Eligibility of submissions for rail level of service arbitration

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Issues eligible for arbitration

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Eligibility of submissions

Objections

Scenarios where a railway company can object to an application

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Principles related to objections

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Additional guidance

Section 169.31 of the ;Canada Transportation Act

Regulations on Operational Terms for Rail Level of Services Arbitration

1. Matters that shippers may submit to the Agency for level of service arbitration

Subsection 169.31(1) of the Canada Transportation Act (the CTA) identifies the matters that shippers may submit to the Agency for level of service arbitration.

• The operational terms that the railway company must comply with for receiving, loading, carrying, unloading and delivering the traffic, including performance standards and communication protocols.
• The operational terms that the railway company must comply with if it fails to abide by an operational term described above.
• Any operational term that the shipper must comply with that is related to an operational term described in the previous two points.
• Any amount to be paid by the railway company or the shipper in relation to a failure to comply with any operational term described above.
• Any service provided by the railway company incidental to transportation that is customary or usual in connection with the business of a railway company.
• The question of whether a railway company may apply a charge for an operational term described in the first two points or for an incidental service described in the previous point.
• The dispute resolution process related to the implementation of the arbitrator's decision.

2. Dismissal of submission for arbitration

Subsection 169.33(1) provides that the Agency must dismiss a submission for arbitration if the shipper has not given the prescribed written notice of its intention to make a submission for arbitration or if the shipper has not demonstrated to the Agency's satisfaction that an attempt has been made to resolve the matters contained in the submission. The Agency will examine all submissions for arbitration on receipt to ensure that they meet these requirements before receiving proposals and referring the matters for arbitration. If they do not meet these requirements, the submissions will be dismissed by the Agency. The fact that the Agency does not dismiss a submission for arbitration at the outset does not preclude the railway company from raising an eligibility issue identified in this part under subsection 169.43(1).

a) The shipper has not given at least 15 days prior written notice to the railway company and the Agency that it intends to make a submission for arbitration to the Agency

Paragraph 169.33(1)(a) of the CTA

If the shipper has not given 15 days prior written notice to the railway company and the Agency of its intent to make a submission for arbitration, the submission is not eligible for arbitration.

b) The written notice for arbitration does not contain the descriptions specified in paragraphs 169.32(1)(a), (b) and (c)

Subsection 169.33(2) of the CTA

Written notice must contain the following:

• a detailed description of the matters to be submitted to the Agency for arbitration, which must be matters that are listed under 169.31 of the CTA;
• a description of the traffic to which the service obligations relate;
• a description of any undertaking with respect to the traffic given by the shipper to the railway company that must be complied with for the period during which the arbitrator’s decision applies to the parties [other than an undertaking with respect to operational terms described in paragraph 169.31(1)(c)].

c) The submission does not contain the undertakings set out in paragraphs 169.32(1)(d) and (e)

If the submission does not contain an undertaking by the shipper to the railway company to ship the goods to which the service obligations relate in accordance with the arbitrator’s decision, the matter is not eligible for arbitration.

The submission must also contain the shipper's undertaking to the Agency to pay the fees and costs for which it is liable under subsection 169.39(3) as a party to the arbitration. If this undertaking is not provided, the matter is not eligible for arbitration.

d) The shipper has not demonstrated to the Agency’s satisfaction that an attempt has been made to resolve the matters contained in the submission

Paragraph 169.33(1)(b) of the CTA

What constitutes “an attempt to resolve matters” will be determined on a case by case basis.; Evidence of an attempt to resolve matters could include e-mails, letters or exchanges of correspondence, and minutes from meetings that were held. Unlike submissions on rail noise and vibration, submissions for rail level of service arbitration will be accepted even if all other avenues of dispute resolution have not yet been exhausted.

Attempts must be made to resolve all matters with the railway company. New matters that have not been previously raised with the railway company are not be eligible for arbitration.

3. Objections to rail arbitration submissions

In addition to the situations described in part 2, subsections 169.31(2), (3) and (4) identify matters that may not be submitted to the Agency for arbitration. If a shipper includes any such matter in its submission for arbitration, under subsection 169.43(1), the railway company has a ten-day period within which to apply to the Agency for an order declaring that the shipper is not entitled to submit a matter contained in the shipper's submission. If the Agency makes an order, it may also dismiss the submission for arbitration if it has not yet been referred for arbitration, discontinue the arbitration, impose terms on the arbitration, or set aside the arbitrator's decision or any part of it.

a) The matter is already governed by a written agreement between the shipper and the railway company

Paragraph 169.31(2)(a) of the CTA

Types of written agreements include:

• existing level of service agreements; and,
• any other existing contract between the shipper and railway company that sets out terms and conditions of the service to be provided to the shipper.

However, specific elements of service relating to traffic that are not covered by an existing written agreement could proceed to level of service arbitration. The determination of whether any specific matter is governed by an existing agreement will be determined on a case by case basis, having regard to the provisions of the existing agreement as a whole.

b) The matter is the subject of an order, other than an interim order, made under subsection 116(4)

Paragraph 169.31(2)(b) of the CTA

If the Agency determines that a company is not fulfilling its service obligations under section 116 of the CTA, it may impose terms or conditions in an order. These terms or conditions are not eligible for level of service arbitration.

Such terms may include, amongst others:

• the amount of cars or other equipment to be used; and
• the frequency of the service or manner in which it will be provided.

c) The traffic is the subject of a tariff or a contract whose terms were set by an arbitrator decision under final offer arbitration, as described in subsection 165(3)

Paragraph 169.31(3)(b) of the CTA

Any traffic that is subject to an arbitrator’s decision rendered under the Agency’s final offer arbitration process is not eligible for level of service arbitration.

d) The traffic is the subject of a long-haul interswitching order made under subsection 134(1)

Paragraph 169.31(3)(c) of the CTA

If a shipper intends to move its goods and has access to only one railway company at the origin or destination of the movement, but the continuous route is operated by two or more railway companies, the shipper may ask the railway company for a long-haul interswitching rate under subsection 134(1).

Where a long-haul interswitching rate has been established, the traffic moving under the LHI is not eligible for level of service arbitration.

e) The traffic is the subject of an arbitrator’s decision under section 169.37

Paragraph 169.31(3)(d) of the CTA

Any traffic that is subject to a previous arbitrator’s decision rendered under the Agency’s level of service arbitration function is not eligible for arbitration.

f) The matter relates to a rate for the movement of traffic or to the amount of a charge for the provision of incidental services

Subsection 169.31(4) of the CTA

The rate for moving traffic and charges for moving traffic or for incidental services (such as demurrage, or storing and cleaning railway cars) are not eligible for level of service arbitration.