Bill C-44

Canada Transportation Act

Clause 2: Existing text of subsection 4(2):

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

Clause 3: Existing text of section 5:

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: Relevant portion of subsection 7(2):

(2) The Agency shall consist of

(a) not more than seven members appointed by the Governor in Council, and

Clause 5: Existing text of subsection 8(3):

(3) Where a member appointed under paragraph 7(2)(a) ceases to hold office, the Chairperson may authorize the member to continue to hear any matter that was before the member on the expiration of the member’s term of office and that member is deemed to be a member of the Agency, but that person’s status as a member does not preclude the appointment of up to seven members under paragraph 7(2)(a) or up to three temporary members under subsection 9(1).

Clause 6: Existing text of subsection 18(2):

(2) The Chairperson shall reside in the National Capital Region described in the schedule to the National Capital Act or within any distance of it that the Governor in Council determines.

Clause 7: (1) Existing text of subsections 27(2) and (3):

(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) Existing text of subsection 27(5):

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

Clause 8: Existing text of subsection 33(1):

33. (1) A decision or an order of the Agency may be made an order of any superior court and is enforceable in the same manner as such an order.

Clause 9: New.

Clause 10: (1) to (3) Relevant portion of subsection 50(1):

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;

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(d) any safety or subsidy program;

(4) New.

Clause 11: New.

Clause 12: (1) Existing text of subsection 51(2):

(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 13: (1) Relevant portion of subsection 52(1):

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) Existing text of subsection 52(2):

(2) Subsection (1) does not apply in respect of the year in which this Act comes into force if this Act was not in force for more than four months in that year.

Clause 14: (1) Existing text of subsections 53(1) and (2):

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) Existing text of subsection 53(5):

(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 15: New.

Clause 16: (1) Existing text of subsection 56(1):

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 17: Existing text of the heading and sections 56.1 to 56.7:

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 18: Existing text of section 59:

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 19: Existing text of section 62:

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 20: (1) Existing text of subsection 64(1.2):

(1.2) A licensee shall, as soon as practicable after giving notice under subsection (1) or (1.1), provide an opportunity for elected officials of the municipal or local government of the community of the point or points, as the case may be, to meet and discuss with the licensee the impact of the proposed discontinuance or reduction.

(2) New.

Clause 21: Relevant portion of section 65:

65. Where, on complaint in writing to the Agency by any person, the Agency finds that a licensee has failed to comply with section 64 and that it is practicable in the circumstances for the licensee to comply with an order under this section, the Agency may, by order, direct the licensee to reinstate the service referred to in that section

(a) for such a period, not exceeding sixty days after the date of the finding by the Agency, as the Agency deems appropriate; and

Clause 22: (1) to (6) Existing text of subsections 66(2) to (7):

(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) 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

(a) historical data respecting fares or cargo rates applicable to domestic services between those two points;

(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;

(b.1) the competition from other modes of transportation, if the finding is in respect of a cargo rate, an increase in a cargo rate or a range of cargo rates; and

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

(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.

(5) Before making a direction under paragraph (1)(b) or subsection (2), the Agency shall consider any representations that the licensee has made with respect to what is reasonable in the circumstances.

(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.

(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

(a) keep the Agency informed of its existing tariffs in respect of that service in the form and manner that the Agency may specify; and

(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 23: Relevant portion of subsection 67(1):

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 24: Relevant portion of section 67.1:

67.1 If, on complaint in writing to the Agency by any person or on its own motion, the Agency finds that, contrary to subsection 67(3), the holder of a domestic licence has applied a fare, rate, charge or term or condition of carriage applicable to the domestic service it offers that is not set out in its tariffs, the Agency may order the licensee to

Clause 25: Existing text of subsection 67.2(1):

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 26: Existing text of subsection 68(1):

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 27: New.

Clause 28: Existing text of the heading and section 85.1:

Air Travel Complaints Commissioner

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

(2) A person shall file in writing with the Air Travel Complaints Commissioner a complaint against a licensee in respect of its air service if the person made the complaint to the licensee and the complaint was not resolved to the person’s satisfaction.

(3) The Commissioner, or a person authorized to act on the Commissioner’s behalf, shall review and attempt to resolve every complaint filed under subsection (2) for which no other remedy exists and may, if appropriate, mediate or arrange for the mediation of a complaint filed under that subsection.

(4) On request by the Commissioner or a person authorized to act on the Commissioner’s behalf, a person shall produce for examination by the Commissioner any document, record or thing that is in the possession or under the control of the person and is, in the opinion of the Commissioner, relevant to a complaint.

(5) The Commissioner or a person authorized to act on the Commissioner’s behalf shall provide to the parties a report that outlines their positions and any settlement that they reached.

(6) The Commissioner shall, at least semi-annually, prepare a report to the Governor in Council through the Minister setting out the number and nature of complaints filed under subsection (2), including the names of the licensees against whom the complaints were made and describing the manner in which they were dealt with and any systemic problems observed. The Agency shall include the Commissioner’s reports in its annual report.

Clause 29: (1) and (2) Relevant portion of subsection 86(1):

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

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(iii) authorizing the Agency to direct a licensee to take corrective measures that the Agency considers appropriate and to pay compensation for any expense incurred by a person adversely affected by the licensee’s failure to apply the fares, rates, charges or terms or conditions of carriage applicable to the service it offers that were set out in its tariffs;

...

(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;

(3) Existing text of subsection 86(3):

(3) A regulation or order made under this Part may be conditional or unconditional or qualified or unqualified and may be general or restricted to a specific area, person or thing or group or class of persons or things.

Clause 30: New.

Clause 31: New.

Clause 32: New.

Clause 33: Existing text of the heading and section 104:

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 34: (1) Existing text of subsections 105(1) and (2):

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) Existing text of subsection 105(4):

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

Clause 35: New.

Clause 36: Existing text of subsections 106(5) and (6):

(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 37: (1) Existing text of subsection 108(2):

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

(2) Existing text of subsection 108(5):

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

Clause 38: (1) and (2) Existing text of the definitions:

“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;

(3) New.

Clause 39: Existing text of section 119:

119. (1) A railway company that proposes to increase a rate in a tariff for the movement of traffic shall publish a notice of the increase at least twenty days before its effective date.

(2) If a railway company issues and publishes a tariff of rates for the movement of traffic in accordance with this Division and Division VI,

(a) the rates are the lawful rates of the railway company and, subject to subsection (1), they take effect on the date stated in the tariff;

(b) the tariff supersedes any preceding tariff or any portion of it in so far as any rate in the tariff is varied; and

(c) a railway company that owns or operates a railway line in respect of which the tariff is issued shall charge the rates in the tariff until they expire or until the tariff is superseded by a new tariff.

Clause 40: Relevant portion of subsection 128(1):

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 41: Existing text of the heading:

Competitive Line Rates

Clause 42: Existing text of subsection 129(1):

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 43: Existing text of subsections 130(1) and (2):

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 44: Existing text of sections 131 to 133:

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 45: New.

Clause 46: (1) Existing text of subsection 136(1):

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) Existing text of subsection 136(4):

(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 47: New.

Clause 48: Existing text of subsection 141(3):

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

Clause 49: Existing text of subsections 143(3) and (4):

(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 50: Existing text of subsection 144(2):

(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 51: New.

Clause 52: (1) to (5) Existing text of section 145:

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.

(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) 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.

(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 53: Existing text of sections 146 and 146.1:

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 54: (1) Relevant portion of subsection 151(4):

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

...

(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.

(2) New.

Clause 55: New.