No. H 013/03
For release February 25, 2003

Transport Minister Releases Vision for Future of Canada's Transportation System

OTTAWA — Transport Minister David Collenette today released Straight Ahead - A Vision for Transportation in Canada.

"I am proud to present to Canadians this vision of the future of our transportation system," said Mr. Collenette. "I believe the policy framework we have set out in this document will allow the transportation system to successfully meet the economic, social and environmental needs of the next decade and beyond, and will improve the quality of life of Canadians."

The document covers the full spectrum of long-term transportation issues in Canada, ranging from airline and railway competition issues to critical infrastructure needs, environmental pressures and safety and security imperatives.

The document provides the vision, the policy framework and principles that will guide the Government of Canada's decisions in the years ahead in key areas such as marketplace policies, strategic infrastructure investments and initiatives in support of the broader government agenda on competitive cities and healthy communities, climate change and innovation and skills.

Straight Ahead provides specific directions and calls for action in many areas, including:

• concrete steps to preserve and improve the benefits of competition, including improved recourse for rail shippers against the market power of railways;
• confirming our made-in-Canada policy on airline competition, with gradual and reciprocal liberalization of our international air markets;
• new measures to improve transparency in advertising airfares;
• maintaining safety and security as the cornerstones of Canada's transportation policy, with a clear focus on the need to continually improve safety and security for Canadians;
• a comprehensive review process for transportation merger proposals, for example between Canadian and American railways;
• an emphasis on infrastructure investments aimed at reducing congestion in our cities and bottlenecks at the Canada-U.S. border and in our trade corridors;
• a clear focus on environmental issues, with specific measures - such as promoting vehicles and fuels that produce fewer emissions, increased use of alternative modes of transportation for passenger travel, and more efficient transportation of goods - to support the government's Climate Change Plan;
• new legislation for VIA Rail and legislative amendments to strengthen publicly funded passenger rail services; and
• support for partnerships to address skills shortages and innovation challenges in the transportation sector.

As a concrete first step towards fulfilling a number of commitments set out in Straight Ahead, the Transport Minister today also introduced amendments to the Canada Transportation Act. The amendments include requirements for airlines to better indicate total prices in their advertising, and provisions to encourage airline competition. The amendments also include concrete steps to preserve and improve the benefits of competition, such as improved protection for rail shippers against the market power of railways, and new legislation for VIA Rail, which, unlike most Crown corporations, did not have separate legislation developed for it when it was established in 1977.

Straight Ahead is the culmination of extensive consultations that began in June 2000 with the Minister's Millennium Conference on Transportation and continued with roundtable discussions across the country headed by Mr. Collenette. It includes responses to many of the recommendations of the Canada Transportation Act Review Panel and of the Independent Transition Observer on Airline Restructuring.

"The consultations that formed the basis of this document were extremely wide-ranging and constructive," said Mr. Collenette. "A great debt of gratitude is owed to the many people who expressed opinions and perspectives, presented problems and offered solutions, and above all, recognized the fundamental importance that transportation plays in our daily life as Canada continues to move straight ahead."

Backgrounders outlining key directions in Straight Ahead, the changes to the Canada Transportation Act and VIA Rail are attached. The document, along with a summary text, is available online at www.tc.gc.ca/straightahead

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BACKGROUNDER
STRAIGHT AHEAD - A VISION FOR TRANSPORTATION IN CANADA

Straight Ahead sets out the government's objectives and strategy for a safe and secure, efficient and environmentally responsible transportation system. It proposes a common vision for all participants in the transportation system, one that will provide direction and purpose as the system adapts to meet the challenges of the 21st century.

Straight Ahead reflects careful consultation with a range of stakeholders in the industry, among users, and with provincial and territorial governments. Among other things, Transport Minister David Collenette convened a series of roundtable discussions with stakeholders to learn their perspectives on the transportation system and its future direction. Throughout 2001-2002, the Minister held roundtables in Halifax, Montreal, Ottawa, Toronto, Edmonton and Vancouver to discuss issues including the needs of shippers, large and small carriers, the special needs of the west and north, and urban transportation.

These consultations revealed a consensus that Canada's transportation policy is essentially sound and moving in the right direction, which was also the conclusion of the panel reviewing the Canada Transportation Act (CTA). Straight Ahead includes responses to many of the panel's recommendations and those of the Independent Transition Observer on Airline Restructuring.

The government's vision for the transportation system is guided by seven principles. They include:

• the highest practicable safety and security of life and property;
• efficient movement of people and goods;
• respect for the environment;
• user pricing that better reflects the full costs of transportation activity, and transportation infrastructure decisions that meet user needs;
• reasonable access to the national transportation system for Canada's remote regions;
• accessibility for persons with disabilities; and
• partnerships and integration among jurisdictions and with the private sector.

Straight Ahead also describes a number of new initiatives the government proposes to take and its longer-term priorities in five key areas.

Setting frameworks for an efficient transportation marketplace (Chapter 3)

The government's policy of deregulation, subsidy reduction, commercialization, privatization and related measures to favour competition and market forces has worked well. The government proposes to fine-tune this policy approach to stimulate further competition and efficiency where needed.

