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Bill C-26

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RECOMMENDATION

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled ``An Act to amend the Canada Transportation Act and the Railway Safety Act, to enact the VIA Rail Canada Act and to make consequential amendments to other Acts''.

SUMMARY

PART 1

Part 1 amends the Canada Transportation Act. Certain amendments apply to all modes of transportation, including those that clarify the national transportation policy and the operation of the Competition Act in the transportation sector, create a mediation process for transportation matters, modify requirements regarding the provision of information to the Minister of Transport and modify and extend provisions regarding mergers and acquisitions of air transportation undertakings to all transportation undertakings.

This Part amends the Act with respect to air transportation. It includes provisions for licensing of domestic service providers, for full price disclosure in advertising and for making available to the public tariffs and terms and conditions of carriage. It also includes requirements for air carriers to permit, in certain circumstances, connection to their routes and access to their loyalty marketing programs.

This Part amends the Act with respect to railway transportation. It includes the creation of a mechanism for dealing with complaints concerning noise resulting from the construction or operation of railways and the modification of provisions relating to the fixing of rates payable by shippers for transport of goods and of provisons dealing with the transfer and discontinuance of operation of railway lines. It also establishes a mechanism for resolving disputes between public passenger service providers and railway companies regarding the use of railway company equipment and facilities.

This Part amends the Act to provide an approval mechanism for the construction or alteration of international bridges and tunnels.

PART 2

Part 2 amends the Railway Safety Act to include provisions for the appointment of police constables with respect to railway companies and procedures for dealing with complaints concerning them.

PART 3

Part 3 enacts a new Act governing VIA Rail Canada, including its mandate to provide passenger rail service in Canada.

PART 4

Part 4 makes consequential and coordinating amendments and provides for the coming into force of the various provisions.

EXPLANATORY NOTES

Canada Transportation Act

Clause 2: Subsection 4(3) is new. Subsection 4(2) reads as follows:

(2) Nothing in or done under the authority of this Act affects the operation of the Competition Act.

Clause 3: Section 5 reads as follows:

5. It is hereby declared that a safe, economic, efficient and adequate network of viable and effective transportation services accessible to persons with disabilities and that makes the best use of all available modes of transportation at the lowest total cost is essential to serve the transportation needs of shippers and travellers, including persons with disabilities, and to maintain the economic well-being and growth of Canada and its regions and that those objectives are most likely to be achieved when all carriers are able to compete, both within and among the various modes of transportation, under conditions ensuring that, having due regard to national policy, to the advantages of harmonized federal and provincial regulatory approaches and to legal and constitutional requirements,

    (a) the national transportation system meets the highest practicable safety standards,

    (b) competition and market forces are, whenever possible, the prime agents in providing viable and effective transportation services,

    (c) economic regulation of carriers and modes of transportation occurs only in respect of those services and regions where regulation is necessary to serve the transportation needs of shippers and travellers and that such regulation will not unfairly limit the ability of any carrier or mode of transportation to compete freely with any other carrier or mode of transportation,

    (d) transportation is recognized as a key to regional economic development and that commercial viability of transportation links is balanced with regional economic development objectives so that the potential economic strengths of each region may be realized,

    (e) each carrier or mode of transportation, as far as is practicable, bears a fair proportion of the real costs of the resources, facilities and services provided to that carrier or mode of transportation at public expense,

    (f) each carrier or mode of transportation, as far as is practicable, receives fair and reasonable compensation for the resources, facilities and services that it is required to provide as an imposed public duty,

    (g) each carrier or mode of transportation, as far as is practicable, carries traffic to or from any point in Canada under fares, rates and conditions that do not constitute

      (i) an unfair disadvantage in respect of any such traffic beyond the disadvantage inherent in the location or volume of the traffic, the scale of operation connected with the traffic or the type of traffic or service involved,

      (ii) an undue obstacle to the mobility of persons, including persons with disabilities,

      (iii) an undue obstacle to the interchange of commodities between points in Canada, or

      (iv) an unreasonable discouragement to the development of primary or secondary industries, to export trade in or from any region of Canada or to the movement of commodities through Canadian ports, and

    (h) each mode of transportation is economically viable,

and this Act is enacted in accordance with and for the attainment of those objectives to the extent that they fall within the purview of subject-matters under the legislative authority of Parliament relating to transportation.

