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This enactment replaces the regulation of maximum rates for the
movement of grain with the regulation of maximum revenues that the
Canadian National Railway Company, the Canadian Pacific Railway
Company and any other railway company that may be prescribed may
earn for the movement of grain. Tariff rates for single car movements
of grain originating on branch lines will not be allowed to exceed main
line tariff rates for similar movements by more than three per cent.
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The enactment revises the final offer arbitration provisions to
provide for the simultaneous submission of offers, the option to use
three arbitrators, and a steamlined process for disputes valued at less
than $750,000. Provisions for branch lines are being amended to
provide longer notice and negotiation periods when a railway company
plans to discontinue service on a line and to provide remedies if parties
do not negotiate the transfer of a line in good faith. Additional remedies
are being provided in the event a railway company does not fulfill its
level of service obligations for grain-dependent branch lines. Railway
companies will be required to provide annual compensation to local
municipalities for three years equal to $10,000 per mile when service
is discontinued on a grain-dependent branch line.
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The enactment authorizes the Minister to provide information to a
third party for the purpose of monitoring the grain handling and
transportation system.
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Clause 1: (1) New. The relevant portion of subsection
50(1) reads as follows:
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50. (1) The Minister may, with the approval of the Governor in
Council, make regulations requiring carriers or transportation or grain
handling undertakings to which the legislative authority of Parliament
extends to provide information to the Minister, when and in the form
and manner that the regulations may specify, for the purposes of
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(2) New.
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Clause 2: New. The relevant portion of subsection
51(2) reads as follows:
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(2) Subsection (1) does not apply so as to prohibit
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Clause 3: Subsection 93(2) reads as follows:
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(2) The Agency may vary a certificate of fitness when it grants a right
under section 138 to the holder of the certificate.
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Clause 4: New. The relevant portion of subsection
116(4) reads as follows:
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(4) If the Agency determines that a company is not fulfilling any of
its service obligations, the Agency may
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Clause 5: (1) Subsection 141(1) reads as follows:
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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 sell,
lease or otherwise transfer the line, or its operating interest in the line,
or to take steps to discontinue operating the line.
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(2) Subsection 141(4) is new. Subsection 141(3) reads
as follows:
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(3) A sale, lease or other transfer of a railway line, or an operating
interest in it, is void unless, before the transfer is completed, the plan
indicates the railway company's intention to transfer or discontinue
operating it.
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Clause 6: Section 142 reads as follows:
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142. (1) Subject to subsection (2), a railway company shall comply
with the steps described in this Division before discontinuing the
operation of the line, but no steps shall be taken until the company's
intention to discontinue the line has been indicated in its plan for at least
sixty days.
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(2) A railway company that operates a railway line listed in Schedule
IV shall discontinue its operation of the line no later than March 31,
1996 or 10 days after this section comes into force, whichever is the
later.
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Clause 7: Subsections 144(3.1), (6) and (7) are new.
Subsections 144(3) to (5) read as follows:
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(3) The railway company shall negotiate with an interested person
in good faith and in accordance with the process it discloses.
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(4) The railway company has four months to reach an agreement
with an interested person after the final date stated in the advertisement
for persons to make their interest known.
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(5) If an agreement is not reached within the four months, the railway
company may decide to continue the operation of the railway line, in
which case it is not required to comply with section 145, but shall amend
its plan to reflect its decision.
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Clause 8: New.
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Clause 9: (1) and (2) The definitions ``joint line
movement'', ``maximum rate scale'' and ``prescribed
railway company'' in section 147 read as follows:
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``joint line movement'' means any rail traffic that passes over a
continuous route in Canada operated by two or more railway
companies;
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``maximum rate scale'' means a scale of maximum rates per tonne that
may be charged for the movement of grain over specified ranges of
distance;
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``prescribed railway company'' means the Canadian National Railway
Company, Canadian Pacific Limited and any prescribed company
operating a railway;
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(3) New.
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Clause 10: The heading before section 149 and
sections 149 to 155 read as follows:
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Maximum Rate Scale
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149. (1) The maximum rate scale for the 1995-96 crop year is set out
in Schedule III.
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(2) The maximum rate scale for each subsequent crop year shall be
determined by the Agency in accordance with section 150 or 150.3, as
the case may be, on or before April 30 of the previous crop year.
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150. (1) The maximum rate scale is determined by multiplying the
amount per tonne for the movement of grain over each range of distance
set out in the maximum rate scale for the 1995-96 crop year by the
freight rate multiplier.
