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

October 4th, 2018 / 9:35 a.m.
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President, Saskatchewan Association of Rural Municipalities

Ray Orb

That's a good question. We've actually been working with the short line association and we have demonstrated that by taking several trucks off our highways and road systems and putting it on a rail car, we're actually reducing greenhouse gas emissions. We should actually be credited for that. We're hoping that the federal government takes it into account when they finally realize that this carbon tax is actually wrong.

I just wanted to mention that the short lines in Saskatchewan are an integral part of moving grain. We have more short-line railroads in Saskatchewan than there are in the rest of the country. They provide a valuable service. They often don't get good service, so we're looking at this legislation. Even though the short lines are regulated in Saskatchewan, we're hoping that the new Bill C-49 actually takes into account the carriers and makes them more accountable, because in the end it's mostly CP Rail that picks up the cars and takes them away.

October 4th, 2018 / 8:55 a.m.
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President, Saskatchewan Association of Rural Municipalities

Ray Orb

We are certainly hoping that's the case. I can tell you that since Bill C-49 was passed, the two major carriers, CN Rail and CP Rail, have been a lot more apt to sit down with organizations like ours. In fact, I'm scheduled to have a meeting with CP Rail next week in Saskatoon.

They have come forward with their plans. They've also come forward now with their winter plans, which obviously we're facing. I think they are being scrutinized a lot more. This year might actually put them to the test. Although it might not be the volume, we have other issues to deal with right off the bat, including the weather.

Thank you.

October 4th, 2018 / 8:55 a.m.
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Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Do you think this shipping year would be a good benchmark to assess whether the changes to the Canada Transportation Act in Bill C-49 will have a meaningful impact for farmers and shippers?

October 4th, 2018 / 8:45 a.m.
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Ray Orb President, Saskatchewan Association of Rural Municipalities

Yes, I will. Thank you.

First of all, I'd like to thank the committee for allowing me to appear this morning. My name is Ray Orb, and I am the president of the Saskatchewan Association of Rural Municipalities, which is known as SARM. We were incorporated in 1905 and have been the voice of agriculture and rural Saskatchewan for over 100 years. We work on behalf of our members to identify solutions and challenges in rural Saskatchewan.

As an association, we are mandated to work in agriculture, which is an important sector in our province. Saskatchewan is a key producer of Canada's wheat, oats, flaxseed and barley, and we are proud to be home to many farms, cattle ranches and dairy operations.

Our agriculture industry relies on the ability to move product efficiently and cost-effectively. An adequate and efficient transportation system is imperative for producers to move their product across the province and across the country.

Saskatchewan, Canada and North America rely on the rural municipal primary weight infrastructure in Saskatchewan to connect to the provincial network to move goods and services in a reliable, timely and safe manner. Our province boasts the largest provincial road network in Canada. Provincial highways contribute 26,000 kilometres, while rural municipal roadways contribute 162,000 kilometres.

The Saskatchewan Ministry of Highways provides funding to SARM to manage a primary weight network grant-funding program for rural municipalities to maintain rural roads at a primary weight. These primary weight corridors enable the seamless transportation of goods and services throughout the province and the country, while protecting the aging provincial system. The program has proven to be very successful, as there are currently 6,500 kilometres of “clearing the path” primary weight corridors in the province.

We also rely on the rail system to ship grain and agricultural products, and SARM has been really vocal about the rail level of service since 2009.

More recently, we provided comments on Bill C-49. We supported the bill, as it provides legislation for increased data reporting. More data means that producers in the supply chain can make better decisions that are based on good information. We also believe that the federal railways should be required to produce plans that detail how they'll deal with demands resulting from the upcoming crop year.

We're pleased to see reciprocal penalties and the provision for informal dispute resolution services included in Bill C-49. It's important that disputes be resolved quickly so that producers aren't faced with additional penalties or delays.

It is also important that the Transportation Modernization Act and related regulations ensure that the Canadian Transportation Agency and Transport Canada have adequate mechanisms to keep railways accountable. SARM believes that the federal government needs the ability to act if it deems a railway's grain plan to be insufficient. Without adequate enforcement options, Bill C-49 would not bring about meaningful change.

Although rail transportation has primarily been an issue for grain producers in western Canada, the increase of oil by rail causes additional concerns. Thousands of barrels of oil on the track not only cause capacity issues for grain but also pose a threat to the environment.

Pipelines are an environmentally favourable alternative to road and rail transportation and should be used where possible to reduce the risks associated with moving dangerous goods by rail. Pipeline development will also take oil cars off the rail tracks and free up cars for the movement of grain.

