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Section II: Analysis of Program Activity by Strategic Outcome

2.1 Analysis of Program Activity by Strategic Outcome

Program Activity: Economic regulation of the federal transportation system

Description: Economic regulation of air, rail, and marine transportation through the administration of laws, regulations, voluntary codes of practice, educational and outreach programs and through the resolution of disputes. As an independent quasi-judicial administrative tribunal reporting to the Parliament of Canada through the Minister of Transport, the Canadian Transportation Agency makes its decisions independently, on a wide range of matters affecting Canadian transportation.

The Agency's program activity is delivered via five program sub-activities: air transportation, rail transportation, marine transportation, accessible transportation, and members and regulatory support.

In support of its strategic outcome, the Agency is both an economic regulator and a quasi-judicial tribunal. As a regulator, the Agency has a mandate to administer the economic regulatory provisions affecting all modes of transport under federal jurisdiction found in various Acts of Parliament. It makes decisions on a wide range of matters involving federally regulated transportation. It also regulates the national transportation system through the administration of laws, regulations, voluntary codes of practice, education and outreach programs. As a quasi-judicial tribunal, the Agency operates like a court and has the authority to issue decisions and orders on matters within its jurisdiction through formal adjudication. The Agency resolves disputes between users of, service providers within, and others affected by, the national transportation system with regards to transportation services, rates, fees and charges, terms and conditions of carriage, accessibility and other matters. Since complaints drive many of the Agency's processes, it has developed ways of handling complaints quickly, effectively and fairly.

The Agency has identified three expected results for this program activity. These results allow the Agency to measure its performance in delivering its mandate, the key element of which is to make sound decisions within the time frames established in the legislation on issues and disputes affecting the transportation system and on matters specified in the legislation as the Agency's responsibility.

Canadian Transportation Agency Logic Model

Program Activity: Economic regulation of the federal transportation system

The program activity is divided into five sub-activities: air transportation, rail transportation, marine transportation, accessible transportation and members and regulatory support.

A. Sub-Activity: Air transportation

This sub-activity has a number of outputs, including:

1. Processing and resolving disputes related to:
   • Air travel complaints,
   • Application of tariff provisions, and
   • NAV Canada charges;
2. Validation of insurance renewals;
3. Compliance determinations; and
4. Decision on licence applications, charter permits and licence suspension orders.

B. Sub-Activity: Rail transportation

This sub-activity has a number of outputs, including:

1. Processing and resolving disputes related to:
   • interswitching,
   • noise and vibration,
   • competitive and single-line rates,
   • joint rates,
   • running rights,
   • level of service, and
   • joint track usage;
2. Issuing determinations related to:
   • net salvage value,
   • financial analysis,
   • composite price indices, and
   • Western revenue cap;
3. Issuing rail certificates of fitness; and
4. Assessing proposed railway projects.

C. Sub-Activity: Marine transportation

This sub-activity has a number of outputs, including:

1. Processing and resolving disputes related to:
   • pilotage charges,
   • Canadian port authority fees, and
   • shipping conference agreements; and
2. Coasting trade applications.

D. Sub-Activity: Members and Regulatory Support

This sub-activity has a number of outputs, including:

1. Providing legal advice and support;
2. Developing and applying the Agency's procedures and regulations;
3. Representing the Agency before the Courts; and
4. Maintaining a record of any rule, order, decision or regulation of the Agency.

E. Sub-Activity: Accessible transportation

This sub-activity has a number of outputs, including:

1. Processing and resolving disputes related to obstacles to the mobility of persons with disabilities;
2. Compliance with regulations and Codes of Practices; and
3. Preparing education materials.

The Agency has three expected results:

A. Fair, effective and efficient resolution of federal transportation issues.

B. Protection of economic and other interests of transportation users, carriers and other affected parties.

The first two expected result are supported by the air transportation, rail transportation, marine transportation and members and regulatory support sub-activities.

C. Removal of undue obstacles for persons with disabilities from the federal transportation network. The third expected result is supported by the accessible transportation and members and regulatory support sub-activities.

The three expected results ensure the Agency meets its strategic outcome of a fair and transparent economic regulatory regime that helps achieve a viable and accessible national transportation system.

Below is a brief summary of the Agency's achievements by expected result:

Ensuring fair, effective and efficient resolution of federal transportation issues

Part of the Agency's mandate is to resolve transportation issues within the federal transportation system pertaining to air, designated rail and marine modes of transportation and for certain accessibility matters, extra-provincial bus transportation. It does so either by investigating and making formal tribunal decisions on complaints and ordering corrective measures as required, or by helping parties resolve their issues through an alternate dispute resolution process of mediation or facilitation. In 2007-2008, the Agency:

• resolved 807 disputes; and
• implemented measures to improve service levels, as resolving more complex complaints within the 120-day statutory deadline continued to pose a significant challenge.

