Rail Complaints: What you need to know

Introduction

The Agency may determine the facts of a dispute involving rate and service matters arising in the rail industry and order the appropriate relief to be implemented.

The Agency further oversees the competitive rail access provisions of the Canada Transportation Act, which are designed to assist shippers in obtaining access to the lines of competing railways.

The Canada Transportation Act preserves the rights of shippers located on a line transferred to a provincial short-line railway to obtain either interswitching or a competitive line rate. Other rail complaints can involve issues related to joint rates, service obligations, interswitching facilities, running rights and joint-track usage.

Under the aegis of the Agency, final offer arbitration provides a mechanism for the resolution of private commercial disputes between users and carriers.

Section 27

27. (1) On an application made to the Agency, the Agency may grant the whole or part of the application, or may make any order or grant any further or other relief that to the Agency seems just and proper.

(2) and (3) [Repealed, 2008, c. 5, s. 1]

Amendments

(4) The Agency may, on terms or otherwise, make or allow any amendments in any proceedings before it.

(5) [Repealed, 2008, c. 5, s. 1]

1996, c. 10, s. 27; 2008, c. 5, s. 1.

Section 111 - Interpretation

Definitions

111. In this Division,

"competitive line rate"
« prix de ligne concurrentiel »

"competitive line rate" means a rate determined with respect to a shipper in accordance with section 133;

"confidential contract"
« contrat confidentiel »

"confidential contract" means a contract entered into under subsection 126(1);

"connecting carrier"
« transporteur de liaison »

"connecting carrier" means a railway company, other than a local carrier, that moves traffic to or from an interchange over a portion of a continuous route in respect of which the railway company and the shipper agree on the movement of the traffic, including the applicable rate;

"interchange"
« lieu de correspondence »

"interchange" means a place where the line of one railway company connects with the line of another railway company and where loaded or empty cars may be stored until delivered or received by the other railway company;

"interswitch"
« interconnexion »

"interswitch" means to transfer traffic from the lines of one railway company to the lines of another railway company in accordance with regulations made under section 128;

"interswitching rate"
Version anglaise seulement

"interswitching rate" means a rate established by, or determined in accordance with, regulations made under paragraph 128(1)(b);

"local carrier"
« transporteur local »

"local carrier" means a railway company that moves traffic to or from an interchange on a continuous route from the point of origin or to the point of destination that is served exclusively by the railway company;

"service obligations"
Version anglaise seulement

"service obligations" means obligations under section 113 or 114.

Section 112 - Rates and Conditions of Service

Commercially fair and reasonable

112. A rate or condition of service established by the Agency under this Division must be commercially fair and reasonable to all parties.

Section 113 - 116 - Levels of Service

Accommodation for traffic

113. (1) A railway company shall, according to its powers, in respect of a railway owned or operated by it,

1. furnish, at the point of origin, at the point of junction of the railway with another railway, and at all points of stopping established for that purpose, adequate and suitable accommodation for the receiving and loading of all traffic offered for carriage on the railway;
2. furnish adequate and suitable accommodation for the carriage, unloading and delivering of the traffic;
3. without delay, and with due care and diligence, receive, carry and deliver the traffic;
4. furnish and use all proper appliances, accommodation and means necessary for receiving, loading, carrying, unloading and delivering the traffic; and
5. furnish any other service incidental to transportation that is customary or usual in connection with the business of a railway company.

Carriage on payment of rates

(2) Traffic must be taken, carried to and from, and delivered at the points referred to in paragraph (1)(a) on the payment of the lawfully payable rate.

Compensation for provision of rolling stock

(3) Where a shipper provides rolling stock for the carriage by the railway company of the shipper's traffic, the company shall, at the request of the shipper, establish specific reasonable compensation to the shipper in a tariff for the provision of the rolling stock.

Confidential contract between company and shipper

(4) A shipper and a railway company may, by means of a confidential contract or other written agreement, agree on the manner in which the obligations under this section are to be fulfilled by the company.

Facilities for traffic

114. (1) A railway company shall, according to its powers, afford to all persons and other companies all adequate and suitable accommodation for receiving, carrying and delivering traffic on and from its railway, for the transfer of traffic between its railway and other railways and for the return of rolling stock.

Through traffic

(2) For the purposes of subsection (1), adequate and suitable accommodation includes reasonable facilities for the receiving, carriage and delivery by the company

1. at the request of any other company, of through traffic and, in the case of goods shipped by carload, of the car with the goods shipped in it, to and from the railway of the other company, at a through rate; and
2. at the request of any person interested in through traffic, of such traffic at through rates.

Connecting railway to reasonable facilities

(3) Every railway company that has or operates a railway forming part of a continuous line of railway with or that intersects any other railway, or that has any terminus, station or wharf near to any terminus, station or wharf of another railway, shall afford all reasonable facilities for delivering to that other railway, or for receiving from or carrying by its railway, all the traffic arriving by that other railway without any unreasonable delay, so that

1. no obstruction is offered to the public desirous of using those railways as a continuous line of communication; and
2. all reasonable accommodation, by means of the railways of those companies, is at all times afforded to the public for that purpose.

Similar facilities for truckers

(4) If a railway company provides facilities for the transportation by rail of motor vehicles or trailers operated by any company under its control for the conveyance of goods for hire or reward,

1.  the railway company shall offer to all companies operating motor vehicles or trailers for the conveyance of goods for hire or reward similar facilities at the same rates and on the same terms and conditions as those applicable to the motor vehicles or trailers operated by the company under its control; and
2. the Agency may disallow any rate or tariff that is not in compliance with this subsection and direct the company to substitute a rate or tariff that complies with this subsection.

