Chair and CEO Scott Streiner addresses the Railway Association of Canada on May 11, 2017
Check against delivery
In just 51 days, we'll celebrate Canada's 150th birthday. This milestone is an opportunity to appreciate how fortunate we are to live in this remarkable place of peace, prosperity, and tolerance. And it's a chance to reflect on the factors that have made Canada's success possible over its first century and a half – and those that will allow it to thrive in the coming decades.
It is no exaggeration to say that Canada as we know it would never have come into existence without its railways. The British North America Act provided for construction of a railway connecting the country's founding provinces, and the Terms of Union with British Columbia required the extension of rail links to the west coast.
The tracks laid from Halifax to Vancouver by labourers covered in sweat and dust – and sometimes blood – were the steely spine of the Canadian body politic. Few images are as iconic, and so symbolize the tying-together of a young nation, as the "last spike" photo taken on the morning of November 7, 1885.
And there is another link between the wave of rail construction in the 19th century and what it means to be Canadian. Our first railway, the Champlain and St. Lawrence between La Prairie and St. Johns, was financed by none other than John Molson, who also founded Canada's first brewery. Yes, that John Molson. So you see, Canada's early railways were not just connected to Confederation; they were also connected to beer!
But of course, the story of railways and Canada is not just a story of our past. Railways today are essential to the country's economic well-being: they move 300 million tonnes of goods across this vast land every year, more than any other mode of transport. The locomotives that pull your trains are the engines of the Canadian economy.
And railways will continue to be a key contributor to Canada's prosperity: according to the Conference Board, freight rail movements are expected to rise by approximately 30 per cent by 2025. But that growth isn't guaranteed. It won't happen because of the laws of physics. It won't happen if we take it for granted.
Rather, it will happen because the system is functioning well, players are actively cooperating while looking after their own interests, the ground rules are clear and fair, and there's a referee to ensure that those rules are respected and to deal with any disagreements.
That's where the Canadian Transportation Agency comes in.
The Canadian Transportation Agency
For a century, the Railway Association of Canada has represented the industry's interests to government. And the Agency has been one of its key interlocutors. The Agency was established as the Board of Railway Commissioners in 1904 – a time of rampant rail construction and multiple bankruptcies. The Board's role was to help ensure the orderly and sustainable development of Canada's railway sector and the provision of predictable, affordable service to that sector's customers.
As the Minister of Railways and Canals explained to the House of Commons, the new Board was to be "composed of members independent of the government, independent of parliament …and capable ... by experience and ability, of making thoroughly effective the legislation." Those fundamental principles of independence and expertise have been at the heart of the Agency's work over the course of its 113 years.
So, the longest-standing mandate of the country's longest-standing quasi-judicial tribunal and regulator is to help keep the national rail network running smoothly and efficiently – in the interests of its employees and investors; the farmers, shippers, businesses, and communities who rely on it; and the economy as a whole.
Of course, a few things have changed since 1904. Railway companies are no longer publicly owned. A tendency towards intervention has been replaced by more respect for market forces and more targeted action. And dispute resolution services have emerged alongside regulatory oversight as a key part of the Agency's toolkit.
How the Agency delivers its responsibilities has changed as the country has changed.
What's on the horizon for the coming period?
Let me touch on four developments.
First, we find ourselves approaching possible legislative change. The Minister of Transport has indicated that the Government will bring forward proposals related to the future of extended interswitching limits, the definition of "adequate and suitable” service, the inclusion of penalties in service level agreements, the future of the Maximum Revenue Entitlement, and access to dispute resolution processes run by the Agency.
This will be the third round of legislative amendments related to freight rail in the last five years. This underscores how complex rail shipper issues can be. And equally, it emphasizes how important it is that everyone – railway companies, shippers, the Agency – look for practical ways of addressing frictions, avoiding escalations, and keeping the supply chain humming along.
Like you, I'm looking forward to seeing what the Government proposes and what amendments Parliament ultimately adopts. Whatever provisions are included in the legislation, I can promise you this: the Agency will administer them with impartiality, based on the evidence before us, the language and purpose of the law, and relevant jurisprudence. As the referees who help keep the game moving, we need to carefully maintain our neutrality and stay clear of the players, while keeping a close eye on the play.
Of course, refs need a rule book. In our case, one form that the rule book takes is regulations, and this brings me to the second key development: the Agency's Regulatory Modernization Initiative, or RMI.
