Chair and CEO Scott Streiner addresses the Standing Committee on Transport, Infrastructure and Communities on September 11, 2017

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Thank you for the invitation to appear before you.

The Canadian Transportation Agency is Canada’s longest-standing independent, expert regulator and tribunal. Established in 1904 as the Board of Railway Commissioners, its responsibilities and functions have evolved as Canada’s national transportation system, economy, and society have evolved.

Today, the CTA has three core mandates:

• helping ensure that the national transportation system runs smoothly and efficiently, which includes dealing with rail-shipper disputes, rail noise and vibration issues, and challenges to port and pilotage fees;
• protecting the fundamental right of persons with disabilities to accessible transportation services; and
• providing consumer protection for air travellers.

Among our most important activities in recent years is the Regulatory Modernization Initiative, or RMI. Launched in May 2016, the RMI is a comprehensive review of all the regulations the CTA administers, to ensure that they are up-to-date with business models, user expectations, and best practices in the regulatory field.

Over the next 10 minutes, I’d like to speak about how Bill C-49 will affect the CTA's roles and how, if and when it is passed, we will implement those elements for which we will be responsible.

I would like to note that my observations are offered from the perspective of the arms-length organization that has primary responsibility for day-to-day administration of the Canada Transportation Act. The Minister of Transport's principal source of public service policy advice is Transport Canada, and I would defer to the Minister and his department with respect to questions regarding the policy intent of the Bill's various sections. 

I'll structure most of my remarks around Bill C-49's two main components: air passenger protection and mechanisms for addressing rail-shipper matters.

Air passenger protection

Air travel is integral to modern life. Usually, it is uneventful, but when something goes wrong, the experience can be disruptive and frustrating – in no small part because as individual passengers, we have little control over events. 

Bill C-49 mandates the CTA to make regulations establishing passengers' rights if their flights are delayed or cancelled, if their bags are lost or damaged, if they are travelling with children or musical instruments, and if they experience tarmac delays of more than three hours. 

This is a significant change. The current regime simply requires that each airline develop and apply a tariff – the document outlining its terms and conditions of carriage. The CTA's role is to determine whether an airline has properly applied its tariff and whether the terms in the tariff are reasonable.

We've said it's important that air passenger rights be:

• transparent, meaning that they can be found by travellers easily;
• clear, meaning that they're written in straightforward, non-legalistic language;
• fair, meaning that they provide for reasonable compensation and other measures if something goes wrong with a flight; and
• consistent, meaning that travellers facing the same circumstances should be entitled to the same compensation and other measures.

In support of the first two of these principles, I wrote last fall to the CEOs of Canada's five largest airlines to ask that they post plain language summaries of their tariffs in prominent locations on their websites, and help us inform passengers of their rights through in-flight magazines and entertainment systems. 

Around the same time, we launched public information activities to help make travellers aware of the recourse available to them through the CTA if they have a flight issue that they aren't able to resolve directly with the airline. We did so because we believe that for remedies created by Parliament to be meaningful, the intended beneficiaries have to know they exist.

The results of these efforts, combined with the Minister of Transport's and media's attention to air travel issues, have been dramatic. Between 2013-14 and 2015-16, the CTA typically received about 70 air travel complaints each month. Over the last year, we've received an average of over 400 per month. This jump suggests that the need for assistance always existed, and once Canadians knew the CTA is here to help, they began turning to us in far greater numbers.

If and when Bill C-49 is passed, the CTA will move quickly to develop Air Passenger Protection Regulations, building on the experience we've accumulated through the Regulatory Modernization Initiative. Our goal will be to balance, on the one hand, the public's high level of interest in air travel issues and desire for input into the new rules with, on the other hand, the expectation that those rules will be put into place without unnecessary delay.  To strike this balance, we will hold focused, intensive consultations over a two- to three-month period with industry, consumer rights associations, and the travelling public, using both a dedicated website and in-person hearings in cities across the country. 