Clause 4: (1) Subsections 27(2) and (3) read as follows:

(2) Where an application is made to the Agency by a shipper in respect of a transportation rate or service, the Agency may grant the relief sought, in whole or in part, but in making its decision the Agency must be satisfied, after considering the circumstances of the particular case, that the applicant would suffer substantial commercial harm if the relief were not granted.

(3) The circumstances to be considered by the Agency in making its decision under subsection (2) may include, but are not limited to, the following:

    (a) the market or market conditions relating to the goods involved;

    (b) the location and volume of traffic of the goods;

    (c) the scale of operation connected with the traffic;

    (d) the type of traffic or service involved;

    (e) the availability to the applicant of alternative means of transporting the goods; and

    (f) any other matters that appear to the Agency to be relevant.

(2) Subsection 27(5) reads as follows:

(5) This section does not apply in respect of final offer arbitration under Part IV.

Clause 5: New.

Clause 6: (1) and (2) The relevant portion of subsection 50(1) reads as follows:

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

    . . .

    (b) annual reporting under section 52;

(3) New.

Clause 7: New.

Clause 8: (1) Subsection 51(2.1) is new. Subsection 51(2) reads as follows:

(2) Subsection (1) does not apply so as to prohibit

    (a) the communication of information to the Agency or to a minister of the Crown in right of Canada, the agent of any such minister or an officer or employee of Her Majesty in right of Canada for the purposes of the administration of this Act or any other Act of Parliament;

    (b) the reporting of information in an aggregated form that prevents information obtained from an identifiable person from being related to that person; or

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

(2) New.

Clause 9: (1) The relevant portion of subsection 52(1) reads as follows:

52. (1) Each year the Minister shall, before the end of May, lay before Parliament a report briefly reviewing the state of transportation in Canada in respect of the preceding year, including

(2) Subsection 52(2) reads as follows:

(2) Information required to be provided under subsection (1) may include the following:

    (a) financial data;

    (b) traffic and operating statistics; and

    (c) fitness and ownership information.

Clause 10: (1) Subsections 53(1) and (2) read as follows:

53. (1) The Minister shall, no later than four years after the day this Act comes into force, appoint one or more persons to carry out a comprehensive review of the operation of this Act and any other Act of Parliament for which the Minister is responsible that pertains to the economic regulation of a mode of transportation and transportation activities under the legislative authority of Parliament.

(2) The person or persons conducting the review shall assess whether the legislation referred to in subsection (1) provides Canadians with an efficient, effective, flexible and affordable transportation system, and, where necessary or desirable, recommend amendments to

    (a) the national transportation policy set out in section 5; and

    (b) the legislation referred to in subsection (1).

(2) Subsection 53(5) reads as follows:

(5) The review shall be completed and a report of the review submitted to the Minister within one year after the appointment referred to in subsection (1).

Clause 11: New.

Clause 12: New.

Clause 13: (1) Subsection 56(1) reads as follows:

56. (1) This Part does not apply to aircraft that are used by the Canadian Armed Forces or by any other armed forces cooperating with the Canadian Armed Forces and that bear the insignia or markings of the Canadian Armed Forces or those other armed forces.

(2) New.

Clause 14: The heading before section 56.1 and sections 56.1 to 56.7 read as follows:

Review of Mergers and Acquisitions

56.1 (1) Every person who is required to notify the Commissioner under subsection 114(1) of the Competition Act in respect of a transaction that involves an air transportation undertaking shall give notice, containing, subject to the regulations, the information required under that subsection, of the transaction to the Minister and the Agency, when notice is given to the Commissioner and, in any event, no later than when the person is required to notify the Commissioner.

(2) If the Minister is of the opinion that the transaction does not raise concerns with respect to the public interest as it relates to national transportation, the Minister shall, within 42 days after a person gives notice under subsection (1), give notice of the opinion to that person.

(3) Sections 56.2 and 56.3 do not apply in respect of the transaction if the Minister gives notice under subsection (2).

(4) In this section and sections 56.2, 56.4 and 56.5, ``Commissioner'' has the same meaning as in subsection 2(1) of the Competition Act.

56.2 (1) No person shall complete a transaction referred to in subsection 56.1(1) unless the Agency determines that the transaction would result in an air transportation undertaking that is Canadian and the transaction is approved by the Governor in Council.