My last comment is related to the important role that ports play in our rural economies. Since the port of Churchill stopped operations in 2016, SARM has been closely monitoring the situation and advocating for a solution. The port provided an important export point for producers, and its restoration would help move the grain backlog in the Prairies.

Last year, SARM had the opportunity to meet with officials from the port of Vancouver. We have seen first-hand some of the logistical issues and how the port authority hopes to bring about further efficiencies.

The rural landscape has changed over the course of the last century. Demands on infrastructure have increased and will continue to increase. The report “How to Feed the World in 2050” indicates that by that time the world's population will reach 9.1 billion. Food production must increase by 70%. Annual cereal production will need to reach three billion tonnes, and annual meat production will need to increase by over 200 million tonnes. It is imperative that we have a transportation system that enables producers in rural Saskatchewan to do their part in feeding the world.

On behalf of Saskatchewan's rural municipalities, I would like to thank the committee for the opportunity to lend our voice to this important conversation.

October 2nd, 2018 / 10:15 a.m.
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NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

Thank you.

You also mentioned the transportation problems. Earlier this year we had CN and CP Rail before the committee to explain the problems they are experiencing getting our crops to market. I'm from Vancouver Island. We can see the problems all the way down the line.

We have freighters parked in anchorages everywhere. Port infrastructure is simply not capable of handling what we want to do to export to the Asian market. The railways gave their assurances that they have a plan and that they're working on it, but all the subsequent witnesses who represented farm groups did not believe them. Now that we're half a year forward, is there anything that gives you hope from your point of view? Is there anything more we can do? I know we passed Bill C-49, but is there light on the horizon in this particular area?

September 26th, 2018 / 4 p.m.
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Director, Industry Relations, Pulse Canada

Greg Northey

We very much supported that provision, but one thing we always have to keep in mind is that if the agency needs to investigate, it means it's too late. The failure has probably happened.

If they have the proper data, they can start to see when the supply chain starts to become an issue and they can maybe step in and smooth it out so it's not so bad, but we need to have that kind of insight. We need to have that information to know that this week, we're starting to see red flags around what's happening in the rail network and we need to do something. We need to be able to go to the railways and we need the rails to speak to the customers so they can start to plan: “Okay, we're going to have a problem in the next couple of months.” That did not happen last year.

If they need to investigate a catastrophe or a crisis, it's too late for us. We need to avoid the crisis in the first place. We need to be forward-thinking. We need to be thinking about how we prevent this. Data is a huge example of how we can do it. The U.S. has their data, but I think we can be much better in Canada. We can be much, much better. We don't have to look to them for an example of it. We can set our own regime now. Bill C-49 gave us the ability to do that.

September 26th, 2018 / 4 p.m.
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Vice-President, International Trade and Transportation, Forest Products Association of Canada

Joel Neuheimer

I can start on this one. Thanks for the question.

Actually, this goes back to an ask that a number of the railway's customers made, going back to Bill C-49, which was for for the agency to go out and investigate these types of matters independently. Minister Garneau put some conditions on it. He made it conditional on his approving an investigation and reserving the right to impose certain criteria for how the investigation is conducted. What we think would be even better would be to give the watchdog the power to go out and investigate things that need investigation on its own, without these special limitations.

It's Transport Canada that sets transportation policy in Canada; there should be no fear that the agency is all of a sudden going to make policy. The agency's job is to go out and investigate situations when things are not working the way they're supposed to. I would very much appreciate having the agency act more independently in the scenarios that you're talking about, Mr. Aubin.

September 26th, 2018 / 3:40 p.m.
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Director, Industry Relations, Pulse Canada

Greg Northey

So far in the grain year, service has been quite good from the railways, as you'd expect, because it's very good railroading weather. The crop has been a bit slow to come off. We've had some issues with weather and some stalls in harvest.

The railways are now meant to publish plans on how they plan to move the crop each year. It came out in Bill C-49. Their plans indicate that there is no increase in capacity. They haven't planned for an increase in capacity. When it's really going to matter for us is when we start to get into winter and start to see how they're able to respond and the kind of flexibility they have to be responsive to shippers' needs.

The investments may work, and we may have a great year—

September 26th, 2018 / 3:35 p.m.
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Director, Industry Relations, Pulse Canada

Greg Northey

I can start.

On your last point, one of the items that came out of the process of Bill C-49 was that Transport Canada started a collaborative forward planning exercise. They worked through on the quantity supply chain table. They are trying to wrestle to the ground some of these points as a larger group, so that includes the railways and the shippers.