Removing undue obstacles for persons with disabilities from the federal transportation network

The Agency contributes to improving access to the federal transportation system for persons with disabilities by resolving complaints, developing standards and carrying out education initiatives. In 2007-2008, the Agency:

• issued 10 rulings ordering corrective actions for the removal of undue obstacles to the mobility of persons with disabilities;
• resolved 46 accessibility complaints through facilitation, mediation and formal rulings;
• promoted accessible transportation and uniform service standards for Canadians with disabilities travelling within Canada and abroad; and
• released a new Passenger Terminal Accessibility Code of Practice and an accompanying guide.

Protecting the economic and other interests of transportation users, carriers and other affected parties

The Government's transportation policy promotes competition and acknowledges market forces. It also recognizes that regulation and strategic public intervention may be required to protect consumers, shippers and Canadian carriers in all modes. The goal is to ensure Canada has an economic and efficient transportation system that does not unduly favour, or reduce the inherent advantages of any particular mode of transportation. In 2007-2008, the Agency:

• after reviewing compliance with the air licensing requirements, processed 1,687 air licensing applications, including applications for new licences as well as suspensions, cancellations and reinstatements;
• issued 1,216 charter permits and denied five permit requests;
• achieved average processing times of 12 days for charter permits and 18 days for coasting trade applications;
• participated in negotiations or consultations with 11 countries and the European Union for new or amended bilateral air agreements or arrangements;
• after investigating suspected illegal air operations, identified 15 contraventions;
• after determining that adequate liability insurance was in place, the Agency amended eight rail certificates and processed two cancellations;
• after assessing their environmental impact, allowed two railway construction projects to proceed, and continued to monitor 17 other projects for their potential effect on the environment;
• determined that Canadian Pacific Railway Company had exceeded their revenue entitlement under the revenue cap regime for Western grain. The carrier was ordered to pay the excess amount as well as incur a penalty for a total of $3,948,371 to be paid to the Western Grains Research Foundation. Canadian National Railway Company's revenue was $2,105,869 below its revenue cap;
• considered 164 coasting trade applications to protect the interests of the Canadian marine industry and allow foreign vessels when no suitable Canadian ships are available; and
• issued one ruling that proposed increases in pilotage fees were not prejudicial to the public interest; and
• was prepared to mediate after an objection to tariff increases was filed. However, the dispute was settled before mediation took place and the objection was withdrawn.

The contribution of the air, rail, marine and accessible sub-activities are key in explaining the Agency's overall performance and are discussed in more detail below.

Spending and Contribution to Results by Program Sub-activity

Program Sub Activity	Fair, effective and efficient resolution of federal transportation issues	Removal of undue obstacles for persons with disabilities from federal transportation network	Protection of economic and other interests of transportation users, carriers and other affected parties
Air transportation	X		X
Rail transportation	X		X
Marine transportation	X		X
Accessible transportation		X
Members and regulatory support	X	X	X

Air Transportation

Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
8,831	9,388	8,890

Description and expected results

This sub-activity is responsible for:

• licensing air carriers that provide domestic or international publicly available air transportation services to ensure that carriers hold liability insurance and a valid Canadian aviation document, and that Canadian carriers are owned and controlled by Canadian citizens;
• administering a permit system for international charter operations to protect international passenger charter flight advance payments;
• participation in negotiation of international air transport agreements and administration and implementation of these international air transport agreements;
• participation in international aviation regulatory organizations (e.g. International Civil Aviation Organization);
• processing of applications for extra-bilateral air services and approval of  cooperative arrangements such as leasing and code-sharing;
• administering international air tariffs to ensure that bilateral agreements are respected, while balancing the interests of all parties;
• resolving complaints related to carriers' application of their tariff provisions and on prices applied by air carriers on non-competitive routes within Canada to ensure that air carriers licensed to operate in Canada meet the legislative requirements in place to protect Canadians; and
• ruling on appeals of new or revised air navigational charges imposed by NAV CANADA to ensure that principles used to establish them are in compliance with the legislation.

Results achieved

Tariffs

Air carriers operating publicly available air services in Canada are required to publish a tariff, setting out their terms and conditions of carriage, fares, rates and charges. These tariffs must be made available to the public on request. With certain exceptions, tariffs for international services to and from Canada must be filed with the Agency.