(2) The Commissioner shall, as soon as feasible, report to the Minister and the parties to the transaction on any concerns regarding potential prevention or lessening of competition that may occur as a result of the transaction.

(3) After receiving the Commissioner's report and before the Minister makes a recommendation for the purposes of subsection (6), the Minister shall inform the Commissioner and the parties to the transaction

    (a) of any national transportation concerns that the Minister has in respect of the transaction; and

    (b) of which of the Commissioner's concerns the Minister believes the parties should address with the Commissioner.

(4) After conferring with the Minister and the Commissioner, the parties to the transaction shall inform the Minister and the Commissioner of any measures they are prepared to undertake to address the Minister's and the Commissioner's concerns and may propose revisions to the transaction.

(5) Before making a recommendation for the purposes of subsection (6), the Minister shall obtain the Commissioner's assessment of the adequacy of any undertaking proposed by the parties to address the Commissioner's concerns and the effects on those concerns of any proposed revisions to the transaction.

(6) If the Governor in Council is satisfied that it is in the public interest to approve the transaction, taking into account any revisions to it proposed by the parties and measures they are prepared to undertake, the Governor in Council may, by order made on the recommendation of the Minister, approve the transaction and specify any terms and conditions that the Governor in Council considers appropriate. The order shall indicate which of the terms and conditions relate to potential prevention or lessening of competition and which relate to national transportation concerns.

(7) On application by a person who is subject to terms and conditions specified in an order, the Governor in Council may, on the recommendation of the Minister, vary or rescind the terms and conditions. If the terms and conditions to be varied or rescinded affect competition, the Minister shall consult with the Commissioner before making the recommendation.

(8) If the Minister directs the Agency under section 49 to inquire into any matter or thing to assist the Minister in making the recommendation under subsection (6) or (7), the Agency shall give notice of the inquiry to the Commissioner and allow the Commissioner to make representations to the Agency.

(9) Every person subject to terms and conditions specified in an order shall comply with them.

56.3 The Agency shall determine whether a transaction referred to in section 56.1 would result in an air transportation undertaking that is Canadian.

56.4 (1) If the Governor in Council is of the opinion that a licensee and its affiliated licensees have, after October 26, 1999, acquired or are about to acquire substantial or complete control over domestic services, otherwise than as a result of a transaction approved under section 56.2, the Governor in Council may, by order made on the recommendation of the Minister, direct the licensee or the affiliated licensees to take any action that the Governor in Council considers reasonable and necessary to protect the public interest from the consequences of that control, including requiring the divestiture of assets.

(2) The Minister shall not make a recommendation under subsection (1) unless the Minister has obtained the Commissioner's assessment of the state of competition in the domestic airline industry.

(3) On application by a person who is subject to an order made under subsection (1) and on the recommendation of the Minister, the Governor in Council may, by order, vary or rescind the order. If the order to be rescinded or varied affects competition, the Minister shall consult with the Commissioner before making the recommendation.

56.5 (1) If a person contravenes subsection 56.2(1), subsection 56.2(9) with respect to a term or condition that relates to national transportation concerns or an order made under subsection 56.4(1), on application by the Minister, a superior court may order the person to cease the contravention or do any thing that is required to be done, and may make any other order that it considers appropriate, including an order requiring the divestiture of assets. The Minister shall notify the Commissioner before making an application.

(2) If a person contravenes subsection 56.2(9) with respect to a term or condition that relates to potential prevention or lessening of competition, on application by the Commissioner, a superior court may order the person to cease the contravention or do any thing that is required to be done, and may make any other order that it considers appropriate, including an order requiring the divestiture of assets. The Commissioner shall notify the Minister before making an application.

56.6 The Governor in Council may, on the recommendation of the Minister, make regulations

    (a) specifying information required in a notice under subsection 56.1(1); and

    (b) exempting classes of transactions from the application of sections 56.1 to 56.3.

56.7 (1) Every person who contravenes subsection 56.1(1) is guilty of an offence and is liable

    (a) on summary conviction, to a fine of not more than $25,000; or

    (b) on conviction on indictment, to a fine of not more than $50,000.

(2) Every person who contravenes subsection 56.2(1) or (9) or an order made under subsection 56.4(1) is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years or to a fine not exceeding $10,000,000 or to both.

