Fair Rail Freight Service Act (S.C. 2013, c. 31)

Assented to 2013-06-26

Fair Rail Freight Service Act

S.C. 2013, c. 31

Assented to 2013-06-26

An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration)

SUMMARY

This enactment amends the Canada Transportation Act to require a railway company, on a shipper’s request, to make the shipper an offer to enter into a contract respecting the manner in which the railway company must fulfil its service obligations to the shipper. It also creates an arbitration process to establish the terms of such a contract if the shipper and the railway company are unable to agree on them. The enactment also amends provisions related to air transportation to streamline internal processes and certain administrative provisions of that Act.

1996, c. 10

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Marginal note:Short title

 This Act may be cited as the Fair Rail Freight Service Act.

 The portion of section 42(1) of the Canada Transportation Act before paragraph (a) is replaced by the following:

Marginal note:Agency’s report
  • 42. (1) Each year the Agency shall, before the end of July, make a report on its activities for the preceding year and submit it, through the Minister, to the Governor in Council describing briefly, in respect of that year,

Marginal note:2007, c. 19, s. 8(1)

 The portion of subsection 50(1) of the French version of the Act before paragraph (a) is replaced by the following:

Marginal note:Règlements relatifs aux renseignements
  • 50. (1) Le gouverneur en conseil peut, par règlement, exiger des personnes visées au paragraphe (1.1) qui sont assujetties à la compétence législative du Parlement qu’elles fournissent au ministre des renseignements, autres que les renseignements personnels au sens de l’article 3 de la Loi sur la protection des renseignements personnels, aux dates, en la forme et de la manière que le règlement peut préciser, en vue :

 The Act is amended by adding the following after section 50:

Marginal note:Externally produced documents
  • 50.01 (1) A regulation made under subsection 50(1) may incorporate by reference any document that is produced by a person or body other than the Minister.

  • Marginal note:Type of incorporation by reference

    (2) A document may be incorporated by reference either as it exists on a particular date or as it is amended from time to time.

  • Marginal note:Accessibility of incorporated document

    (3) The Minister must ensure that a document that is incorporated by reference is accessible.

  • Marginal note:No finding of guilt or administrative sanction

    (4) A person is not liable to be found guilty of an offence or subjected to an administrative sanction for any contravention in respect of which a document that is incorporated by reference is relevant unless, at the time of the alleged contravention, the document was accessible as required by subsection (3) or it was otherwise accessible to that person.

  • Marginal note:No registration or publication

    (5) For greater certainty, a document that is incorporated by reference is not required to be transmitted for registration or published in the Canada Gazette by reason only that it is incorporated by reference.

Marginal note:Existing power not limited

50.02 For greater certainty, an express power in this Act to incorporate by reference does not limit the power that otherwise exists to incorporate by reference in a regulation made under this Act.

 Section 62 of the Act is renumbered as subsection 62(1) and is amended by adding the following:

  • Marginal note:Statutory Instruments Act

    (2) The order is not a regulation for the purposes of the Statutory Instruments Act.

  • Marginal note:Publication

    (3) The Minister must, as soon as feasible, make the name of the person who is exempted and the exemption’s duration accessible to the public through the Internet or by any other means that the Minister considers appropriate.

 Subsection 69(2) of the Act is replaced by the following:

  • Marginal note:Eligibility of Canadians

    (2) The Minister may, in writing, designate any Canadian as eligible to hold a scheduled international licence. That Canadian remains eligible while the designation remains in force.

 Section 80 of the Act is amended by adding the following after subsection (2):

  • Marginal note:Exemption not to provide certain relief — section 69

    (3) No exemption shall be granted under subsection (1) that has the effect of relieving a person from the provisions of section 69 that require, in order to be eligible to hold a scheduled international licence,

    • (a) a Canadian to be designated by the Minister to hold such a licence; or

    • (b) a non-Canadian to be designated by a foreign government or an agent of a foreign government to operate an air service under the terms of an agreement or arrangement between that government and the Government of Canada.

  •  (1) Section 126 of the Act is amended by adding the following after subsection (1):

    • Marginal note:Request for confidential contract

      (1.1) If a shipper wishes to enter into a contract under subsection (1) with a railway company respecting the manner in which the railway company must fulfil its service obligations under section 113, the shipper may request that the railway company make it an offer to enter into such a contract.

