Transport Committee on Oct. 3rd, 2006

[Gilles Dufault]

It might seem to you that way. I am speaking from experience, however. I am simply saying that we are currently operating with five members and there are no delays. If there are delays, it has nothing to do with the members. We can do the work with five members.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Generally speaking, what are your timeframes for dealing with air travel complaints at each level?

[Gilles Dufault]

Air travel complaints that used to be handled by the commissioner are dealt with informally. It is really the parties that influence how long it takes.

We have performance standards for dealing with complaints. For example, when someone phones the call centre, the call is returned right away. If the call comes in after working hours, the person is called back the next day. If the complaint comes through the Internet, an acknowledgment is sent back electronically. If we receive a written complaint, we send an acknowledgment within a few days. That way, the complainant knows that the complaint has been received and that the Agency is dealing with it. These complaints are handled informally and they used to be dealt with by the complaints commissioner.

In the case of formal complaints, the Agency has standard procedures. The act stipulates that a decision must be handed down within 120 days. We write immediately to the complainant and the party concerned to inform them of the timeframes and give instructions on how to provide the necessary information.

Then there is an exchange of correspondence until the arguments are heard. Once that stage is completed, after around 60 days, the case is analyzed and the substance of the complaint is discussed. Finally, the Agency makes its decision, which has to be written, translated and produced. That is the way we work.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

What is the average time required for mediation cases and cases in which a decision must be handed down?

[Gilles Dufault]

Mediation is a process that can be very short or very long. It depends on the parties. The maximum is 120 days for decisions made through the Agency's formal processes.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I'm talking about the average. Do you have statistics that indicate the average length of time for cases?

[Gilles Dufault]

We do not have any statistics as such. In licence cases, in cases involving marine transportation under the Coasting Trade Act, it takes us between 7 and 10 days to make a decision. We can be very quick. But with more complicated cases, we need to get information and analyze it, which can take more time.

[The Chair, Conservative, Merv Tweed]

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you, Mr. Chair.

I want to thank all three of you for appearing before us today.

I'd also like to focus on the dispute resolution process, but in a different part of the bill, and that's clause 44, which creates a number of new sections addressing the whole issue of setting rates for publicly funded commuter rail services that want to use the assets of some of the main-line carriers. It would be sections 152.1 and 152.2, which would be added to the act.

My questions arise from an experience in a community across the river from us, the city of Mission, which is at one end of the West Coast Express line that runs into Vancouver. It goes through a number of communities and picks up passengers along the way. When negotiations were under way to establish a rate to be paid to the main-line carrier, there was some public discontent that the rate the public was paying was so high.

I notice from the bill that there's still an initial negotiation process, but if the two parties, the publicly funded carrier and the main-line operator, can't come to an agreement, the matter is now referred to you for settlement. At that time it's no longer an arbitration; it's simply a decision you would make based on a number of factors.

If I were a main-line carrier I would be somewhat concerned about this intrusion into the normal free market process when negotiating these rates. Have you consulted with the industry, and what has been the reaction?

[Gilles Dufault]

As you know, the bill is being drafted by Transport Canada. The question should be addressed to them. We've been consulted on the feasibility of the bill but not on its operation.

[Ed Fast, Conservative, Abbotsford, BC]

Are you aware of any concerns that have been raised regarding this process? Are you aware of any of the considerations that will be undertaken to determine the rates that would be charged?

For example, if you go back to clause 44 and the new section 152.2, it sets out that the agency must take into consideration a number of factors: variable costs incurred by the railway company, cost of capital based on the rates set by the agency, those sorts of considerations. Has there been any discussion within the industry as to exactly what the impact of that new process will be on the main-line carriers?

[Gilles Dufault]

I'm not aware of any discussion. I don't know if Seymour is.

[Seymour Isenberg]

Commuter rail lines have been an issue for cities that are running out of room for automobiles--that would be Vancouver, Toronto, and Montreal. This is an attempt to provide a backstop. So if the parties can't negotiate themselves, they can apply to the agency to set a fair rate, given the cost of providing that service and any impact it has on the freight line. This is a North American problem, by the way. Freight lines sometimes don't mix too well with passenger lines, as you can guess.

We'll try to determine a fair cost for what the commuter line is asking the railway to do and give the commuter corporation the opportunity to access those rail lines for a compensated fee. Each case would be treated in a separate way. Analysts would go out and say, “What does this mean?” It's designed to give the railways their normal rate of return on access to their asset but not an unreasonable rate of return. That would certainly be the intent of the members who make that judgment, and our costing analysts, who are familiar with railway costing, will provide some of that data.

We work on a natural justice process, so both sides will be given an opportunity to put their points across, and from that we would hope to reach a decision. That's the intent of the bill.

[Ed Fast, Conservative, Abbotsford, BC]

Can that decision be appealed?

[Seymour Isenberg]

All of our decisions can be appealed in two ways. One, if we erred in law, it's through the Federal Court, and the second way is through the Governor in Council. I guess you'd call it a political route or a policy route that can be accessed, and they can go to the Governor in Council and ask for a decision to be overturned.

Obviously, we're not an entity unto ourselves as the last resort. I think Parliament is meant to be supreme.

[Ed Fast, Conservative, Abbotsford, BC]

If I could ask you a question that I've asked earlier, has there been a push-back from industry, or is industry generally supportive of this particular method of determining those rates?

[Seymour Isenberg]

As Mr. Dufault said, we're not really involved in negotiations, and they wouldn't be coming at us. If they were, they'd likely be interacting with Transport Canada.

Our real role is to implement the law and not to actually do the policy side of it. I really can't comment on whether there's been much in that area. All I can tell you is we're prepared to carry out the mandate, should the mandate come to us.

[Ed Fast, Conservative, Abbotsford, BC]

Do you expect that publicly funded commuter rail services will now find it easier to establish new routes to service more communities with this kind of a clause in place?

[Seymour Isenberg]

One cannot predict the future. Obviously, one would have to ask the intent of the people developing the legislation. But it certainly provides another avenue of negotiation, if you like, to know there's backstop legislation if you can't negotiate directly with the carrier.

Overall, the intent of the act is to allow parties to reach decisions themselves, and we would interfere as little as possible unless necessary.

[The Chair, Conservative, Merv Tweed]

We have Mr. Bell, and I understand Mr. McGuinty has a brief question.

[David McGuinty, Liberal, Ottawa South, ON]

Yes, I have a quick preamble question.

I wanted to get it on the record, Mr. Dufault, if I could.

My colleague, Wayne Easter, has been doing a lot of work on Canadian farmers and the issue of hopper cars. I have a single question that I'm hoping you'll answer with a yes or no.

Was the CTA involved in developing the methodology that resulted in the minister's $2 per tonne statement in May? If that was the case, can you provide an analysis of that statement? Can you give us the background analysis? Is that possible?

[Gilles Dufault]

I know that $2 is an approximate number. It will be reviewed at the annual review of the revenue cap that recently started, with a decision to be rendered at the end of the year, I think.

[David McGuinty, Liberal, Ottawa South, ON]

I don't want to take Mr. Bell's time, Monsieur Dufault. Very quickly, did the CTA devise the methodology to arrive at the $2 per tonne?

[Gilles Dufault]

The methodology is imposed by the legislation, so we then devised the methodology.

[David McGuinty, Liberal, Ottawa South, ON]

Do you have any analysis to substantiate the $2 per tonne claim?