September 26th, 2018 / 3:30 p.m.
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Director, Industry Relations, Pulse Canada

Greg Northey

Agriculture is a bit unique, because we have what's called the maximum revenue entitlement, the MRE. Essentially, it's an entitlement for the railways on the revenue they can make for moving grain. It guarantees them a 20% rate of return or whatever on grain, but prevents them from charging monopoly prices, because they have the entitlements.

Cost is still an issue, at least for our members. Containerized movement has been pulled from the maximum revenue entitlement. That's one of the changes made in Bill C-49. We have seen some increases in rates for moving containerized grain as a result, because it's not protected under the maximum revenue entitlement.

Service in general for agriculture will be the number one issue, as opposed to rates. In the event the MRE disappears, we—

September 26th, 2018 / 3:30 p.m.
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Vice-President, International Trade and Transportation, Forest Products Association of Canada

Joel Neuheimer

Thanks so much for the question.

For us, costs and service are both concerns. We actually asked for the same thing that Michael outlined in his presentation to be in Bill C-49, but the amendments we were asking for did not come through.

I'll let you know that right now, in our operations across Canada, northern Alberta is one of the biggest pain points. They're having a lot of trouble moving stuff by rail from places like Edmonton to Winnipeg. It's been that way for a number of months now, and we're not even into the serious winter conditions yet. What's going to happen in January and February? That makes us extremely anxious about how bad it might be again this winter.

Prince Rupert is definitely an option. We have members who ship through Prince Rupert already. Of course, CN is the only one that's there. It would help us if both railways were using the port.

I think it is a bit of a game of who is going to move first. Are terminals going to build up there to bring in more traffic, or are the railways going to invest there first? We need somebody to show some leadership there and make a move so that we can—

September 26th, 2018 / 3:20 p.m.
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Joel Neuheimer Vice-President, International Trade and Transportation, Forest Products Association of Canada

Good afternoon, Madam Chair and members of the committee. Thanks very much for having me here on behalf of the members of the Forest Products Association of Canada, or FPAC.

FPAC is the voice of Canadian wood, pulp and paper producers nationally and internationally. The forest products industry generates $69 billion annually and contributes $21 billion to Canada's GDP. The industry is one of Canada's largest employers, operating in over 600 forest-dependent communities from coast to coast, and directly employing 230,000 Canadians across the country.

In 2017, our industry exported over $35 billion worth of goods to 180 countries. We heavily rely on Canada's supply chain to get our goods to market. We are the second-largest user of the rail system, transporting over 31 million tonnes by rail in 2017. We transport over 74.2 million tonnes by truck each year, which makes us one of the largest users of this system. Through ports, we ship approximately 31.2 million tonnes overseas.

The forest products industry is facing several challenges right now. Most importantly, the lack of reliable infrastructure to support our transportation system is estimated to cost our industry over $500 million a year.

Minister Garneau's 2030 transportation strategic plan is a step in the right direction, to help ensure that Canada has a long-term vision of what our transportation and infrastructure systems must look like. However, 2030 is fast approaching, and while some of the investments may well help in the future, forest products are still feeling the effects of the 2017-18 freight rail crisis, and we fear the same will happen this year. Months after the crisis, fulfillment levels are still low in our sector. With winter fast approaching, our members are concerned that they will have to shut down mills.

I would like to acknowledge the work that the Canadian railways have done in recent months to add more capacity to the system. Unfortunately, there is still great concern across Canada in our business that it will not be enough.

We need to revitalize the Pacific gateway initiative, and FPAC looks forward to seeing the benefits of the investments made through the trade corridors fund. FPAC also looks forward to the quick implementation of the comprehensive and progressive trans-Pacific partnership.

Canada needs to avoid taking sector-specific approaches to transportation usage. We know that Minister Garneau recently met with representatives of the grain and agriculture sector, and FPAC believes these types of meetings should be held with all sectors together.

With the implementation of Bill C-49, Canada has an opportunity to strengthen its legislation and regulations to make rail rates and service more competitive for railway customers.

FPAC hopes that with the new own-motion power granted to the Canadian Transportation Agency, or CTA, through Bill C-49, more investigations into rail issues will be done, with the support of Minister Garneau.

Rail, however, is not the only mode that currently has negative effects on the Canadian transportation system. For the past couple of years, Canada has faced and continues to face a severe truck driver shortage, which has caused the cost of this mode to rise dramatically. With the rail issue already prominent, the need for trucks is higher than ever, yet most times our members cannot get the service they need.

