Statement regarding the independence of the Canadian Transportation Agency

Executive Summary

The Canadian Transportation Agency (CTA) is created by the Canada Transportation Act (Act). Like other administrative agencies, the CTA is part of the executive branch of government and its purpose is to implement government policy. The CTA has a duty to be independent and impartial to the extent determined by the laws voted by Parliament.

Under the Act, the CTA has two roles. It acts as a quasi-judicial tribunal when deciding proceedings such as air travel or rail complaints. It acts as a regulatory body when making regulations; publishing guidelines; issuing determinations and regulatory authorities (such as permits, licences, and rail certificates of fitness); and enforcing compliance with the law. The CTA must exercise all of its powers, in both roles, to fulfil the mandate given to it by Parliament.

To perform some of its regulatory functions and achieve results in connection with its mandate, the CTA must engage with government officials, the industries it regulates, as well as consumer and disability rights organizations. Engagement is required by law or government policies when the CTA develops certain regulatory instruments. In other situations, engagement allows the CTA to, for example, further its expertise in transportation matters, improve operational efficiencies, and keep informed about transportation trends and issues. Engagement also allows the CTA to remain current and relevant and to competently advance its mandate, in accordance with the National Transportation Policy (set out in section 5 of the Act).

The composition and structure given to the CTA under the Act include several safeguards to ensure the CTA is not controlled or inappropriately influenced by the government or others. The CTA has also adopted additional safeguards to maintain its independence and impartiality. Key safeguards include:

Rules regarding the selection and appointment of CTA members by the Governor in Council, along with the Act's provisions regarding members' tenure.
Conflict of interest prohibitions under the Act and other statutes.
Requirements governing the conduct of members and employees, set out in the code of conduct and values and ethics codes, and embedded in various CTA practices.
CTA rules, guidelines, and practices for complaint and determination cases, which ensure a fair process. CTA members only decide cases based on material that is filed in the record of proceedings and on which parties have had an opportunity to comment, to prevent improper external influence.
CTA practices when engaging with government officials, industry stakeholders, and consumer and disability rights organizations, which is that the merits of specific cases not be discussed.

With these safeguards in place, the CTA fulfills its administrative decision-making function in an independent and impartial manner while engaging appropriately on a regular basis with government officials, regulated industry stakeholders, and consumer and disability rights organizations, in the proper discharge of its regulatory functions.

Purpose

The Canadian Transportation Agency (CTA) is an administrative agency created by an act of Parliament – the Canada Transportation Act (Act). The Act is the main source of the CTA's powers and duties. The Act is also a key instrument informing the manner in which the CTA conducts itself when it fulfills its mandate.

Under the Act, the CTA is given two roles: to act as a quasi-judicial tribunal and as a regulatory body. As an administrative agency with these roles, the CTA is required to make administrative decisions that affect parties' rights and interests, and has a duty to be independent and impartial. However, where the CTA fits on the spectrum of independence for government bodies is determined by the mandate given to it by Parliament.

This statement explains how the CTA fulfils its dual role within the boundaries of the law. This includes how it preserves the level of independence the Act requires and ensures that parties' right to an impartial decision-maker is respected, while legitimately engaging with external parties for different purposes to achieve results, to maintain its expertise with respect to the transportation industry and to discharge its mandate.

Independence and Impartiality of Administrative Agencies – General Principles

Independence

"Independence" is a requirement of natural justice ^{Footnote 1}. It is concerned with the structure of a particular decision-making body and its relationship vis à vis other parts of the executive branch of the government and others. "Independence" refers to whether or not that structure and relationship may reasonably be perceived as providing the government control over an agency's activities and decisions. ^{Footnote 2}

Independence does not mean the same thing for all decision-making bodies. There is a spectrum of independence.

Superior courts fall at the highest end of the spectrum. These courts are part of the judicial branch of government, and are separate from the legislative and executive branches. The Constitution requires superior courts to be independent.

