Journalist, Diplomat, Entrepreneur & Author

Transportation Modernization Bill

5 December 2017

Debate on Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts

I am pleased to rejoin the debate over Bill C-49 and resume my remarks on the need to strengthen air passenger rights through a bill that promises some plain language when it comes to carrier obligations and spells out standards for the treatment of passengers.

Travelling, as we all do weekly, but as I do from Saskatchewan, I realize that airlines clearly cannot be held responsible for weather emergencies or medical or security incidents, but Canadians do have a right to a reasonable level of respect and fair treatment and compensation when the former are denied.

Appropriate and timely reporting is key to measuring and managing. You can’t fix what you can’t measure.

In addition to establishing this passenger bill of rights, the bill also seeks to increase the limits on foreign ownership from 25 per cent to 49 per cent, with safeguards. For example, a single international investor will be permitted to hold no more than 25 per cent of voting shares in a Canadian airline, and no combination of international air carriers, either directly or indirectly through an affiliate, would be permitted to own more than 25 per cent of voting shares.

I believe that the committee should take a good look at these safeguards to make sure that they are workable and effective. The goal is to allow Canadian air carriers to access more capital investment. That should mean growth, and that should mean more route choice and improved service. It should also mean a more competitive industry, which should also lead to more choice.

Again, these outcomes need to be monitored to ensure that this bill is having the desired effect.

Bill C-49 also addresses the issue of joint ventures, enabling, among other things, air carriers to coordinate scheduling, pricing, revenue management, marketing and sales. This is a double-edged sword as coordination of scheduling might actually, in some cases, lead to fewer options.

This bill will allow or perhaps even oblige the Minister of Transport, in consultation with the Commissioner of Competition, to review these arguments before they are implemented, and I think that is a key element of this bill.

The bill also deals with a number of important rail issues and offers provisions to improve safety, increase efficiencies, and encourage capital investment by the companies, while enabling lower costs for shippers, including, importantly, grain farmers from my region and province.

I know we all have received a lot of email on the topic of locomotive voice and video recorders, referred to as LVVR. Voice recorders have been required in airplane cockpits for decades. I was truly taken aback to learn that neither voice nor video recorders are required to record internal locomotive conversations and activity in this country. This means that policy-makers, accident investigators and railway operators are at a profound disadvantage, with no access to this critical information, when it comes to determining why accidents have occurred, why they might occur and, more importantly, how to avoid them.

Bill C-49 will mandate the installation of voice and video recording equipment in all locomotives operating in Canada, and the information provided by these devices would be used for very specific purposes: for the railway companies for proactive action to ensure safety; for the Transportation Safety Board to investigate accidents and incidents; and for Transport Canada for policy development and accident and incident investigation.

Clearly, this issue has raised privacy concerns for workers, but there are safeguards. For example, access to the data for proactive safety issues can only be done through a legislatively defined random process. The data cannot be used to take action against an employee, except — and this seems more than reasonable — when someone has specifically tampered with the LVVR equipment or where a threat to safety has been identified.

Transport Canada is required to conduct audits to ensure compliance and has the authority to take enforcement action if infractions occur, and that is reassuring.

The bill also addresses the issues of pricing and service for shippers. Many shippers are captive, meaning they have limited access to competing options for transport of their goods. Too often, they can be held hostage to a single provider’s service level and pricing.

The bill proposes a new measure called long-haul interswitching, or LHI. This requires any available railway to transport a shipper’s goods where there is access to a competing railway. The further the long haul, the greater the benefit to captive shippers. This is an interesting development.

Previously, the reach was 160 kilometres, under the temporary extended interswitching provisions of the Fair Rail for Grain Farmers Act. It will now be extended to the greater of 1,200 kilometres or 50 per cent of the total movement in Canada. This will accommodate all captive grain elevators and will apply broadly across the country.

The LHI rates will also be established by the Canadian Transportation Agency. This will actually give people choices and options.

The current wording of Bill C-49 gives a shipper access to the nearest competing rail line. However, this is of little value if this interswitch traffic is in the opposite direction of the shipment’s destination or does not have the capacity to hold the full size of the shipment, or if the competing rail line does not reach the actual shipment’s destination.

The Western Grain Elevator Association testified in the other place that they want extended interswitching made a permanent remedy.

So again, our committee should look at this, too, to ensure the bill keeps prices and services competitive for the benefit of shippers and for farmers.

Adequate and suitable service will be defined for the first time in over 100 years in this bill. It will help to ensure that railways provide the highest level of service that can be reasonably offered, and it will give shippers some guarantees.

Again, because you can’t fix what you can’t measure, railways will be obliged to provide weekly information on their service and performance.

Additionally, reciprocal financial penalties will now be instituted. Currently, railways can apply for penalties against a shipper if they believe the shipper has not complied with the terms of their shipping agreement or tariff. But this is not the case for shippers. This bill makes it possible for shippers to apply for penalties against railways, and there will be a better dispute resolution mechanism in these cases.

As David Emerson, the former chair of the Canadian Transportation Act Review Panel said:

Bill C-49 includes some significant steps to improving the information base to enable better decisions, improve dispute resolution, and generally enhance the regulatory framework.

He made other suggestions that I would like our committee to look at as well. He says that the CTA ought to have the mandate to foresee and address issues before they become systemic issues. The agency needs the power to self-initiate investigations and, where practical, to initiate mitigating or preventive measures. I’m not sure of the practicality of that, but it seems a reasonable thing to study.

I will conclude my remarks with the hope that this bill makes its way to committee as quickly as possible so that we might see much-needed changes to ensure more air-passenger rights, to ensure improved safety in the rail transport sector, and to keep our grain and pulses moving so that our farmers can continue to feed the world.

Thank you, and I ask that this debate remain adjourned in Senator Mercer’s name.