CANADA TRANSPORTATION ACT REVIEW
Summary of Key Positions and Issues
for Consideration by the Panel
Alberta Department of Transportation
on behalf of the
Government of Alberta
April 12, 2001
1. INTRODUCTION:
Last December, the Alberta Minister of Infrastructure, Honourable Ed Stelmach,
transmitted the Government of Alberta’s Overall Position Paper (dated November 17,
2000) to the Panel for its consideration. (Honourable Stelmach is now Minister of
Transportation, further to a recent reorganization.)
As the Panel moves into its report-writing stage, Alberta would like to reiterate the
following key positions.
2. GENERAL APPROACH TO TRANSPORTATION AND THE REVIEW:
Alberta’s general approach to transportation has been based on one overarching policy
objective: that every traveller and shipper must have effective, competitive options –
preferably through the workings of the marketplace but by means of legislative
measures where necessary. The current Canada Transportation Act (CTA), related
legislation and federal government policies should be judged against this objective.
Canadians need to be on the leading edge in a globalized world, not followers, and
understand that transportation carriers, facility providers, freight forwarders, customs
brokers – as well as other components of the supply chain – are enablers of prosperity,
not themselves entities to be preserved at any cost. It is the entire supply chain that is
important – not the viability of every entity that makes it up.
2. RECENT PROPOSALS BY THE MAINLINE RAILWAYS:
The rail mode remains a special case, because it alone controls the infrastructure and,
in most cases, who uses it and at what price..…/2.- 2 -The
mainline railways have evolved drastically over the past several decades, and are
now highly regionalized – to the point where the western network is very different from
the eastern. The rail network in the west is bulk-oriented and has long provided a
disproportionate share of profits earned by our national railways.
In contrast, the future of the rail network in the east may well depend on the mainline
railways doing what they have not been able to do so far: provide truck-competitive,
intermodal service at prices shippers are willing to pay – and which cover all costs.
Alberta raises this matter because Canada’s large railways recently embarked on a
campaign to divert monies now being invested in highways to themselves and to use
tax policy to encourage shippers to switch from road to rail – claiming substantial
environmental benefits and reduction of road congestion.
This proposal should be treated with considerable scepticism, for these reasons:
(i) highways are built and operated primarily for automobile traffic, meaning that future
investment needs will not decline appreciably due to any diversion of truck traffic; (ii) the
anticipated shift of freight from road to rail would not, in any case, significantly reduce
overall commercial traffic on highways; (iii) the ability, given past experience, of railways
to provide truck-competitive service at rates that shippers are willing to pay will be a key
issue, no matter what advantages are provided; and (iv) any environmental net benefit
might not be as large as some would believe.
The Panel also should question claims that truckers do not pay their full share of
highway costs. While railways pay fuel taxes, they do benefit from grade separations
and other significant investments in highway infrastructure that particularly assist
intermodal traffic and their maintenance activities, as well as from social programs in
part funded by provincial governments (the latter to an extent that their American
counterparts do not).
As for road users, it should not be forgotten that the federal government extracts some
$5 billion annually in highway fuel-tax revenue while putting back only a fraction into the
National Highway System. Five billion dollars per year would be sufficient to maintain
and improve the entire national highway system if it were spent for that purpose.
The recently announced federal investment of $600 million on national highway projects
over three years represents only a small proportion of the money still being taken by the
federal government from Canadian highway users.
…/3.- 3 -It
should be mentioned here that the amount expended by the Alberta government on
provincial highways is now essentially in balance with provincial fuel-tax revenue in an
average year. It is understood that Saskatchewan, despite not having Alberta’s
financial resources, has also achieved such a balance.
3. KEY ALBERTA POSITIONS:
Air:
The Review Panel should call upon the federal government:
• to remove current CTA restrictions on foreign ownership of airlines operating within
Canada;
• to greatly liberalize the current approach to international air policy by aggressively
moving to expand open-skies agreements with other countries (beginning with a
push to include air-cargo traffic rights under the General Agreement on Trade in
Services);
• to reduce rents now being extracted from airport authorities to cover only those
expenses now being directly incurred by the federal government where each airport
is concerned, and to transfer ownership to the operator of each large airport as it
reaches sustainable financial viability; and
• to request an independent body to evaluate what it will take to make local and
regional airports viable (including removal of unnecessary regulatory and other
impediments).
Rail:
The Review Panel should:
• call for the repeal of both the “substantial commercial harm” and “commercially fair
and reasonable to all parties” sections of the CTA, on the grounds that these
provisions have significantly reduced the effectiveness of the shipper-relief
provisions;
• call for the adoption of the Competitive Access Rate concept, on the understanding
that it would be reviewed after an initial two-year period to determine its
effectiveness;
…/4.- 4 -....
call for the inclusion of provisions in the CTA that extend interswitching to a railway
company operating over trackage owned by another railway, on the basis of a lease
or running rights;
• call upon the federal government: to evaluate, in concert with interested parties, the
operational, administrative, financial, and regulatory implications of an Expanded
Running Rights model based on the Kroeger elements; to consider implementing
such a concept, provided it is determined to be effective in providing shippers with
greater access to rail infrastructure, while assuring the viability of the rail mode; and
to review the experience two years after implementation, to determine success in
increasing competition and impact on the owning railways;
• call upon the federal government to ensure that the current Final Offer Arbitration
mechanism is retained and not weakened, and to work with provinces to ensure that
shippers located on provincially regulated shortlines have recourse to an arbitration
process;
• call for the removal of inconsistencies between the CTA’s section 113 and 114 “level
of service requirements”, and car-allocation powers granted to the Canadian Wheat
Board under section 28(k) of the Canadian Wheat Board Act, by designating grain
companies as shippers under the CTA; and
• call upon the federal government to amend the CTA to provide the Agency with the
authority to investigate proposed mergers and acquisitions in the rail sector as to
their impact on Canada and its shippers.
Accessibility:
The Review Panel should call upon the federal government to enshrine in legislation the
right of persons with disabilities to bring along a bonafide attendant, free of charge, on
all modes under federal jurisdiction, as a matter of basic equity.
Transportation and Logistics Policy:
The Review Panel should call upon the federal government to prepare – in concert with
key stakeholders – a comprehensive, clearly defined, “National Transportation and
Logistics Policy” that: has as its objective a competitive and viable system; is respectful
of local needs and priorities; incorporates best safety and environmental practices;
promotes intermodalism wherever possible; is concerned more with outcomes than who
owns and operates facilities or carriers; and is mindful of the reality that Canada is a
trading nation operating in a highly competitive, North American and global context.