The Government of Canada believes that the transportation system of tomorrow should remain largely market driven, where government sets a competitive framework and intervenes only as a last resort. To support this, we will:

• continue our made-in-Canada policy on airline, gradually liberalize Canada's bilateral air agreements on a reciprocal basis, and put in place measures that will help lower barriers to participation in the domestic market for domestic operators;
• improve transparency in the advertising of air fares;
• adopt a comprehensive review process similar to that already in place for airlines, for transportation merger proposals in all modes under federal jurisdiction, such as for mergers between Canadian and U.S. railways;
• demonstrate our long-term commitment to passenger rail in Canada by making legislative amendments to strengthen publicly funded passenger and commuter rail services;
• introduce new legislation to confirm VIA Rail's mandate; and
• continue to take concrete steps to preserve and improve competition in the rail transportation sector and provide improved recourse and remedies for rail shippers against the market power of the railways. Previous policy reforms have helped make Canada's freight rail system one of the most efficient in the world, and recent initiatives such as the 2000 grain reforms are already producing real savings. The end result of the proposals in Straight Ahead will be to have an even more efficient, effective system with low freight rates and good service.

Managing and investing in transportation infrastructure (Chapter 4)

Where possible, commercialization and divestiture of government-owned transportation infrastructure will continue, with some fine-tuning in the way new entities are governed. Strategic infrastructure investments in support of competitiveness, sustainable growth and a well-integrated transportation system will be made in partnership with other levels of government and the private sector. This will include initiatives addressing urban transportation needs, such as public transit, and trade and passenger corridors, while remaining sensitive to the needs of rural and remote areas.

Since 1993, the Government of Canada has invested more than $8 billion in improving the country's infrastructure, much of it related to transportation.

Specifically, we will:

• continue to make strategic investments in infrastructure aimed at reducing congestion in our cities and bottlenecks at the border;
• place increasing emphasis on public transit in existing and future infrastructure agreements with provincial and territorial governments; and
• introduce the Canada Airports Act to clarify the roles of the government and airport authorities.

Protecting the environment (Chapter 5)

The Government of Canada is committed to fostering better environmental performance from the transportation sector. The transportation sector will be expected to assume its share of the responsibility to meet Canada's international obligations on climate change. In collaboration with others, the government will continue to address the environmental impact of transportation. It will promote respect for the environment as a criterion in transportation planning, find ways to implement Canada's environmental obligations, and curb pollution in the transportation sector. To accomplish this, we will:

• enshrine our commitment to environmental responsibility in the National Transportation Policy declaration set out in the Canada Transportation Act as a clear signal of the new prominence that will be given to environmental issues in Canada's transportation policies of the future;
• promote vehicles and fuels that produce fewer emissions;
• promote increased use of alternative modes of transportation for passenger travel and more efficient transportation of goods;
• launch a national awareness campaign designed to help Canadians make more environmentally sustainable transportation choices in their day-to-day lives; and
• collaborate with industry, other governments and transportation experts to determine the full cost of transportation, including environmental impacts, and to better reflect this in pricing.

Improving safety and security (Chapter 6)

With one of the safest and most secure transportation systems in the world, Canada will continue to maintain its leadership, which springs from a long tradition of research, problem solving, and government action. Safety and security will remain the cornerstones of Canada's transportation policy. A safe and secure transportation system is an essential element of this government's commitment to protecting the health and well-being of Canadians. It is also essential for the efficient flow of goods both domestically and to and from our trading partners.

Starting from a position of strength, we enhanced our system with swift and effective action following the tragic events of September 11, 2001, to reinforce safety and security across all modes of transportation. We will continue to build on those efforts to further promote the "safety culture" within the transportation community.

We will also:

• work with industry, other departments and other governments to continue implementing security plans covering each mode of transportation;
• continue to engage our partners and stakeholders in the pursuit of the safest transportation system in the world, including through mode-specific programs targeted to improve transportation safety; and
• continue to promote a cooperative approach to the domestic and international harmonization of transportation safety and security standards.

Encouraging innovation and skills development (Chapter 7)

Innovation in the transportation sector is essential not only to maintain the sector's own growth and competitiveness, but also to contribute to national priorities like greenhouse gas reduction, safety and security, and improving the quality of life in cities. Innovation in this sector will support Canada's Innovation Strategy.

Transport Canada will:

• focus on advancing its research and development program in five areas, namely intermodal integration, congestion, environmental pressures, safety and security, and accessibility;
• work with industry, government and academic partners to:
  • identify areas of potential skills shortages and develop responses to them;
  • stimulate the adoption of e-commerce in the transportation sector; and
  • promote the adoption of intelligent transportation systems.

Next Steps

As a concrete first step to fulfilling a number of commitments set out in Straight Ahead, Minister Collenette also introduced amendments to the Canada Transportation Act on February 25, 2003. The amendments to the act incorporate a number of the recommendations made by the Canada Transportation Act Review Panel.

Separate backgrounders on the Canada Transportation Act amendments and on VIA Rail, for which new legislation is being established, are available.

Long-term changes stemming from this strategy will be seen over the coming decade through government policy directions supporting a safe, secure, efficient and environmentally responsible transportation sector.

For a more detailed list of the Government of Canada's commitments in Straight Ahead, please see the backgrounder, Straight Ahead - Key Commitments.