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(2) The freight rate multiplier is the product obtained by applying the
following formula:
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(1 + ((A - B)/B)) x (1 - ((C x $10,000)/$1,052,800,000))
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where
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A is the volume-related composite price index, as determined by the
Agency, for the crop year for which the Agency is determining the
maximum rate scale,
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B is the volume-related composite price index for the 1994-95 crop
year, and
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C is the number of miles of grain-dependent branch line set out in
Schedule I whose operation was discontinued from April 1, 1994 to
April 1 before the crop year for which the Agency is determining the
maximum rate scale.
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Disposal of Railway Cars and Rights in Railway Cars
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150.1 (1) The Minister, with the approval of the Minister of Finance,
may
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(a) dispose of, and enter into agreements or arrangements with
respect to the disposal of railway cars, or of any rights of Her Majesty
in right of Canada with respect to railway cars, that are used for the
purpose of moving grain and that belong to Her Majesty; and
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(b) pay out of the Consolidated Revenue Fund, or from the proceeds
from the disposal of the railway cars or the rights, amounts in respect
of any agreement or arrangement referred to in paragraph (a) or of
the disposal.
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(2) The Minister may do such things as the Minister considers
appropriate to carry out an agreement or arrangement referred to in
paragraph (1)(a) or to protect the interests or enforce the rights of Her
Majesty under such an agreement or arrangement.
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(3) Without limiting the generality of subsection (2), the Minister
may, with respect to an agreement or arrangement referred to in
paragraph (1)(a),
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(a) accept and hold on behalf of Her Majesty any security granted to
Her Majesty under or pursuant to the agreement or arrangement or
any security granted in substitution for that security;
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(b) release or realize on any security referred to in paragraph (a); and
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(c) acquire shares of a corporation in trust for Her Majesty.
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150.2 The Minister shall, as soon as any right with respect to no
fewer than 10,000 railway cars that belong to Her Majesty in right of
Canada has been disposed of under section 150.1, give notice in the
Canada Gazette.
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150.3 (1) If the notice referred to in section 150.2 is published on or
before April 15, 1998, the new maximum rates referred to in subsection
(2) take effect with respect to the 1998-99 crop year. With respect to the
period that begins April 16, 1998, if the notice is published no later than
April 15 in any year after 1998, the new maximum rates apply in respect
of the crop year that begins on the next August 1 but if the notice is
published after April 15 in any of those years, the new maximum rates
apply in respect of the following crop year.
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(2) The increase in the maximum rate that applies in respect of the
range of distance in which the average length of haul, as determined by
the Agency based on the most recent crop year or calendar year for
which information is available, falls, which range of distance is called
the ``average range of distance'' for the purpose of this subsection, is
$0.75 per tonne. With respect to each other range of distance, the
increase in the maximum rate for the range of distance is calculated by
multiplying $0.75 by the ratio that the maximum rate for that range of
distance for the crop year bears to the maximum rate for the average
range of distance for the crop year.
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(3) The freight rate multiplier used in determining the maximum
rates referred to in subsection (2) is set out in the following formula:
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D x [(1 + A) - (E - 0.005)/3]
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where
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D is the freight rate multiplier for the previous crop year,
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A is the rate of change in the volume-related composite price index, as
determined by the Agency for the crop year in respect of which the
Agency is determining the maximum rate scale,
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E is the rate of productivity change, as determined by the Agency on
an historic basis, for the crop year in respect of which the Agency is
determining the maximum rate scale or 0.005, whichever is greater.
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150.4 No later than ninety days after having given the notice referred
to in section 150.2, or in the case of a subsequent disposal of rights, no
later than ninety days after the disposal, the Minister may order, with
respect to a particular group of railway cars that is the object of a
disposal, that all or part of the amount attributable to the increase in rates
referred to in subsection 150.3(2) be paid, as of any day chosen by the
Minister, whether the day is before the day on which the Minister so
orders or not, by a railway company to whom the rate is paid, in the
manner and on the dates ordered by the Minister, to the person who
acquired the rights, or any person claiming under that person or who
acquired, directly or indirectly, the rights from that person.
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Tariff of Rates
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151. (1) The rates of a prescribed railway company for the
movement of grain in a crop year must not exceed the rates set out in the
maximum rate scale for that crop year.
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(2) Each rate must be derived from the rate applicable to the
appropriate range of distance in the maximum rate scale for that crop
year.