Adequate and suitable accommodation

115. For the purposes of subsection 113(1) or 114(1), adequate and suitable accommodation includes reasonable facilities

1. for the junction of private sidings or private spurs with a railway owned or operated by a company referred to in that subsection; and
2. for receiving, carrying and delivering traffic on and from private sidings or private spurs and placing cars and moving them on and from those private sidings or private spurs.

Complaint and investigation concerning company's obligations

116. (1) On receipt of a complaint made by any person that a railway company is not fulfilling any of its service obligations, the Agency shall

1. conduct, as expeditiously as possible, an investigation of the complaint that, in its opinion, is warranted; and
2. within one hundred and twenty days after receipt of the complaint, determine whether the company is fulfilling that obligation.

Confidential contract binding on Agency

(2) If a company and a shipper agree, by means of a confidential contract, on the manner in which service obligations under section 113 are to be fulfilled by the company, the terms of that agreement are binding on the Agency in making its determination.

Competitive line rate provisions binding on Agency

(3) If a shipper and a company agree under subsection 136(4) on the manner in which the service obligations are to be fulfilled by the local carrier, the terms of the agreement are binding on the Agency in making its determination.

Orders of Agency

(4) If the Agency determines that a company is not fulfilling any of its service obligations, the Agency may

1. order that
   1. specific works be constructed or carried out,
   2. property be acquired,
   3. cars, motive power or other equipment be allotted, distributed, used or moved as specified by the Agency, or
   4. any specified steps, systems or methods be taken or followed by the company;
2. specify in the order the maximum charges that may be made by the company in respect of the matter so ordered;
3. order the company to fulfil that obligation in any manner and within any time or during any period that the Agency deems expedient, having regard to all proper interests, and specify the particulars of the obligation to be fulfilled;
4. if the service obligation is in respect of a grain-dependent branch line listed in Schedule I, order the company to add to the plan it is required to prepare under subsection 141(1) an indication that it intends to take steps to discontinue operating the line; or
5. if the service obligation is in respect of a grain-dependent branch line listed in Schedule I, order the company, on the terms and conditions that the Agency considers appropriate, to grant to another railway company the right
   1. to run and operate its trains over and on any portion of the line, and
   2. in so far as necessary to provide service to the line, to run and operate its trains over and on any portion of any other portion of the railway of the company against which the order is made but not to solicit traffic on that railway, to take possession of, use or occupy any land belonging to that company and to use the whole or any portion of that company's right-of-way, tracks, terminals, stations or station grounds.

Right of action on default

(5) Every person aggrieved by any neglect or refusal of a company to fulfil its service obligations has, subject to this Act, an action for the neglect or refusal against the company.

Company not relieved

(6) Subject to the terms of a confidential contract referred to in subsection 113(4) or a tariff setting out a competitive line rate referred to in subsection 136(4), a company is not relieved from an action taken under subsection (5) by any notice, condition or declaration if the damage claimed in the action arises from any negligence or omission of the company or any of its employees.

Section 117 - Tariffs (General)

Rates to be charged

117. (1) Subject to section 126, a railway company shall not charge a rate in respect of the movement of traffic or passengers unless the rate is set out in a tariff that has been issued and published in accordance with this Division and is in effect.

Tariff to include prescribed information

(2) The tariff must include any information that the Agency may prescribe by regulation.

Publication of tariff

(3) The railway company shall publish and either publicly display the tariff or make it available for public inspection at its offices.

Copy of tariff on payment of fee

(4) The railway company shall provide a copy of the tariff, or any portion of it, to any person who requests it and pays a fee not exceeding the cost of making the copy.

Record of tariff

(5) The railway company shall keep a record of the tariff for at least three years after its cancellation.

Section 118 - 120 - Tariffs (Freight)

Freight tariff requested by shipper

118. A railway company shall, at the request of a shipper, issue a tariff in respect of the movement of traffic on its railway.

Increasing rates in freight tariff

119. (1) A railway company that proposes to increase a rate in a tariff for the movement of traffic shall publish a notice of the increase at least twenty days before its effective date.

Effect of freight tariff

(2) If a railway company issues and publishes a tariff of rates for the movement of traffic in accordance with this Division and Division VI,

1. the rates are the lawful rates of the railway company and, subject to subsection (1), they take effect on the date stated in the tariff;
2. the tariff supersedes any preceding tariff or any portion of it in so far as any rate in the tariff is varied; and
3. a railway company that owns or operates a railway line in respect of which the tariff is issued shall charge the rates in the tariff until they expire or until the tariff is superseded by a new tariff.

Application to vessels

120. The provisions of this Division relating to tariffs, in so far as the Agency considers them applicable, apply to traffic carried by a railway company by water between ports or places in Canada if the company owns, charters, uses, maintains or operates vessels for carrying traffic by water between ports or places in Canada, or is a party to an arrangement for using, maintaining or operating vessels for that purpose.

Section 121 - 125 - Joint Rates

Continuous route in Canada

121. (1) If traffic is to move over a continuous route in Canada and portions of it are operated by two or more railway companies, the companies shall, at the request of a shipper intending to move the traffic,

1. agree on a joint tariff for the continuous route and on the apportionment of the rate in the joint tariff; or
2. enter into a confidential contract for the continuous route.

Agency may decide if no agreement

(2) If the railway companies fail to agree or to enter into a confidential contract, the Agency, on the application of the shipper, may

1. direct the companies, within any time that the Agency may specify, to agree on a joint tariff for the continuous route and an apportionment of the rate that is satisfactory to the Agency; or
2. within ninety days after the application is received by the Agency,
   1. determine the route and the rate and apportion the rate among the companies, and
   2. determine the dates, not earlier than the date of receipt by the Agency of the application, when the rate comes into effect and when it must be published.