February 2003

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BACKGROUNDER
STRAIGHT AHEAD - KEY COMMITMENTS

The following is a compilation of the key commitments made in each of the chapters of Straight Ahead. Where it is thought necessary, contextual information is provided (in bracketed italics) to elaborate on the commitment. For more complete information, please refer to the chapter as indicated. A glossary of terms used in the document is also available at www.tc.gc.ca/straightahead/glossary.htm.

Action is already being taken to address a number of these commitments through amendments to the Canada Transportation Act, introduced by Transport Minister David Collenette on February 25, 2003. More details on the amendments are available in the backgrounder entitled Canada Transportation Act Amendments.

Marketplace Framework (Chapter 3)

The Government of Canada believes that the transportation system of tomorrow should remain largely market driven, where the government sets a competitive framework and intervenes only as a last resort.

Air

The government will:

• update its legislative tools as needed to ensure that Canada's aviation markets are and remain competitive and free of abuse;
• introduce legislation to assist domestic air carriers in meeting their needs for interlining, joint fares, pro-rates and loyalty marketing programs where required to enhance competition without causing hardship;
• continue the gradual liberalization of Canada's bilateral air agreements, using the 1995 Canada-United States Open Skies agreement as a guide; and
• set minimum standards of airline commercial behaviour when essential for the protection of consumers and consistent with a fully deregulated market. (This includes ensuring that pricing information in air travel advertising is complete and not misleading, that better public access to airline terms and conditions of carriage is provided, and that the interests of passengers are protected).

Freight rail

The government proposes to amend the Canada Transportation Act to:

• remove the requirement for the Canadian Transportation Agency to assess whether a shipper would suffer "substantial commercial harm" before giving the shipper access to a regulatory remedy against a carrier. (Repeal of this provision will make it possible to request rulings by the Canadian Transportation Agency with the focus on the behaviour of the railway, rather than the effects on the shipper); and
• retain the provision requiring that Canadian Transportation Agency - prescribed rates and conditions of service be "commercially fair and reasonable to all parties;"
• retain the current level of service provisions because they are working well;
• retain, with some amendments, the existing Final Offer Arbitration provisions in the Canada Transportation Act, which work well. For disputes under $750,000, the arbitrator would be required to consider whether alternative, effective, adequate and competitive means of transportation are available. (Final Offer Arbitration is available to any shipper who is dissatisfied with the rate or conditions of service proposed by a railway. The Final Offer Arbitration process requires an independent arbitrator to review the final offers made by the shipper and railway company and to select one or the other);
• amend the Final Offer Arbitration provisions to clarify: that a group of shippers may join in one proceeding and submit one offer for arbitration when their offer seeks a common relief; that Final Offer Arbitration applies to incidental services such as car cleaning; and that other persons subject to railway charges, such as terminal operators, may apply for Final Offer Arbitration;
• retain the current interswitching provisions with the clarification that the Canadian Transportation Agency be allowed to prescribe maximum rates, thereby allowing parties to agree to lower rates. (This means a shipper with access to only one railway at the beginning or end point of a shipment can have the shipment transferred to another carrier at an interchange point within 30 kilometres. The Canadian Transportation Agency would set the rate for access to the interchange point);
• improve the provisions on regulated rates for shippers to an interchange point with a second carrier by removing the obligation for a shipper to have an agreement with the connecting carrier. In determining whether a shipper should be granted a regulated connection rate, the Canadian Transportation Agency would be required to decide whether the level of the rate proposed by the railway company is substantially above rates for similar commodities under similar conditions and whether alternative transportation is available. Guidance would be given to the Canadian Transportation Agency in setting the regulated connection rates; and
• retain the current running rights provision for rail companies. (The current provision permits any federally regulated railway, including U.S. based railways, to apply to the Canadian Transportation Agency for running rights over the lines of another federal railway in Canada, where a commercial agreement cannot be reached. The Canadian Transportation Agency has determined that running rights are available as an extraordinary remedy if there is evidence of market abuse or failure and that the current provision does not allow a guest railway to solicit traffic on the line of the "host" railway).

Grain transportation

The government:

• will continue to monitor the impact of its May 2000 grain policy reforms before making decisions on further policy changes; and
• proposes that the Canada Transportation Act be amended to require railways to publish a list of sidings available for loading grain producer cars and to give a 60-day public notice before removing such sidings from operation. (Sidings are the places where farmers load their grain into rail cars. This provision would give farmers time to make alternative arrangements or to work with the railway to keep such sidings in operation).

Passenger rail

The government proposes to:

• establish VIA Rail's mandate in legislation. (Unlike most Crown corporations, when VIA Rail was established in 1977 through incorporation under the Canada Business Corporations Act, separate legislation was not developed for it. This new legislation, the VIA Rail Canada Act, will confirm and continue VIA Rail's current mandate, structure, powers and operations. More details are available in the backgrounder entitled, VIA Rail);
• amend the Canada Transportation Act to allow publicly funded passenger rail service providers, when commercial negotiations are unsuccessful, to seek adjudication from the Canadian Transportation Agency on the terms and conditions of operation on federal rail lines, including fees and service charges by the host railway; and
• make public the details of future contracts between railways and publicly funded passenger rail service providers. Existing agreements would also be made public unless one of the parties can demonstrate to the satisfaction of the Canadian Transportation Agency that the contract contains sensitive information and that it would be harmed by its release.

