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

Sponsor

Marc Garneau  Liberal

Status

This bill has received Royal Assent and is, or will soon become, law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

May 22, 2018 Passed Motion respecting Senate amendments to Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts
May 3, 2018 Passed Motion respecting Senate amendments to Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts
May 3, 2018 Failed Motion respecting Senate amendments to Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts (amendment)
Nov. 1, 2017 Passed 3rd reading and adoption of Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts
Oct. 30, 2017 Passed Concurrence at report stage of Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts
Oct. 30, 2017 Failed Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts (report stage amendment)
Oct. 30, 2017 Failed Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts (report stage amendment)
Oct. 30, 2017 Passed Time allocation for Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts
June 19, 2017 Passed 2nd reading of Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts
June 15, 2017 Passed Time allocation for Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:10 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Mr. Speaker, it is a pleasure working with my colleague on the transportation committee.

In 2002, the United States had a form of a passenger bill of rights, and in 2005, Europe did. We are actually playing 15 years of catch-up to our counterparts. I was wondering if my colleague could comment on the fact that, in Canada, we are actually playing catch-up to our counterparts.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:10 p.m.
See context

NDP

Robert Aubin NDP Trois-Rivières, QC

Mr. Speaker, I thank my colleague and I would like him to know that I also enjoy working with him in committee.

He raised some essential points. When it comes to a passengers' bill of rights, we do not have to reinvent the wheel here in Canada because good models already exist, including the European Union's bill of rights, which many witnesses mentioned in committee. They said that Europe's bill of rights was good, that it worked, and that we should use it as a model.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:10 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Mr. Speaker, last year the Minister of Transport presented his vision for the future of transportation in Canada, also referred to as transportation 2030. This vision reflects thorough consultation with Canadians, stakeholders, provinces and territories, indigenous groups, and academics, following the release of the final report on the Canada Transportation Act review, also known as the Emerson report.

Transportation 2030 is made up of a series of initiatives under five themes: the traveller; safe transportation; green and innovative transportation; waterways, coasts, and the north; and trade corridors to global markets. These themes encompass various modes of transport and allow the government to take a holistic approach in ensuring the transportation system is equipped to support our broader priorities.

Canadian travellers and their experiences are top of mind for our government. During consultations conducted by the Minister of Transport, we asked Canadian travellers for their feedback, and they were clear. They want lower-cost air travel, more opportunities for leisure and business travel, and they want to see Canada become a more attractive travel destination for visitors. Canadians told us that they want long-term sustainable competition, which will allow for the introduction of additional air services, improved air connectivity, and more choice.

The government has listened, and it is committed to achieving tangible improvements to the traveller experience. As a result of the feedback we received, a number of proposals have been introduced in Bill C-49 to help improve the traveller experience. For example, the government intends to liberalize international ownership restrictions for Canadian air carriers. What does this mean for Canadian travellers? Allow me to briefly describe this initiative.

The legislation proposes to liberalize international ownership restrictions from 25% to 49% for Canadian air carriers, with associated safeguards. For example, a single international investor would not be able to hold more than 25% of the voting interests of a Canadian air carrier, and no combination of international air carriers could own more than 25% of a Canadian carrier. The policy change would not apply to Canadian specialty air services, such as aerial photography or firefighting, which would retain international ownership levels at 25%. Liberalizing international ownership restrictions means Canadian air carriers—and this includes all passenger and cargo providers—would have access to more investment capital that they can use for innovation. This would bring more competition into the Canadian air sector, providing more choice for Canadians, and generating benefits for airports and suppliers, including—

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:15 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

In fact, Mr. Speaker, in the fall of 2016, the Minister of Transport exempted from the 25% ownership restrictions two companies that wanted to enter the Canadian market supported by increased foreign investment. This decision is now permitting Enerjet and Jetlines to pursue their intention to create low-cost carrier service to Canadians. With liberalized foreign investment provisions, Canadians would have more frequent access to air travel within and from Canada to transborder and international locations.

Like most countries, Canada limits international ownership and control of domestic air carriers. As I mentioned, under the Canada Transportation Act, non-Canadians currently cannot possess more than 25% of the voting shares of a Canadian carrier. Additionally, Canadian air carriers must also be controlled by Canadians, which means they may not be subject to controlling influence by international investors.

