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- Canada Transportation Act Review
- Transport Canada’s announcement of a CTA Review Panel on June 29, marked the beginning of the legislated review of the Canada Transportation Act (CTA, 1996).
The CTA Review is to assess what is working and what is not under the existing rules—a "report card" on the effectiveness of the legislation after its first four years of operation.
The Review also allows a broad examination of national transportation policy—whether the existing policy serves the needs of shippers, travelers and transportation service providers; whether it serves Canadians—the public interest.
The Review Panel has until July 1, 2001 to submit its final report and recommendations to the Minister of Transportation. The Panel's interim report on Competitive Rail Access Issues was submitted to the Minister of Transport at the end of 2000, and was released to the public on January 10, 2001.
Background:
The CTA Review comes at a critical time. Canada’s economy depends heavily on trade. World trade is growing and changing rapidly. An efficient transportation system is essential in order to seize new opportunities and to compete successfully. The Review represents an opportunity for analysis of Canada’s legislation, regulations, and other factors affecting competitiveness in the context of continental trade and greater economic integration among trading nations.
- There are other concerns as well, for example: calls for a national transportation strategy; the urgent need to reinvest in transportation infrastructure and technology; and travelers and freight shippers that are demanding transportation choices and greater value for their transportation dollar. Meeting Canada’s Kyoto targets is also of concern given that transportation is the largest consumer of non-renewable fossil fuels, a leading cause of pollution.
Transportation could also play a key role in keeping a cleaner environment.
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- STATUS
- (Last updated on March 14, 2001)
On January 10, 2001, the Minister of Tranaport released the CTA Review Panel's interim report on Competitive Rail Access Issues. The report is the result of extensive consultations and submissions received by the Panel.
In addition, on January 19, 2001 an "Issues Under Consideration" paper was released, identifying the main issues that the Panel is considering.
On March 13, 2001 WESTAC released the "Understanding Competitive Rail Access and Position Profiles" report. This comprehensive document focuses on competitive rail access issues and issues related to emerging market structures and capital sustainability.
WESTAC undertook this project on behalf of the Canada Transportation Act Review Panel, and presented the findings at the Rail Symposium held on February 26-27 in Winnipeg.
The Panel will assess the overall effectiveness of the current legislative framework to provide the basis for the kind of transportation system which Canadians need. In conducting its assessment, the Panel will consult with purchasers and suppliers of transportation services and other parties as appropriate. The Review Panel will make recommendations as necessary and desirable relative to national transportation policy and legislation.
Early discussions with the Panel have indicated a desire to have a "forward looking" dimension to the Review. Therefore, information on current and emerging trends, where they are leading, and the impacts on transportation would be useful to the Panel.
The Terms of Reference call for consultations with purchasers and suppliers of transportation services and appropriate others. The scope of the Review could be quite broad, covering the operation of the CTA and "any other Act of Parliament for which the Minister is responsible" (CTA and Related Acts). However, a priority area will be the rail sector.
The Review's web site is:
www.reviewcta-examenltc.gc.ca
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In the past decade or so, transportation policy has emphasized deregulation and relying on market forces to develop an efficient, affordable transportation system. Subsidies have been reduced or eliminated. The federal government role has been narrowed to safety regulation and monitoring to ensure adequate choice and competition.
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- Privatization has occurred with Air Canada, Canadian National Railways and other parts of the system such as air traffic control which was sold to private interests. Ports and airports across the country have been divested to local operators.
Transportation, like many other industries, is consolidating. Perhaps the best example is Air Canada’s takeover of Canadian Airlines. Restructuring is also occurring in rail, despite the recent aborted attempt to combine Canadian National and Burlington Northern Santa Fe. In the 1980s there were 66 large (Class 1) railways in North America compared to 6 today.
The CTA deals primarily with air and rail transportation which come under federal jurisdiction. The extent to which the Review will address marine transportation issues (which now fall under the Canada Marine Act, 1998) is unclear since it has only been in effect for a short time. Nevertheless, there are issues affecting the competitiveness of our port system that impact on our ability to keep traffic moving through the Canadian transportation system.
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- Key Questions
• What principles should govern our national transportation policy?
• How can we balance the interests of shippers, carriers and Canadians?
• What structural changes are occurring in the demand for transportation services and how will that affect the transportation services required in future?