    • Marginal note:Content of request

      (1.2) The request must describe the traffic to which it relates, the services requested by the shipper with respect to the traffic and any undertaking that the shipper is prepared to give to the railway company with respect to the traffic or services.

    • Marginal note:Offer

      (1.3) The railway company must make its offer within 30 days after the day on which it receives the request.

    • Marginal note:Exception to offer

      (1.4) Subject to subsection (1.5), the railway company is not required to include in its offer terms with respect to a matter that

      • (a) is governed by a written agreement to which the shipper and the railway company are parties;

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

      • (c) is set out in a tariff referred to in subsection 136(4) or 165(3); or

      • (d) is the subject of an arbitration decision made under section 169.37.

    • Marginal note:Clarification

      (1.5) The railway company must include in its offer terms with respect to a matter that is governed by an agreement, the subject of an order or decision or set out in a tariff, referred to in subsection (1.4) if the agreement, order, decision or tariff expires within two months after the day on which the railway company receives the request referred to in subsection (1.1). The terms must apply to a period that begins after the agreement, order, decision or tariff expires.

  • (2) Subsection 126(2) of the French version of the Act is replaced by the following:

    • Marginal note:Arbitrage

      (2) Toute demande d’arbitrage au titre de l’article 161 sur une question faisant l’objet d’un contrat confidentiel est subordonnée à l’assentiment de toutes les parties au contrat.

 The headings before section 159 of the Act are replaced by the following:

PART IVARBITRATIONS

Division IFinal Offer Arbitration

 The heading before section 161 of the Act is repealed.

 The Act is amended by adding the following after section 169.3:

Division IIArbitration on Level of Services

Marginal note:Submission for arbitration — confidential contract
  • 169.31 (1) If a shipper and a railway company are unable to agree and enter into a contract under subsection 126(1) respecting the manner in which the railway company must fulfil its service obligations under section 113, the shipper may submit any of the following matters, in writing, to the Agency for arbitration:

    • (a) the operational terms that the railway company must comply with in respect of receiving, loading, carrying, unloading and delivering the traffic, including performance standards and communication protocols;

    • (b) the operational terms that the railway company must comply with if it fails to comply with an operational term described in paragraph (a);

    • (c) any operational term that the shipper must comply with that is related to an operational term described in paragraph (a) or (b);

    • (d) any service provided by the railway company incidental to transportation that is customary or usual in connection with the business of a railway company; or

    • (e) the question of whether the railway company may apply a charge with respect to an operational term described in paragraph (a) or (b) or for a service described in paragraph (d).

  • Marginal note:Matter excluded from arbitration

    (2) The shipper is not entitled to submit to the Agency for arbitration a matter that

    • (a) is governed by a written agreement, including a confidential contract, to which the shipper and the railway company are parties; or

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

  • Marginal note:Excluded matter — traffic

    (3) The shipper is not entitled to submit to the Agency for arbitration a matter that is in respect of traffic that is the subject of

    • (a) a confidential contract between the shipper and the railway company that is in force immediately before the day on which this section comes into force;

    • (b) a tariff, or a contract, referred to in subsection 165(3);

    • (c) a competitive line rate; or

    • (d) an arbitrator’s decision made under section 169.37.

  • Marginal note:Clarification

    (4) For greater certainty, neither a rate for the movement of the traffic nor the amount of a charge for that movement or for the provision of incidental services is to be subject to arbitration.

Marginal note:Contents of submission
  • 169.32 (1) The submission must contain

    • (a) a detailed description of the matters submitted to the Agency for arbitration;

    • (b) a description of the traffic to which the service obligations relate;

    • (c) an undertaking with respect to the traffic, if any, 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 given by the shipper to the railway company with respect to an operational term described in paragraph 169.31(1)(c);

    • (d) an undertaking given by the shipper to the railway company to ship the goods to which the service obligations relate in accordance with the arbitrator’s decision; and

    • (e) an undertaking given by the shipper to the Agency to pay the fee and costs for which the shipper is liable under subsection 169.39(3) as a party to the arbitration.

  • Marginal note:Copy of submission served

    (2) The shipper must serve a copy of the submission on the railway company on the day on which it submits the matters to the Agency for arbitration.

