very strong harvest this year. The concerns I hear from grain producers is that the access to grain act is not part of this legislation. It sounds like the government did not have any conversations with agriculture stakeholders, but simply listened to what the rail companies wanted to see in Bill C-49.

My question to my esteemed colleague is this. What conversations has the government had with agricultural producers and why did it not entrench the Fair Rail for Grain Farmers Act as part of this legislation?

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Mr. Speaker, let me assure the member that through our committee hearings, everyone on the committee was especially sensitive to the issue of the shippers, the agricultural community, and what needed to be done.

Once Bill C-49 is passed, moves forward, and hopefully gets royal assent, people in the agriculture area will have certainty about getting their grain to market when they need to do that. That is an important part. It was important for every member who sat on the committee. We heard more from the agricultural side than we heard from the railway side. Clearly, the committee wanted to ensure we did this right and ensure that the farmers had the ability to get their grain to market as quickly as possible, without any additional problems.

[Vance Badawey, Liberal, Niagara Centre, ON]

Mr. Speaker, the transportation modernization act would represent a first step to provide Canadians with a safer, more reliable, and efficient transportation system to better facilitate trade and travel across our great nation. It would respond to the needs of Canadians and their expectations for services to allow Canada to take advantage of international opportunities and contribute to a highly productive economy.

I thank the member for her leadership as chair of the committee. As a member of that committee, one of the concerns I heard was with respect to LVVR. Could she explain what LVVR is, and what the conclusions contained upon bringing the bill back to the floor of the House of Commons?

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Mr. Speaker, LVVR refers to cameras that would be put into the front part of the train, exclusively from a safety perspective. In the event of an accident, people could go back to the camera and see exactly what went on in the front of the locomotive prior to the accident. It would not go into the hands of the human resources branch for any kind of disciplinary action. This would strictly go to the Canadian transportation department when it required it or if it needed to check on something. It cannot be used in any way, shape, or form for discipline among the members. The clear intent is to protect the safety of the passengers and to ensure they are well aware of what goes on at all times. Ensuring the safety of our railways is extremely important.