(3) If an offence under subsection (2) is committed or continued on more than one day, the person who commits it is liable to be convicted for a separate offence for each day on which it is committed or continued.

(4) If a corporation commits an offence under subsection (1) or (2), any officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted.

(5) Sections 174 and 175 do not apply in respect of an offence committed under subsection (1) or (2).

Clause 15: Section 57.1 is new. Sections 58 and 59 read as follows:

58. A licence issued under this Part for the operation of an air service is not transferable.

59. No person shall sell, cause to be sold or publicly offer for sale in Canada an air service unless, where required under this Part, the person holds a licence issued under this Part in respect of that service.

Clause 16: New.

Clause 17: The heading before section 61 reads as follows:

Licence for Domestic Service

Clause 18: Section 62 reads as follows:

62. Where the Minister considers it necessary or advisable in the public interest that a domestic licence be issued to a person who is not a Canadian, the Minister may, by order, on such terms and conditions as may be specified in the order, exempt the person from the application of subparagraph 61(a)(i) for the duration of the order.

Clause 19: New.

Clause 20: (1) The relevant portion of subsection 66(1) reads as follows:

66. (1) If, on complaint in writing to the Agency by any person, the Agency finds that a licensee, including affiliated licensees, is the only person providing a domestic service between two points and that a fare, cargo rate or increase in a fare or cargo rate published or offered in respect of the service is unreasonable, the Agency may, by order,

(2) Subsection 66(2) reads as follows:

(2) If, on complaint in writing to the Agency by any person, the Agency finds that a licensee, including affiliated licensees, is the only person providing a domestic service between two points and that it is offering an inadequate range of fares or cargo rates in respect of that service, the Agency may, by order, direct the licensee, for a period that the Agency considers reasonable in the circumstances, to publish and apply in respect of that service one or more additional fares or cargo rates that the Agency considers reasonable in the circumstances.

(3) to (5) The relevant portion of subsection 66(3) reads as follows:

(3) When making a finding under subsection (1) or (2) that a fare, cargo rate or increase in a fare or cargo rate published or offered in respect of a domestic service between two points is unreasonable or that a licensee is offering an inadequate range of fares or cargo rates in respect of a domestic service between two points, the Agency shall consider

    . . .

    (b) fares or cargo rates applicable to similar domestic services offered by the licensee and one or more other licensees using similar aircraft, including terms and conditions of carriage and, in the case of fares, the number of seats available at those fares;

    . . .

    (c) any other information that may be provided by the licensee, including information that the licensee provides under section 83.

(6) Subsection 66(4.1) is new. Subsection 66(4) reads as follows:

(4) The Agency may find that a licensee is the only person providing a domestic service between two points if every alternative domestic service between those points is, in the opinion of the Agency, unreasonable, taking into consideration the number of stops, the number of seats offered, the frequency of service, the flight connections and the total travel time.

(7) Subsection 66(6) reads as follows:

(6) The Agency may make a finding under subsection (1) or (2) on its own motion within two years after the date that this subsection comes into force. The Governor in Council may, by order, extend for a maximum of two years the period within which the Agency may make a finding on its own motion.

(8) and (9) The relevant portion of subsection 66(7) reads as follows:

(7) During the period during which the Agency may make a finding under subsection (6), every licensee operating a domestic service between two points in accordance with a published timetable or on a regular basis shall

    . . .

    (b) on request, inform the Agency of the tariffs it applied in respect of any of its domestic services during the previous three years and provide the Agency with any information that the Agency considers necessary for the purposes of subsection (6) and that is in support of those tariffs or related to the passenger seating or cargo capacity offered or proposed to be offered in relation to the fares or cargo rates set out in those tariffs.

Clause 21: Paragraph 67(1)(a.1) is new. The relevant portion of subsection 67(1) reads as follows:

67. (1) The holder of a domestic licence shall

    (a) publish or display and make available for public inspection at the business offices of the licensee all the tariffs for the domestic service offered by the licensee;

Clause 22: Subsection 67.2(1) reads as follows:

67.2 (1) If, on complaint in writing to the Agency by any person, the Agency finds that the holder of a domestic licence has applied terms or conditions of carriage applicable to the domestic service it offers that are unreasonable or unduly discriminatory, the Agency may suspend or disallow those terms or conditions and substitute other terms or conditions in their place.