Marginal note:Arbitration precluded in certain cases
  • 169.33 (1) The Agency must dismiss the submission if

    • (a) the shipper has not, at least 15 days before making it, served on the railway company and the Agency a written notice indicating that the shipper intends to make a submission to the Agency for arbitration; or

    • (b) the shipper does not demonstrate, to the Agency’s satisfaction, that an attempt has been made to resolve the matters contained in it.

  • Marginal note:Content of notice

    (2) The notice must contain the descriptions referred to in paragraphs 169.32(1)(a) and (b) and, if the shipper’s submission will contain an undertaking described in paragraph 169.32(1)(c), a description of that undertaking.

Marginal note:Submission of proposals
  • 169.34 (1) Despite any application filed under section 169.43, the shipper and the railway company must each submit, within 10 days after the day on which a copy of a submission is served under subsection 169.32(2), to the Agency, in order to resolve the matters that are submitted to it for arbitration by the shipper, a proposal that contains any of the following terms:

    • (a) any operational term described in paragraph 169.31(1)(a), (b) or (c);

    • (b) any term for the provision of a service described in paragraph 169.31(1)(d); or

    • (c) any term with respect to the application of a charge described in paragraph 169.31(1)(e).

  • Marginal note:Proposals provided to parties

    (2) The Agency must provide the shipper and the railway company with a copy of the other party’s proposal immediately after the day on which it receives the last of the two proposals.

  • Marginal note:Exchange of information

    (3) The parties must exchange the information that they intend to submit to the arbitrator in support of their proposals within 20 days after the day on which a copy of a submission is served under subsection 169.32(2) or within a period agreed to by the parties or fixed by the arbitrator.

  • Marginal note:Exception

    (4) Unless the parties agree otherwise, a party to the arbitration is not, in support of the proposal it submits under subsection (1), to refer to any offer, or any part of an offer, that was made to it — before a copy of the submission is served under subsection 169.32(2) — by the other party to the arbitration for the purpose of entering into a confidential contract.

  • Marginal note:If no proposal from party

    (5) If one party does not submit a proposal in accordance with subsection (1), the proposal submitted by the other party is the arbitrator’s decision made under section 169.37.

Marginal note:Arbitration
  • 169.35 (1) Despite any application filed under section 169.43, the Agency must refer, within two business days after the day on which it receives the last of the two proposals, the matters for arbitration to be conducted by an arbitrator that it chooses.

  • Marginal note:Arbitrator not to act in other proceedings

    (2) The arbitrator is not to act in any other proceedings in relation to a matter that is referred to him or her for arbitration.

  • Marginal note:Assistance by Agency

    (3) The Agency may, at the arbitrator’s request, provide administrative, technical and legal assistance to the arbitrator.

  • Marginal note:Arbitration not proceeding

    (4) The arbitration is not a proceeding before the Agency.

Marginal note:Agency’s rules of procedure
  • 169.36 (1) The Agency may make rules of procedure for an arbitration.

  • Marginal note:Procedure generally

    (2) Subject to any rule of procedure made by the Agency and in the absence of an agreement between the arbitrator and the parties as to the procedure to be followed, the arbitrator must conduct the arbitration as quickly as possible and in the manner that he or she considers appropriate having regard to the circumstances of the matter.

  • Marginal note:Questions

    (3) Each party may direct questions to the other in the manner that the arbitrator considers appropriate.

Marginal note:Arbitrator’s decision

169.37 The arbitrator’s decision must establish any operational term described in paragraph 169.31(1)(a), (b) or (c), any term for the provision of a service described in paragraph 169.31(1)(d) or any term with respect to the application of a charge described in paragraph 169.31(1)(e), or any combination of those terms, that the arbitrator considers necessary to resolve the matters that are referred to him or her for arbitration. In making his or her decision, the arbitrator must have regard to the following:

  • (a) the traffic to which the service obligations relate;

  • (b) the service that the shipper requires with respect to the traffic;

  • (c) any undertaking described in paragraph 169.32(1)(c) that is contained in the shipper’s submission;

  • (d) the railway company’s service obligations under section 113 to other shippers and the railway company’s obligations to persons and other companies under section 114;

  • (e) the railway company’s obligations, if any, with respect to a public passenger service provider;

  • (f) the railway company’s and the shipper’s operational requirements and restrictions;

  • (g) the question of whether there is available to the shipper an alternative, effective, adequate and competitive means of transporting the goods to which the service obligations relate; and

  • (h) any information that the arbitrator considers relevant.

