Ottawa, ON — The Freight Management Association of Canada (FMA) says it is disappointed that the Minister of Transport is not accepting several important amendments made by the Senate to Bill C-49, the Transportation Modernization Act.
On April 27, Marc Garneau announced the government’s response to the 10 amendments enacted by the Senate.
The government accepted partial amendments of only three of the Senate’s 10 amendments. Only one of the three pertains to the rail shipper provisions. This was Senate recommendation 7(a) that would provide additional flexibility for shippers to access the proposed “Long Haul Interswitching” (LHI) provision that may give shippers access to a competing railway where they are captive to one railway.
The Senate listened and responded to the concerns of shippers on two major points:
the need to permit the Canadian Transportation Agency to undertake rail investigations on its “own motion” and the need for railway operational and costing data to be made available to shippers when accessing the “Final Offer Arbitration” (FOA) process to resolve rate disputes
On the first point, the Agency has this right with regard to some airline problems that arise and, in fact has announced one such investigation on April 25th regarding tarmac delays and other problems by Sunwing Airlines at Toronto Pearson Airport between April 14 and 18. The Agency announcement states: “This inquiry will allow the CTA to deal efficiently with the high volume of complaints relating to these flights”. This describes precisely why the same authority needs to be extended to railway freight service.
In response to the Senate amendment on “own motion” investigations, the government is insisting on maintaining oversight by the Transport Minister in such instances. The Senate amendment responded to the broadly “own motion” authority recommended by the Hon. David Emerson in his review of the Act, leading up to Bill C-49, by the Chair of the Agency in his annual report, and by all shipper groups that provided input to the Commons and Senate Committees studying Bill C-49.
As the only organization with knowledge of chronic, widespread, or systemic problems, the Canadian Transportation Agency would be able to respond quickly if it had this power.
Final Offer Arbitration is important to shippers in mitigating the dominant bargaining power that the railways have in the rail-freight marketplace; however in using FOA, there is information asymmetry between shippers and railways in favour of railways. The railways used to provide aggregated statistical information to Statistics Canada that was available and useful to shippers in preparing their offers, but the railways stopped providing that information several years ago. Shipper access to appropriate railway information including calculation of a railway’s variable costs, as recommended by the Senate, would serve to maintain the FOA process as a viable tool for shippers and remain useful in rebalancing the bargaining power between the buyers and sellers in the rail-freight market.
“The government’s response to these two well-researched amendments put forward by the Senate to improve Bill C-49 is very disappointing to shippers” said FMA President, Bob Ballantyne.
Ballantyne also commented on other proposals put forward by the Minister of Transport in a letter to FMA and several other shipper groups, that accompanied the government’s response to the Senate amendments. “The Minister has made some proposals related to data acquisition and dissemination and to working with shippers and railways to improving the rail freight system for all stakeholders and FMA looks forward to working with the Minister, his officials and Transport Canada on these proposals”.