Federal and provincial governments need to do more to ease the truck driver shortage, for example via immigration and training. To help ease the truck driver shortage crisis in Canada and the U.S., FPAC recommends harmonizing weights and dimensions across Canada and eliminating cabotage rules.

In the final point of the supply chain, current congestion and bottlenecks at ports are increasing delivery times and costs for the forest products industry, specifically at places such as the port of Vancouver. Our second-largest market is China; therefore, the industry heavily relies on this port to get our product to Asia. Enhanced performance metrics, expanding B.C. ports and other opportunities along the B.C. coast, including the implementation of short-sea shipping where needed, will help with these challenges.

On dangerous goods, we need to maintain a risk-based approach.

FPAC also believes it is important for the federal government to provide a mandate for safety-sensitive workplaces, such as the transportation sector and ours, to be able to test employees in relation to the legalization of cannabis.

Finally, labour stoppages are an issue over which our members have to be extremely vigilant in order to prepare for delays and added costs. FPAC asks the government to include railways and ports as an essential service, ensuring that service will continue even during a strike.

In conclusion, we need to do more and have a better-defined vision of the infrastructure we need going forward, now and for the future.

Recently, the Minister of Innovation, Science and Economic Development Innovation, Navdeep Bains, announced a report called “Resources of the Future”. Within this report, it is recommended that Canada have a 50-year Canadian strategic infrastructure plan.

September 26th, 2018 / 3:15 p.m.
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Greg Northey Director, Industry Relations, Pulse Canada

Thank you very much, committee, for the opportunity to speak to you today.

Pulse Canada is the national industry association that represents over 35,000 growers and 132 processors and exporters of peas, lentils, beans and chickpeas. Canada is the world's largest producer and exporter of peas and lentils, accounting for over one third of global pulse trade. Approximately 80% of Canadian pulse production is exported to over 100 markets, and the value of the industry's exports exceeded $3.5 billion in 2017.

The Canadian pulse industry has set ambitious growth targets that focus on the incremental use of 25% of production, so about two million tonnes, in new markets or for new uses by 2025. Referred to as “25 by 2025”, this target will seek to capture the significant volume opportunities for pulses that exist in the food industries around the world, particularly North America, western Europe and China. Capturing these markets will be essential if we are to retain our standing as a world-leading producer. The significant economic, employment and processing innovation benefits that the industry brings also rely on capturing these markets.

Improving supply chain efficiency and performance is a key pillar of the sector's long-term strategy, as effective transportation is a significant determinant of export competitiveness in global markets. As noted in the 2015 CTA review report, “In a world of massive and complex webs of interconnectedness, the quality of transportation and logistics systems may be the single greatest contributor to a country’s economic performance.”

The pulse and special crops sector is particularly sensitive to this sentiment, as we are the most multimodal grain crop in western Canada, with product moving in box cars, hopper cars, intermodal vans and marine containers. In fact, 40% of our exports through Vancouver are containerized. When supply chains fail and logistics, reliability and predictability disappear, as we saw this past winter and in 2013-14, transportation costs increase, suboptimal economic decisions become the norm, and stable, long-term growth opportunities with international customers become difficult.

According to the World Bank, Canada ranks 20th on the 2018 global logistics performance index, a tool that was created to help countries identify the challenges and opportunities they face in the performance on trade logistics. Canada has dropped eight spots since 2014. On key indicators such as quality of infrastructure, timeliness of shipments, and the ability to track and trace consignments, Canada falls out of the top 20 countries. There is clearly room for improvement for Canada, which demonstrates that this committee's study on the Canadian transportation and logistics strategy is both timely and essential. Improving transportation and logistics is a tremendous opportunity to improve competitiveness for our sector and the Canadian economy as a whole. If effective, the strategy can set Canada down the path to become a world leader in logistics performance and infrastructure excellence, and our goal should be to become a top performer on the World Bank logistics performance index.

As you've heard from several witnesses today, a data-driven approach for any strategy will be essential. For our sector, the logistics system required to get pulse from the field to international markets, to customers and the store shelves, has a wide array of challenges, not the least of which is how to ensure complete visibility in the performance of these complex supply chains. Within months, the regulatory process required by Bill C-49 will begin to identify the service and performance metrics to be collected on the freight rail supply chain.

By establishing the right outcomes for this study, the committee can help guide Transport Canada and all stakeholders to ensure that these new regulations place Canada at the forefront of digital data management and real-time supply chain visibility that supports the competitiveness of Canadian exporters. We have to move beyond reviews of the Canada Transportation Act every eight to 10 years and legislative interventions when the system is in crisis. To do that, we need a data-driven supply chain that improves logistics and guides infrastructure spending continuously. This is by far the best way to do this, as it supports both commercial interaction between supply chain players and legislative efforts from government.

