Long-Haul Interswitching: A guide for freight rail shippers and federal railway companies

1. Introduction

This is a guide for freight rail shippers who want to apply to the Canadian Transportation Agency (CTA) for a Long-Haul Interswitching (LHI) order, and the railway companies to which the order would apply.

The guide provides general information about LHI, and explains:

• which shippers are eligible to apply for LHI,
• how to apply, and
• how the CTA reviews applications and decides what to include in the LHI order.

2. About Long-Haul Interswitching

LHI is a way of giving shippers access to railway companies that do not directly serve their facilities or sidings. If you are an interested shipper, you can ask a railway company that does provide you with direct service (the Local Carrier) to transfer cars of your traffic to a different railway company with which you make transportation arrangements (the Connecting Carrier). The transfer would occur at an interchange, where the lines of the two railway companies meet.

If you cannot agree with the Local Carrier on the LHI service terms or rate, you can ask us to settle the disagreement. The CTA can order the carrier to transfer the cars and can set the service terms, rate, or both.

The CTA regulates two types of interswitching. Under Regular Interswitching, you can have cars interswitched if the origin or destination of your traffic is within a 30-kilometre radius of an interchange or is, in our opinion, reasonably close to the interchange. Under Long-Haul Interswitching, you are not limited to a 30-km radius, although other conditions apply that are explained in this guide.

For example, one important condition is that you must try to make arrangements with the Local Carrier to interswitch the traffic. You may only apply to us if you have tried to negotiate, but are not satisfied with the rate the Local Carrier charged or offered, or the service terms it offered, or both.

3. Eligibility

Interested shippers must check that they are eligible to apply for LHI. Whether you are eligible depends on your circumstances, including the traffic you want to move and the interchange and route you want to use.

3.1 Shipper's circumstances

To be an eligible shipper, you must be in one of these three situations:

1. You have access to only one railway company (for LHI purposes, this is the Local Carrier) at the point of origin or destination of your traffic AND that company is a Class 1 railway company.
2. Of the railway companies you have access to at the point of origin or destination of your traffic, only one (for LHI purposes, this is the Local Carrier) is moving in the reasonable direction your traffic needs to go to get to its destination AND that company is a Class 1 railway company.
3. The one railway company you have access to at the point of origin or destination of your traffic is not a Class 1 railway BUT there is a junction between the lines of that railway and a single other railway, which is a Class 1 (For LHI purposes, this is the Local Carrier).

In addition, both of the following must apply to you:

1. You have tried to agree with the Local Carrier on a rate, service terms, or both AND despite your efforts, you and the Local Carrier cannot agree.
2. There is a continuous route between the origin and destination of your traffic AND at least two federal railway companies (one is the Connecting Carrier) operate on that route.

Even if you meet these basic requirements, you must still check your traffic and interchange.

3.2 Traffic

Not all traffic is eligible under LHI. Whether it is eligible depends on:

• the location of the traffic's point of origin or destination ("O or D point") served exclusively by the Local Carrier;
• the type of traffic it is;
• whether you have certain agreements or orders for this traffic; and
• the location of the interchange.

If any of the following apply to you, then you are not eligible for LHI.

Location of the Traffic's O or D Point (served exclusively by the Local Carrier)

1. If the O or D point is within 30 km of an interchange in Canada, and that interchange is in the reasonable direction your traffic needs to go, you are not eligible for LHI.
   • If the interchange is not in the reasonable direction you need, you are still eligible.
2. If the O or D point is on a track that serves a reload or distribution compound, a container terminal, or any other facility, and that compound/terminal/facility is operated by the Local Carrier or used by the Local Carrier for its own purposes, you are not eligible for LHI.
3. If the O or D point is located in the Quebec-Windsor Corridor, or in the Vancouver-Kamloops Corridor, you are not eligible for LHI.
4. If the O or D point is on a track used by the Local Carrier to transfer traffic between cars, or to transfer traffic between a car and a warehouse owned by the Local Carrier, you are not eligible for LHI.
5. If the distance between your O or D point and the nearest interchange in Canada is more than 1200 km, and also more than 50% of the total kilometres the traffic will move by rail within Canada, you are not eligible for LHI.

