Transport Committee on Sept. 11th, 2017

[Helena Borges]

We're in fact telling them, “If you overbook and if a passenger is unable to take that flight, then you have to compensate that passenger for the ticket that passenger has purchased because he's not being allowed to fly, and on top of that you also have to compensate him for his out-of-pocket or other expenses”, and those would be detailed in the regulations.

[Martin Shields, Conservative, Bow River, AB]

I understand and agree, but somebody is going to pay somewhere because that's less money.

[Helena Borges]

Somebody's going to pay.

[Martin Shields, Conservative, Bow River, AB]

Yes, exactly.

When you talked about consulting with everybody as you go forward on this, do you have a timeline?

[The Chair, Liberal, Judy Sgro]

Mr. Shields, I'm sorry, I hate to interrupt you.

[Martin Shields, Conservative, Bow River, AB]

No problem, thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

You were on a very interesting group of questions.

Monsieur Aubin, you have three minutes.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

I would like to draw some more comparisons. For a bill as important as this one, as for any other bill, I think it is important to compare ourselves with others.

You used this approach earlier in answering Mr. Fraser's question about the 49% maximum. For my part, I would like to go back to the two points I mentioned earlier, locomotive voice and video recorders and the passenger bill of rights.

It appears that voice and video recordings are not taken into consideration in Canada, unlike European countries, New Zealand and Australia. As to the passenger bill of rights, those same countries, and in particular European countries, have a much stronger bill of rights than what is proposed in Bill C-49.

There will be consultations. Why isn't Canada doing what is being done elsewhere? That is my main question. In the upcoming consultations on the passenger bill of rights, would it not be helpful to draw on a specific example rather than broad philosophical principles?

[Helena Borges]

I will ask Ms. Diogo to talk about the situation in Europe, because we have looked at what is in place. Let me just say that our regulatory and operational framework is completely different from what they have in Europe.

[Brigitte Diogo]

To develop locomotive voice and video recorders, we have looked at and are continuing to look at what is done elsewhere. We are looking at the system in the United States in particular, because our trains will cross the border. We always look at what is in place elsewhere and how we can learn from those examples. We have done this and we continue to discuss these matters with our European colleagues.

[Robert Aubin, NDP, Trois-Rivières, QC]

What about the passenger bill of rights?

[Helena Borges]

As to the bill of rights, we have compared the current frameworks in the United States and Europe, and have taken the best from each of them. When we introduce regulations, we will look at what is in place in the United States, Europe and other countries and develop a framework that is even better than what those countries have. That is our objective.

[Robert Aubin, NDP, Trois-Rivières, QC]

The upcoming consultations will be based on the conclusions of the analysis of those two frameworks. Is that correct?

[Helena Borges]

Yes.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Monsieur Aubin.

Go ahead, Ms. Block.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I just want to follow up on some of my colleague's questions around long-haul interswitching as it goes to the extended interswitching that was in Bill C-30. I thought I heard you say that some of the measures in Bill C-30 have been carried over in Bill C-49, but in fact there are no measures in place right now when it comes to interswitching or long-haul interswitching or extended interswitching because that legislation was allowed to sunset on August 1, before this legislation has received royal assent. So right now our shippers are without any ability to do any kind of long-haul or extended interswitching. Is that correct?

[Helena Borges]

That is correct. They do have access to what we call regular interswitching, which is 30 kilometres; that existed in the legislation before and continues to exist.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Okay.

[Helena Borges]

In fact, we're recommending some improvements to it in this bill, but yes, with the sunset, the extended interswitching no longer operates. That's why we're hopeful that this bill will receive royal assent so that long-haul can be put in place.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I have many questions around long-haul interswitching that I'm sure we'll get to over the next few days, but I'm wondering if you could describe the difference between long-haul interswitching and competitive line rates.

[Helena Borges]

I'm going to ask Marcia Jones to take you through some of the high-level differences between the two and, as you say, we'll probably have more opportunities to get into detail on this.

[Marcia Jones, Director, Rail Policy Analysis and Legislative Initiatives, Department of Transport]

Thank you for the opportunity to respond to this question.

Long-haul interswitching provides to a shipper that's captive to the line of only one railway outside of the regular 30-kilometre interswitch zone with access to the line of a competing carrier for a distance of up to 1,200 kilometres or 50% of the total haul, whichever is greater. In some respects there are some similarities between long-haul interswitching and competitive line rates, but there are some key differences and I'll set them out for you very briefly.

First of all, long-haul interswitching does not include a requirement for a shipper seeking relief to have an agreement with the connecting carrier. We heard from shippers across the board that this was an impediment to their accessing competitive line rates. That does not exist under this provision. In fact, the legislation specifies that the connecting carrier is required to provide cars and to contribute to the cost of the interchange.

Second, the Canadian Transportation Agency will have access to a much more significant amount of granular waybill data, which will allow it to calculate rates that are comparable. They will have access to 100% of railway waybill data, which is a key aspect of this measure.

Third, just generally, we have evidence that railways can and will compete for traffic, as with the case under extended interswitching, and that long-haul interswitch measure builds upon that by allowing for competition between two carriers by which the agency can set both the rate and the terms of service.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

One of the questions I have then is with regard to long-haul interswitching rate setting. I know that in Bill C-49, paragraph 135(3)(b), in setting an LHI rate the CTA has to have regard for the rates of comparable traffic for the distance over which the traffic is moved. However, in the “frequently asked questions” document that was circulated last week, it is noted that this does not mean that an LHI rate would be a simple pro-rated amount for the LHI short-haul based on the total distance from origin to destination of the long haul.

Will the total distance from origin to its ultimate final destination and the rates for comparable traffic for these distances be taken into account when setting an LHI rate? Really, it's based on what is perceived to be two different explanations by Transport Canada.

[Marcia Jones]

To be clear, under long-haul interswitching, the agency is provided with considerable discretion to set the rate. You are correct that it is not a prescriptively pro-rated rate. The agency is given a number of factors to consider in setting the rate, which include the distance as well as other factors, including, for example, the operational requirements of the shipper.

However, it is important to note as well that the rate set is a blended rate. For the first 30 kilometres, it is a cost-based regulated interswitch rate with the balance set by the agency under the approach I just outlined.