Surplus urban rail corridors: Urban transit and discontinuance

The government proposes that:

• the rail line discontinuance process incorporate an offer of sale to urban transit authorities before municipal governments;
• railways be required to offer spurs and sidings in urban areas and passenger stations to governments and urban transit authorities, for not more than net salvage value, before removing them from service;

(These two recommendations would modify current provisions governing how companies can dispose of railway lines that are no longer required for freight service. Currently, the lines must first be offered for continued railway operations, then to governments. The changes would allow urban transit authorities, which in some urban areas serve several municipalities, to receive such offers, so that they would be able to acquire corridors that could be used for urban transit. Similarly, the current provisions would be extended to line segments known as "spurs" and "sidings" which in some cases have potential for commuter rail use) .

• the line transfer and discontinuance provisions of the Canada Transportation Act require railways to provide notification to governments, urban transit authorities and the Canadian Transportation Agency at certain stages during the process;
• governments and urban transit authorities be able to seek a determination of net salvage value from the Canadian Transportation Agency after receiving an offer from a railway company and before committing themselves to an offer to purchase; and
• (These recommendations, which will be most useful in urban areas where the potential for alternative use of rail corridors is greatest, will give more information throughout the process, including allowing the potential purchaser to have the net salvage value of the line determined before they commit to an offer).
• the Canada Transportation Act be amended for leased lines that revert back to the transferring railway and on which the transferring railway does not resume service, so that:
  • before the transferring railway dismantles the line, it must advertise the line for sale on a commercial basis and, if a sale does not take place, it must then offer it to governments; and
  • if the line is grain-dependent, the transferring railway must pay $10,000 per mile annually over three years to the local municipalities.

(Allowing for other operators to take over service would give better protection for such lines. When this is not successful and service ceases, the provisions would provide compensation to affected municipalities).

Railway noise

The government proposes that:

• the Canada Transportation Act be amended to require that railways keep any adverse noise effects to a minimum when constructing or operating a railway, taking into consideration the requirements of railway operations and services and the interests of affected communities; and
• the Canadian Transportation Agency be given the statutory power to:
  • develop and make public guidelines for the resolution of noise complaints;
  • require a complainant to demonstrate to the Agency that all voluntary or collaborative measures have been exhausted before the complaint is considered by the Agency; and
  • investigate noise complaints and require a railway company to undertake certain actions in order to keep any adverse noise effects to a minimum.

Commercial motor vehicles

Transport Canada will continue to:

• take a leadership role to ensure that a consistent national safety rating regime is put in place;
• seek greater compatibility in North American standards through the existing North American Free Trade Agreement and bilateral mechanisms; and
• work cooperatively with provincial and territorial governments to ensure that a consistent national hours of service regime for commercial vehicle drivers is put in place. (A new national hours of service standard was developed by the Canadian Council of Motor Transport Administrators and approved by the Council of Ministers Responsible for Transportation and Highway Safety. The new standard would increase the minimum daily off-duty time for commercial drivers who operate through more than one province from eight to 10 hours, an increase of 25 per cent, and reduce the maximum workday by 12.5 per cent, from 16 to 14 hours. For more information, please visit http://www.ccmta.ca/english/producstandservices/news.cfm).

Bus

• The Minister of Transport is reviewing the December 2002 recommendations of the Standing Senate Committee on Transport and Communications regarding intercity bus issues, including rural and small community bus access and will be consulting with his provincial and territorial colleagues, as well as with stakeholders, in due course.

Marine

Transport Canada will:

• continue to contribute to international shipping policy developments. (International efforts have been a key aspect of forming maritime transport policy in Canada. Our contributions to the Organization for Economic Cooperation and Development and the International Maritime Organization have ensured that Canada remains at the forefront of shaping economic policy as it relates to the maritime shipping industry);
• monitor the impact of the Shipping Conferences Exemption Act, 2002, and its effects on competition. (Much of international maritime container cargo is handled by shipping lines that belong to various shipping conferences, which are essentially associations of ocean carriers that regulate rates and conditions of ocean transport among member lines. Canada and other countries exempt such agreements from competition law); and
• participate, in partnership with the industry, in a review of the benefits of marine transportation. (The joint study, for which terms of reference are currently being developed, will examine all marine and marine-related services in Canada. It will be broad ranging and address such areas as the environmental, security and safety impacts of marine transportation and the contribution of the marine industry to the competitiveness of Canadian industry).

Mergers

• The government proposes that a new process be introduced to review significant merger or acquisition proposals above a specified threshold involving carriers or transportation service providers under federal jurisdiction. The new process would be an extension of the existing merger review process for airlines adopted in 2000.
• Notice of proposed transactions involving transportation undertakings notifiable to the Commissioner of Competition would also be given to the Minister of Transport. The Minister would have the authority to appoint a person or the Canadian Transportation Agency to review the proposed transaction where the Minister determines that the proposal raises sufficient public interest issues as it relates to national transportation.
• The Minister would receive the recommendations of the Commissioner of Competition, including proposed measures, before taking a recommendation to Cabinet.