The RMI was launched last year and involves a comprehensive examination of every regulation that the Agency administers. Many of these regulations haven't been looked at for two decades or more and are in urgent need of reform. The Railway Costing Regulations, for instance, date from 1980 and refer to laws and programs that no longer exist. The Railway Insurance Regulations need to be updated to reflect legislative changes made after the Lac Megantic tragedy. And we think that there may be value in consolidating the six rail-related regulations for which the Agency is responsible into a single, streamlined instrument.
The RMI aims to ensure that regulations reflect current business models, user expectations, and best practices in the regulatory field. They should be clear, be no heavier than required to achieve public policy goals, and facilitate quick identification and correction of non-compliance.
This is the most sweeping regulatory review in the history of the Agency. We've divided it into four consultation phases, one of them on rail-related matters. Exactly when we'll release a discussion paper and hold consultations will depend on the timing of the legislative process. But we hope to complete consultations before the end of the year, and to have updated regulations approved by both the Agency and Cabinet and brought into force in 2018.
Rail line construction approvals
Another area in which we're seeking your views – and the third development I want to mention – relates to the process for authorizing the construction of new rail lines. We haven't had a large number of rail construction applications in recent years, but when they do come in, they can be contentious, depending on the planned location of the new line. A case in point is CN's proposed Milton logistics hub, for which the Minister of Environment and Climate Change and I have agreed to a joint hearings process – a sort of single window for gathering information relevant both to the environmental assessment and the Agency's determination on whether or not to authorize construction.
A draft guide on rail line construction applications is currently posted on our website for comment, along with a related Indigenous Engagement Framework. If you're contemplating rail line construction and haven't had a chance to read and give feedback on these documents, I'd encourage you to do so.
Dispute resolution services
Even as we consult on regulations and approval processes, we continue to help parties deal with disputes. Steps we're taking to improve our dispute resolution services is the final development I'd like to cover.
You may be most familiar with the Agency's adjudication role. Applications brought by shippers can result in a complex pleadings processes and binding decisions with multi-million dollar implications.
The Agency believes that when adjudication has been triggered, we should get to a decision as efficiently as possible while, of course, gathering all the evidence and arguments we need to assess the case and protecting procedural fairness and natural justice for both sides. That's why, after a hiatus of nine years, we've returned to holding oral hearings. And it's why we're undertaking earlier and more active case management discussions with parties to adjudications, to allow for common understandings around timelines and the length of written submissions.
The parties to a case and the system as a whole benefit when clearly-written, well-reasoned decisions are rendered sooner rather than later.
Railway companies and shippers also benefit when disputes between them can be resolved more informally. For this reason, we're reminding everyone that the Agency has a broad mediation mandate. With the agreement of both sides, we'll make impartial mediators available to you at no cost to try, in confidence, to address disagreements that are complicating your commercial relationship. If an agreement doesn't materialize and the case proceeds to arbitration or adjudication, nothing that was said during mediation will be divulged.
Equally important: mediation won't drag on forever. Under the law, it can only last 30 days from the moment I appoint a mediator, unless the parties agree that progress is being made and the deadline should be extended.
Finally, we're redoubling efforts to ensure that our rail team has a sound, up-to-date appreciation of industry challenges. Over the past few years, 21 Agency Members and staff, including me, have gone on intensive one-week learning tours of rail and shipper facilities. During these tours, we've visited shunt yards, operations and training centres, grain elevators, and port terminals, and we've spoken to everyone from company presidents to engineers and mechanics in the field.
Quite simply: understanding your on-the-ground realities allows us to do our job better.
Early in my remarks, I quoted the Minister of Railways and Canals from the early 20th century. I'd like to conclude with a quote from another Canadian, one who was never a minister but perhaps should have been: "the Honourable" Gordon Lightfoot. I'll refrain from singing – because I value our collegial relations too much! – but will do my best to use a "Lightfoot voice":
And when the young man's fancy was turnin' to the spring
The railroad men grew restless for to hear the hammers ring
Their minds were overflowing with the visions of their day
And many a fortune lost and won and many a debt to pay
For they looked in the future and what did they see
They saw an iron road runnin' from sea to the sea
Bringin' the goods to a young growin' land
All up through the seaports and into their hands
That song was written in honour of Canada's centennial celebrations. As we approach our sesquicentennial, we can look back with pride on another 50 years of accomplishment, and look forward to many more.
The Canadian Transportation Agency stands ready to do its part.
Thank you for your attention.