The Agency helps to protect the interests of the travelling public, shippers and Canadian air carriers by ensuring that carriers abide by the terms and conditions of carriage, fares, rates and charges set out in their published tariffs; that proposed fares, rates, charges and terms and conditions of carriage are clear, just, reasonable and not unduly discriminatory; and that they are consistent with Canadian legislation and regulations, and with the relevant international agreements.

Most complaints the Agency receives from individuals centre on whether an air carrier has properly applied its tariff. If the Agency finds that it did not, the Agency can order the carrier to properly apply its tariff and to reimburse out-of-pocket expenses that the passenger may have incurred due to the incident. While a few of these complaints are resolved using the quasi-judicial process, the great majority are addressed using an informal process in which Agency employees investigate the complaints to determine their validity and, where appropriate, negotiate settlements between carriers and complainants.

During fiscal year 2007-2008, the Agency closed 683 such complaints through its informal process, as compared with 819 in 2006-2007. The Agency was able to close approximately 25 percent more complaints during 2006-2007 than the historical yearly average as a result of its targeted initiative to reduce the number of active cases carried forward into 2007-2008. The number of complaints that the Agency closed through its informal process during 2007-2008 is consistent with the historical yearly average.

The Agency also deals with complaints related to whether a tariff is just and reasonable.  In such cases, if the Agency determines that a particular provision of a tariff is either unjust or unreasonable, it may order the carrier to amend its tariff. No compensation is payable to the complainant under such circumstances.

A key decision issued in December 2007 involved Air Canada's denied boarding of a person for a flight from Toronto, Ont., to Edmonton, Alta. In its decision, the Agency stated that the need to seek volunteers before denying boarding is a key element of the denied boarding policy, and that there may have been confusion among Air Canada front-line staff about the procedures to follow in cases where it becomes necessary to deny boarding because of over-booking. Accordingly, the Agency ordered Air Canada to issue a bulletin to carrier staff involved in the denied boarding process, reminding such staff of Air Canada's denied boarding policy, as set out in the carrier's tariff, including the requirement to seek volunteers to relinquish their seats before denying boarding to passengers.

NAV CANADA charges

The Agency reviews appeals of new or revised charges for air navigation services implemented by NAV CANADA. Appeals can be filed only if it is established that NAV CANADA has not observed the statutory notice requirements, announcement requirements, or the charging principles set out in the Civil Air Navigation Services Commercialization Act.

During 2007-2008, NAV CANADA filed an announcement of revised service charges with the Agency. Pursuant to section 42 of the Civil Air Navigation Services Commercialization Act, these revised service charges were appealable to the Agency for a period of 30 days; however, no appeals were filed with the Agency.

Licensing and charters

As the Canadian licensing authority for publicly available air services, the Agency licenses Canadian air carriers to transport passengers and cargo within Canada. It also licenses Canadian and foreign applicants to operate scheduled and non-scheduled (charter) international air services to and from Canada. A licence applicant must have adequate liability insurance and must hold a Canadian aviation document issued by Transport Canada. If an applicant proposes to operate commercial air services as a Canadian air carrier, it must prove that it is Canadian-owned and controlled. Also, if a Canadian applicant proposes to use a medium or large aircraft, it must meet certain financial requirements. To maintain their licences, all licence holders must continue to hold a valid Canadian aviation document and have adequate liability insurance.

The new Canada-U.S. Agreement came into force on March 12, 2007, replacing the 1995 Canada-U.S. Agreement. Normally, all licences issued by the Agency for international services terminate with the signature of a new agreement; however, the Agreement specifically provided for authorities to continue until they are replaced with new licences in accordance with and reflecting the new Agreement. The Agency issued amended licences to all 21 Canadian carriers and 668 U.S. carriers under its authority. The replacement was done as part of the implementation of the provisions of the new Agreement as an administrative action in order to reduce the administrative burden on airlines and the government.

During fiscal year 2007-2008, the Agency processed 1,687 air licensing applications, which included applications for new licences, suspensions, cancellations and reinstatements. The increase in the number of air licence applications in 2007-2008, from 1,299 in 2006-2007, is due to the amendments to licences for Canadian and U.S. carriers as well as a general increase in the number of suspensions and reinstatements.

The Agency grants charter permits to Canadian carriers to transport Canadian-originating passengers and cargo to foreign countries, and to foreign carriers to transport passengers and cargo from Canada to their home country. In the case of international passenger charter flights originating in Canada, the Agency also ensures that advance payments are protected through a letter of credit or agreement of guarantee that requires the prompt refund of all advance payments received from tour operators and charterers should the air carrier fail to provide the flights. The Agency also receives applications from foreign carriers to transport passengers and cargo between Canada and countries other than their home country. In reviewing these applications, the Agency balances the interests of Canadian travellers and shippers with the interests of affected Canadian carriers. Applications regarding passenger charter flights between Canada and third countries that do not also involve a service between the carriers' home country and Canada, are considered only under special circumstances and on an exceptional basis and where justified by the applicant.

