Arbitration: Final offer arbitration

What is final offer arbitration?

It’s one of three types of arbitration offered as part of the Agency’s options for dispute resolution.

Types of disputes Disputes between Possible outcome Timeframes Legislation
  • Rates
  • Conditions of service

Shippers &

  • Railways
  • Air carriers
  • Marine carriers

Governments &

The arbitrator (or panel of arbitrators) makes a legally binding, confidential decision on which final offer will be used to settle the dispute.

60 days.

30 days for disputes involving freight charges of less than $2,000,000 unless an extension is requested.

Section 161 of the Canada Transportation Act

Who initiates the process? Who arbitrates the dispute? Who chooses the arbitrator? How much does it cost?

The shipper or urban transit authority

An external arbitrator (or panel of 3 arbitrators)

The parties (or the Agency, if the parties can’t agree)

The shipper and the carrier share the costs equally.

For a comparison of the Agency’s dispute resolution methods, see options for dispute resolution.

When can final offer arbitration be used?

FOA can be used to settle rate and service disputes relating to:

  • movements of goods by railway (movements of containers and trailers on flat cars are not eligible for FOA unless the containers arrive by water at a port in Canada served by only one railway company to move on by rail, or arrive by rail at such a port in Canada for further movement by water);
  • rates for a railway company's services to a designated commuter rail authority or a passenger railway;
  • movements of goods by water needed to maintain or develop permanent settlements for northern marine resupply purposes; or
  • domestic movements of goods by air to which Part II of the Act applies.

How does final offer arbitration work?

Within 10 days of submitting the issue to the Agency, the shipper and the carrier make their final offers, including the proposed rates.

The arbitrator must consider information the carrier and the shipper provide in addition to any other information he or she may request

The arbitrator must choose either the final offer of the shipper or the final offer of the carrier. The decision will remain in effect for the period requested by the shipper (for up to two years).

To learn more about final offer arbitration, see Final Offer Arbitration: A Resource Tool.

How can I apply for final offer arbitration?

A shipper's submission for final offer arbitration must include:

  1. the final offer of the shipper to the carrier, excluding any dollar amounts;
  2. the period requested by the shipper, not exceeding two years, for which the decision of the arbitrator is to apply;
  3. an agreement by the shipper to abide by the arbitrator's decision;
  4. an agreement by the shipper to pay half of the arbitration costs (the carrier is responsible for the other half);
  5. if possible, the name of the arbitrator agreed to by both parties to conduct the arbitration. 

The carrier must receive written notice of the shipper's intention to submit a matter to the Agency for final offer arbitration at least five days prior to the shipper doing so.

Send your complete submission to the Agency Secretariat.

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