Traffic Type

1. If the traffic you want to move is motor vehicles or their parts, you are not eligible for LHI.
2. If the traffic you want to move is a Toxic Inhalation Hazard (TIH), you are not eligible for LHI.
3. If the traffic you want to move is radioactive material, you are not eligible for LHI.
4. If the traffic you want to move is moved on flat cars, and it is containers OR trailers OR oversized, with dimensions that require exceptional measures, you are not eligible for LHI.

Existing Agreements or Orders

1. If your traffic is covered by rates in CN's Consent Agreement with the Competition Bureau, for example, because it is moving on former BC Rail lines or lines in the Peace River area of Alberta, you are not eligible for LHI.
2. If you already have a LHI order for the traffic, you are not eligible for LHI.

3.3 Interchanges

The location of key interchanges can also affect your eligibility.

Interchanges

1. If the nearest interchange to your O or D point is in the Quebec-Windsor Corridor, or in the Vancouver-Kamloops Corridor, you are not eligible for LHI.^{Endnote 1}

If you meet the basic requirements, and nothing about your traffic or interchange makes you ineligible, you can apply for LHI. You can only apply for one order for the traffic you want interswitched. If you are eligible for LHI at both the origin and destination point of the traffic, you must choose one of these for your application.

4. How to apply

4.1 The application form

Shippers applying for LHI must complete and send us an application. You may use our LHI application form or you may create your own document(s) containing all the information shown in the form, including all information listed as "required". This includes basic information about you, your dispute with the railway (Local Carrier) and how you tried to resolve it, as well as:

• how and where you want your traffic to move under LHI; and
• your commitment to use the Local Carrier and respect any LHI order you get.

4.2 Review for completeness

Once we receive your application, we will review it to make sure it is complete. Our target is to finish this review within five (5) business days.

If your application is incomplete, we will tell you and give you twenty (20) business days to send us the missing information. If you do not provide the information within 20 days, we will close your file. You may have to re-apply if you still want the LHI order.

If your application is complete and demonstrates that you attempted to resolve your dispute with the railway, we will accept it. We will send you and the railway a letter announcing our acceptance, send a copy of your application package (application form and related documents) to the railway, and move to the assessment stage. From that point, we have up to 30 business days to consider the case and make a final decision about what to include in the LHI order. Sections 5 and 6 explain this in more detail.

5. How we assess the application

The CTA assesses LHI applications using a process called adjudication. In this section, we explain:

• what LHI adjudication is, and
• the two stages involved, including the parts of the dispute that are settled in Stage 1 and the parts that are settled in Stage 2.

Section 6 will explain the two stages in more detail, including what the shipper and railway are doing at each stage.

5.1 About LHI adjudication

An adjudication is similar to a court case. For LHI disputes, the CTA assigns one or more Members to be the Adjudicator, similar to a judge. The shipper and the railway each have an opportunity to present information and arguments to the Adjudicator, who:

• hears both sides,
• asks each side questions (if needed to better understand the issues),
• calls for expert evidence (if needed to better understand the issues), and
• decides what goes in the LHI order based on the arguments of both sides.

The Adjudicator's decision is final and binding, like a decision from a court. There are ways to challenge the decision, which this guide describes in Section 5.3.

Often, the shipper and the railway present all their information and arguments ("pleadings") to the Adjudicator in writing. However, the Adjudicator may ask the two parties to come together for a meeting or teleconference, if this would help to work out issues or otherwise advance the case. Either way, the Adjudicator will consider all the pleadings and issue an order within the 30 business days provided for LHI adjudication.

Terms used in LHI adjudication

Applicant

The shipper

Respondent

The railway (Local Carrier)

Adjudicator

The CTA Member or Members hearing the case

Pleadings

Information and arguments

LHI order

The Adjudicator's final decision and direction

5.2 Adjudication – Stage 1

To manage time effectively, the Adjudicator works in two stages.

Stage 1 of the LHI adjudication covers any of the following that are part of the dispute:

• the service terms,
• the nearest interchange in Canada, and
• the continuous route from origin to destination.

Both parties (shipper and railway) will have an opportunity to submit pleadings on these issues. The railway may also submit an objection to the LHI application, for example if the railway believes the shipper is not eligible for LHI.