During 2007-2008, the Agency issued 1,216 charter permits and denied five permit requests.

The Canada Transportation Act requires air carriers to give notice of intention to discontinue or reduce domestic air services in certain circumstances. The Act also requires them to provide an opportunity for elected officials of the local government of the affected communities to meet with the air carrier to discuss the possible impact of such changes. During the fiscal year 2007-2008, there were no applications for reductions or exemptions to the notice requirements.

Bilateral air transport agreements

The Government of Canada negotiating team, comprised of officials from Transport Canada, the Agency and the Department of Foreign Affairs and International Trade, and led by Canada's Chief Air Negotiator, negotiates air transport agreements with other countries. The Agency is also responsible for the timely implementation and administration of those portions of international air transport agreements and arrangements that fall within the Agency's jurisdiction. This task involves the provision of advice and recommendations to negotiators to coordinate regulatory and treaty obligations to ensure obligations are satisfied in the administration of agreements. As well, the Agency processes applications for services not included in an agreement, approval for code-share and leasing arrangements and for extra capacity as provided for in bilateral agreements. Staff members also participate, as representatives of the Agency or of the Canadian Government, in the activities of the International Civil Aviation Organization (ICAO) on matters related to economic regulation and facilitation. Agency staff acted as both the Chair and Secretary to Canada's National Facilitation Committee and led the preparation of the Canadian delegation to the ICAO Facilitation Panel. An Agency staff member was elected Chairman of the Panel. Agency staff led the Canadian delegation for the presentation of facilitation issues at the ICAO Assembly in March/April 2008.

As of March 31, 2008, Canada had 77 bilateral air transport agreements and arrangements, which provide the frameworks governing primarily scheduled international air services. During the year, Agency staff participated in negotiations with 11 different countries, including Ireland, Kuwait, Japan, Jordan, Iceland, New Zealand, Singapore, Mexico, Barbados, Panama and Israel, and the European Union. In addition to issuing new scheduled international licence authorities, the Agency addressed 115 applications relating to bilateral air agreements and arrangements. Of these, 67 involved such matters as code-sharing and leasing of aircraft with flight crews, and 42 dealt with applications for extra-bilateral authorities.

Regulatory compliance

To ensure regulatory compliance with Canadian law, Agency enforcement staff-located in field offices in six cities across Canada-conduct periodic inspections of Canadian-based licensees and of passenger terminals that fall under the Agency's purview. Staff members also investigate allegations that companies and individuals are operating in contravention of the Canada Transportation Act and related regulations. Sanctions for non-compliance range from the assessment of an administrative monetary penalty, to cease and desist orders and formal reprimands. During fiscal year 2007-2008, the Agency completed 266 on-site inspections of Canadian-based air carriers and passenger terminal operators. Of the 68 informal warnings it issued for minor contraventions, 56 went to air carriers and 12 to passenger terminal operators. The Agency also completed 31 investigations of carriers or individuals suspected of operating illegal air services in Canada, and identified 15 contraventions.

Detailed statistics and further information on licensing, charter and tariff activities can be found in the Agency's Annual Report for 2007-2008 (refer to the Air transportation sections), which is available on its Web site at http://www.cta.gc.ca/publications/ann-rpt/2007-2008/index_e.html. Information is also available in the Web site's Air section.

Rail transportation

Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
6,844	6,690	6,073

Description and expected results

This sub-activity is responsible for:

• resolving disputes between shippers and rail carriers regarding issues such as: interswitching, competitive or single line rates; joint rates; running rights; joint track usage; and level of service to ensure that shippers have access to alternative railways, adequate level of service and reasonable rates;
• resolving disputes between railway companies and municipalities, road authorities, landowners and others that interact with them to ensure a balance between parties of varying economic stature and a lower-cost, more efficient process to resolve disputes;
• making fair and reasonable determinations of Canadian National Railway Company (CN) and Canadian Pacific Railway Company (CP) unit costs and price indices, for use in the development of interswitching rates and other regulatory cost applications;
• making an independent and fair assessment of the annual revenue caps for CN and CP for the movement of Western grain to ensure the railway companies have not exceeded their revenue entitlement for the movement of Western grain;
• making fair and reasonable determinations of the net salvage values of railway lines advertised for discontinuance and sale, as requested by at least one of the parties to the purchase transaction;
• issuing rail certificates of fitness to federally regulated rail carriers to ensure that they hold adequate liability insurance; and
• assessing the environmental, operational, social and other impacts of proposed railway construction projects and ordering corrective measures as required to ensure the requirements of the Canadian Environmental Assessment Act and the interests of communities affected by the proposed lines are taken into account.