Administrative agencies must also be independent, but the standard of independence is lower than that which applies to a superior court. Administrative agencies are not part of the judiciary, even though some perform quasi-judicial functions. Instead, they are part of the executive branch of government. Their purpose is to ensure that government policy is implemented.

The common law requires that all administrative agencies be independent. However, the degree of independence required of each agency will vary depending on the mandate set out in its legislation ^{Footnote 3}. Through this legislation, Parliament determines the structure and composition of the agency that is required to fulfill its mandate and, in doing so, Parliament establishes the level of independence required of that agency.^{Footnote 3}

Courts examine the degree of independence required of an administrative agency by looking at what Parliament intended. The Supreme Court of Canada has found that the fact that a single agency is given different and overlapping functions-- for example that of an administrative tribunal conducting court-like proceedings and other types of functions -- is a sign that Parliament intended that body to be subject to a lower standard of independence than that which applies to courts.^{Footnote 4}

Impartiality

"Impartiality" is also a component of natural justice. It refers to a state of mind or attitude of a decision-maker in relation to the issues and the parties in a particular case. To be impartial, a decision-maker must be free from actual or perceived bias ^{Footnote 2}. When deciding whether a particular decision-maker is impartial, courts apply this test: what would an informed, reasonable and right minded person, viewing the matter realistically and practically, and having thought the matter through, conclude? Would that person think that it is more likely than not that the decision-maker, whether consciously or unconsciously, would not decide the case fairly? ^{Footnote 5}

The Supreme Court of Canada has found that the fact that an administrative agency, like the CTA, cumulates more than one function, for instance a quasi-judicial and a policy-making function, does not in and of itself give rise to a reasonable apprehension of bias. ^{Footnote 4}

Independence and Impartiality of the CTA

The CTA has a broad mandate in respect of transportation matters under the legislative authority of Parliament. It is charged with implementing the Act, parts of other federal statutes and the provisions of several regulations, through the exercise of a broad range of powers.

The CTA has to exercise the powers it received under this legislative scheme in a manner that furthers the National Transportation Policy. This Policy is set out at section 5 of the Act, and requires the CTA to balance a range of interests, including commercial and consumer interests, in order to ensure a competitive, safe, and accessible transportation network for all Canadians ^{Footnote 6}. The CTA has two functions—quasi-judicial and regulatory ^{Footnote 7}. The two functions are equally important. The CTA must exercise both functions to fulfil the mandate given to it by Parliament fully and completely. The requirement to exercise both functions informs the manner in which the CTA conducts itself.

As a quasi-judicial tribunal, the CTA resolves commercial and consumer transportation-related disputes filed under the Act and other acts it administers, such as complaints from air travel passengers and rail shippers. When considering these applications, the CTA conducts court-like proceedings and issues legally binding decisions. To preserve its impartiality in fulfilling this role, the CTA adopts conduct that keeps it shielded from external influence. This includes not engaging with external parties, whether government, industry stakeholders, or others, with respect to any given case.

As a regulator, the CTA has the authority under the Act to make its own regulations about a wide range of transportation matters. The CTA also has numerous other regulatory functions, including:

issuing determinations, licenses and permits to federal transportation service providers;
monitoring compliance with the Act, other statutes the CTA administers and regulations, which includes educating carriers and other regulated entities about their obligations;
carrying out enforcement activities, including imposing monetary penalties; and
publishing guidance and other information for stakeholders and the public.

To fully and properly fulfil some of these regulatory functions, the CTA must consult and engage with government officials and other external parties, including regulated industry and other interested groups (such as consumer and disability rights organizations). This does not affect the ability of the CTA to decide cases that affect the rights and interests of parties involved in such cases in an independent and impartial manner.

The composition and structure given to the CTA under the Act establish several safeguards ensuring the CTA is not controlled or inappropriately influenced by the government or others. In order to uphold public confidence in the administration of justice and in the CTA's ability to fulfil its mandate in a fair and impartial manner, the CTA has also implemented additional safeguards. Some of the main safeguards in place are described in the sections below.

Safeguards relating to the structure and governance of the CTA

Per the Act, the CTA comprises up to five full-time members appointed by the Governor in Council and up to three temporary members.