Additionally, during Stage 1 the Adjudicator will appoint an Inquiry Officer who will write a report on the traffic and revenue issues needed for Stage 2. This includes:

• information on what kind of traffic would be comparable to the shipper's traffic, and
• information required to determine the LHI rate.

The Adjudicator will make a determination about any disputed issues that are part of Stage 1. At the end of the stage, each party receives a copy of the determination and of the Inquiry Officer's report.

5.3 Adjudication – Stage 2

Stage 2 of the adjudication covers the LHI rate. Both parties will have an opportunity to submit pleadings, including comments on the information set out in the Inquiry Officer's report.

The Adjudicator will carefully review the report and each party's pleadings, and make a determination about the rate. The rate that is based on the comparable traffic will apply to the entire LHI haul except for the first 30 kilometres. The rate for the first 30 kilometres will be the applicable Regular Interswitching rate, which the CTA sets each year.

The determination may also include findings about traffic density on the railway's lines where the traffic will be moved, and whether any long-term investment in those lines is needed. The shipper and the railway will each receive a copy of the Stage 2 determination, which will contain the LHI order.

What you will be doing at each stage

LHI adjudication generally involves some back-and-forth between the shipper and the railway. Each of you submits information and arguments (pleadings), and sometimes, you comment on each other's pleadings. You will have the opportunity to submit your pleadings at the following times, in addition to any other times the Adjudicator may provide:

• the opening of Stage 1, when the railway receives a copy of the shipper's LHI application package (application form and any documents that accompanied it),
• the opening of Stage 2, to respond to the Inquiry Officer's report, and
• the end of each stage, to identify minor errors that should be corrected in the determinations, if any.

This section explains what each of you will need to do, and how much time you will have to do it, if you want to submit pleadings or comments at any of the above moments. It also describes other times when you could be given an opportunity to submit pleadings, but that do not come up in every adjudication.

For a graphic of the key points in Stages 1 and 2, see Annex B.

6.1 Opening of Stage 1

Railway: When we send you the copy of the shipper's application package, you have the right to provide your views on the issues the shipper raised, including things you agree with and things you disagree with. This is called your "answer to the application."

• You have five (5) calendar days from the date we accept the LHI application (open Stage 1) to send us your answer to it. You must send a copy of your answer to the shipper on the same day you send it to us.
• Your answer can include your objections to the application, if you have any. There are two primary grounds for objecting: you believe the shipper is not eligible for LHI, or you believe the application includes an issue that should not have been accepted.
• Annex C, the Document Guide, explains what information to include in your answer to the application and in your objection, if any.

Shipper: If the railway submits an answer to the application, you may send us your reply to the answer, including the railway's objections, if any. You may only reply to the answer and objections. You may not introduce new issues, and any evidence you provide must support your reply and not a new issue.

• You have three (3) calendar days from the time you receive the answer to the application to send us your reply. You must send a copy of your reply to the railway on the same day you send it to us.
• Annex C, the Document Guide, explains what information to include in your reply.

Opening of Stage 1

The Adjudicator will consider the application, the railway's answer to the application, and the shipper's reply. If the railway's answer includes an objection and the Adjudicator agrees with it, this will affect the adjudication. It could mean that the adjudication will cover only some of the issues raised in the application, or it could mean that the adjudication ends. For example, if the Adjudicator finds that the shipper is not eligible for LHI, the Adjudicator will dismiss the application.

6.2 Opening of Stage 2

The Adjudicator will ask for comments on the Inquiry Officer's report at the time it is sent to each of you. The following timelines will apply:

• Railway, you have five (5) calendar days from the time we issue the Inquiry Officer's report to provide comments. You must send a copy of your comments to the shipper on the same day you send them to us.
• Shipper, you have three (3) calendar days from the day you receive the railway's comments to provide your comments on the Inquiry Officer's report and the railway's comments. You must send a copy of your comments to the railway on the same day you send them to us.

6.3 End of each stage

Shipper and railway: If you see any small errors in the Stage 1 or Stage 2 determinations, such as a spelling or math mistake, or words missing, you can ask us to correct it. You have two (2) business days from the day you receive the determination to request a correction.

6.4 Other times you may be invited to submit pleadings or comments

6.4.1 If the shipper withdraws the application

A shipper who has applied for LHI may ask to withdraw the application at any time before the Adjudicator issues the final determination at the end of Stage 2. The shipper must provide reasons for wanting to withdraw. Reasons could include, for example, that the shipper and the railway have come to an agreement on the interswitching after all.