• How to promote competition in the provision of transportation services?
• Are we Canadians or North Americans? Do we want foreign-owned operators to provide the competition?
• How do we keep transportation business moving on Canadian routes/corridors and keep jobs in Canada?
• What role, if any, should the federal government have in urban transportation?
• What allowances should be made in our policies and regulations to accommodate electronic commerce?
• How can we ensure safety in transportation?
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- One of the central issues for the Review will be to determine whether sufficient competition exists in the provision of air and rail services and, if not, how to create it.
Sampling of Air/Airport Issues . . .
Now that Canada has a dominant airline, travelers and many communities are acutely aware of the need for competitive ticket prices and service choice. Some competition exists now—for example, WestJet, Air Transat and Canada 3000 and there are some new services being planned (e.g., CanJet, Capital City Air)—but will this be enough? Should foreign-owned airlines have greater access to domestic routes? If so, under what conditions? At the same time, Air Canada continues a complex restructuring effort and needs to be strong to compete in growing transborder and international markets.
Airports, depending on their size, are concerned about the level of rent payments to the federal government on leased properties. Airports in small communities that have been transferred to local operators also have concerns about viability, particularly in cases where flight frequencies have been reduced because of airline restructuring.
Sampling of Rail Issues . . .
The Terms of Reference require special attention be given to proposals for enhancing competition within rail. How can the interests of shippers and railways be balanced to stimulate service innovation and productivity gains? Shippers say that competition between railways is lacking and view "open access"—effectively forcing existing railways to allow others to operate trains on their tracks—as the way to achieve competition.
Railways seek the commercial freedom and traffic density that will lead to financial strength and an improved ability to attract investment funds. "Forced access", they counter, will undermine the long term viability of the railway infrastructure. A number of problems are cited including safety risks, determining access fees and the need for regulatory oversight (re-regulation), operating issues (e.g., how to determine traffic priorities), and several other issues.
The rail issue is intensified because of the recent Grain Handling and Transportation System Review. Some stakeholders still have concerns about Bill C-34, the result of the combined two-year Estey/Kroeger processes, which became law on August 1, 2000.
Some want to see competition and choice increased by creating a more extensive regional railway system. Regional railways own and operate rural rail lines that might otherwise have been discontinued by the big railways. This concept has been proposed to address the issue of community viability and rail service to grain producers following Prairie elevator and branch line closures. Some view regional railways as a solution that will allow Prairie communities to preserve rail service.
- CTA and Related Acts
The CTA, which came into effect in 1996:
- • Continued deregulation for all modes (building on the National Transportation Act, 1987 which recognized competition and market forces as the prime forces governing transportation);
• Streamlined the rail line transfer and discontinuance process (did away with public hearings);
• Enhanced safety.
The CTA was recently amended:
- • Bill C-26 (effective July 5, 2000): implemented elements of the government’s airline restructuring plan to protect consumers and foster competition in Canada’s air industry; *
• Bill C-34 (effective August 1, 2000): made several changes to the grain handling and transportation system including changes to the CTA respecting the transfer of branch lines and simplifying the dispute resolution mechanism (also applies to non-grain)
Marine transportation is governed by the Canada Marine Act (CMA) which received Royal Assent in 1998. Canada Port Authorities brought into being by the CMA were, for the most part, formed in 1999 (see The Canada Marine Act – Creating Canada Port Authorities). The degree to which the Review Panel will make recommendations respecting the CMA is questionable because it has only been in effect for a short time.
Motor vehicle transport and commodity pipelines are excluded from the CTA. The Review could examine other federal transportation-related Acts.
* As well, an Air Travel Complaints Commissioner was appointed on August 1, 2000 to monitor domestic air services.
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CTA Review Panel
Chair – Brian Flemming, a Halifax consultant and lawyer
Vice-Chair – Jean Patenaude, recent Vice-Chair of the Canadian Transportation Agency, the regulatory body responsible for administering the CTA
Panel members:
• Glen Findlay, former Manitoba Minister of Highways and Transportation
• Honourable Bob Rae, former Premier of Ontario
• Dr. Bill Waters, professor and director at the Centre for Transportation Studies at the University of British Columbia
Senior staff:
• Emile Di Sanza (Executive Director), Ian MacKay (Legal Counsel), Ms. Michèle Le Lay (Consultations and Communications).
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