The CTA is a standalone organization, with its own Chief Executive Officer (CEO), budget, offices and employees. The CTA is not an office or division of Transport Canada or any other department.

The CEO of the CTA is also the CTA's Chair and a member. He or she is responsible for overall leadership of the CTA. He or she sets the CTA's own strategic priorities, reports on the CTA's plans and results to Parliament through the Minister of Transport, and handles relations with Ministers, Parliamentarians, Deputy Ministers, and analogous bodies in other jurisdictions. The CEO is the Deputy Head and Accounting Officer with a broad range of related responsibilities under the Financial Administration Act and other statutes. He or she assigns cases to members, supervises and directs their work, and chairs members' meetings.

The CTA's CEO has the same powers as a department's Deputy Minister for the purpose of hiring staff. He or she has his or her own delegation instruments, which allows the CTA to select and appoint, or to revoke the appointment of, individuals it employs to fulfil its mandate. CTA employees are subject to the Values and Ethics Code for the Public Sector, the Code of Values and Ethics for the Canadian Transportation Agency and Treasury Board's Directive on Conflict of Interest as a condition of their employment.

The CTA also has delegated financial signing authority which allows it to make all expenditures within its budget that are necessary for its everyday operations.

Safeguards regarding CTA members' conduct

Members of the CTA, including the Chair, hold office during good behavior, the same standard as applies to Federal Court judges ^{Footnote 8}. This means that members may only be removed by the Governor in Council for cause. Members cannot be removed simply because the decisions they make do not please part of the government or a minister. They can only be removed if they adopt a conduct that would undermine public confidence in the integrity of the CTA. ^{Footnote 9}

Members of the CTA are appointed following a process managed by the Privy Council of Canada, which is transparent, merit-based, and open to all interested applicants. The process is designed to identify highly qualified candidates who also meet the eligibility factors and conditions of employment. Full-time members serve for a term of not more than five years but are eligible for reappointment at a term's end.

The CTA places strict limitations on the conduct of members. In particular, they may not directly or indirectly own, be the administrator of, work for, or have an interest in a transportation undertaking or business. Other specific instruments also govern members' conduct while in office:

the Conflict of Interest Act ^{Footnote 10} that establishes conflict of interest and post-employment compliance measures for all public office holders;
the Ethical and Political Activity Guidelines for Public Office Holders, which sets out the ethical principles to which such office holders must adhere.

The CTA's Members Code of Conduct, to which all full-time and temporary members must adhere, establishes several additional and more specific standards to ensure members remain independent and impartial. These include the requirement for CTA members to:

approach each case with an open mind -- to be, and be seen to be, impartial and objective at all times and to make decisions free from the improper influence of any other person, institution, stakeholder or interest group, or political actor;
arrange their private affairs in a manner that ensures they have no conflicts of interest;
conduct themselves with integrity, avoid impropriety or the appearance of impropriety, and eschew any action that could cast doubt on their ability to perform their duties with impartiality;
refuse to accept gifts, hospitality, or other advantages or benefits from any party that has an interest in matters handled by the CTA;
recuse themselves from any proceeding where they know, or reasonably should know, that in making the decision they would be in a conflict of interest, or where their participation might create a reasonable apprehension of bias;
refrain from communicating directly or indirectly with any party, counsel, witness, or other non-CTA participants appearing before them in a proceeding with respect to that proceeding, except in the presence of all parties or their counsel;
refrain from communicating with the news media or political actors or officials of other federal departments and agencies, provincial or foreign governments, or international organizations regarding a matter that is, was, or could be before the CTA;
refrain from publicly expressing an opinion about any past, current, or potential cases, or any other issue related to the work of the CTA, and refrain from comments or discussions (in public or otherwise) that may create a reasonable apprehension of bias;
refrain from using their position or the CTA’s resources (for example, a CTA email account or letterhead) for personal gain;
refrain from accepting invitations to attend social events such as receptions or dinners with stakeholder representatives or with persons who are, or may become, a party, counsel, witness, or other non-CTA participant in a CTA proceeding, except in rare instances where there is a compelling justification and the Chair provides prior written approval.