After we've heard from Canadians and completed regulatory drafting in collaboration with Justice Canada, we'll formally make the regulations. Ours will be the first of two required approvals. The second will come from the Governor in Council.   

Once in force, the new Air Passenger Protection Regulations will give Canadians travelling by air greater, and long-overdue, clarity on what their rights are and what recourse is available if they don't think those rights are being respected.

Rail-shipper provisions

Let me turn now to the second main component of Bill C-49: changes to the provisions dealing with relations between freight rail companies and shippers. 

Facilitating these relations has been a key part of the CTA's mandate from the beginning. That reflects both the fundamental importance of the national freight rail system to Canada's prosperity, and the enduring concern among shippers about what they see as unequal bargaining power between them and the small number of railway companies on whom they depend to move their goods.

The CTA has observed that notwithstanding these concerns, shippers make relatively limited use of the remedies available to them under the law. If this is because good-faith commercial negotiations are producing mutually satisfactory agreements across-the-board, that is excellent news. But if it is because the cost and effort involved in accessing the remedies are perceived to outweigh the likely benefits, or because of challenges with how those remedies are structured, the provisions in question may not be fully realizing their objectives.

We've also noted that there is relatively little data available about the freight rail system's performance. This paucity of information affects the effective functioning of the market and the evidence available for decision-making – and stands in contrast to the situation south of the border.

The freight rail elements of Bill C-49 have the potential to address some of these issues. Amendments related to rate arbitrations, service level agreement arbitrations, and level of service adjudications may help re-calibrate the cost-benefit assessment shippers make when considering whether to access recourse mechanisms. And the requirement that railway companies submit more data and that the CTA publish performance statistics online may help fill information gaps.

Perhaps the most significant rail-related change in Bill C-49 is replacement of both the CTA's authority to set interswitching distances beyond 30 km and the competitive line rate provisions with long-haul interswitching. Under this option, a shipper served by only one Class 1 railway company will be able to request interswitching to the nearest interchange, which can be up to 1200 km away, or as far away as 50 per cent of the total haul distance in Canada, whichever is greater. The CTA's role will be to order that the requested service be provided if certain conditions are met, and to establish the rate for that service. 

The Bill gives us 30 business days to receive pleadings from the parties and make these determinations.  We have already begun to develop a process to ensure that we can meet that extremely tight timeline. We know parties will be watching our decisions on long-haul interswitching applications closely. Those decisions will be based on the criteria Parliament ultimately adopts and the CTA's analysis of the facts before us – because as a quasi-judicial tribunal and regulator, what guides us is nothing more, and nothing less, than the law and the evidence. 

Own motion authority

Before concluding, I would like to mention one item that is not contained in Bill C-49: extension of the CTA's ability to initiate inquiries on its own motion. 

The CTA already has this authority for international flights – and most recently used it to undertake an inquiry into the July 31 Air Transat tarmac delays.  That case shows how relevant the authority can be when the CTA has grounds to believe there may be issues around compliance with legal obligations. 

In each of our Annual Reports since 2010, we have suggested that the CTA's own motion powers be tied less specifically to international air travel. Such a change would allow the CTA to respond with greater agility to challenges in the transportation system; would bring the CTA's toolkit into line with that of other independent regulatory bodies; and would be consistent with the recommendations of the Canada Transportation Act Review, which was led by Mr. Emerson and supported by a panel of advisors that included Mr. Al-Katib.

The Committee may wish to consider such an amendment to the Bill. 

Conclusion

As I wrap up, I would like to emphasize that the CTA stands ready to provide whatever information and analysis would be helpful to the Committee as it reviews Bill C-49, based on our experience implementing the legislation.

An efficient, competitive, accessible national transportation system that provides reliable, reasonably-priced service to travellers and shippers is essential to the economic and social well-being of Canadians. The CTA helps foster that system through its administration of the Canada Transportation Act. And you, as the people's elected representatives, shape that legislation, assigning us duties and providing us with the resources to discharge them. 

I hope my remarks today have been helpful, and I look forward to answering your questions.