I'll leave it there. Thanks.

September 26th, 2018 / 3:15 p.m.
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Director, Logistics, Teck Resources Limited

Michael O'Shaughnessy

I just won't look at you, then.

Madam Chair, members of the committee and fellow witnesses, good afternoon, and thank you for inviting Teck to participate.

My name is Mike O'Shaughnessy, and I'm the director of logistics for Teck Resources, headquartered in Vancouver. Teck is here to address concerns over Canadian competitiveness in reaching export markets.

Teck is a Canadian diversified resource company that exports steelmaking coal, copper, zinc and energy. We employ nearly 8,000 people across the country. We are Canada's single-largest rail user, spending over $600 million annually. We're Canadian Pacific Railway's biggest customer, and a leading exporter to key markets, particularly Asia.

Over the last five years, Teck has exported over $20 billion in products from our Canadian operations to China, Japan, South Korea, India and other Pacific markets. With improved transportation and logistics infrastructure, Teck's export potential also improves, and that supports jobs for Canadians and generates economic activity where we operate.

I would now like to highlight additional steps to improve Canada's rail freight competitiveness and ensure the competitiveness of Pacific coast ports.

Our primary rail recommendation relates to shipper remedies and the need for a sufficient rail data regime that would empower the Canadian Transportation Agency to effectively deliver costing determinations under final offer arbitration. With the recent changes to the Canada Transportation Act, we understand that the agency's mandate requires it to request information in order to conduct costing determinations.

We recommend that the agency clearly confirm that it does in fact receive non-aggregated costing information, and that it does so without being impaired by any public body within the Government of Canada, the railways, or any other person.

Also, we have ongoing transparency concerns that the amended Canada Transportation Act does not compel the agency to disclose details around its costing model or information regarding its processes or methodology for regulatory costing. Simply put, there is no transparency on how the agency determines costs. This contrasts sharply with the regulatory system in the United States.

The U.S. Surface Transportation Board publishes details online respecting the uniform rail costing system, its system for determining railroad costs. We recommend that the government consider adopting a similar data transparency mechanism so that the Canadian Transportation Agency is required to make its costing model processes and methodologies publicly available.

Last, on rail issues, we remain concerned about whether railways are fulfilling their service obligations by taking into account the railway company and the shippers' operational requirements and restrictions. The language that became law under Bill C-49 does not reflect the reality that in connection with the service that a railway may offer, it is the railway that decides the resources it will provide. Those decisions include the purchasing of assets, the hiring of labour and the building of infrastructure. Any of those decisions could result in one or more restrictions. As those restrictions are determined unilaterally by the railway, it is not appropriate that they be used as a goalpost in an agency determination. As such, we recommend making the restrictions themselves subject to review.

The second area I will highlight relates to Canada's support for infrastructure competitiveness. Similar to rail monopolies in Canada, I have serious concerns about the non-competitive business environment of Canadian ports. On Canada's Pacific coast, there are only two publicly accessible major export points for steelmaking coal: Westshore Terminals, located here, and the federally owned Ridley Terminals, in Prince Rupert.

With the potential divestiture of Ridley Terminals, we are concerned about the possibility that both Pacific coast terminals would be owned or operated by a single entity. If both Pacific coast terminals were to fall into the same hands, our cost competitiveness, service levels and reputation would erode even further. We recommend a sale process that is fair, competitive and transparent, and that results in reasonable rates, service levels and open access.

I would like to thank the committee once again for the opportunity to appear before you today and for undertaking this important study. Given the limited time for my remarks, I invite you to read Teck's written brief, which outlines our position in much greater detail.

Thank you. I look forward to the questions.

September 24th, 2018 / 5 p.m.
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Director, Government Relations and Regulatory Affairs, WestJet Airlines Ltd.

Andy Gibbons

There's a big educational component about ultra low-cost carriers, too, because it is new to Canada. It is something the government sought in Bill C-49. The government sought to bring in foreign investors to fill that market need. We have filled that market need. We'll just leave that to the side.

Swoop is not integrated with the WestJet network. It is point to point. It's a separate reservation system. You don't buy a Swoop ticket from Abbotsford to Hamilton and then connect on to the WestJet mainline to Halifax.

There was an experience of another Canadian carrier around the new carrier they created, so I think some lessons were learned by us there, but it is a very precise, very specific model, and it's new to Canada.