Bill C-14

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Royal Assent

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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:
	(a) the amount of the competitive line rate;
	(b) the designation of the continuous route;
	(c) the designation of the nearest interchange; and
	(d) 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 x (D - E) C
	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
	(a) of traffic that
	(i) is the same as or substantially similar to, the traffic moved, and
	(ii) is moved over similar distances, unless no such traffic is moved over similar distances; and
	(b) 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 determina- tion	(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
	(a) 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
	(b) 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.
Determi- nation of prorated share	(3) The prorated share is the proportion that
	(a) the competitive line rate traffic transferred at the interchange during the period
	is of
	(b) 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
	(a) as agreed on by the shipper and the local carrier, if they agree on the amount of the competitive line rate; or
	(b) as determined by the Agency, if the amount of the competitive line rate is established by the Agency under section 132.
	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
	(a) on the application of the company, specify for the traffic; or
	(b) prescribe by regulation, if none are specified for the traffic.
	Running Rights and Joint Track Usage
Application by railway company	138. (1) A railway company may apply to the Agency for the right to
	(a) take possession of, use or occupy any land belonging to any other railway company;
	(b) use the whole or any portion of the right-of-way, tracks, terminals, stations or station grounds of any other railway company; and
	(c) 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.
Compensa- tion	(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
	(a) 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
	(b) 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.
Compensa- tion	(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.
	DIVISION V
	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
	(a) a yard track, siding or spur; or
	(b) other track auxiliary to a railway line.
Determi- nation	(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 sell, lease or otherwise transfer the line, or its operating interest in the line, or 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.
No sale, etc., unless indicated in plan	(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.
Compliance with steps for discontinua- tion	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.
Discontinu- ance ordered by Governor in Council	(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.
Advertise- ment 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 advertise- ment	(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
	(a) 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
	(b) 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.
Time limit for agreement	(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.
Decision to continue operation of railway line	(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.
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
	(a) no person makes their interest known to the railway company, or no agreement with an interested person is reached, within the required time; or
	(b) 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
	(a) to the Minister if the railway line passes through
	(i) more than one province or outside Canada,
	(ii) land that is or was a reserve, as defined in subsection 2(1) of the Indian Act, or
	(iii) land that is the subject of an agreement entered into by the railway company and the Minister for the settlement of aboriginal land claims;
	(b) to the minister responsible for transportation matters in the government of each province that the railway line passes through; and
	(c) 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
	(a) by the Minister, the Government of Canada may accept it within thirty days;
	(b) 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
	(c) 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.

Bill C-14

DIVISION V

TRANSFERRING AND DISCONTINUING THE OPERATION OF RAILWAY LINES