Data for decisions

• The government proposes to amend the Canada Transportation Act (CTA) provisions on data collection to ensure the availability of consistent, useful information on the various elements of the transportation system. (This corresponds to the recommendation made by the CTA Review Panel and the Independent Transition Observer for Airline Restructuring who highlighted the need for improved information about the transportation industry, specifically on traffic volumes and prices, to be available for policy analysis by government, industry and the public).

Accessibility

The government will:

• evaluate the impact of existing legislative provisions and codes of practice and determine whether other measures are needed to improve access to the federally regulated transportation system; and
• work with the community of persons with disabilities, senior citizens, and the transportation industry to develop a long-term, multi-modal federal strategy for enhancing the accessibility of the national transportation system.

Mediation

• The government proposes to amend the Canada Transportation Act to give the Canadian Transportation Agency the statutory authority to engage in mediation with respect to matters within its jurisdiction while ensuring adequate safeguards to maintain its quasi-judicial role. (The Canada Transportation Act Review Panel supported the use of alternative dispute resolution processes with respect to matters under the responsibility of the Canadian Transportation Agency. Mediation can be simpler, faster, less litigious and less costly, and could bring the parties closer together before the Canadian Transportation Agency exercises its adjudication role.

Language

• The Government of Canada will continue to address compliance with the provisions of the Official Languages Act by exercising appropriate oversight and discussing enforcement measures for improving the situation with affected parties.

Infrastructure (Chapter 4)

Where possible, commercialization and divestiture of government-owned transportation infrastructure, such as ports and airports, will continue, with some fine-tuning in the way new entities are governed. Strategic infrastructure investments in support of competitiveness, sustainable growth and a well-integrated transportation system will be made in partnership with other levels of government and the private sector.

• The government will complete its commercialization and divestiture program wherever possible, fine-tune the governance models of those elements of the national transportation system that have been commercialized and explore new avenues for commercialization where feasible. Government support will continue to be provided to address new security issues and extraordinary events.
• Building on the September 2002 Speech from the Throne commitment to "put in place a 10-year program for infrastructure to accommodate long-term strategic initiatives essential to competitiveness and sustainable growth", the government will continue to make selected strategic investments in partnership with other levels of government and the private sector, including transportation investments that will help reduce congestion in our cities and bottlenecks in our trade corridors and assist in meeting our climate change and clean air objectives.
• In areas of federal responsibility and in collaboration with its partners, where applicable, the government will continue to address the issue of reasonable access by remote communities to the national transportation system.

Airport governance

• The government will introduce a bill, the Canada Airports Act, to clarify the respective responsibilities of the government and of airports of national significance and set out requirements for airport authorities respecting governance, accountability, and transparency as part of economic oversight. (The proposed legislation will build on Canada's National Airports Policy, which was announced in 1994 and provides a framework that enabled the government to promote the commercialization of the 26 major airports that make up the National Airports System, and which handle approximately 94 per cent of all passengers).

Airport rent

• A review by Transport Canada of the rent policy for the 26 National Airports System airports is under way. The government will examine its findings and is committed to balancing the interests of all stakeholders, including the air industry and Canadian taxpayers, in establishing its future policy on rent.

Airport divestiture

• Transport Canada is committed to completing the commercialization of the 26 National Airports System airports and to divesting the remaining regional/local and small airports that are scheduled for transfer. (On January 30, 2003, an agreement was signed to transfer Prince George Airport, the last of the 26 National Airports System airports to be transferred to, and managed by, local authorities. The official transfer will take place March 31, 2003. The regional and small airports not yet divested are scheduled to be transferred to local control by March 31, 2005).

Airport viability

• Transport Canada will conduct a study of the viability of regional and small airports in 2003.

Port divestiture

• The government intends to complete, by March 31, 2003, wherever practicable, the planned divestiture of ports and harbour beds within the terms of the existing program extension. (The 1995 National Marine Policy, which aimed to reduce overcapacity and improve the efficiency of the port system in Canada, established three categories of ports: Canada Port Authorities, regional/local ports, and remote ports. In 1996, the Port Divestiture Program was established to seek local ownership and control of regional/local and remote ports. To date, Transport Canada has divested 436 of these 549 ports, and saved Canadian taxpayers more than $122 million) .
• Transport Canada will consider options for the future of its remaining ports and will conduct a full program evaluation of port divestiture.

Canada Marine Act

• Following presentation of the findings of the Canada Marine Act Review Panel in 2003, the government will determine what further refinements to the Act may be required.

Ferries

• With the overall objective of improving ferry services, the government will continue to explore cost reductions and efficiency improvements through new ways of doing business including the management of its real property assets.

Marine navigation services

• Transport Canada, in partnership with the Department of Fisheries and Oceans and industry partners, will evaluate alternative methods of delivering marine navigational services. (This is in response to concerns raised by representatives of the domestic marine industry regarding the provision of essential services, such as pilotage, providing and setting buoys and signals, traffic control and ice-breaking).