Not adhering to the required standards could give the Governor in Council grounds to remove a member for cause. Failure to respect the Conflict of Interest Act may lead to removal. ^{Footnote 11}

Safeguards regarding the CTA's processes

Disputes

Most complaints the CTA receives do not require formal adjudication. Instead, they are resolved informally using the CTA's facilitation and mediation services, in which CTA staff trained in alternative modes of dispute resolution help the parties work things out collaboratively. If these methods fail and the case moves to adjudication, the CTA member(s) hearing the case are not given any details about the informal process. For example, if in facilitation one party makes the other an offer for resolving the dispute, that offer can't be mentioned or taken into account in the adjudication.

The process followed by the CTA when formally adjudicating complaints is described in the CTA Dispute Adjudication Rules (Rules). Courts have confirmed that the Rules set out procedures that "provide sufficient flexibility to the [CTA] to allow it to adjudicate disputes in a manner that fulfils the requirements of procedural fairness." ^{Footnote 12}

The Rules contain a number of requirements to ensure that adjudication is not subject to undue external interference. This includes a requirement that each party receives a copy of every piece of material the CTA sends or receives. Subject only to determinations of confidentiality made by the CTA, all material is placed on the public record and the CTA makes its decision solely on the contents of the record of the proceeding.

When making a decision in adjudication, the CTA only takes into account information officially entered in the record of the proceeding. This includes material received from the applicant and the respondent (parties). It can also include information from respondents that the CTA added to the proceedings or from persons who requested and were granted intervener status by the CTA. The CTA may also use information not filed by either a party or intervener -- for instance, when the CTA retains the services of an expert or when it uses a foreign jurisdiction instrument that deals with the same issues that the CTA must decide. When that happens, the CTA informs the parties that it intends to consider material from external sources and invites parties to make submissions on it.

CTA decisions are not shared with any external parties before they are issued to the parties to the proceeding.

The CTA's Code of Conduct for Members, which includes the requirement to refrain from communicating with external parties or with one party unless the other party is also part of the communication, also protects the integrity of the CTA's dispute proceedings and the impartiality of CTA members.

To help people navigate the CTA's dispute adjudication process while ensuring not to give rise to a reasonable apprehension of bias, the CTA has created the Registrar's Office. CTA staff working within the Registrar's Office are responsible for direct communications with parties. They provide information and answer inquiries from the parties and their representatives engaged in adjudications with respect to the CTA's processes and procedures. A record is kept of these communications, but they are not placed on the record of the complaint proceeding or shared with the members who eventually decide the case. The Registrar's Office staff only provide general information about process. They do not offer advice or opinions on the merits of a party's case.

Determinations for regulatory authorities

The CTA has the power under the Act to issue different types of regulatory authorities, which it does by issuing determinations. Applications for these authorities typically involve a single applicant who comes to the CTA for an authority to perform an activity, for instance a licence to operate an air service, or an authorization to construct a railway. Authorities are issued when the CTA is satisfied that conditions set out in the Act are met. In this context, as no other party is involved in the case, CTA staff may have direct communications with the applicant that is seeking the regulatory authority. The purpose of these discussions is to assist the applicant in understanding the CTA process and to ensure that all information the CTA needs to decide whether to issue the regulatory authority is on file.

During these communications, CTA staff do not offer advice to applicants or opinions on the result of the application. CTA staff's discussions do not bind the members, and applicants are always informed that any decision regarding the application, including what information needs to be provided and whether or not to issue the regulatory authority, rests with the member(s) assigned to the case.

CTA staff may also make contact with other government officials for coordination purposes when the regulatory authority requested can only be approved by the CTA if and when another body has given its own regulatory authorization. This includes, for example, when the CTA considers an application for an air licence, which can only be issued if the Minister of Transport has previously issued a Canadian Aviation Document. When engaging with government officials in this fashion, CTA staff refrain from discussing the merits of the application or whether or not the authority will be issued by the CTA.