Refund to shipper

(3) If the Agency determines a rate under paragraph (2)(b), the companies that operate the route shall pay a shipper who moved traffic over the route an amount equal to the difference, if any, between the rate that was paid by the shipper and the rate determined by the Agency, applicable to all movements of traffic by the shipper over the route from the date on which the application was made to the date on which the determined rate comes into effect.

Publication requirements for joint tariff or rate

122. (1) If a joint tariff or rate is agreed on or determined under section 121, the requirements of this Division for the publication of the tariff or rate apply only to the railway company operating the railway line on which the movement of the traffic originates.

Publication of subsection 121(2) tariff or rate

(2) A joint tariff or rate agreed on or determined under subsection 121(2) must be published without delay, or within any additional time that the Agency may specify.

Publication of joint tariff - from Canada to or through foreign country

123. If traffic is to move over a continuous route from a point in Canada through a foreign country into Canada, or from a point in Canada to a foreign country, and the continuous route is operated by two or more railway companies, the requirements of this Division for the publication of an applicable joint tariff apply only to the railway company operating the railway line on which the movement of the traffic originates.

Publication of joint tariff - from foreign country to or through Canada

124. If traffic is to move over a continuous route from a point in a foreign country into Canada, or from a foreign country through Canada into a foreign country, and the continuous route is operated by two or more companies, the requirements of this Division for the publication of an applicable joint tariff apply only to the railway company operating the railway line on which the traffic is first moved in Canada.

Continuous carriage not to be prevented

125. (1) No railway company shall, by any combination, contract or agreement, express or implied, or by any other means, prevent traffic from being moved on a continuous route from the point of origin to the point of destination.

Break in bulk, etc.

(2) A break in bulk, stop or interruption made by a railway company does not prevent the movement of traffic from being treated, for the purposes of sections 121 to 124, as one continuous movement from the point of origin to the point of destination, if the break, stop or interruption was made in good faith for a necessary purpose and without intent to avoid or unnecessarily interrupt the continuous movement or to evade the provisions of this Division.

Agency may require information

(3) The Agency may direct a railway company operating on a continuous route to inform the Agency of the proportion of the rates that the railway company, or any other company operating on the continuous route, is to receive or has received under a joint tariff or confidential contract applicable to the route.

Section 126 - Confidential Contracts

126. (1) A railway company may enter into a contract with a shipper that the parties agree to keep confidential respecting

1. the rates to be charged by the company to the shipper;
2. reductions or allowances pertaining to rates in tariffs that have been issued and published in accordance with this Division;
3. rebates or allowances pertaining to rates in tariffs or confidential contracts that have previously been lawfully charged;
4. any conditions relating to the traffic to be moved by the company; and
5. the manner in which the company shall fulfill its service obligations under section 113.

No investigation or arbitration of confidential contracts

(2) No party to a confidential contract is entitled to submit a matter governed by the contract to the Agency for final offer arbitration under section 161, without the consent of all the parties to the contract.

Section 127 - 128 - Interswitching

Application to interswitch traffic between connecting lines

127. (1) If a railway line of one railway company connects with a railway line of another railway company, an application for an interswitching order may be made to the Agency by either company, by a municipal government or by any other interested person.

Order

(2) The Agency may order the railway companies to provide reasonable facilities for the convenient interswitching of traffic in both directions at an interchange between the lines of either railway and those of other railway companies connecting with them.

Interswitching limits

(3) If the point of origin or destination of a continuous movement of traffic is within a radius of 30 km, or a prescribed greater distance, of an interchange, a railway company shall not transfer the traffic at the interchange except in accordance with the regulations.

Extension of interswitching limits

(4) On the application of a person referred to in subsection (1), the Agency may deem a point of origin or destination of a movement of traffic in any particular case to be within 30 km, or a prescribed greater distance, of an interchange, if the Agency is of the opinion that, in the circumstances, the point of origin or destination is reasonably close to the interchange.

Regulations

128. (1) The Agency may make regulations

1. prescribing terms and conditions governing the interswitching of traffic, other than terms and conditions relating to safety;
2. determining the rate per car to be charged for interswitching traffic, or prescribing the manner of determining that rate, including the adjustments to be made to that rate as a result of changes in costs, and establishing distance zones for those purposes; and
3. prescribing, for the purposes of subsections 127(3) and (4), a greater distance than 30 km from an interchange.

Cost savings to be considered

(2) In determining an interswitching rate, the Agency shall take into consideration any reduction in costs that, in the opinion of the Agency, results from moving a greater number of cars or from transferring several cars at the same time.

Limit on rate

(3) In determining an interswitching rate, the Agency shall consider the average variable costs of all movements of traffic that are subject to the rate and the rate must not be less than the variable costs of moving the traffic, as determined by the Agency.

Transfer of lines does not affect entitlement

(4) For greater certainty, the transfer of a railway line, or an operating interest in it, under Division V or section 158 of the National Transportation Act, 1987 does not affect any entitlement to an interswitching rate.

Review of interswitching regulations

(5) The Agency shall review the regulations when the circumstances warrant and at least once in every five year period after the regulations are made.

Section 129 - 136 - Competitive Line Rates

Application

129. (1) Sections 130 to 136 apply where

1. a shipper has access to the lines of only one railway company at the point of origin or destination of the movement of the shipper's traffic; and
2. a continuous route between those points is operated by two or more companies.

Transferred railway lines

(2) For greater certainty, the transfer of a railway line, or an operating interest in it, under Division V or section 158 of the National Transportation Act, 1987 does not affect the right of a shipper to obtain a competitive line rate under sections 130 to 136.