Results achieved

Western grain revenue caps

In each crop year, ending July 31, the Agency regulates the amount of revenue earned for the movement of statutory grain by rail in Western Canada. The program provides a flexible pricing regime for transporting Western grain by rail while safeguarding grain shippers and farmers from excessive rail rate increases. As part of this program, the Agency annually determines the maximum revenue entitlement (also known as the revenue cap) for CN and CP for the movement of this grain. Then it determines the actual revenues that CN and CP earned, and compares them with this revenue cap. The fiscal year 2007-2008 was the seventh year in which the Agency made revenue cap determinations.

In 2007-2008, the Agency found that CP's actual revenue exceeded its respective revenue cap for the crop year 2006-2007. As a result, CP had to pay the difference between its actual revenue and its respective revenue cap plus a five-percent penalty to the Western Grains Research Foundation, a total of $3,948,371. CN's grain revenue for crop year 2006-2007 was $2,105,869 below its revenue cap.

This decision is available on the Agency's Web site at http://www.cta.gc.ca/rulings-decisions/decisions/2007/R/655-R-2007_e.html.

CP appealed a portion of this ruling to the Federal Court of Appeal and this appeal was pending on March 31, 2008.

The Agency's administrative responsibilities for the revenue cap program include determining an annual inflation index (known as the volume-related composite price index), which is factored into each railway's revenue cap. To determine this price index, the Agency consults with parties in the grain-handling and transportation industry, including producer representatives, shipper organizations, railway companies, grain companies, and federal, provincial and municipal governments. It also verifies and audits detailed information in railway submissions.

The Agency's original determination of the volume-related composite price index for crop year 2007-2008 reflected an increase over the previous crop year. However, on June 22, 2007, Bill C-11, an Act to amend the Canada Transportation Act and the Railway Safety Act and to make consequential amendments to other Acts, received Royal Assent. Clause 57 of Bill C-11 called upon the Agency to make an adjustment to the volume-related composite price index to reflect the [lower] costs incurred by CN and CP for the maintenance of hopper cars used for the movement of grain. The Agency issued a decision establishing an interim price index until the final volume-related composite price index was determined, which resulted in an 8.4 percent decrease from the original determination of the index.

CN and CP appealed both the decisions establishing the interim and final adjusted volume-related composite price index before the Federal Court of Appeal, which stayed both decisions. These appeals were pending on March 31, 2008.

Dispute resolution

Certain provisions in the Canada Transportation Act are intended to ensure that shippers have access to alternative railways, an adequate level of service and reasonable rates. The Agency can consider applications or complaints related to interswitching, competitive or single line rates, joint rates, running rights and level of service. During 2007-2008, the Agency received nine level-of-service complaints to add to three outstanding complaints.

The new applications that the Agency was considering related to issues such as inadequate rail service and inequitable car allocation. At year end, four complaints had been settled and eight remained outstanding, including one group case with wide-ranging implications.

Shippers are also protected through access to a final offer arbitration process administered by the Agency. Final offer arbitration is a confidential method of settling a matter through an independent arbitrator. During this fiscal period, the Agency received one final offer arbitration request, which was referred for arbitration.

The Agency also has a mandate to resolve disputes between railways and other parties. During fiscal year 2007-2008, the Agency resolved 13 formal and numerous informal disputes between railways and municipalities, road authorities, utility companies, landowners and private citizens. Issues under dispute included apportionment of costs for grade separations and for grade crossing protective devices; rights to private crossings; terms and conditions of utility crossings; and the location of road and pipeline crossings. This function ensures a balance between parties of varying economic stature, allows for judicial remedies where parties of different jurisdictions may be in conflict and provides a less expensive, more efficient process for resolving disputes than potentially lengthy and costly court proceedings.

The Agency further assisted parties by initiating a full review to update the Guide to Railway Charges for Crossing Maintenance and Construction. The Agency maintains this guide, which sets a nation-wide rate structure for work performed by railway companies related to crossings and similar projects. The guide reduces or eliminates disputes involving invoicing matters between Canadian municipalities or road authorities and railways, while also reducing the administrative burden on the parties. During the year, the Agency consulted with CN and CP to ensure that the upcoming revision to the guide (was released in July 2008) will incorporate the most accurate, up-to-date railway costing and operational information.