Annex C explains what information to include in a request to withdraw the application.

The Adjudicator may allow the railway to comment on the withdrawal request, and could put conditions on the withdrawal if these would be reasonable.

6.4.2 If the shipper or the railway requests confidentiality

Either of you may request confidentiality for a document you submit to us as part of the LHI adjudication. The next section sets out how to submit documents and request confidentiality.

7. Administrative issues

This section applies to both shippers and railways. It explains how to:

• let us know if someone who is not a lawyer will be representing you in the LHI adjudication,
• keep your contact information up to date, and
• submit documents to us and to each other, including how to request confidentiality for a document.

7.1 Authorizing someone who is not a lawyer to represent you

If someone from outside your company will be representing your company in the adjudication, and that person is not a lawyer (member of the bar in a Canadian province or territory), then you must send us a document authorizing that person to be your Representative. You should do this as soon as you choose the person to be your Representative. For shippers, this could be as early as the application period (as explained in the application form).

Annex C explains what information to include in the authorization document.

7.2 Your contact information

If your contact information changes, you must give the new contact information to us and to each other right away. Follow the instructions for submitting documents shown in Section 7.3.

7.3 Document management and how to submit documents

During the adjudication, when you are sending us documents, you must send them by email or fax. Any information counts as a document (such as letters and emails, maps, or reports).

• You should only send documents that are related to the LHI case.
• If you send by email, send to: Secretariat@otc-cta.gc.ca. If you send by fax, send to: 819.953.5253.
• Any fax must include a cover page showing the total number of pages, including the cover, and a contact name and phone number in case there is any problem with the fax.
• You can send documents in English or French. If you send a document in another language, you must include a translation in English or French. Annex C gives more complete instructions for sending us a translation.

You must send the other party a copy of any document that you send to us, on the same day that you send it to us. Again, send these by email or fax (including the cover sheet as described above).

• If the other party is being represented in the adjudication by a lawyer or other person, send the document to that person.
• If you send a document after 5:00 p.m. our time (Eastern Time / Gatineau, QC), it counts as the next day, not the same day.
• If you send a document by email or fax and the other party lets you know that it didn't come through properly, you must deliver a paper copy to them as soon as possible.

7.4 Requesting confidentiality for documents

This section applies to both shippers and railways. Normally, you must send each other any documents you send us during the adjudication. In addition, we make any documents you send available to the public on request, or the Adjudicator may make them public as part of a determination. However, if any of your documents includes information that you think would cause specific, direct harm to you, your company, or a third party if released, you can ask that it be held in confidence.

To request confidentiality for a document, follow the complete instructions in Annex C. Be sure to include a copy of the complete document and one in which the confidential information has been blacked out, as described in the annex.

7.4.1 Withholding documents from the public only

If your request is to withhold the document from the public only, then you must send the other party a copy of everything you sent to us, as usual. This means sending them a copy of the request for confidentiality, the complete document, and the version with the confidential information blacked out.

7.4.2 Withholding documents from the public and the other party

If your request is to withhold the document from the public and the other party, you must still send the other party a copy of the request for confidentiality and the version of the document with the confidential information blacked out.

7.4.3 Opposing a request for confidentiality

If the other party believes the information in your document should be available to them or to the public, they may oppose your request for confidentiality and request that the document be disclosed. They have three (3) calendar days to make this request for disclosure.

If the other party makes a request for disclosure, you are allowed to respond to it. You have two (2) calendar days to send us your response.

Annex C explains how to request disclosure and how to respond to a request for disclosure.

Requests for Confidentiality and Disclosure

After considering the requests for confidentiality and disclosure, the Adjudicator will decide whether to withhold all or part of the document, and from whom.

8. A just outcome

This guide has explained LHI adjudication and the main rules you have to follow if you are the shipper (Applicant) or the railway (Respondent) in a LHI case.