Annual determinations

Under the Act, the CTA must issue a number of rail-related rates, indices, costs, and revenue entitlements on an annual basis. The CTA calculates these figures using large volumes of data provided by the railway companies. In this context, CTA staff engage with the railway companies for things such as coordinating the transfer of data, obtaining additional information, clarification and corrections. CTA staff provide general information to railway companies on how they can seek methodological changes from the CTA. CTA staff also visit railway companies' premises to observe operations to inform their analysis of railway data.

When engaging in this way, CTA staff do not offer advice to railway companies or provide information about the conclusion that the CTA will reach regarding the rates, indices, costs or revenue entitlements to be established. Railway companies are advised that the authority to determine these figures rests with the CTA members and that members are not bound by the advice and analysis staff provide.

Some of the railway data that the CTA takes into account is received through the Minister of Transport under the Act. However, the Minister of Transport and staff from Transport Canada are not consulted or in any way involved in the CTA's annual determinations. The CTA does not share any of its calculations with them before issuing its annual determinations.

Own motion investigations

The CTA has the express power under the Act to initiate, on its own motion, investigations into two specific types of matters – rail level of service and accessibility issues. Before launching such proceedings, the Act requires the CTA to seek the Minister of Transport's approval, which may be given subject to terms and conditions that the Minister may impose. In this context, the CTA engages with Transport Canada, including to discuss why an own motion investigation may be warranted and if it is, the scope of the CTA's potential investigation.

Safeguards - engagement with government and industry for other regulatory purposes

Regulatory and Policy Development

When making regulations, the CTA is exercising a delegated legislative power, a highly discretionary function that is not subject to natural justice requirements.

The Open and Accountable Government principles and the Cabinet Directive on Regulation and related policies, such as the Federal Policy on Regulatory Development, require the CTA, like any other regulator, to consult with relevant ministers and stakeholders. This includes consulting stakeholders as early as possible when making regulations, then actively continuing to engage throughout a regulation's life cycle – that is, its development, implementation, and eventual review. ^{Footnote 13}

When developing regulations, the CTA decides the policy within the framework of the powers provided to it by Parliament in the Act and it decides how to articulate this policy in the requirements of the regulations it makes. However, it must involve different parts of the government, as a condition for the validity of the regulations. For example, it must consult with the Minister of Transport when making regulations in the areas of air passenger protection and for the purpose of eliminating barriers to the mobility of persons with disabilities. The Minister must also receive notice of any regulations the CTA proposes to make. Like any other regulatory body, the CTA works with the Department of Justice when drafting the proposed text of regulations. Finally, any regulation made by the CTA is subject to the approval of the Governor in Council. For this reason, the CTA engages with Treasury Board Secretariat and the Minister of Transport, who presents all regulations made by the CTA to Cabinet for its approval.

The CTA provides the opportunity to any interested persons to give their input into the proposed regulations by publishing consultation papers and draft regulations. These provide details of the CTA's policy rationale and the text of the regulations. The CTA provides various channels by which input can be provided, including written submissions and technical meetings. The CTA makes sure to give an equal opportunity to regulated entities and interested persons or organizations. For transparency purposes, the CTA publishes "what we heard reports" so that everyone involved or interested in regulatory consultations can see what others have said.

From time to time, members of the public, including industry stakeholders, communicate with the CTA to discuss situations that they believe warrant regulatory intervention by the CTA. The CTA informs itself of these issues, and considers them as appropriate when deciding whether new regulations or regulatory amendments are warranted and to what extent. Ultimately, whether someone asks for regulatory intervention or not, the CTA has the discretion to establish its regulatory agenda having regard to policy objectives it sets in accordance with the National Transportation Policy and mandates it receives under legislation.

Guidance material

The CTA develops and publishes guidance material to provide information to the public and industry stakeholders about legislative and regulatory requirements, the CTA's services, its processes, and the manner in which it makes decisions.

The CTA often consults Transport Canada when developing these materials to inform them of regulatory actions being undertaken but also to ensure policy alignment, where appropriate.

