Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 15 - Tenth Report of the Committee


Thursday, May 17, 2007

The Standing Senate Committee on Transport and Communications has the honour to present its

TENTH REPORT

Your Committee, to which was referred Bill C-11, An Act to amend the Canada Transportation Act and the Railway Safety Act and to make consequential amendments to other Acts, has, in obedience to the Order of Reference of Wednesday, March 28, 2007, examined the said Bill and now reports the same with the following amendments:

1. Page 20, clause 29:

(a) Replace lines 2 and 3 with the following:

``way, a railway company shall cause only such noise and vibration as is reasonable, taking into''; and

(b) Replace lines 7 to 11 with the following:

``(b) its operational requirements; and

(c) the area where the construction or operation takes place.''

2. Page 44, new clause 64: Add after line 12 the following:

``COMING INTO FORCE

64. Section 27 comes into force on a day to be fixed by order of the Governor in Council.''.

Your Committee has also made certain observations, which are appended to this report.

Respectfully submitted,

LISE BACON

Chair


Observations to the Tenth Report of the
Standing Senate Committee on Transport
and Communications

The Senate Committee on Transport and Communications held five meetings on Bill C-11, an Act to amend the Canada Transportation Act and the Railway Safety Act, and heard from many stakeholders. In addition to making two amendments to the bill, your Committee wishes to make some observations about what it heard.

A number of stakeholders recommended that your Committee make changes to the bill, all of which were given serious consideration. Your Committee notes that a third and final bill to amend the Canada Transportation Act is expected in the near future, which will give some of these stakeholders another forum to present their concerns. Your Committee's evaluation of stakeholders' recommendations respecting provisions that they believed would have a significant impact on their industry is summarized in the following paragraphs.

Clause 7 of Bill C-11 formalizes the Canadian Transportation Agency's authority to provide mediation and/or arbitration services to resolve disputes within its jurisdiction or under commercial dispute resolution processes if all parties agree. Representatives of Canadian rail shippers expressed concern that these provisions would limit their ability to engage private sector mediators and to resolve disputes over cross-border rail services. Your Committee is of the opinion, however, that since the provisions explicitly state that recourse to the Agency's mediation and/or arbitration services requires agreement from all parties, the legislation will not prevent rail shippers from engaging a non-Agency mediator if they wish. Also, your Committee is confident that the wording of the provisions is sufficiently broad to allow the Agency to mediate between any Canadian shipper and any railway regardless of whether the shipment crosses into the United States.

Clause 12 of Bill C-11 sets the statutory review period of the Canada Transportation Act at eight years from the day the provision comes into force. While some stakeholders objected to the postponement of the review of the entire Act for eight years, arguing that the Canadian transportation industry will be slow to react to shifts in global markets in the interim, your Committee believes that the extended time frame will allow a review panel to better assess the full impacts of recent and upcoming amendments to the Canada Transportation Act. If sectors of the Canadian transportation or shipping communities identify legislative impediments as global markets evolve, your Committee is confident that the Minister of Transport will respond by undertaking an early review of all, or parts of, the Act.

Clause 27 of Bill C-11 obliges the Agency to make regulations requiring airlines advertising services originating in, or destined to, Canada to include all costs of providing the service in the price. While consumer groups generally supported this provision, some Canadian airlines felt that it would put them at a competitive disadvantage for internet sales, which represent a substantial share of total sales, as foreign airlines may not be affected by the regulations in the same way. The Committee notes that, at present, most U.S. and European carriers advertise ``all-in'' or almost ``all-in'' prices on the Internet. Moreover, the regulatory process includes a separate consultation process, giving the airlines an opportunity to have their case examined by Transport Canada and the Treasury Board, should the proposed regulations have a potentially significant negative impact. Nonetheless, your Committee added a new clause to the bill, allowing the Governor in Council to postpone the date that the provision respecting airfare advertising regulations comes into force so that the airlines and the government will have more time to consult.

Finally, the House of Commons Standing Committee on Transport, Infrastructure and Communities amended clause 29 of Bill C-11 to require railway companies to cause ``as little noise and vibration as possible'' when constructing or operating a railway with due consideration to its obligations and operational requirements and the potential impact upon its residential neighbours, if it has any. Before the amendment, the standard was that the railways ``must not cause unreasonable noise.'' Canadian railway companies believed that the new standard could present a significant threat to their economic viability as there is no jurisprudence on its interpretation. As such, the railway companies recommended that the standard of ``reasonableness'' be restored to the provision. While accepting that the new standard would be conditional on the railways' operational needs and obligations being met, as stated in new subsections 95.1 (a) and (b), your Committee believed that a standard based on ``reasonableness'' would be more clear and easier for the Agency and the courts to interpret. We have therefore amended the provision by restoring the concept of ``reasonableness'' and removing the reference to residential neighbours.

While your committee passes this bill with two amendments, it remains conscious of other concerns raised by the transportation industry and its users, and will monitor the impact that these and other provisions may have. After a period of two years, and should it be necessary, your Committee would then be prepared to seek an order of reference to review these new provisions.


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