Limits on foreign ownership and control of air carriers are the norm around the world. For example, in the United States, the limit is 25%, while the European Union, Korea, Australia, and New Zealand allow up to 49%, and Japan allows 33.3%. Limits vary depending on the circumstance of each region. However, Canada's current ownership limits may be acting as a barrier to new services and enhanced competition.

Earlier I mentioned that the two prospective ultra-low-cost carriers, Canada Jetlines and Enerjet, have already applied for and received exemptions to the current limits on international ownership from the Minister of Transport. This was granted because both companies successfully argued that, under the current 25% limit, there is insufficient risk capital in the Canadian market to support the launch of new services.

Reflecting on this reality and the Canada Transportation Act review recommendations, the government is proposing changes that would allow international investors to own up to 49% of the voting shares of Canadian air carriers, by introducing legislation that would amend the act and other relevant acts. As I mentioned earlier, countries have different approaches to international ownership of air carriers, and our government wants to make sure that Canadian air carriers compete on a level playing field.

To protect the competitiveness of our air sector and support connectivity, no single international investor or any combination of international air carriers would be allowed to own more than 25%, but how would this benefit Canadian travellers? The direct impact of higher levels of international investment is that Canadian air carriers would have access to a wider pool of risk capital. This would allow air carriers to be better funded and could allow new carriers, which are otherwise not able to find sufficient risk capital, to enter the Canadian market.

New carriers, including ultra-low-cost carriers offering extremely competitive prices, are expected to bring more competition into the entire Canadian air travel sector. This could, in turn, reduce the cost of air transportation and open new markets to Canadian consumers and shippers. Small markets currently underserved by existing carriers could also benefit from services by new carriers. For example, airports in smaller cities that currently offer services to a very limited number of destinations could benefit from the addition of new services since we know that ultra-low-cost carriers use these smaller airports as their hubs. All of this could lead to more choice when purchasing airline tickets, more travel destinations for all travellers, including those from smaller cities, and lower prices for Canadian travellers. Additionally, there could also be benefits for airports and suppliers and the entire country, as more jobs are added to the Canadian economy.

Another improvement to the air travel sector in this bill is that it proposes a new transparent and predictable process for the authorization of joint ventures between air carriers, taking into account competition and wider public interest considerations. Joint ventures are a common practice in the global air transport sector. They enable two or more air carriers to coordinate functions on specific routes, including scheduling, pricing, revenue management, and marketing and sales. In Canada, air carrier joint ventures are currently examined from the perspective of possible harm to competition by the Competition Bureau under the Competition Act.

Unlike many other countries, notably the United States, Canada's current approach does not allow for the consideration of the wider public interest benefits other than competition and economic impacts. Furthermore, the bureau's review is not subject to specific timelines. This raises concerns that the current approach to assessing joint ventures may make Canadian carriers less attractive to global counterparts as joint venture partners and may limit the ability of Canadian carriers to engage in this industry trend.

The bill before us in the House proposes amendments that would allow the minister to consider and approve air carrier joint ventures, taking into account competition considerations. On this latter concern, the current transport minister would work in close consultation with the commissioner of competition to ensure that he or she was properly informed regarding any concerns he or she may have with regard to competition. Air carriers that chose to have their proposed joint ventures assessed through the new process would be given clear timelines for an expected decision.

Providing Canada's air carriers with such a tool would also benefit the air traveller. By joining up networks, air carriers could allow seamless travel to a wide range of destinations and could reduce the duplication of functions. For Canadians, this could mean more seamless access to key global markets, easier inbound travel in support of tourism and business, and increased transiting traffic through our airports, thus increasing flight options.

Globally, airports are making unprecedented investments in passenger screening to facilitate passenger travel and to gain global economic advantages. Canada's largest airports have expressed interest in making significant investments in passenger screening, either through an additional workforce or technology innovation. Smaller airports have also shown interest in obtaining access to screening services to promote local economic development. In the last two years alone, 10 small airports across Canada have requested screening services.

The proposed amendments to the Canadian Air Transport Security Authority Act are important, as they would create a more flexible framework to allow CATSA to provide these services on a cost-recovery basis, which would in turn allow Canada to maintain an aviation system that is both secure and cost-effective. It would also strengthen Canadian communities' competitiveness as they attracted new commercial routes.