When competitive line rate to be established on shipper's request

130. (1) Subject to section 131, the local carrier serving the shipper at the point of origin or destination, as the case may be, shall, on the request of the shipper, establish a competitive line rate applicable to the movement of the traffic between the point of origin or destination, whichever is served exclusively by the local carrier, and the nearest interchange with a connecting carrier.

Requirement unaffected by extent of carrier's capability

(2) The local carrier shall establish the competitive line rate even if it is able to move the traffic over the whole of the continuous route or a portion of that route that is longer than the portion in respect of which the competitive line rate is to apply.

Designation of route by shipper

(3) The shipper may designate the continuous route for the movement of the shipper's traffic from the point of origin to the point of destination.

Route within Canada

(4) If the ultimate point of destination of a movement of the shipper's traffic is in Canada, the shipper shall designate a route wholly within Canada, unless there is no cost-effective continuous route wholly within Canada that is available to the shipper and over which it is reasonable to move the shipper's traffic.

Export and import

(5) For the purposes of this section,

1. if the point of destination of a movement of traffic is a port in Canada for export out of Canada, that port is the ultimate point of destination in Canada; and
2. if the point of origin of a movement of traffic is a port in Canada for import into Canada, that port is the point of origin.

Nearest interchange

(6) For the purposes of subsection (1), the nearest interchange is the one nearest the point of origin or destination, whichever is served exclusively by the local carrier, in the reasonable direction of the movement of the traffic from the point of origin to the point of destination on the continuous route designated by the shipper, unless the local carrier can demonstrate that the interchange cannot be used for engineering reasons.

Shipper and connecting carriers must agree

131. (1) A competitive line rate must not be established unless the shipper agrees with the connecting carrier, and with any other company, other than the local carrier, that moves traffic over a portion of the continuous route, on the terms and conditions governing their movement of the traffic, including the applicable rate.

No other rate applies

(2) If an interswitching rate determined under paragraph 128(1)(b) is available for a portion of the route operated by the local carrier, no other rate may be applied to that portion of the route.

Movement on flat cars or less than carload traffic

(3) A competitive line rate must not be established for the movement of trailers on flat cars, containers on flat cars or less than carload traffic, unless they arrive at a port in Canada by water for movement by rail or by rail for movement by water.

Maximum portion of traffic

(4) The portion of a movement of traffic in respect of which a competitive line rate may be established must not exceed 50 per cent of the total number of kilometres over which the traffic is moved by rail or 1 200 km, whichever is greater.

Exception

(5) On application of a shipper, the Agency may establish a competitive line rate for a greater portion of a movement of traffic if the Agency is satisfied that no interchange exists within the maximum portion referred to in subsection (4).

No other rates may be established

(6) If a competitive line rate has been established for a movement of traffic of a shipper, no other competitive line rate may be established in respect of that movement while the rate is in effect.

Application to Agency to establish competitive line rates

132. (1) On the application of a shipper, the Agency shall, within forty-five days after receiving the application, establish any of the following matters in respect of which the shipper and the local carrier do not agree:

1. the amount of the competitive line rate;
2. the designation of the continuous route;
3. the designation of the nearest interchange; and
4. the manner in which the local carrier shall fulfil its service obligations.

No final offer arbitration

(2) If a matter is established by the Agency under this section, the shipper is not entitled to submit the matter to the Agency for final offer arbitration under section 161.

Competitive line rate

133. (1) A competitive line rate in respect of the movement of traffic of a shipper is the result obtained by applying the following formula:

A + (B/C x (D - E))

where

A

is the amount resulting from the application of the interswitching rate;

B

is the total revenue that the local carrier received in respect of all movement over its lines of railway

1. of traffic that
   1. is the same as or substantially similar to, the traffic moved, and
   2. is moved over similar distances, unless no such traffic is moved over similar distances; and
2. during the most recent period designated by the local carrier or any other period determined by the Agency, if the Agency determines that the designated period is not appropriate in the circumstances;

C

is the total number of tonne kilometres of the movement of traffic that generated the total revenue;

D

is the number of kilometres over which the competitive line rate is to apply; and

E

is the total number of kilometres to which the interswitching rate is applicable.

Adjustment of rate

(2) If a shipper performs any of the activities in respect of which an interswitching rate is applicable, the applicable interswitching rate in the description of A in the formula must be adjusted to account for the performance of those activities.

Alternative determination

(3) The Agency may make an order in respect of a particular shipper or railway company, or make regulations that apply generally to shippers or railway companies, establishing an alternative method of determining the amount of a competitive line rate if the amount cannot be determined in accordance with this section.

Rate must be compensatory

(4) A competitive line rate determined under this section must not be less than the variable costs of moving the traffic, as determined by the Agency.

Rate to be included in tariff or confidential contract

134. A competitive line rate must be set out in a tariff or confidential contract.

Effective period of rate

135. If a competitive line rate is established by the Agency, it has effect for one year after its effective date, or for any other period that the shipper and the local carrier agree on.

Obligation of carriers to provide cars

136. (1) If a competitive line rate is established, a railway company, other than the local carrier, shall provide the shipper with an adequate supply of cars for the traffic being moved.

Additional obligations

(2) Subject to any agreement to the contrary between the local carrier and any connecting carrier concerned, the connecting carrier is responsible for

1. a prorated share, determined in accordance with subsection (3), of the costs of operating and maintaining the interchange during the period in respect of which the competitive line rate is in effect; and
2. the capital cost of making any change or addition to the interchange that may be necessary for transferring the traffic for which the competitive line rate is established.

Determination of prorated share

(3) The prorated share is the proportion that

1. the competitive line rate traffic transferred at the interchange during the period is of
2. the total traffic transferred at the interchange during the period.