Clause 23: Subsection 68(1.1) is new. Subsection 68(1) reads as follows:

68. (1) Sections 66, 67, 67.1 and 67.2 do not apply in respect of fares, rates, charges or terms and conditions of carriage applicable to a domestic service provided for under a contract between a holder of a domestic licence and another person whereby the parties to the contract agree to keep its provisions confidential.

Clause 24: New.

Clause 25: (1) and (2) New.

Clause 26: New.

Clause 27: Subsection 85.1(1) reads as follows:

85.1 (1) The Minister shall designate a temporary member to act as the Air Travel Complaints Commissioner for the purposes of this section.

Clause 28: (1) New.

Clause 29: (1) to (3) Paragraph 86(1)(d.1) and subparagraph 86(1)(h)(iv) are new. The relevant portion of subsection 86(1) reads as follows:

86. (1) The Agency may make regulations

    . . .

    (h) respecting traffic and tariffs, fares, rates, charges and terms and conditions of carriage for international service and

    . . .

    (j) requiring licensees to include in contracts and arrangements with tour operators, charterers and other persons in conjunction with whom air services are provided to the public, or to make such contracts and arrangements subject to, terms and conditions specified or referred to in the regulations;

Clause 30: New.

Clause 31: New.

Clause 32: Section 104 and the heading before it read as follows:

Mortgages and Hypothecs

104. (1) A mortgage or hypothec issued by a railway company, or an assignment or other document affecting the mortgage or hypothec, may be deposited in the office of the Registrar General of Canada, and notice of the deposit must be published in the Canada Gazette without delay.

(2) The mortgage or hypothec, assignment or other document need not be deposited, registered or filed under any other law or statute respecting real or personal property if it has been deposited and a notice has been published in accordance with subsection (1).

Clause 33: (1) Subsections 105(1) and (2) read as follows:

105. (1) A document, or a copy or summary of a document, evidencing any of the following transactions may be deposited in the office of the Registrar General of Canada:

    (a) a lease, sale, conditional sale, mortgage, hypothec, bailment or security agreement relating to rolling stock or any accessories or appurtenances relating thereto; and

    (b) an amendment, assignment or discharge of a document mentioned in paragraph (a).

(2) A summary of a document must include any information that the Governor in Council may prescribe by regulation.

(2) Subsection 105(4) reads as follows:

(4) Notice of the deposit must be published in the Canada Gazette without delay.

Clause 34: New.

Clause 35: Subsections 106(5) and (6) read as follows:

(5) No order of the Federal Court or any other court restraining action against the railway company affects the right of any person to take possession of the rolling stock of the company as a creditor under a security agreement, bailment, mortgage or hypothec or as a lessor or conditional vendor, whether as trustee or otherwise, unless

    (a) within 60 days after filing the scheme of arrangement, or any extended period to which the person may agree, the railway company agrees to perform all its obligations under the security agreement, bailment, mortgage, hypothec, lease or conditional sale agreement; and

    (b) any event that occurred before or after the scheme was filed and that constitutes a default under the security agreement, bailment, mortgage, hypothec, lease or conditional sale agreement is cured before the later of

      (i) 30 days after the event, and

      (ii) the end of the period mentioned in paragraph (a).

(6) An extension of the 60 day period under paragraph (5)(a) does not prejudice the right to take possession of the rolling stock.

Clause 36: (1) Subsection 108(2) reads as follows:

(2) Notice of the application must be published in the Canada Gazette.

(2) Subsection 108(5) reads as follows:

(5) Notice of the confirmation and registration of the scheme must be published in the Canada Gazette.

Clause 37: (1) to (3) The definition ``competitive connection rate'' is new. The definitions ``competitive line rate'' and ``connecting carrier'' in section 111 read as follows:

``competitive line rate'' means a rate determined with respect to a shipper in accordance with section 133;

``connecting carrier'' means a railway company, other than a local carrier, that moves traffic to or from an interchange over a portion of a continuous route in respect of which the railway company and the shipper agree on the movement of the traffic, including the applicable rate;

Clause 38: The relevant portion of subsection 128(1) reads as follows:

128. (1) The Agency may make regulations

    . . .