Railway costs

The Agency is required to annually assess the operating costs of the two Class 1 railways, CN and CP, to assist in deliberations regarding complaints related to interswitching, competitive or single line rates, joint rates, running rights and level of service. During 2007-2008, the Agency finalized the determination of the 2005 and 2006 unit costs for CP and significantly advanced the determination of the 2005 unit costs for CN. Additionally, the Agency finalized the development of 2006 labour, material and fuel price indices for CN and CP, and developed 2007 preliminary labour, material and fuel price indices for both CN and CP.

Net salvage value determinations

Railway companies are required to advertise the availability of railway lines for continued operation before discontinuing them. Parties are free to negotiate an acceptable sale price. However, any party to the negotiation can ask the Agency to set the net salvage value of the line for continued operation. If the railway does not transfer the line after advertising it, it must offer to transfer the line to the federal and provincial governments, urban transit authorities, and municipal or local government for not more than the net salvage value of the line. Either the railway or the government may ask the Agency to determine the net salvage value. Governments may use the line for any purpose after taking possession. The Agency received one application for a net salvage value determination of a railway line for continued operation. Three applications were received from local governments for net salvage value determinations for any purpose, which remained outstanding at the end of the year. The Agency also received a joint request from the Municipality of Greenstone (in Northern Ontario) and CN to prepare a report on the net salvage value of the Kinghorn Subdivision. The report was provided to the Municipality of Greenstone in March 2008.

Certificates of fitness

The Agency issues a certificate of fitness when it is satisfied that a company proposing to construct or operate a railway under federal jurisdiction has adequate liability insurance. Certified companies are then monitored for continued compliance. During 2007-2008, the Agency amended eight certificates of fitness for existing companies, and processed two cancellations due to the integration of two subsidiaries into the operations of CN. The Agency monitors all 34 existing federal railways for continual compliance with regulatory insurance requirements.

Railway line construction assessments

The Agency is responsible for assessing the environmental, economic, operational, social and other impacts of railway line construction in Canada. In 2007-2008, the Agency approved the construction of a new railway spur in Oshawa, Ont., and the Fort Hills spur near Fort Saskatchewan, Alta. In so doing, the Agency took into account the requirements for railway operations and services, the interests of the communities that would be affected by the proposed construction, and the requirements of the Canadian Environmental Assessment Act (CEAA). In addition, it allowed two railway crossing projects to proceed under the CEAA once it was assured there would be no significant adverse environmental effects. It continued to assess and monitor 17 other projects that will likely require Agency approval in the future, such as the proposed Pearson International Airport rail link in Toronto.

Economic regulation

The Agency has an agreement with the Competition Bureau to monitor CN's transit times to deliver railway cars along the former BC Rail lines from northern British Columbia to Vancouver interchanges. In 2007-2008, the Agency issued four transit time reports covering the last quarter of 2006 and the first three quarters of 2007. Some interline traffic in certain zones was under the benchmark while some exceeded the benchmark, but not at a level significant enough to indicate any operational difficulties.

Details of the Agency's rail transportation activities can be found in the Agency's Annual Report for 2007-2008 (refer to the Rail transportation sections), which is available on the Agency's Web site at http://www.cta.gc.ca/publications/ann-rpt/2007-2008/index_e.html. Information is also available in the Web site's Rail section.

Marine Transportation

Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
1,339	1,052	1,018

Description and expected results

This sub-activity is responsible for:

• determining if Canadian ships are available to operate commercial services proposed to be provided by foreign ships in Canadian waters in order to ensure that no foreign ships will be allowed to operate commercial services in Canadian waters if a suitable Canadian ship is available to carry out the services;
• resolving complaints about user fees charged by Canadian port authorities, the St. Lawrence Seaway Management Corporation and the Federal Bridge Corporation to determine if they are unjustly discriminatory;
• resolving complaints that shipping conference agreements or actions by a member of a cartel of shipping lines substantially reduces competition and results in an unreasonable increase in price or a reduction in service; and
• ruling on objections to proposed pilotage charges to determine whether the pilotage authority has based its fees to continue operations on a self-sustaining financial basis, and if the proposed user charges are fair, reasonable and in the public interest.

Results achieved

Coasting Trade Act

Under the Coasting Trade Act, the transport of goods, passengers and any other commercial activity in Canadian waters, including the continental shelf area, is reserved for Canadian-registered vessels, except where no suitable Canadian vessels are available to carry out an activity. Before an applicant can get a coasting trade licence to bring a foreign vessel into Canadian waters for a commercial activity, the Agency must determine that no suitable vessel in the Canadian marine industry is available. In 2007-2008, the Agency processed 164 coasting trade applications (compared with 118 in 2006-2007). Of these, 141 were approved and six were denied. Sixteen applications were withdrawn (no Agency ruling required) and one was dismissed as speculative.