Marginal note:Requirements of decision
  • 169.38 (1) The arbitrator’s decision must

    • (a) be made in writing;

    • (b) be made so as to apply to the parties for a period of one year as of the date of his or her decision, unless the parties agree otherwise; and

    • (c) be commercially fair and reasonable to the parties.

  • Marginal note:Decision binding

    (2) The arbitrator’s decision is final and binding on the parties and is deemed, for the purposes of Division IV of Part III and its enforceability between the parties, to be a confidential contract.

  • Marginal note:Period for making decision

    (3) The arbitrator’s decision must be made within 45 days after the day on which the matters are submitted to the Agency for arbitration under subsection 169.31(1) unless in the arbitrator’s opinion making a decision within that period is not practical, in which case the arbitrator must make his or her decision within 65 days after that day.

  • Marginal note:Period — agreement of parties

    (4) Despite subsection (3), the arbitrator may, with the agreement of the parties, make his or her decision within a period that is longer than 65 days after the day on which the matters are submitted to the Agency for arbitration.

  • Marginal note:Copy of decision to Agency

    (5) The arbitrator must provide the Agency with a copy of his or her decision.

Marginal note:Arbitration fees
  • 169.39 (1) The Agency may fix the fee to be paid to it or, if the arbitrator is not a member or on the staff of the Agency, to the arbitrator for the arbitrator’s services in arbitration proceedings.

  • Marginal note:Arbitration fees — not member

    (2) An arbitrator who is not a member or on the staff of the Agency may fix a fee for his or her services if the Agency does not do so under subsection (1).

  • Marginal note:Payment of fees and costs

    (3) The shipper and the railway company are to share equally, whether or not the proceedings are terminated under section 169.41, in the payment of the fee for the arbitrator’s services and in the payment of the costs related to the arbitration, including those borne by the Agency in providing administrative, technical and legal assistance to the arbitrator under subsection 169.35(3).

  • Marginal note:Cost related to arbitration

    (4) Costs related to the arbitration also include the cost to the Agency when a member or a person on the staff of the Agency acts as an arbitrator and the Agency does not fix a fee for that arbitrator under subsection (1).

Marginal note:Confidentiality of information
  • 169.4 (1) If the Agency and the arbitrator are advised that a party to an arbitration wishes to keep information relating to the arbitration confidential, the Agency and the arbitrator must take all reasonably necessary measures to ensure that the information is not disclosed by the Agency or the arbitrator or during the arbitration to any person other than the parties.

  • Marginal note:Limited disclosure

    (2) Despite subsection (1), the Agency may, in the exercise of its powers or in the performance of its duties and functions under this Act, disclose any information that a party advised the Agency and the arbitrator it wishes to keep confidential.

Marginal note:Termination of proceedings

169.41 If, before the arbitrator makes his or her decision, the parties advise the Agency or the arbitrator that they agree that the matters being arbitrated should be withdrawn from arbitration, any proceedings in respect of those matters are immediately terminated.

Marginal note:List of arbitrators
  • 169.42 (1) The Agency, in consultation with representatives of shippers and railway companies, must establish a list of persons, including persons who are members or on the staff of the Agency, who agree to act as arbitrators in arbitrations.

  • Marginal note:Expertise required

    (2) Only persons who, in the Agency’s opinion, have sufficient expertise to act as arbitrators are to be named in the list.

  • Marginal note:Publication of list

    (3) The Agency must publish the list on its Internet site.

Marginal note:Application for order
  • 169.43 (1) A railway company may apply to the Agency, within 10 days after the day on which it is served with a copy of a submission under subsection 169.32(2), for an order declaring that the shipper is not entitled to submit to the Agency for arbitration a matter contained in the shipper’s submission.

  • Marginal note:Content of order

    (2) If the Agency makes the order, it may also

    • (a) dismiss the submission for arbitration, if the matter contained in it has not been referred to arbitration;

    • (b) discontinue the arbitration;

    • (c) subject the arbitration to any terms that it specifies; or

    • (d) set aside the arbitrator’s decision or any part of it.

  • Marginal note:Period for making decision

    (3) The Agency must make a decision on the railway company’s application made under subsection (1) as soon as feasible but not later than 35 days after the day on which it receives the application.

 
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