International bridges and tunnels

• The government will provide for a process for authorizing new international bridges and tunnels. The government proposes to amend the Canada Transportation Act to require the authorization of the Governor-in-Council (GIC), upon the recommendation of the Minister, for new international bridge or tunnel crossings for vehicular traffic. The proponent would have to meet any conditions stipulated by the GIC, as well as existing federal legal requirements (such as navigation, environment, boundary waters, etc.)

Road pricing

• Recognizing the challenges associated with jurisdictional and funding issues, Transport Canada intends to explore with provincial and territorial governments the implications of possible new governance and investment models for road transportation and urban transit.

Integrated transportation

• The government will place a high priority, when making strategic investments, on intermodal transportation, intelligent transportation systems, and planning and feasibility studies in support of such investments in the context of an integrated national transportation system.

Transportation corridors

• The government will place a high priority, when making strategic investments, on trade and passenger corridors such as the national highway system, federal roads and bridges, transportation border infrastructure, shortline freight infrastructure, road rail grade crossings, and passenger rail revitalization.

Urban transportation

• The government will place a high priority, when making strategic investments, on urban transportation needs, such as public transit, major urban bypasses, and road and rail grade separations.

Rural issues and remote access

• The government intends to pursue its policy of encouraging local control of transportation infrastructure and of finding innovative arrangements to support transportation in rural Canada. (For example, the government will continue its policy of divestiture of airports and ports, and its policies for shortline railways) .
• The government will continue to seek the best means to provide reasonable access to the national transportation system for remote communities where such access is not financially self-sufficient but essential to their survival.

Protection of the Environment (Chapter 5)

• The Government of Canada's commitment to environmental responsibility as outlined in Straight Ahead will be included in the declaration of National Transportation Policy in the Canada Transportation Act. The government will continue to address the environmental impact of transportation in collaboration with others, and the transportation sector will be expected to assume its share of the responsibility to meet Canada's international obligations on climate change.

Understanding the full cost of transportation

• Transport Canada will look to increase its understanding of the full cost implications of, and better pricing signals for, the use of different modes of transportation. (Transport Canada is committed to evaluating the impact of internalising the environmental and social costs of transportation decisions. The department is interested in collaborating with industry and other governments in developing appropriate charging mechanisms for all modes, initially incorporating the real cost of infrastructure, and eventually including environmental and social costs).

Integrating environmental considerations

• Transport Canada will integrate environmental considerations more systematically in the decision-making process for transportation and specifically incorporate environmental responsibility as a fundamental principle in the National Transportation Policy set out in the Canada Transportation Act.

Sustainable development

• Transport Canada will fully implement its Sustainable Development Strategy 2001-2003 and build on its success in developing future strategies.

Clean air

• Transport Canada will continue to work with partners on improving standards and reducing air emissions from transportation.

Climate change

Transport Canada will:

• continue implementing the transportation component of the Action Plan 2000 on Climate Change, and collaborate with other government and industry partners to implement the new measures identified in the Climate Change Plan for Canada;
• continue to lead in the development of additional measures in the transportation sector, consistent with Canada's national strategies on greenhouse gas emissions reduction; and
• work to understand the vulnerabilities of the transportation system to the effects of climate change and to develop effective strategies to respond to harmful impacts.

Clean water

• Transport Canada will continue to work with partners and stakeholders to develop Canadian standards, monitor compliance, influence global marine transportation standards, and ultimately reduce and prevent water pollution. (The government will continually explore options to enhance regulations and practices for effective ballast water management to prevent or control the discharge of effluents and wastes and respond to accidental spills and improve the effectiveness of monitoring and inspection programs to eliminate substandard shipping, including strong port state control measures).

Technology

• Transport Canada will promote innovation in transportation by supporting the development and implementation of advanced technologies to support environmental sustainability.

Transport choices

• Transport Canada will work with other jurisdictions to augment the availability of more environmentally respectful forms of transportation.

Urban congestion

• The Government of Canada will continue to work with provinces, municipalities and stakeholders to minimize congestion and pollution from motor vehicles in urban areas.

Awareness

• Transport Canada will expand its efforts to give Canadians better information on environmentally sustainable transportation choices by launching a national awareness campaign.

International collaboration

• Transport Canada will enhance efforts to collaborate with the United States and the international community to address transport-related environmental issues.

Safety and Security (Chapter 6)

• Canada has always had one of the safest and most secure transportation systems in the world. Since the tragic events of September 11, 2001, our world-class system has become even stronger as a result of actions taken by the Government of Canada in conjunction with the transportation community. Canada will continue its leadership, which springs from a long tradition of research, problem solving, and government action to achieve these results.

Strategic Safety and Security Plan

• Transport Canada will continue to implement the strategies of the current Strategic Plan for Safety and Security. A formal evaluation of the plan's performance and a subsequent update of the plan will be completed. (The plan focuses on safe practices, risk reduction, stakeholder awareness, effective intervention and measurement of performance. It also serves as an umbrella under which mode-specific strategic plans and programs operate).

Performance-based

• Transport Canada will continue reforms aimed at establishing a performance-based approach to safety and security.

Regulatory reform

• Transport Canada will continue to work to revise transportation safety statutes and regulations, as required, to enhance the safety and security of the transportation system. (Many transportation safety statutes have been established or revised recently to provide the direction, authority and flexibility for Transport Canada to develop safety management systems, requiring industry to develop strategies for managing the safety of their operations and to report on these strategies to the department).

