Safe, fair, commercially based, market-driven freight rail system – CIAC presents recommendations to Transport Canada.
January 12, 2017
On December 22, 2016, the Chemistry Industry Association of Canada (CIAC) met with Transport Canada’s Rail Policy Group to present recommendations regarding freight rail legislation. CIAC was thankful for this opportunity and is committed to working with the department to implement changes that will foster “a safe, secure, green, innovative and integrated transportation system that supports trade and economic growth, a cleaner environment and the well-being of the middle class,” as discussed by Minister Garneau in his Transportation 2030 speech.
CIAC has long advocated that a safe, reliable, and competitive rail system is critical to the economic sustainability of Canada’s chemistry sector. CIAC members rely on rail for 75 per cent of products shipped, making the sector the second largest shipper by rail in Canada. Additionally, rail is the safest mode of transportation for chemistry products.
When Transportation 2030 was introduced, CIAC was pleased to see that the Government’s transportation vision reflected many of CIAC’s previous recommendations. Now that the Government is working on developing an implementation plan, CIAC submitted the following proposed legislation amendments regarding freight rail measures (for further details, please see our submission):
Interswitching and Competitive Line Rate Provisions
- Remove the prior agreement provision, expand interswitching to the first interchange for all shippers, and make the existing interswitching limit permanent and applicable across Canada.
Canadian Transportation Agency (CTA) Processes
- Level of Service Complaints Process
- Require, within the terms of the Service Level Agreement, that the railways have the discipline of contractual terms for effective accountability and continuous performance improvement and establish reciprocal commercial incentives through ancillary charges, contracts, or arbitrated agreements.
- Service Level Arbitration (minus reciprocal financial penalties)
- Strengthen and clarify the obligations of the railways as written in the Act.
- Implement a data regime which is reliable, fulsome, and transparent to support evidence-based decision making by government and all stakeholders.
“Adequate and suitable” accommodation
- Review the core elements that CIAC proposes for the definition of what constitutes effective railway service.
Reciprocal Financial Penalties
- Give CTA the authority to undertake investigations and establish a continuing monitoring function.
Maximum Revenue Entitlement (MRE)
- Re-examine the MRE to address the current prioritization of certain commodities over others. Consider an accelerated capital cost allowance as an alternative to incentivize investments and improve service.
CIAC believes that Transport Canada and the CTA must constantly seek to provide a needed balance to level and cost of service where a working market environment does not exist. These recommended adjustments to the current transportation legislative and policy framework are required to support Canada’s international competitiveness, trade interests, and economic prosperity. CIAC will continue to engage with government on this file as draft legislation is anticipated for Spring 2017.
For information please contact Kara Edwards.