There are also rules that the CTA, represented by your Adjudicator, must follow. These rules recognize that LHI disputes are important and complex. They require the CTA to manage the adjudication in a way that reflects this and matches the seriousness of the issues at stake. For example:

• The Adjudicator is required to interpret all the rules in a way that promotes justice and helps make the adjudication as efficient and speedy as possible.
• The Adjudicator can change or set aside a rule, but only if this is needed to ensure a just outcome in the case.
• If an action is allowed under the rules, the Adjudicator can take it of their own initiative. They do not have to wait for a party to ask for it.

If you still have questions about Long-Haul Interswitching or our role in adjudicating or otherwise settling LHI disputes, contact us at:

1-877-850-7148

or

info@otc-cta.gc.ca

Annex A – Excluded Corridors

If the nearest interchange to your traffic's O or D point is located in one of the following corridors, you are not eligible for LHI.

Quebec-Windsor Corridor

Description: Quebec–Windsor corridor means the area of Canada that is bounded

1. to the east by longitude 70.50° W;
2. to the north by a straight line connecting a first point located at latitude 47.45° N and longitude 70.50° W to a second point located at latitude 43.70° N and longitude 83.25° W;
3. to the west by longitude 83.25° W; and
4. to the south by the Canada-United States border.

Map 1: Google Maps

Kamloops-Vancouver Corridor

Description: Vancouver–Kamloops corridor means the area of Canada that is bounded

1. to the east by longitude 121.21° W;
2. to the north by latitude 50.83° N;
3. to the west by longitude 128.45° W; and
4. to the south by the Canada-United States border.

Map 2: Google Maps

Annex B – Process Maps of Stage 1 and Stage 2

Annex C – Document Guide

This annex explains what to include in documents you may need to send us during the adjudication. This is not legal information. For a legal description of the documents, see the Rules of Procedure for Long-Haul Interswitching Adjudication (Rules). There are schedules at the end of the Rules that describe each document listed in this annex.

Reminder: if you have supporting information to send with a document, remember to include it when you send the document to us and to the other party.

All documents

Include this basic information in every document:

List for Applicants (Shippers)

• Your name
• The Respondent's name
• The adjudication file number we gave you when we received your application
• The name and email address of each person you are sending the document to (or their fax number if you are sending by fax)
• If applicable, the name of the person sending us the document for you, whether that is your Representative or someone else

List for Respondents (Railways)

• Your name
• The Applicant's name
• The adjudication file number we sent you with your copy of the LHI application
• The name and email address of each person you are sending the document to (or their fax number if you are sending by fax)
• If applicable, the name of the person sending us the document for you, whether that is your Representative or someone else

Individual documents

Applicant and Respondent: Document Authorizing Someone Who is Not a Lawyer to Represent Your Company

Rules, Schedule 2

Include the basic information, plus:

1. This title: "Authorization of Representative"
2. A statement saying: [company name] authorizes [Representative's name] to act on its behalf in this Long-Haul Interswitching adjudication before the Canadian Transportation Agency.

3. A statement by your Representative saying: I agree to act on behalf of [your company name] in this Long-Haul Interswitching adjudication before the Canadian Transportation Agency.

4. The Representative's complete address and telephone number. Include also their email and fax, if any.

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Applicant and Respondent: Document(s) Translated into English or French

Rules, Schedule 1

Include the basic information, plus:

1. This title: "Translation – Required Information"
2. A list of the translated documents you are sending. For each document, say what language it was in originally.
3. An affidavit that includes, [for each translator involved],
   • The translator's name.
   • The city/town, province/state, and country where the document was translated.
   • Statement by the translator that he/she has translated the document and the translation is, to his/her knowledge, "true, accurate, and complete".

4. The signature and official seal of the person who took the affidavit, plus the date and place where the affidavit was made.

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Respondent only: Document Answering the Shipper's LHI Application

Rules, Schedule 4

Include the basic information, plus:

1. This title: "Answer to the Application"
2. Your company's name, complete address, phone number, and email and fax number, if any.
3. If applicable, the name, firm, address, phone number, email, and fax number of the lawyer (member of a bar in Canada) representing you in this adjudication.

4. What you agree with and disagree with in the shipper's LHI application. Include your reasons or arguments.
5. Your description of the facts.
6. A list of any documents you are sending to support your Answer.