Consultation

• Concerted efforts will continue to be made to ensure a transparent legislative and regulatory process that engages our partners and stakeholders in the pursuit of the safest transportation system in the world.

Safety culture

• Transport Canada, with its partners, will continue to foster a strong safety culture in support of the safest transportation system in the world.

Harmonization

• Transport Canada will continue to promote a cooperative approach to the domestic and international harmonization of transportation safety and security standards.

Road Safety Vision 2010

• Transport Canada will collaborate with all its Road Safety Vision 2010 partners and show national leadership to achieve the program's objective. (For more information, please visit: http://www.tc.gc.ca/roadsafety/safedrivers/trafficsafety).

Flight 2005

• Transport Canada will continue working with the aviation industry to further improve aviation safety in Canada in pursuit of Flight 2005 targets.(For more information, please visit: http://www.tc.gc.ca/CivilAviation/flight2005/menu.htm).

Rail Safety Direction 2006

• Transport Canada will continue to work with its partners to contribute actively to meeting the objectives of Rail Safety Direction 2006 and to develop and implement integrated and effective rail safety programs.(For more information, please visit: http://www.direction2006.com).

Marine safety

• Transport Canada will work in partnership with the marine industry toward the future for marine safety as envisaged in The Way Ahead and The Next Wave.

Dangerous goods

• Transport Canada will develop and implement Transportation of Dangerous Goods, Target 2010.

Security

• The government will seek to prevent, minimize and respond effectively to threats to the security of the national transportation system while promoting an efficient border. (The Government of Canada has taken action in all transportation modes to enhance security since the tragic events of September 11, 2001, and will remain vigilant in promoting transportation security).

Plans integration

• Transport Canada will work with stakeholders, in a timely manner, with the goal of aligning its planning horizon to the year 2010 for strategic safety and security initiatives in all modes of transport.

Innovation and Skills (Chapter 7)

Innovation in the transportation sector is essential not only to maintain the sector's own growth and competitiveness, but also to contribute to national priorities like greenhouse gas reduction, safety and security, and improving the quality of life in cities.

Research and development

Transport Canada will:

• work with transportation and non-transportation sector stakeholders to increase transportation-related research and development;
• explore, with partners, mechanisms to facilitate increased research on transportation and transportation-related issues in the private sector and at universities and will explore the range of existing federal programs to identify opportunities to further transportation research and development (R&D); and
• explore interest in establishing a visiting chair program at Transport Canada to create opportunities for research on government priorities with the university sector.

Intelligent Transportation Systems

Transport Canada will continue to:

• work with its partners in developing an Intelligent Transport Systems (ITS) R&D Plan in an effort to accelerate commercialization of knowledge and technology uptake in the area of ITS;
• promote and support the adoption of ITS technologies to advance the safety, efficiency and security of the multi-modal transportation system, provide increased access to transportation services, and reduce fuel consumption and environmental harm;
• (Intelligent Transportation Systems are technologies and their applications that can help make transportation systems safer, more secure, efficient, productive and environmentally friendly. They include applications such as advanced systems for traveller information, traffic management, public transport, commercial vehicle operations, emergency response management and vehicle safety).

Logistics technology

• Transport Canada will continue working on the Industry Canada-led initiative to develop, with other government and industry partners, a technology roadmap for logistics.

E-commerce

• Transport Canada will explore means of stimulating the adoption of e-commerce technology by the transportation sector consistent with the Connecting Canadians agenda.

Government On-Line

• Transport Canada will increase the provision of services to the sector through the Government On-Line initiative.

Sector councils

• Transport Canada will continue to work in close collaboration with transportation-related sector councils, as well as assist sectoral partners considering the creation of new councils.

Skills

Transport Canada will:

• work with sectoral partners to identify areas of potential skills shortages in the transportation sector and the means of addressing these shortages; and
• explore partnerships to promote and support programs leading to the development of transportation-specific skills and knowledge in Canadian universities and colleges.

February 2003

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BACKGROUNDER
CANADA TRANSPORTATION ACT AMENDMENTS

The Government of Canada is proposing a series of amendments to the Canada Transportation Act (CTA) to fine-tune the legislation's provisions. The introduction of this bill on February 25, 2003, is the first step towards fulfilling a number of commitments set out in Straight Ahead - A Vision for Transportation in Canada, which Transport Minister David Collenette tabled the same day.

The Canada Transportation Act sets out frameworks for market competition in the transportation sector, it provides powers and a mandate for the Canadian Transportation Agency, and empowers the Minister of Transport to perform critical regulatory functions affecting marketplace competition.

The proposed amendments to the Canada Transportation Act reflect broad consultations with industry, stakeholders, and provinces and territories. They include responses to many of the recommendations that came out of reports of the Canada Transportation Act Review Panel and of the Independent Transition Observer on Airline Restructuring, which were also based on extensive public consultations.

The changes proposed to the Canada Transportation Act are in three major categories, as follows.