In most cases (127 out of 148 where a ruling was issued), there were no offers of Canadian vessels from the Canadian marine industry so the Agency ruled that there were no suitable Canadian ships available. Sixty-nine applications related to petroleum tankers, while the other applications related to a mixture of specialized ships such as seismic vessels, cargo vessels, construction vessels, drilling rigs and passenger vessels. The average processing time for coasting trade applications in 2007-2008 was 18 days.

Canada Marine Act

Under the Canada Marine Act, the Agency may investigate complaints about fees set by the port authorities, which manage operations at major ports across the country. Also under this Act, the Agency may investigate complaints regarding tolls set by the St. Lawrence Seaway Management Corporation and the Federal Bridge Corporation.

In December 2007, Adventure Tours Inc. filed a complaint alleging that the St. John's Port Authority had refused to issue the company a licence to allow operations of its two masted schooner out of the St. John's harbour in Newfoundland and Labrador. Adventure Tours Inc. argued that the port authority acted in a discriminatory manner that caused financial hardship. The St. John's Port Authority argued that the Agency does not have jurisdiction to consider the complaint as the Agency only has the mandate to investigate fees fixed by a port authority. The Agency found that this complaint related to a policy or practice of the St. John's Port Authority and concluded that it did not have the jurisdiction to investigate the complaint filed by Adventure Tours Inc. as the complaint is not related to a fee fixed by the port authority.

No complaints were filed in 2007-2008 regarding tolls set by the St. Lawrence Seaway Management Corporation and the Federal Bridge Corporation.

Pilotage Act

Under the Pilotage Act, most ships entering or leaving major Canadian ports or traversing designated Canadian waterways must have a qualified Canadian marine pilot on board to navigate. Four pilotage authorities (Atlantic, Laurentian, Great Lakes and Pacific) are responsible for pilotage services in their respective regions and set the tariffs for these services. The Agency has the mandate, upon objection, to investigate whether any proposed tariff increase is in the public interest.

In October 2006, the Laurentian Pilotage Authority (LPA) published a tariff proposal to increase its pilotage fees, which triggered objections by the Shipping Federation of Canada (SFC) and the Canadian Shipowners Association. The Agency ruled in a majority decision that the tariff proposal was in the public interest, and recommended its implementation. In September 2007, the LPA published a tariff proposal that contains tariff increases for the years 2008, 2009 and 2010, and no objections were filed with the Agency.

In October 2007, the Atlantic Pilotage Authority (APA) published a tariff proposal to increase pilotage charges at 11 compulsory pilotage areas, and proposed to implement a separate $100 surcharge per assignment at Halifax, N.S., and Saint John, N.B., for two and three years respectively. This surcharge is designed to setup a pilot boat replacement fund. The SFC objected to the APA's tariff proposal. The APA and the SFC have settled their differences on their own and the SFC withdrew its objection.

Shipping Conferences Exemption Act

Under the Shipping Conferences Exemption Act, a person may file a complaint with the Agency if he or she believes that a conference agreement or an action by a member line reduces competition and results in an unreasonable increase in price or a reduction in service. No complaints under this Act were filed in 2007-2008.

Details of the Agency's marine transportation activities can be found in the Annual Report for 2007-2008 (refer to the Marine transportation sections), which is available on the Agency's Web site at http://www.cta.gc.ca/publications/ann-rpt/2007-2008/index_e.html and in the Marine section of the Web site.

Accessible Transportation

Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
2,690	2,640	2,496

Description and expected results

This sub-activity is responsible for:

• resolving complaints, promulgating regulations, developing codes of practice and standards concerning the level of accessibility in modes of transport under federal jurisdiction, and communicating with the transportation industry and the community to ensure that the federal transportation network is accessible to persons with disabilities by removing undue obstacles to their mobility, and to increase awareness about industry and consumer rights and obligations.

Results Achieved

The case-by-case approach

When travellers believe they have encountered an undue obstacle, they may contact the Agency for help. If the parties do not agree to resolve the complaint through mediation or facilitation, the Agency will investigate the complaint to determine whether an obstacle exists and whether it is undue.

Through the years, the Agency has received several complex applications that raise significant issues that, due to their importance to industry and to persons with disabilities, have required oral hearings, expert evidence and extensive analysis. Some of these issues have been related to obesity and allergies, both of which are "grey area" disabilities that require a detailed analysis to assess whether a particular individual is a person with a disability in the context of the federal transportation network. The Agency decisions in such matters can be significant for both the industry and the community of persons with disabilities.

After extensive pleadings and two hearings in January 2008, the Agency issued its decision requiring Air Canada, Air Canada Jazz and WestJet to adopt a one person-one fare policy for persons with severe disabilities on domestic flights. The Agency held a hearing in October and November 2007 to hear and test evidence regarding the possible undue obstacles faced by persons requiring medical oxygen to travel by air. A decision regarding this matter was issued in June 2008.