That is not all the transportation modernization act would do. Bill C-49 proposes to mandate the Canadian Transportation Agency to develop, in partnership with Transport Canada, new regulations to enhance Canada's air passenger rights. These new rules would ensure that air passenger rights were clear, consistent, and fair for both travellers and air carriers. When passengers purchase an airline ticket they expect and deserve that the airline will fulfill its part of the transaction. When that agreement is not fulfilled, passengers deserve clear, transparent, and enforceable standards of treatment and compensation for such situations.

Under the proposed legislation, Canadians would benefit from a uniform, predictable, and reasonable approach. The details of the new approach would be elaborated through the regulatory process, which would include consultations with Canadians and the air stakeholders. My objective is to ensure that Canadians have a clear understanding of their rights as air travellers without negatively impacting access to air services and the cost of air travel for Canadians.

Bill C-49 specifies that the regulations would include provisions regarding the following most frequently experienced irritants: providing passengers with plain language information about carriers' obligations and how to seek compensation or file complaints; setting standards for the treatment of passengers in the case of overbooking, delays, and cancellations, including compensation; standardizing compensation levels for lost or damaged baggage; establishing standards for the treatment of passengers in the case of tarmac delays over a certain period of time; seating children close to a parent or guardian at no extra charge; and requiring air carriers to develop standards for transporting musical instruments.

The minister has been clear that he intends that the regulations include provisions ensuring that no Canadian is involuntarily removed from an aircraft due to overbooking after having boarded. The minister has issued a challenge to Canada's air carriers on this matter, on seating arrangements for minors, and on moving to strengthen air practices even before new passenger rights are finalized.

The bill also proposes that data could be required from all parties in the air sector to monitor the air traveller experience, including compliance with the proposed passenger rights approach. This data would also inform any future policy or regulatory actions taken by the Minister of Transport to ensure that the air traveller experience to, within, and out of Canada was efficient and effective.

To finish, I will underscore that the experience of Canadian air travellers is a priority for the Government of Canada. We know that it is also a priority for Canadians. This is why we have proposed to increase international ownership restrictions for Canadian carriers. It is why we are proposing new rules on joint ventures that would help create greater efficiencies and more choices for Canadian travellers. It is why we are proposing some modest changes to the provisions of CATSA screening services that should help air passengers transit through airports more quickly. Finally, it is why we are creating a legislative framework so that Canadians can finally benefit from an air travellers' bill of rights.

Once these new measures were in place, they could help lower prices, support increased competition among air carriers, provide more choice to Canadians when it comes to purchasing tickets, and improve service and connectivity for all Canadians and Canadian travellers.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:25 p.m.
See context

NDP

Gord Johns NDP Courtenay—Alberni, BC

Mr. Speaker, coastal communities rely on jobs in the transportation industry, especially in shipping. During the last election campaign, the Liberal Party promised not to change the Coasting Trade Act, yet the bill before us would allow foreign registered vessels to compete unfairly with Canadian shipowners. We are requesting that Canadian registered vessels continue to have preferential access to government contracts, to carrying goods by container, and to repositioning of empty containers. In addition, the government did not consult the stakeholders affected by this measure.

Why is the government going back on its word and now opening the door to unfair competition by foreign registered vessels?

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:30 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Mr. Speaker, I can assure my hon. colleague that anything this government does takes into account Canadians. We surely do not intend that any change affects Canadians in a detrimental way. At the same time, we have to recognize that we operate in a global economy and a global marketplace, which is why we should not be very protectionist. We should actually work with foreign investors to increase our economy and benefit all Canadians.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:30 p.m.
See context

Conservative

Tony Clement Conservative Parry Sound—Muskoka, ON

Mr. Speaker, we have had a lot of debate in the House already on the bill, which seems to be, and in fact manifestly is, an omnibus bill. It would amend 13 different pieces of legislation. At the same time, the much-vaunted expression to the Canadian people was that this was going to solve a lot of passenger issues. It was going to be the passenger bill of rights, yet there is very little in the bill that is about passengers.