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Respondent only: Document Answering the Shipper's LHI Application

Rules, Schedule 4

Include the basic information, plus:

1. This title: "Answer to the Application"
2. Your company's name, complete address, phone number, and email and fax number, if any.
3. If applicable, the name, firm, address, phone number, email, and fax number of the lawyer (member of a bar in Canada) representing you in this adjudication.

3. What you agree with and disagree with in the shipper's LHI application. Include your reasons or arguments.
4. Your description of the facts.
5. A list of any documents you are sending to support your Answer.

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Respondent only: Document Objecting to the LHI Application

Rules, Schedule 6

Include the basic information, plus:

1. This title: "Objection"
2. Your description of the facts.
3. Why you object to the LHI application. Provide your reasons or arguments. These should include one or more of the following:
   • You believe the shipper does not meet one or more of the basic requirements of eligibility.
   • You believe something about the shipper's traffic or interchange makes the shipper ineligible.
4. A list of any documents you are sending to support your Objection.

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Applicant only: Document Replying to the Railway's Answer to the Application

Rules, Schedule 5

Include the basic information, plus:

1. This title: "Reply to Answer"
2. What you agree with and disagree with in the railway's Answer to the Application. Include your reasons or arguments.
3. A list of any documents you are sending to support your Reply.

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Applicant only: Document Responding to the Railway's Objection to the Application

Rules, Schedule 7

Include the basic information, plus:

1. This title: "Response to Objection"
2. Information that makes clear which Objection you are responding to. Include the name of the person who submitted the Objection for the railway.
3. What you agree with and disagree with in the railway's Objection. Include your reasons or arguments.
4. A list of any documents you are sending to support your Response.

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Respondent only: Document Responding to Agency Determination

Rules, Schedule 8

Include the basic information, plus:

1. This title: "Comments Following a Decision"
2. What you agree with and disagree with in the decision (determination). Include your reasons or arguments.
3. Your description of the facts.
4. A list of any documents you are sending to support your Comments.

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Applicant only: Document Responding to Agency Determination

Rules, Schedule 9

Include the basic information, plus:

1. This title: "Comments Following a Decision"
2. What you agree with and disagree with in the decision (determination). Include your reasons or arguments.
3. What you agree with and disagree with in the Respondent's comments on the decision. Include your reasons or arguments.
4. Your description of the facts.
5. A list of any documents you are sending to support your Comments.

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Applicant only: Request to Withdraw the LHI Application

Rules, Schedule 10

Include the basic information, plus:

1. This title: "Request to Withdraw an Application"
2. A summary of the facts leading you to want to withdraw. Include your reasons or arguments.
3. A list of any documents you are sending to support your request.

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Applicant and Respondent: Requesting Confidentiality for a Document or Part of a Document

Rules, Schedule 11

Include the basic information, plus:

1. This title: "Request for Confidentiality"
2. Information about your request, including:
   • why this document is relevant to the LHI case,
   • why you think disclosing the information would be harmful to you, your company, or a third party (you must describe a specific, direct harm),
   • a list of any documents you have that support your request/claim of specific direct harm, if any, and
   • the names of anyone participating in the LHI adjudication process that you are willing to share the information with, if any (for example, the other party). If you are asking us to withhold the information from the public and the other party, make this clear.
3. Attach two copies of the document, as follows:
   1. One copy (the public version) from which the confidential information has been blacked out.
   2. One copy (the confidential version) in which:
      • each page is marked "CONTAINS CONFIDENTIAL INFORMATION" at the top, and
      • on each page, you highlight or otherwise identify the confidential information that was blacked out in the first copy.

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Applicant and Respondent: Objecting to a Request for Confidentiality (Requesting that a Document be Disclosed)

Rules, Schedule 12

Include the basic information, plus:

1. This title: "Request for Disclosure"
2. The name of the document you want disclosed, or other information identifying which document it is.
3. Why you think the document should be disclosed, including how it is relevant to you and/or why it is in the public interest to disclose it.
4. A list of any documents you are sending to support your Request.

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Applicant and Respondent: Responding to a Request for Disclosure

Rules, Schedule 13

Include the basic information, plus:

1. This title: "Response to Request for Disclosure"
2. Information that makes clear which Request for Disclosure you are responding to. Include the name of the person who submitted the Request.
3. What you agree with and disagree with in Request for Disclosure. Include your reasons or arguments.
4. A list of any documents you are sending to support your Response.