    (b) determining the rate per car to be charged for interswitching traffic, or prescribing the manner of determining that rate, including the adjustments to be made to that rate as a result of changes in costs, and establishing distance zones for those purposes; and

Clause 39: The heading before section 129 reads as follows:

Competitive Line Rates

Clause 40: Subsection 129(1) reads as follows:

129. (1) Sections 130 to 136 apply where

    (a) a shipper has access to the lines of only one railway company at the point of origin or destination of the movement of the shipper's traffic; and

    (b) a continuous route between those points is operated by two or more companies.

Clause 41: Subsections 130(1) and (2) read as follows:

130. (1) Subject to section 131, the local carrier serving the shipper at the point of origin or destination, as the case may be, shall, on the request of the shipper, establish a competitive line rate applicable to the movement of the traffic between the point of origin or destination, whichever is served exclusively by the local carrier, and the nearest interchange with a connecting carrier.

(2) The local carrier shall establish the competitive line rate even if it is able to move the traffic over the whole of the continuous route or a portion of that route that is longer than the portion in respect of which the competitive line rate is to apply.

Clause 42: Section 133.1 is new. Sections 131 to 133 read as follows:

131. (1) A competitive line rate must not be established unless the shipper agrees with the connecting carrier, and with any other company, other than the local carrier, that moves traffic over a portion of the continuous route, on the terms and conditions governing their movement of the traffic, including the applicable rate.

(2) If an interswitching rate determined under paragraph 128(1)(b) is available for a portion of the route operated by the local carrier, no other rate may be applied to that portion of the route.

(3) A competitive line rate must not be established for the movement of trailers on flat cars, containers on flat cars or less than carload traffic, unless they arrive at a port in Canada by water for movement by rail or by rail for movement by water.

(4) The portion of a movement of traffic in respect of which a competitive line rate may be established must not exceed 50 per cent of the total number of kilometres over which the traffic is moved by rail or 1 200 km, whichever is greater.

(5) On application of a shipper, the Agency may establish a competitive line rate for a greater portion of a movement of traffic if the Agency is satisfied that no interchange exists within the maximum portion referred to in subsection (4).

(6) If a competitive line rate has been established for a movement of traffic of a shipper, no other competitive line rate may be established in respect of that movement while the rate is in effect.

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.

(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.

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/C x (D - E))

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.

(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.

(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.

(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.

Clause 43: New.

Clause 44: (1) Subsection 136(1) reads as follows:

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.

(2) Subsection 136(4) reads as follows:

(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.

Clause 45: New.

Clause 46: Subsection 141(2.1) is new. Subsection 141(3) reads as follows:

(3) A railway company may sell, lease or otherwise transfer its railway lines, or its operating interest in its lines, for continued operation.

Clause 47: Subsections 143(3) and (4) read as follows:

(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.

(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.

Clause 48: Subsection 144(2) reads as follows:

(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.

Clause 49: New.

Clause 50: (1) The relevant portion of subsection 145(1) reads as follows:

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

(2) Subsection 145(2) reads as follows:

(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.

(3) and (4) Paragraph 145(3)(b.1) is new. The relevant portion of subsection 145(3) reads as follows:

(3) After the offer is received

    . . .

    (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.

(5) Subsections 145(4) and (5) read as follows:

(4) Once a government communicates its written acceptance of the offer to the railway company, the right of any other government to accept the offer is extinguished and the railway company shall notify the other governments of the acceptance.

(5) If a government accepts the offer, but cannot agree with the railway company on the net salvage value within ninety days after the acceptance, the Agency may, on the application of the government or the railway company, determine the net salvage value.

Clause 51: Sections 146.2 to 146.4 are new. Sections 146 and 146.1 read as follows:

146. (1) Where a railway company has complied with the process set out in sections 143 to 145, but an agreement for the sale, lease or other transfer of the railway line or an interest therein is not entered into through that process, the railway company may discontinue operating the line on providing notice thereof to the Agency. Thereafter, the railway company has no obligations under this Act in respect of the operation of the railway line and has no obligations with respect to any operations by VIA Rail Canada Inc. over the railway line.