Tariff to set out service obligations

(4) The tariff setting out a competitive line rate must set out the manner in which the local carrier issuing the tariff shall, subject to subsection (1), fulfil its service obligations

1. as agreed on by the shipper and the local carrier, if they agree on the amount of the competitive line rate; or
2. as determined by the Agency, if the amount of the competitive line rate is established by the Agency under section 132.

Section 137 - Limiting Carriers' Liability

Agreement limiting liability

137. (1) A railway company shall not limit or restrict its liability to a shipper for the movement of traffic except by means of a written agreement signed by the shipper or by an association or other body representing shippers.

Liability if no agreement

(2) If there is no agreement, the railway company's liability is limited or restricted to the extent provided in any terms and conditions that the Agency may

1. on the application of the company, specify for the traffic; or
2. prescribe by regulation, if none are specified for the traffic.

Section 138 - 139 - Running Rights and Joint Track Usage

Application by railway company

138. (1) A railway company may apply to the Agency for the right to

1. take possession of, use or occupy any land belonging to any other railway company;
2. use the whole or any portion of the right-of-way, tracks, terminals, stations or station grounds of any other railway company; and
3. run and operate its trains over and on any portion of the railway of any other railway company.

Application may be granted

(2) The Agency may grant the right and may make any order and impose any conditions on either railway company respecting the exercise or restriction of the rights as appear just or desirable to the Agency, having regard to the public interest.

Compensation

(3) The railway company shall pay compensation to the other railway company for the right granted and, if they do not agree on the compensation, the Agency may, by order, fix the amount to be paid.

Request for joint or common use of right-of-way

139. (1) The Governor in Council may

1. on the application of a railway company, a municipal government or any other interested person, or on the Governor in Council's own initiative, and
2. after any investigation that the Governor in Council considers necessary,

request two or more railway companies to consider the joint or common use of a right-of-way if the Governor in Council is of the opinion that its joint or common use may improve the efficiency and effectiveness of rail transport and would not unduly impair the commercial interests of the companies.

Order in Council for joint or common use of right-of-way

(2) If the Governor in Council is satisfied that significant efficiencies and cost savings would result from joint or common use of the right-of-way by two or more railway companies and would not unduly impair the commercial interests of the companies, the Governor in Council may make any order for the joint or common use of the right-of-way that the Governor in Council considers necessary.

Compensation

(3) The Governor in Council may also, by order, fix the amount of compensation to be paid in respect of the joint or common use of the right-of-way and any related work if the companies do not agree on the amount of that compensation.

Section 140 - 146 - Transferring and Discontinuing the Operation of Railway Lines

Definition of "railway line"

140. (1) In this Division, "railway line" includes a portion of a railway line, but does not include

1. a yard track, siding or spur; or
2. other track auxiliary to a railway line.

Determination

(2) The Agency may determine as a question of fact what constitutes a yard track, siding, spur or other track auxiliary to a railway line.

Three-year plan

141. (1) A railway company shall prepare and keep up to date a plan indicating for each of its railway lines whether it intends to continue to operate the line or whether, within the next three years, it intends to take steps to discontinue operating the line.

Public availability of plan

(2) The railway company shall make the plan available for public inspection in offices of the company that it designates for that purpose.

When sale, etc., permitted

(3) A railway company may sell, lease or otherwise transfer its railway lines, or its operating interest in its lines, for continued operation.

Continued operation of a portion of a line

(4) A railway company that sells, leases or otherwise transfers a portion of a grain-dependent branch line listed in Schedule I, or its operating interest in such a portion, to a person who intends to operate the portion shall continue to operate the remaining portion for three years, unless the Minister determines that it is not in the public interest for the company to do so.

Compliance with steps for discontinuance

142. (1) A railway company shall comply with the steps described in this Division before discontinuing operating a railway line.

Limitation

(2) A railway company shall not take steps to discontinue operating a railway line before the company's intention to discontinue operating the line has been indicated in its plan for at least 12 months.

Community-based groups

(3) Subsection (2) does not apply and a railway company shall without delay take the steps described in section 143 if

1. the federal government, a provincial, municipal or district government or a community-based group endorsed in writing by such a government has written to the company to express an interest in acquiring all or a portion of a grain-dependent branch line that is listed in Schedule I for the purpose of continuing to operate that line or portion of a line; and
2. that line or portion of a line is indicated on the company's plan as being a line or a portion of a line that the company intends to take steps to discontinue operating.

Advertisement of availability of railway line for continued rail operations

143. (1) The railway company shall advertise the availability of the railway line, or any operating interest that the company has in it, for sale, lease or other transfer for continued operation and its intention to discontinue operating the line if it is not transferred.

Content of advertisement

(2) The advertisement must include a description of the railway line and how it or the operating interest is to be transferred, whether by sale, lease or otherwise, and an outline of the steps that must be taken before the operation of the line may be discontinued, including

1. a statement that the advertisement is directed to persons interested in buying, leasing or otherwise acquiring the railway line, or the railway company's operating interest in it, for the purpose of continuing railway operations; and
2. the date by which interested persons must make their interest known in writing to the company, but that date must be at least sixty days after the first publication of the advertisement.

Agreement with VIA Rail

(3) The advertisement must also disclose the existence of any agreement between the railway company and VIA Rail Canada Inc. in respect of the operation of a rail passenger service on the railway line if VIA Rail advises the railway company that it agrees to the transfer of the company's rights and obligations under the agreement to any person to whom the line, or the company's operating interest in it, is transferred.

Termination of agreement

(4) If VIA Rail has not advised the railway company that it agrees to the transfer, or has advised that it does not agree to the transfer, the agreement terminates in respect of the railway line on the effective date of any transfer of the line, or the company's operating interest, under this Division.

Disclosure of process

144. (1) The railway company shall disclose the process it intends to follow for receiving and evaluating offers to each interested person who makes their interest known in accordance with the advertisement.