The Agency received 62 new complaints in 2007-2008 involving persons with disabilities, compared with 43 in 2006-2007, and continued working on the 67 outstanding cases from the previous year. Ten were closed through the issuance of an Agency ruling, eight were settled through mediation, 28 were resolved as a result of facilitation by Agency staff, 10 were closed internally (for reasons such as not being able to contact complainants, matters not being within the Agency's jurisdiction or issues having already been addressed in other decisions), and 11 were withdrawn.

Approximately 42 percent of the issues constituted undue obstacles involved services, such as assistance in boarding or proper seating assignments or assistance within the airport; 29 percent involved fares and charges for persons with disabilities who require extra seating. The remaining 29 percent involved the communication of information, including calling out bus stops. To address these undue obstacles, the Agency ordered 18 corrective measures.

The systemic approach

The Agency has developed regulations, codes of practice and guidelines to make public transportation by air, rail and ferry more accessible to persons with disabilities. It developed these standards in consultation with associations of and for persons with disabilities, seniors, manufacturers, carriers, terminal operators and other service providers. They are available on the Agency's Web site at http://www.cta.gc.ca/access/index_e.html.

The Agency uses various methods to assess the level of industry compliance with the Agency's codes of practice, including site visits, discussions with service providers, Web site reviews, reviews of contracts, periodic surveys and written reports from carriers and terminal operators, on their measures to meet code requirements. Many of these methods give transportation service providers a chance to exchange information and obtain guidance that will help them implement accessibility improvements more quickly.

The Passenger Terminal Accessibility Code of Practice, as well as the accompanying guide that includes practical information and resources to help transportation service providers implement the new code, was released at the 11th International Conference on Mobility and Transport for Elderly and Disabled Persons (TRANSED) in Montréal in June 2007. This world conference on accessible transportation brought together experts in the field to discuss progress to date and the road ahead in accessible transportation. The Agency supported Transport Canada in hosting the conference with a goal of making major contributions to the organizational activities and the program. Additionally, the Agency assisted staff at the Pierre Elliot Trudeau International Airport to facilitate arrangements for the arrival and departure of hundreds of persons with disabilities who attended the conference.

In 2007-2008, Agency staff continued to monitor the Communication Code introduced in 2004, a code of practice for removing communication barriers for travellers with disabilities. Staff met with transportation service providers to discuss its implementation and to clarify related issues. The Agency also continued to help service providers draft their multiple format policies, as required by the code, to provide information to passengers with disabilities in formats that complement or replace conventional print or video products.

Given the number of Agency codes of practice and the increased number of entities involved, the Agency initiated the development of a comprehensive and integrated monitoring and compliance methodology in 2007-2008 to improve efficiency and enhance compliance levels. This work will continue in 2008-2009.

The Agency also issued information bulletins to those subject to the Communication and Terminal Accessibility Codes, including an update of the Canadian Standards Association's Accessible Design for Self-Service Interactive Devices standard among other matters.

As part of its outreach program, the Agency also undertakes liaison and monitoring activities that directly support its mandate to remove undue obstacles.

In 2007-2008, the Agency examined 49 training programs as part of its enforcement plan to ensure that affected carriers and terminal operators in the air, rail and ferry modes comply with the Agency's Personnel Training for the Assistance of Persons with Disabilities Regulations.

This monitoring and the resulting changes ensure that the training provided to transportation service personnel is comprehensive and appropriate, thereby helping to prevent obstacles from arising in the first place. In determining which carriers and facilities to visit, Agency staff gives consideration to issues raised by the community of persons with disabilities and new entrants to the industry as well as other factors.

The Agency also monitors service providers' tariffs, public information (including that contained on Web sites), and procedural and flight manuals to ensure that they are consistent with the Agency's regulations regarding the carriage of persons with disabilities.

Education is an essential element of the Agency's outreach program, which is especially important when new providers enter the federal transportation network, and when service providers change the way they do business and respond to market forces. In response to requests, Agency employees help service providers prepare their policies, set their terms and conditions of carriage, design their training programs, and address specific problems their passengers face regarding accommodation.

All Canadian travellers benefit from these measures and, since the incidence of disability increases with age, the demand for accessible transportation will be even greater as Canada's population ages.

More information about the Agency's accessible transportation program can be found in the Annual Report for 2007-2008 (refer to the Accessible transportation section) available on the Agency's Web site at http://www.cta.gc.ca/publications/ann-rpt/2007-2008/index_e.html and in the Accessible Transportation section of the Web site.

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