(2) If the railway line, or any interest of the railway company therein, is sold, leased or otherwise transferred by an agreement entered into through the process prescribed by sections 143 to 145 or otherwise, the railway company that conveyed the railway line has no obligations under this Act in respect of the operation of the railway line as and from the date the sale, lease or other transfer was completed and has no obligations with respect to any operations by VIA Rail Canada Inc. over the railway line as and from that date.

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.

Clause 52: New.

Clause 53: (1) New.

Clause 54: Section 158 and the heading before it read as follows:

Police Constables

158. (1) A judge of a superior court may appoint a person as a police constable for the enforcement of this Part and for the enforcement of the laws of Canada or a province in so far as their enforcement relates to the protection of property owned or administered by a railway company and the protection of persons and property on that property.

(2) The appointment must only be made on the application of a railway company that owns or administers property located within the judge's jurisdiction.

(3) The police constable has jurisdiction on property under the administration of the railway company and in any place within 500 m of property that it owns or administers.

(4) The police constable may take a person charged with an offence under this Part, or any law referred to in subsection (1), before a court that has jurisdiction in such cases over any area where property owned or administered by the railway company is located, whether or not the person was arrested, or the offence occurred or is alleged to have occurred, within that area.

(5) The court shall deal with the person as though the person had been arrested, and the offence had occurred, within the area of the court's jurisdiction, but the court shall not deal with the person if the offence is alleged to have occurred outside the province in which the court is sitting.

(6) A superior court judge referred to in subsection (1) or the railway company may dismiss or discharge the police constable and the dismissal or discharge terminates the powers, duties and privileges conferred on the constable by this section.

Clause 55: Section 160 reads as follows:

160. Sections 161 to 169 also apply, with such modifications as the circumstances require, in respect of the rates charged or proposed to be charged by, or any of the conditions associated with the provision of services by, a railway company to

    (a) a commuter rail authority designated by the government of a province; or

    (b) a railway company engaged in passenger rail services.

Clause 56: Subsection 161(1) reads as follows:

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, if the matter cannot be resolved between the shipper and the carrier, submit the matter in writing to the Agency for a final offer arbitration to be conducted by one arbitrator or, if the shipper and the carrier agree, by a panel of three arbitrators.

Clause 57: The relevant portion of section 164.1 reads as follows:

164.1 If the Agency determines that a shipper's final offer submitted under subsection 161.1(1) involves freight charges in an amount of not more than $750,000 and the shipper did not indicate a contrary intention when submitting the offer, sections 163 and 164 do not apply and the arbitration shall proceed as follows:

Clause 58: New.

Clause 59: New.

Clause 60: (1) and (2) The relevant portion of section 177 reads as follows:

177. The Agency may, by regulation,

    . . .

    (b) prescribe the maximum amount payable for each violation, but the amount shall not exceed

      (i) $5,000, in the case of an individual, and

      (ii) $25,000, in the case of a corporation.

(3) New.

Clause 61: (1) The relevant portion of subsection 178(1) reads as follows:

178. (1) The Agency may

(2) Subsection 178(3) reads as follows:

(3) Every person designated as an enforcement officer pursuant to paragraph (1)(a) shall receive an authorization in prescribed form attesting to the person's designation and shall, on demand, present the authorization to any person from whom the enforcement officer requests information in the course of the enforcement officer's duties.

Clause 62: Subsection 179(1) reads as follows:

179. (1) Every person who contravenes a provision, requirement or condition designated under section 177 commits a violation and is liable to a penalty fixed pursuant to that section.

Clause 63: (1) Subsection 180(1) reads as follows:

180. (1) Where a person designated as an enforcement officer pursuant to paragraph 178(1)(a) believes that a person has committed a violation, the enforcement officer may issue and serve on the person a notice of violation that names the person, identifies the violation and sets out

    (a) the penalty, established in accordance with the regulations, for the violation that the person is liable to pay; and

    (b) particulars concerning the time for paying and the manner of paying the penalty.

(2) and (3) The relevant portion of subsection 180(2) reads as follows:

(2) Sections 7.8 to 8.2, 36 and 37 of the Aeronautics Act apply to the contravention of a provision, requirement or condition designated under section 177, with such modifications as are necessary, and a reference in any of those provisions or in any document issued under any of those provisions to

    . . .

    (b) ``designated provision'' shall be read as a reference to a provision, requirement or condition designated under paragraph 177(a);

    (c) ``Minister'' shall be read as a reference to the Agency or, in any provision other than subsection 7.8(1) of the Aeronautics Act, to a person designated by the Agency;

    . . .

