2nd Session, 36th Parliament,
48-49 Elizabeth II, 1999-2000

The House of Commons of Canada

BILL C-34

An Act to amend the Canada Transportation Act

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

1996, c. 10

CANADA TRANSPORTATION ACT

1. (1) Subsection 50(1) of the Canada Transportation Act is amended by striking out the word ``or'' at the end of paragraph (e) and by adding the following after paragraph (e):

    (e.1) monitoring the grain transportation and handling system; or

(2) Section 50 of the Act is amended by adding the following after subsection (3):

Limitation

(3.1) Subsection (3) does not apply in respect of a contract entered into under subsection 126(1) to the extent that the information is required for the purpose of monitoring the grain transportation and handling system.

2. Subsection 51(2) of the Act is amended by striking out the word ``or'' at the end of paragraph (a), by adding the word ``or'' at the end of paragraph (b) and by adding the following after paragraph (b):

    (c) the communication of information by the Minister for the purpose of monitoring the grain transportation and handling system.

3. Subsection 93(2) of the Act is replaced by the following:

Variation when running rights granted

(2) The Agency may vary a certificate of fitness when it

    (a) makes an order under paragraph 116(4)(e) that requires a railway company to grant a right to the holder of the certificate; or

    (b) grants a right under section 138 to the holder of the certificate.

4. Subsection 116(4) of the Act is amended by striking out the word ``or'' at the end of paragraph (b) and by adding the following after paragraph (c):

    (d) 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

    (e) 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

      (i) to run and operate its trains over and on any portion of the line, and

      (ii) 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.

5. (1) Subsection 141(1) of the Act is replaced by the following:

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.

(2) Subsection 141(3) of the Act is replaced by the following:

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.

6. Section 142 of the Act is replaced by the following:

Compliance with steps for discontinu-
ance

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-b ased groups

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

    (a) 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

    (b) 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.

7. Subsections 144(3) to (5) of the Act are replaced by the following:

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.

8. The Act is amended by adding the following after section 146:

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.

9. (1) The definitions ``joint line movement'' and ``maximum rate scale'' in section 147 of the Act are repealed.

(2) The definition ``prescribed railway company'' in section 147 of the Act is replaced by the following:

``prescribed railway company''
« compagnie de chemin de fer régie »

``prescribed railway company'' means the Canadian National Railway Company, the Canadian Pacific Railway Company and any railway company that may be specified in the regulations ;

(3) Section 147 of the Act is amended by adding the following in alphabetical order:

``government hopper car''
« wagon-trémi e du gouverne-
ment »

``government hopper car'' means a hopper car provided to a prescribed railway company by the government of Canada or a province or by the Canadian Wheat Board;

1996, c. 18, s. 41

10. The heading before section 149 and sections 149 to 155 of the Act are replaced by the following:

Tariffs

Issuance and publication

149. (1) A prescribed railway company shall issue and publish tariffs that include single car rates in respect of the movement of grain from each grain delivery point on its railway.

Prohibition

(2) No prescribed railway company shall establish a single car rate in a tariff in respect of the movement of grain from a grain delivery point on one of its branch lines that is more than three per cent higher than any single car rate in its tariffs for the movement of the same type of grain under substantially similar conditions for a substantially similar distance from the grain delivery point on one of its main lines that is nearest, as measured in a straight line, to the grain delivery point on the branch line.

Maximum Grain Revenue Entitlement

Ceiling

150. (1) A prescribed railway company's revenues, as determined by the Agency, for the movement of grain in a crop year may not exceed the company's maximum revenue entitlement for that year as determined under subsection 151(1).

Payment of excess and penalty

(2) If a prescribed railway company's revenues, as determined by the Agency, for the movement of grain in a crop year exceed the company's maximum revenue entitlement for that year as determined under subsection 151(1), the company shall pay out the excess amount, and any penalty that may be specified in the regulations, in accordance with the regulations.

Items not included in revenue

(3) For the purposes of this section, a prescribed railway company's revenue for the movement of grain in a crop year shall not include

    (a) incentives, rebates or any similar reductions paid or allowed by the company;

    (b) any amount that is earned by the company and that the Agency determines is reasonable to characterize as a performance penalty or as being in respect of demurrage or for the storage of railway cars loaded with grain; or

    (c) compensation for running rights.

Impermissible reductions

(4) For the purposes of this section, a prescribed railway company's revenue for the movement of grain in a crop year shall not be reduced by amounts paid or allowed as dispatch by the company for loading or unloading grain before the expiry of the period agreed on for loading or unloading the grain.

Reductions from revenue

(5) For the purposes of this section, if the Agency determines that it was reasonable for a prescribed railway company to make a contribution for the development of grain-related facilities to a grain handling undertaking that is not owned by the company, the company's revenue for the movement of grain in a crop year shall be reduced by any amount that the Agency determines constitutes the amortized amount of the contribution by the company in the crop year.

Agency to determine revenue

(6) The Agency shall make the determination of a prescribed railway company's revenues for the movement of grain in a crop year on or before December 31 of the following crop year.

Maximum revenue entitlement

151. (1) A prescribed railway company's maximum revenue entitlement for the movement of grain in a crop year is the amount determined by the Agency in accordance with the formula

[A/B + ((C - D) x $0.022)] x E x F

where

A is the company's revenues for the movement of grain in the base year;

B is the number of tonnes of grain involved in the company's movement of grain in the base year;

C is the number of miles of the company's average length of haul for the movement of grain in that crop year as determined by the Agency;

D is the number of miles of the company's average length of haul for the movement of grain in the base year;

E is the number of tonnes of grain involved in the company's movement of grain in the crop year as determined by the Agency; and

F is the volume-related composite price index as determined by the Agency.

Canadian National Railway Company

(2) For the purposes of subsection (1), in the case of the Canadian National Railway Company,

    (a) A is $348,000,000;

    (b) B is 12,437,000; and

    (c) D is 1,045.

Canadian Pacific Railway Company

(3) For the purposes of subsection (1), in the case of the Canadian Pacific Railway Company,

    (a) A is $362,900,000;

    (b) B is 13,894,000; and

    (c) D is 897.

Volume-relate d composite price index

(4) The following rules are applicable to the volume-related composite price index:

    (a) in the crop year 2000-2001, the index is deemed to be 1.0;

    (b) the index applies in respect of all of the prescribed railway companies; and

    (c) the Agency shall make adjustments to the index to reflect the incremental costs incurred by the prescribed railway companies for the purpose of obtaining cars as a result of the sale, lease or other disposal or withdrawal from service of government hopper cars.

When Agency to make determina-
tion

(5) The Agency shall make the determination of a prescribed railway company's maximum revenue entitlement for the movement of grain in a crop year under subsection (1) on or before December 31 of the following crop year and shall make the determination of the volume-related composite price index on or before April 30 of the previous crop year.

Regulations

Regulations

152. The Governor in Council may make regulations

    (a) specifying railway companies for the purposes of the definition ``prescribed railway company'' in section 147;

    (b) specifying, in respect of a prescribed railway company other than the Canadian National Railway Company or the Canadian Pacific Railway Company,

      (i) revenues for the movement of grain in the base year,

      (ii) the number of tonnes for the movement of grain in the base year, and