Evaluation of offers

(2) If the advertisement has disclosed the existence of an agreement mentioned in subsection 143(3), the railway company shall, in evaluating each offer, consider whether the offeror is willing to assume the company's rights and obligations under the agreement in respect of the railway line.

Negotiation in good faith

(3) The railway company shall negotiate with an interested person in good faith and in accordance with the process it discloses and the interested person shall negotiate with the company in good faith.

Net salvage value

(3.1) The Agency may, on application by a party to a negotiation, determine the net salvage value of the railway line and may, if it is of the opinion that the railway company has removed any of the infrastructure associated with the line in order to reduce traffic on the line, deduct from the net salvage value the amount that the Agency determines is the cost of replacing the removed infrastructure. The party who made the application shall reimburse the Agency its costs associated with the application.

Time limit for agreement

(4) The railway company has six months to reach an agreement after the final date stated in the advertisement for persons to make their interest known.

Decision to continue operating a railway line

(5) If an agreement is not reached within the six months, the railway company may decide to continue operating the railway line, in which case it is not required to comply with section 145, but shall amend its plan to reflect its decision.

Remedy if bad faith by a railway company

(6) If, on complaint in writing by the interested person, the Agency finds that the railway company is not negotiating in good faith and the Agency considers that a sale, lease or other transfer of the railway line, or the company's operating interest in the line, to the interested person for continued operation would be commercially fair and reasonable to the parties, the Agency may order the railway company to enter into an agreement with the interested person to effect the transfer and with respect to operating arrangements for the interchange of traffic, subject to the terms and conditions, including consideration, specified by the Agency.

Remedy if bad faith by an interested person

(7) If, on complaint in writing by the railway company, the Agency finds that the interested person is not negotiating in good faith, the Agency may order that the railway company is no longer required to negotiate with the person.

Offer to governments

145. (1) The railway company shall offer to transfer all of its interest in the railway line to the governments mentioned in this section for not more than its net salvage value to be used for any purpose if

1. no person makes their interest known to the railway company, or no agreement with an interested person is reached, within the required time; or
2. an agreement is reached within the required time, but the transfer is not completed in accordance with the agreement.

Which governments receive offer

(2) After the requirement to make the offer arises, the railway company shall send it simultaneously

1. to the Minister if the railway line passes through
   1. more than one province or outside Canada,
   2. land that is or was a reserve, as defined in subsection 2(1) of the Indian Act, or
   3. land that is the subject of an agreement entered into by the railway company and the Minister for the settlement of aboriginal land claims;
2. to the minister responsible for transportation matters in the government of each province that the railway line passes through; and
3. to the clerk or other senior administrative officer of each municipal or district government through whose territory the railway line passes.

Time limits for acceptance

(3) After the offer is received

1. by the Minister, the Government of Canada may accept it within thirty days;
2. by a provincial minister, the government of the province may accept it within thirty days, unless the offer is received by the Minister, in which case the government of each province may accept it within an additional thirty days after the end of the period mentioned in paragraph (a) if it is not accepted under that paragraph; and
3. by a municipal or district government, it may accept it within an additional thirty days after the end of the period or periods for acceptance under paragraphs (a) and (b), if it is not accepted under those paragraphs.

Communication and notice of acceptance

(4) Once a government communicates its written acceptance of the offer to the railway company, the right of any other government to accept the offer is extinguished and the railway company shall notify the other governments of the acceptance.

Net salvage value

(5) If a government accepts the offer, but cannot agree with the railway company on the net salvage value within ninety days after the acceptance, the Agency may, on the application of the government or the railway company, determine the net salvage value.

Discontinuation

146. (1) Where a railway company has complied with the process set out in sections 143 to 145, but an agreement for the sale, lease or other transfer of the railway line or an interest therein is not entered into through that process, the railway company may discontinue operating the line on providing notice thereof to the Agency. Thereafter, the railway company has no obligations under this Act in respect of the operation of the railway line and has no obligations with respect to any operations by VIA Rail Canada Inc. over the railway line.

No obligation

(2) If the railway line, or any interest of the railway company therein, is sold, leased or otherwise transferred by an agreement entered into through the process prescribed by sections 143 to 145 or otherwise, the railway company that conveyed the railway line has no obligations under this Act in respect of the operation of the railway line as and from the date the sale, lease or other transfer was completed and has no obligations with respect to any operations by VIA Rail Canada Inc. over the railway line as and from that date.

Compensation

146.1 A railway company that discontinues operating a grain-dependent branch line listed in Schedule I, or a portion of one, that is in a municipality or district shall, commencing on the date on which notice was provided under subsection 146(1), make three annual payments to the municipality or district in the amount equal to $10,000 for each mile of the line or portion in the municipality or district.

Section 159 - 169 - Final Offer Arbitration

Application of sections 161 to 169

159. (1) Sections 161 to 169 apply only in respect of matters arising between shippers and carriers that involve

1. the carriage of goods by air to which Part II applies, other than their carriage internationally;
2. the carriage of goods by railways to which this Act applies, other than the carriage of goods in trailers or containers on flat cars unless the containers arrive by water at a port in Canada, served by only one railway company, for further movement by rail or arrive by rail at such a port in Canada for further movement by water; or
3. the carriage by water, for hire or reward, of goods required for the maintenance or development of a municipality or any permanent settlement for northern marine resupply purposes, other than goods required in relation to national defence or in relation to the exploration for or the development, extraction or processing of oil, gas or any mineral.