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(3) The following are excluded from the rates for the movement of
grain:
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(b) rates for the storage of railway cars loaded with grain; and
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(c) benefits for loading or unloading grain before the expiration of
the period agreed on for loading or unloading grain.
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152. (1) A prescribed railway company may include in its tariff a rate
in respect of a joint line movement that is higher than that provided by
section 151 if the higher rate is authorized under subsection (2).
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(2) The Agency may determine an amount by which a rate applicable
to a joint line movement may exceed the level provided by section 151,
but the amount must not exceed the level that, in the opinion of the
Agency, is necessary to defray the additional costs directly attributable
to the joint line movement, other than costs that, in the opinion of the
Agency, are incurred by a prescribed railway company for the
movement of grain in the vicinity of a port for unloading purposes.
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153. (1) A prescribed railway company may include in its tariff a rate
in respect of the movement of grain by means of railway cars, other than
box cars, hopper cars or shipper supplied tank cars, that is higher than
that provided by section 151 if the rate is authorized under subsection
(2).
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(2) The Agency may determine an amount by which a rate applicable
to a movement of grain by means of railway cars, other than box cars,
hopper cars or shipper supplied tank cars, may exceed the rate provided
by section 151, but the amount must not exceed the level that, in the
opinion of the Agency, is necessary to reflect the difference in costs.
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Regulations
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154. The Governor in Council may make regulations prescribing
railway companies for the purposes of this Division.
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Review
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155. (1) During 1999, the Minister shall, in consultation with
shippers, railway companies and any other persons that the Minister
considers appropriate, conduct and complete a review of the effect of
this Act, and in particular this Division, on the efficiency of the grain
transportation and handling system and on the sharing of efficiency
gains as between shippers and railway companies.
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(2) The Minister shall, as part of the review, determine whether the
repeal of this Division and Schedules I, II and III will have a significant
adverse impact on shippers and whether they should be repealed.
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(3) If the Minister determines that this Division and Schedules I, II
and III should be repealed, then they are repealed on a day to be fixed
by order of the Governor in Council.
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Clause 11: (1) Subsection 161(1) reads as follows:
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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,
where the matter cannot be resolved between the shipper and the carrier,
submit the matter in writing to the Agency for a final offer arbitration.
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(2) and (3) The relevant portion of subsection 161(2)
reads as follows:
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(2) A copy of a submission under subsection (1) shall be served on
the carrier by the shipper and the submission shall contain
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(a) the final offer of the shipper to the carrier in the matter;
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(b) the last offer received by the shipper from the carrier in the matter;
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(e) the name of the arbitrator, if any, that the shipper and the carrier
have agreed should conduct the arbitration.
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Clause 12: New.
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Clause 13: Subsections 162(1.1) and (1.2) are new.
Subsection 162(1) reads as follows:
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162. (1) On the submission of a matter to the Agency for a final offer
arbitration, the Agency shall refer the matter for the arbitration
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(a) to the chosen arbitrator, if any, referred to in paragraph 161(2)(e),
if that arbitrator is available to conduct the arbitration; or
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(b) where no arbitrator is chosen as contemplated by paragraph (a)
or the arbitrator chosen is, in the opinion of the Agency, unavailable
to conduct the arbitration, to any other arbitrator, chosen by the
Agency from the list of arbitrators referred to in section 169, that the
Agency determines is appropriate and available to conduct the
arbitration.
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Clauses 14 and 15: New.
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Clause 16: (1) Subsection 165(1) reads as follows:
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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 and, for the purpose of this section,
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(a) the final offer of the shipper shall be the shipper's final offer set
out in the submission to the Agency under subsection 161(1); and
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(b) the final offer of the carrier shall be the last offer received by the
shipper from the carrier as set out in the submission to the Agency
under subsection 161(1) or any other offer that the carrier, within ten
days after the service referred to in subsection 161(2), specifies in
writing to the shipper and to the Agency as the carrier's final offer.
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(2) The relevant portion of subsection 165(2) reads as
follows:
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(2) The decision of the arbitrator shall
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(b) unless the parties agree otherwise, be rendered within sixty days
after the date on which the submission for the final offer arbitration
was received by the Agency from the shipper; and
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(3) Subsection 165(5) reads as follows:
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(5) The arbitrator shall, if requested by all of the parties to the
arbitration within thirty days after the decision of the arbitrator, give
reasons in writing for the decision.
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Clause 17: Subsection 169(1) reads as follows:
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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.
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