Air Transportation

Consumer protection is a key element of this category. The proposed amendments include:

• rules requiring airlines to include the total price of air travel, including all airline-generated surcharges, in their price advertisements;
• prohibiting carriers from advertising products they do not actually sell - for example, one-way travel when only return tickets can be bought. These rules will also apply to resellers; and
• new requirements that the terms and conditions of flights be posted on Internet sites used to sell air travel. The Canadian Transportation Agency is given the power, on its own initiative, to investigate unreasonable or discriminatory terms and conditions for travel on domestic air services.

Another key element is the protection of domestic competition. The proposed amendments include:

• giving the Canadian Transportation Agency the power to compel domestic carriers to provide other requesting carriers with access to their loyalty marketing plans, interlining, joint fares and pro-rates, if needed, to enhance competition and if no financial hardship is caused.

Rail Transportation

The amendments in this category include:

• improving the existing shipper protection regime for rail customers and removing the requirement for the Canadian Transportation Agency to assess whether a shipper would suffer "substantial commercial harm" before giving the shipper access to a regulatory remedy against a carrier;
• giving the Canadian Transportation Agency authority to review railway noise complaints, and requiring that railways keep any adverse noise effects to a minimum when constructing or operating a railway, taking into consideration the requirements of railway operations and services and the interests of affected communities;
• modifying current provisions governing how companies can dispose of railway lines that are no longer required for freight service. Currently, the lines must first be offered for continued railway operations, then to governments. The changes would allow urban transit authorities, which in some urban areas serve several municipalities, to receive such offers, so that they would be able to acquire corridors that could be used for urban transit. Similarly, the current provisions would be extended to line segments known as "spurs" and "sidings" which in some cases have potential for commuter rail use;
• improving the policy environment for passenger rail, including improved arbitration of disputes with track owners, to allow publicly funded passenger rail service providers, when commercial negotiations are unsuccessful, to seek adjudication from the Canadian Transportation Agency on the terms and conditions of operation on federal rail lines, including fees and service charges by the host railway; and
• altering the conditions for applications for final offer arbitration so that they cover incidental services, charges, terms or conditions and so that shippers may come together with a joint offer under a single application.

Other

Other highlights among the amendments in the Canada Transportation Act include:

• creating a new VIA Rail Canada Act to put VIA Rail on the same legislative footing as most other Crown corporations, since separate legislation was not developed for the corporation when it was established in 1977 (for more information, refer to the backgrounder entitled VIA Rail);
• enshrining the Government of Canada's commitment to environmental responsibility in the National Transportation Policy declaration set out in the Canada Transportation Act as a clear signal of the new prominence that will be given to environmental issues in Canada's transportation policies of the future;
• expanding the review process, similar to that already in place for airlines, for transportation merger proposals, such as for mergers between Canadian and U.S. railways;
• empowering the Canadian Transportation Agency to engage in mediation with respect to matters within its jurisdiction while ensuring adequate safeguards to maintain its quasi-judicial role. Mediation can be simpler, faster, less litigious and less costly, and could bring the parties closer together before the Canadian Transportation Agency exercises its adjudication role; and
• establishing a streamlined approval process for the construction of new international bridges and tunnels to provide authority for the federal government to consider issues of national interest as related to such projects.

February 2003

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BACKGROUNDER
VIA RAIL

The Government of Canada has proposed amendments to the Canada Transportation Act, which includes creating the VIA Rail Canada Act. When VIA Rail was established in 1977, through incorporation under the Canada Business Corporations Act, separate legislation was not developed for it. This new legislation will confirm VIA Rail's current mandate.

The legislation fulfils a commitment made in Straight Ahead: A Vision for Transportation in Canada. This document sets out the government's objectives and strategy for a safe and secure, efficient and environmentally responsible transportation system.

VIA Rail Canada Inc., is Canada's national passenger rail service. The company operates more than 480 trains weekly, on 14,000 kilometres of track connecting more than 450 Canadian communities. In 2001, VIA Rail carried almost four million passengers almost 1,500 million kilometres and generated $253.8 million in total operating revenues. Its headquarters are in Montreal and the company operates three maintenance centres, in Montreal, Winnipeg and Vancouver.

Since 1990, VIA Rail has reduced operating costs and increased revenues dramatically. VIA Rail's annual operating subsidy has declined from $350 million in 1990 to $170 million in 2001. In the same period, its trains covered five per cent more distance and passenger volumes increased by 15 per cent. VIA Rail now earns twice as much revenue per train, at lower costs, and delivers a higher quality of service than ever before. A firm commitment to safety, customer service, innovation and sound financial controls has made VIA Rail one of the best-managed transportation companies in Canada.

In April 2000, Transport Minister David Collenette announced a five-year, $402 million capital investment to modernize the passenger rail network. The investment was targeted for fleet renewal, signalling, infrastructure improvements, refurbishment of stations and environmental waste management. In making the announcement, Mr. Collenette emphasized that passenger rail would play a critical role in meeting the country's future transportation needs, and alleviating challenges such as traffic congestion and pollution in major urban centres.

In June 2001, VIA Rail announced a commuter rail strategy to expand the frequency of its existing services by establishing partnerships with commuter rail agencies in Toronto, Montreal and Ottawa.

The company has also undertaken a review of passenger rail service in Canada to examine creative and practical ways of ensuring safe and quality service for Canadians while minimizing the fiscal burden on the taxpayer.

February 2003