Scope of paragraph (1)(c)

(2) Paragraph (1)(c) applies only to resupply services on

1. the rivers, streams, lakes and other waters within the watershed of the Mackenzie River;
2. the territorial sea and internal waters of Canada that are adjacent to the coast of the mainland and islands of the Canadian Arctic and situated within the area bounded by the meridians of longitude 95o West and 141o West and the parallels of latitude 66o 00'30" North and 74o00'20" North; and
3. the internal waters of Canada comprised in Spence Bay and Shepherd Bay and situated east of the meridian of longitude 95o West.

Application

(3) Paragraph (1)(c) applies only if

1. the total register tonnage of all ships used to provide the resupply service exceeds fifty register tons; or
2. the resupply service originates from a point situated on the waters described in subsection (2).

Rail passenger services

160. Sections 161 to 169 also apply, with any modifications that the circumstances require, in respect of the rates charged or proposed to be charged by, and in respect of any of the conditions associated with the provision of services by, a railway company to any other railway company engaged in passenger rail services, except a public passenger service provider (as defined in section 87, a "public passenger service provider" means VIA Rail Canada Inc., a passenger rail service provider designated by the Minister or an urban transit authority).

Final Offer Arbitration

Submission for final offer arbitration

161. (1) A shipper who is dissatisfied with the rate or rates charged or proposed to be charged by a carrier for the movement of goods, or with any of the conditions associated with the movement of goods, may, if the matter cannot be resolved between the shipper and the carrier, submit the matter in writing to the Agency for a final offer arbitration to be conducted by one arbitrator or, if the shipper and the carrier agree, by a panel of three arbitrators.

Contents of submission

(2) A copy of a submission under subsection (1) shall be served on the carrier by the shipper and the submission shall contain

1. the final offer of the shipper to the carrier in the matter, excluding any dollar amounts;
2. [Repealed 2000 c.16, s.11(2)];
3. an undertaking by the shipper to ship the goods to which the arbitration relates in accordance with the decision of the arbitrator;
4. an undertaking by the shipper to the Agency whereby the shipper agrees to pay to the arbitrator the fee for which the shipper is liable under section 166 as a party to the arbitration; and
5. the name of the arbitrator, if any, that the shipper and the carrier agreed should conduct the arbitration or, if they agreed that the arbitration should be conducted by a panel of three arbitrators, the name of an arbitrator chosen by the shipper and the name of an arbitrator chosen by the carrier.

Arbitration precluded in certain cases

(3) The Agency shall not have any matter submitted to it by a shipper under subsection (1) arbitrated if the shipper has not, at least five days before making the submission, served on the carrier a written notice indicating that the shipper intends to submit the matter to the Agency for a final offer arbitration.

Final offer arbitration not a proceeding

(4) A final offer arbitration is not a proceeding before the Agency.

Submission of final offers

161.1 (1) Within 10 days after a submission is served under subsection 161(2), the shipper and the carrier shall submit to the Agency their final offers, including dollar amounts.

Copies to the parties

(2) Without delay after final offers are submitted under subsection (1) by both the shipper and the carrier, the Agency shall provide the shipper and the carrier with copies of each other's final offer.

If no final offer from a party

(3) If one party does not submit a final offer in accordance with subsection (1), the final offer submitted by the other party is deemed to be the final offer selected by the arbitrator under subsection 165(1).

Arbitration

162. (1) Notwithstanding any application filed with the Agency by a carrier in respect of a matter, within five days after final offers are received under subsection 161.1(1), the Agency shall refer the matter for arbitration

1. if the parties did not agree that the arbitration should be conducted by a panel of three arbitrators, to the arbitrator, if any, named under paragraph 161(2)(e) or, if that arbitrator is not, in the opinion of the Agency, available to conduct the arbitration or no arbitrator is named, to an arbitrator on the list of arbitrators referred to in section 169 who the Agency chooses and determines is appropriate and available to conduct the arbitration; and
2. if the parties agreed that the arbitration should be conducted by a panel of three arbitrators,
   1. to the arbitrators named by the parties under paragraph 161(2)(e) and to any arbitrator who those arbitrators have, within 10 days after the submission was served under subsection 161(2), notified the Agency that they have agreed on, or if those arbitrators did not so notify the Agency, to an arbitrator on the list of arbitrators referred to in section 169 who the Agency chooses and determines is appropriate and available to conduct the arbitration, or
   2. if an arbitrator referred to in subparagraph (i) is not, in the opinion of the Agency, available to conduct the arbitration, to the arbitrators named in that subparagraph who are available and to an arbitrator chosen by the Agency from the list of arbitrators referred to in section 169 who the Agency determines is appropriate and available to conduct the arbitration.

Interpretation

(1.1) If a matter was referred to a panel of arbitrators, every reference in subsections (1.2) and (2) and sections 163 to 169 to an arbitrator or the arbitrator shall be construed as a reference to a panel of arbitrators or the panel of arbitrators, as the case may be.

Delay in referral

(1.2) If the shipper consents to an application referred to in subsection (1) being heard before the matter is referred to an arbitrator, the Agency shall defer referring the matter until the application is dealt with.

Assistance by Agency

(2) The Agency may, at the request of the arbitrator, provide administrative, technical and legal assistance to the arbitrator on a cost recovery basis.

Decision or order affecting a matter being arbitrated

162.1 The Agency may, in addition to any other decision or order it may make, order that an arbitration be discontinued, that it be continued subject to the terms and conditions that the Agency may fix or that the decision of the arbitrator be set aside if

1. the Agency makes a decision or an order arising out of an application that is in respect of a matter submitted to the Agency for a final offer arbitration and that is filed by a carrier before the matter is referred to arbitration; and
2. the decision or order affects the arbitration.

Procedure

163. (1) In the absence of an agreement by the arbitrator and the parties as to the procedure to be followed, a final offer arbitration shall be governed by the rules of procedure made by the Agency.