I wonder whether the hon. member can give his perspective on why he is supporting this piece of legislation when it does not do what the Liberals said it was going to and it would have all this impact on 13 other pieces of legislation.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:30 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Mr. Speaker, I find it curious to have that charge, knowing that the previous government was notorious for using omnibus bills.

If members look at what we are putting forward, it all deals with one piece of legislation, or 90% of it deals with one piece of legislation. Having said that, I am quite confident that this bill would help Canadians, especially with the aspect of air passenger rights. We are 15 years behind the United States and 12 years behind Europe, so it is about time we put something forward Canadians can rely on.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:30 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Mr. Speaker, the approach is looking forward to 2030, and the approach has been to look at the entire transportation system holistically, as it is vast and quite intricate.

I applaud the minister for the work he has done and for all the consultations he has had with stakeholders and Canadians.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:30 p.m.
See context

NDP

Don Davies NDP Vancouver Kingsway, BC

Mr. Speaker, listening to the Conservatives accuse the Liberals of introducing omnibus bills is a little rich. The Harper government introduced omnibus bills to such an extent that Canadians became quite engaged and enraged about it, but that does not excuse the current government for doing the same thing, and it is doing it here. The Liberals stood in the House, along with New Democrats, and criticized the previous government for introducing omnibus bills, and here they have introduced one bill that would amend 13 different acts. It is by every single measure an omnibus bill.

My question is about Canadians, not about what we are doing in the House. I would like the member to explain why his Liberal colleagues voted against an NDP amendment that would have, among other things, required airlines to reimburse passengers for the full price of a ticket when a flight was cancelled. It would seem to me that this would be a very logical and reasonable request of airlines. Why did the Liberals not support that NDP amendment?

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:30 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Mr. Speaker, I apologize. I was not here in the House when the previous government was here.

Speaking to the first part of my colleague's question, we cannot compartmentalize such a vast transportation system. When 90% of Bill C-49 deals with one act, I do not see that it is an omnibus bill.

To the second part of the member's question, we worked quite collaboratively in committee. If specific amendments were rejected, it could have been due to duplication or a number of other reasons. There was no malice there. We worked really well together.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:35 p.m.
See context

Conservative

Ben Lobb Conservative Huron—Bruce, ON

Mr. Speaker, when David Emerson did a review of the act many years ago and put forward his report, he had a vision for transportation in the country. Obviously, this legislation falls well short of his vision.

With respect to the passenger bill of rights, the government has left it to regulations. Virtually everything is being left to regulations instead of being put in the bill, into law, so members of Parliament know what they are voting on. Why did the government fail to put these penalties, which would provide support to passengers, in the bill and instead are leaving it to the department to do through regulations?

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:35 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Mr. Speaker, this, quite frankly, leaves a lot of flexibility. Going forward, everything will be stipulated in the legislation. The important thing is to get the ball rolling now. As I said, we are playing catch-up with our counterparts in Europe and the United States. Once we get this in place, everything else will be stipulated in the legislation.

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:35 p.m.
See context

NDP

Gord Johns NDP Courtenay—Alberni, BC

Mr. Speaker, as stated earlier, the Liberal government ran on a platform that it would not ram omnibus bills through the House. The government has put 13 acts together in this one bill. It says that 90% of it is covered in one act. Why did the government not separate the one act and put that piece of legislation forward separately?

This legislation talks about joint ventures between airlines, a passenger bill of rights, and protecting the marine industry through transportation, which the government has not done. This legislation is jam-packed with many different issues that need to be debated separately.

The member pointed out that the Conservative government rammed through omnibus bills. The Liberals opposed them during the campaign, yet they are doing it themselves. I would like the member to explain why the government is ramming through omnibus bills. What is the threshold? Is it 15 acts, 20 acts, 25 acts? What is the threshold for the Liberal government in ramming through omnibus bills?

Transportation Modernization ActGovernment Orders

October 31st, 2017 / 12:35 p.m.
See context

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Mr. Speaker, I completely disagree. We are not ramming through anything. With such a vast, intricate system, we cannot compartmentalize it. We need to look at it holistically, otherwise we would be duplicating the work we are doing here, which would not make sense. As I said, we are playing catch-up, especially when it comes to the air passenger bill of rights. We are over a decade behind, which speaks for itself.