The CTA sometimes engages with industry stakeholders when developing this material, to educate and inform them about their obligations, and to take into account, as appropriate, the realities of their operations. This ensures guidelines are effective and reflect the most up-to-date information about industry practices and operations.

The CTA incorporates the input received into its guidance material to the extent deemed appropriate, having regard to the CTA's policy objectives. While it is open to receiving comments and suggestions, it is the CTA that ultimately decides the content of its own guidance material.

As a general principle, guidance material is not a legally binding instrument. Guidance material published by the CTA provides information about how the CTA has decided certain matters in the past and how it could examine certain matters in future cases if appropriate given the specific facts of cases brought before the CTA.

The CTA balances the need to provide guidance to industry and the public on their rights and responsibilities under the law with the requirement that each case be decided on its own merit. This balance is achieved by publishing guidelines that are expressly drafted as non-binding instruments. This informs parties to CTA proceedings of their right to make a case about why guidance material should not be followed in their particular case.

Compliance and enforcement

The CTA's approach to compliance monitoring and enforcement is described in the CTA's Compliance and Enforcement Policy. This policy recognizes that public interest objectives are best served when regulated entities undertake to comply with applicable standards and legal obligations voluntarily. For this reason, the CTA applies a graduated approach to enforcement. Compliance assurance activities start with education and promotion. The CTA's enforcement officers, like those of all other regulators, engage regulated entities on a proactive basis for this purpose, in line with Cabinet Directive requirements ^{Footnote 14}.

CTA enforcement officers employ a number of other tools and activities within the compliance continuum to foster compliance and address instances of non-compliance, including the issuance of notices of violation that impose an administrative monetary penalty.

Safeguards – other types of engagement

The CTA engages with government and stakeholders on a regular basis. Such consultations contribute to its expertise as an expert tribunal and a regulator and inform its functions, including its ability to implement the National Transportation Policy.

Minister of Transport

Like the head of any other agency, the CTA's Chair and CEO meets regularly with the minister, his or her office, and the deputy minister of the portfolio department of which it forms part to discuss matters such as the CTA's resources, its operations, and potential regulatory or legislative amendment proposals. There is no discussion about the merits of complaints and determination cases before the CTA or about enforcement actions during these meetings.

Given the overlapping mandates of the CTA and Transport Canada over the regulation of certain transportation matters, the two organizations have exchanges, where appropriate, in order to effectively fulfill their respective responsibilities. For example, the CTA and Transport Canada both have responsibilities regarding railway crossings. While the CTA's role is to authorize their construction, Transport Canada oversees the safety aspects of rail crossings, as well as administering programs to fund their closure. In this context, discussions between the CTA and Transport Canada ensure that both organization do not work at cross purposes.

Stakeholder engagement

The CTA's CEO meets on a regular basis with representatives of the regulated industry and other interested parties, such as consumers and disability rights organizations. The CTA has also established a consultative forum, the Accessibility Advisory Committee, which includes persons with disabilities and disability rights organizations, as well as industry and government representatives. The rules of this engagement are made very clear: the CTA CEO will discuss situations and matters that affect stakeholders generally, but will not discuss any information, or hear comments or views, about particular proceedings that are or could be brought before the CTA for decision by members.

CTA staff also engage regularly with the staff of industry stakeholders to discuss general procedural matters that could improve the CTA's efficiency in fulfilling its mandate. From time to time, CTA members and staff also visit various industry stakeholder facilities, for instance railway yards, shipper terminals, and airports, to further their expertise in transportation matters. These visits also further staff's understanding of the realities of the industry the CTA regulates, and of its customers and users.

Again, these engagements do not include discussions about the merits of applications before the CTA.

Conclusion

The legislation creating the CTA establishes the level of independence required of the CTA, and sets out a number of safeguards to preserve it. In addition, the CTA has put in place codes and practices to preserve public trust in the organization and to ensure that members and staff operate, and are seen to operate, with independence and impartiality when the CTA carries out activities to fully discharge its quasi-judicial and regulatory roles.

Date modified:: 2022-09-09

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