Procedure generally

(2) The arbitrator shall conduct the arbitration proceedings as expeditiously as possible and, subject to the procedure referred to in subsection (1), in the manner the arbitrator considers appropriate having regard to the circumstances of the matter.

Exchange of information

(3) Within fifteen days after the Agency refers a matter for arbitration, the parties shall exchange the information that they intend to submit to the arbitrator in support of their final offers.

Interrogatories

(4) Within seven days after receipt of the information referred to in subsection (3), each party may direct interrogatories to the other, which shall be answered within fifteen days after their receipt.

Withholding of information

(5) If a party unreasonably withholds information that the arbitrator subsequently deems to be relevant, that withholding shall be taken into account by the arbitrator in making a decision.

Arbitration information

164. (1) The arbitrator shall, in conducting a final offer arbitration between a shipper and a carrier, have regard to the information provided to the arbitrator by the parties in support of their final offers and, unless the parties agree to limit the amount of information to be provided, to any additional information that is provided by the parties at the arbitrator's request.

Arbitration considerations

(2) Unless the parties agree otherwise, in rendering a decision the arbitrator shall have regard to whether there is available to the shipper an alternative, effective, adequate and competitive means of transporting the goods to which the matter relates and to all considerations that appear to the arbitrator to be relevant to the matter.

Summary process

164.1 If the Agency determines that a shipper's final offer submitted under subsection 161.1(1) involves freight charges in an amount of not more than $750,000 and the shipper did not indicate a contrary intention when submitting the offer, sections 163 and 164 do not apply and the arbitration shall proceed as follows:

1. within seven days after a matter is referred to an arbitrator, the shipper and the carrier may file with the arbitrator a response to the final offer of the other party;
2. subject to paragraph (c), the arbitrator shall decide the matter on the basis of the final offers and any response filed under paragraph (a); and
3. if the arbitrator considers it necessary, the arbitrator may invite the parties to make oral representations or may ask the parties to appear before him or her to provide further information.

Decision of arbitrator

165. (1) The decision of the arbitrator in conducting a final offer arbitration shall be the selection by the arbitrator of the final offer of either the shipper or the carrier.

Requirements re decision

(2) The decision of the arbitrator shall

1. be in writing;
2. unless the parties agree otherwise, be rendered within 60 days or, in the case of an arbitration conducted in accordance with section 164.1, 30 days after the date on which the submission for the final offer arbitration was received by the Agency; and
3. unless the parties agree otherwise, be rendered so as to apply to the parties for a period of one year or any lesser period that may be appropriate, having regard to the negotiations between the parties that preceded the arbitration.

Incorporation in tariff

(3) The carrier shall, without delay after the arbitrator's decision, set out the rate or rates or the conditions associated with the movement of goods that have been selected by the arbitrator in a tariff of the carrier, unless, where the carrier is entitled to keep the rate or rates or conditions confidential, the parties to the arbitration agree to include the rate or rates or conditions in a contract that the parties agree to keep confidential.

Reasons not required

(4) No reasons shall be set out in the decision of the arbitrator.

Reasons may be requested

(5) The arbitrator shall, if requested by all of the parties to the arbitration within 30 days or, in the case of an arbitration conducted in accordance with section 164.1, seven days after the decision of the arbitrator, give written reasons for the decision.

Application of decision

(6) Except where both parties agree otherwise,

1. the decision of the arbitrator on a final offer arbitration shall be final and binding and be applicable to the parties as of the date on which the submission for the arbitration was received by the Agency from the shipper, and is enforceable as if it were an order of the Agency; and
2. the arbitrator shall direct in the decision that interest at a reasonable rate specified by the arbitrator shall be paid to one of the parties by the other on moneys that, as a result of the application of paragraph (a), are owed by a party for the period between the date referred to in that paragraph and the date of the payment.

Payment by party

(7) Moneys and interest referred to in paragraph (6)(b) that are owed by a party pursuant to a decision of the arbitrator shall be paid without delay to the other party.

Arbitration fees

166. (1) The Agency may fix the fee to be paid to an arbitrator for the costs of, and the services provided by, the arbitrator in final offer arbitration proceedings.

Payment of fees and costs

(2) The shipper and the carrier shall share equally, whether or not the proceedings are terminated pursuant to section 168, in the payment of the fee fixed under subsection (1) and in the cost

1. borne by the Agency for administrative, technical and legal services provided to the arbitrator pursuant to subsection 162(2); and
2. of the preparation of any reasons requested pursuant to subsection 165(5).

Confidentiality of information

167. Where the Agency is advised that a party to a final offer arbitration wishes to keep matters relating to the arbitration confidential,

1. the Agency and the arbitrator shall take all reasonably necessary measures to ensure that the matters are not disclosed by the Agency or the arbitrator or during the arbitration proceedings to any person other than the parties; and
2. no reasons for the decision given pursuant to subsection 165(5) shall contain those matters or any information included in a contract that the parties agreed to keep confidential.

Termination of proceedings

168. Where, before the arbitrator renders a decision on a final offer arbitration, the parties advise the Agency or the arbitrator that they agree that the matter being arbitrated should be withdrawn from arbitration, the arbitration proceedings in respect of the matter shall be immediately terminated.

List of arbitrators

169. (1) The Agency shall, from time to time, in consultation with representatives of shippers and carriers, establish a list of persons who agree to act as arbitrators in final offer arbitrations. The list must state which of the persons have indicated that they have expertise that may assist them in conducting final offer arbitrations and the nature of that expertise.

List per mode

(2) A separate list of persons may be established under subsection (1) in respect of each or any mode of transportation, as the Agency considers appropriate.

Publication of list

(3) The Agency shall have the list of persons made known to representatives of shippers and carriers throughout Canada.

For More Information

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