    (e) ``regulations made under paragraph 7.6(1)(b)'' shall be read as a reference to regulations made under paragraph 177(b).

Clause 64: New.

Railway Safety Act

Clause 66: (1) New.

Air Canada Public Participation Act

Clause 68: (1) Subsections 10.1(1) and (2) read as follows:

10.1 (1) The proposed acquisition described in a letter dated December 21, 1999 from 853350 Alberta Ltd. and Air Canada to the Minister of Transport is deemed to be a transaction that has been approved by the Governor in Council under subsection 56.2(6) of the Canada Transportation Act on the day on which that subsection comes into force.

(2) The undertakings provided by 853350 Alberta Ltd. and Air Canada to the Minister of Transport in the letter referred to in subsection (1) are deemed to be terms and conditions of an order made under subsection 56.2(6) of the Canada Transportation Act that relate to national transportation concerns, and the undertakings provided by 853350 Alberta Ltd. and Air Canada to the Commissioner of Competition that are set out in Annex A to a letter from the Commissioner dated December 21, 1999 in respect of the acquisition referred to in that subsection are deemed to be terms and conditions of an order made under subsection 56.2(6) of the Canada Transportation Act that relate to potential prevention or lessening of competition.

(2) The relevant portion of subsection 10.1(4) reads as follows:

(4) The Governor in Council may, by order, declare that 853350 Alberta Ltd. and Air Canada are not subject to the terms and conditions referred to in subsection (2) if the undertakings cease to have effect and are not revived in the circumstances described in

Canada Labour Code

Clause 69: The definition ``private constable'' in subsection 3(1) reads as follows:

``private constable'' means a person appointed as a constable under Part III of the Canada Transportation Act;

Competition Act

Clause 70: Subsections 29.1(3) to (5) read as follows:

(3) Requests under this section must be in writing and must

    (a) specify the information referred to in any of paragraphs (2)(a) to (f) that is required; and

    (b) state that the Minister of Transport requires the information for the purposes of section 56.1 or 56.2 of the Canada Transportation Act and identify the transaction being considered under that section.

(4) The information communicated under subsection (1) may be used only for the purposes of section 56.1 or 56.2, as the case may be, of the Canada Transportation Act.

(5) No person who performs or has performed duties or functions in the administration or enforcement of the Canada Transportation Act shall communicate or allow to be communicated to any other person any information communicated under subsection (1), except to persons who perform duties or functions under section 56.1 or 56.2 of that Act.

Clause 71: The relevant portion of subsection 78(1) reads as follows:

78. (1) For the purposes of section 79, ``anti-competitive act'', without restricting the generality of the term, includes any of the following acts:

    . . .

    (j) acts or conduct of a person operating a domestic service, as defined in subsection 55(1) of the Canada Transportation Act, that are specified under paragraph (2)(a); and

    (k) the denial by a person operating a domestic service, as defined in subsection 55(1) of the Canada Transportation Act, of access on reasonable commercial terms to facilities or services that are essential to the operation in a market of an air service, as defined in that subsection, or refusal by such a person to supply such facilities or services on such terms.

Clause 72: Subsection 79(3.1) reads as follows:

(3.1) Where the Tribunal makes an order under subsection (1) or (2) against an entity who operates a domestic service, as defined in subsection 55(1) of the Canada Transportation Act, it may also order the entity to pay, in such manner as the Tribunal may specify, an administrative monetary penalty in an amount not greater than $15 million.

Clause 73: The relevant portion of section 94 reads as follows:

94. The Tribunal shall not make an order under section 92 in respect of

    . . .

    (c) a merger or proposed merger approved under subsection 56.2(6) of the Canada Transportation Act and in respect of which the Minister of Transport has certified to the Commissioner the names of the parties.

Clause 74: The relevant portion of subsection 104.1(1) reads as follows:

104.1 (1) The Commissioner may make a temporary order prohibiting a person operating a domestic service, as defined in subsection 55(1) of the Canada Transportation Act, from doing an act or a thing that could, in the opinion of the Commissioner, constitute an anti-competitive act or requiring the person to take the steps that the Commissioner considers necessary to prevent injury to competition or harm to another person if

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