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Section II: Analysis of Program Activity by Strategic Outcome

2.1 Analysis of Program Activity by Strategic Outcome

The Agency is both an economic regulator and a quasi-judicial tribunal. It regulates the national transportation system (air, rail and marine) through the administration of laws, regulations, voluntary Codes of Practice, and education and outreach programs. It adjudicates disputes between users of, service providers within and others affected by the national transportation system.

As a regulator, the Agency has a mandate to administer the economic regulatory provisions affecting all modes of transportation under federal jurisdiction found in various Acts of Parliament. In 2008–2009, the Agency:

• issued approximately 2,400 discretionary and administrative rulings to support the effective regulation of the federal transportation system;
• after reviewing compliance with the air licensing requirements, processed 1,038 air licensing activities, including applications for new licences as well as suspensions, cancellations and reinstatements;
• issued 1,215 charter permits;
• participated in the negotiation of a comprehensive agreement for air services between Canada and all 27 European Union member states, and participated in the negotiation of an “Open-Skies” agreement with the Dominican Republic as well as expanded or new agreements with the Philippines and Panama;
• issued one new certificate of fitness to a railway, approved five variations to existing certificates in order to reflect changes in railway operations and processed two cancellations;
• determined that both the Canadian National Railway Company (CN) and the Canadian Pacific Railway Company (CP) had exceeded their revenue entitlement under the revenue cap regime for Western grain by $25,961,880 and $33,806,200 respectively. The carriers were ordered to pay the excess amounts, as well as a penalty totalling $3,894,282 for CN and $5,070,930 for CP, to be paid to the Western Grains Research Foundation. This is the largest amount by which any railway company has ever exceeded its revenue cap, and only the second time that both railway companies were above their caps in the same year[4];
• considered 135 coasting trade applications to protect the interests of the Canadian marine industry and allow foreign ships when no suitable Canadian ships are available; and
• undertook 360 inspections resulting in the issuing of 89 informal warnings, 13 formal warnings and seven notices of violation.

As an adjudicator, the Agency resolves transportation issues within the federal transportation system either by investigating and making formal tribunal decisions on complaints and ordering corrective measures as required, or by helping parties resolve their issues through the alternate dispute resolution processes of mediation or facilitation. In 2008–2009, the Agency:

• implemented measures to improve service levels, as resolving more complex complaints within the targeted 120 days continued to pose a significant challenge;
• resolved 757 dispute cases of which, 655 were through facilitation, 22 through mediation and 80 through decisions issued as a result of formal adjudication;
• was involved in 108 accessibility cases;
• released its final decision regarding the mobility of persons who require medical oxygen to travel by air;
• monitored the implementation of the 2007–2008 one-person-one-fare decision;
• processed 1,209 air travel complaints;
• redesigned the way it will capture and measure client feedback regarding the facilitated air travel complaints process;
• published its Guidelines for the Resolution of Complaints Concerning Railway Noise and Vibration;
• was involved in 31 environmental assessment processes for proposed rail line construction, road and utility crossing projects; and
• processed 127 agreements filed by parties that had successfully conducted their own negotiations related to rail crossings.

Strategic Outcome 1: Transparent, fair and efficient economic regulation of the federal transportation system

Program Activity: Economic regulation of the federal transportation system

Expected Result: Access to a specialized tribunal that is designed to serve the needs of users of, service providers within and others affected by the national transportation system

2008–2009 Financial Resources ($ thousands)			2008–2009 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
26,094	29,195	26,985	251	223	28

Program Description and Results: Economic regulation of air, rail and marine transportation through the administration of laws, regulations, voluntary Codes of Practice, and 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.

Performance Indicator	Target	Target Date	Performance Status
Measures of satisfaction with Agency services related to serving the needs of users of, service providers within and others affected by the national transportation system	2008: Design survey	2008–2009	Successfully met
	2009: Conduct benchmark surveys and set targets	2009–2010	Will meet
	2010: Conduct subsequent surveys	2010–2011	Will meet

The Agency's program activity is delivered via four program sub-activities — air transportation, rail transportation, marine transportation and accessible transportation — which are discussed in more detail below.

Air Transportation

Several amendments to the Air Transportation Regulations were made in 2009 to reflect legislative changes as a result of Bill C-11, An Act to amend the Canada Transportation Act and the Railway Safety Act and to make consequential amendments to other Acts (2007), receiving Royal Assent.

Specifically, changes were made to reflect the new requirement for air carriers flying to and from Canada, and who sell transportation through their Web sites, to post their terms and conditions of carriage on these same Web sites. Additionally, signage requirements for domestic and international carriers were harmonized. The revised regulations are now in effect.

In order to respond to concerns about the clarity and completeness of tariffs, the Agency is creating “model tariffs,” which clearly set out the format and tone to be used — and highlight the importance of making the terms and conditions of carriage understandable to Canadians. In 2008–2009, to encourage air carriers to simplify the terms and conditions found in their tariffs, the Agency began drafting best practices for tariff provisions.

Air Transportation

2008–2009 Financial Resources ($ thousands)			2008–2009 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
8,012	8,964	9,008	83	84	(1)

Description and expected results

Economic regulation

• 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 Canadian originating international passenger charter flight advance payments;
• participating in negotiation of international air transport agreements and administration and implementation of these international air transport agreements;
• administering an enforcement program (through periodical inspections and investigations on alleged violations) to ensure ongoing compliance with the provisions of the Canada Transportation Act, the Air Transportation Regulations and the Personnel Training for the Assistance of Persons with Disabilities Regulations, as they apply to publicly available air carriers and other transportation service providers;
• leading Canadian participation in International Civil Aviation Organization facilitation activities;
• processing applications for extra-bilateral air services and approving cooperative arrangements such as leasing and code-sharing; and
• administering international air tariffs to ensure that bilateral agreements are respected, while balancing the interests of all parties.

Dispute resolution

• 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 comply with the legislation.

Expected Results	Indicator	Target	Target Date	Performance Status
Regulatory authorities required to operate publicly available air services are issued on a timely basis upon meeting the regulatory requirements	Percentage of licences and charter permits issued prior to specified timelines	92% of charter permits issued within 30 days	2008	91%
		85% of licences issued within 14 days	2011	94%
Compliance with the Canada Transportation Act and its attendant regulations by licensees and by persons subject to the Personnel Training Regulations	Percentage of inspections in which full compliance was identified	100% compliance with the requirements to hold a valid licence, insurance and Air Operator Certificate	2008	100%
		85% compliance with all other requirements of the Act and regulations	2008	72%
The Agency efficiently resolves complaints on air services, weighing the evidence submitted by the parties in a fair and reasonable manner [5]	Percentage of disputes resolved formally within 120 days	70%	2011	61%
	Percentage of disputes resolved informally within 90 days	80%	2011	67%

Rail Transportation

After extensive consultations, the Agency published its Guidelines for the Resolution of Complaints Concerning Railway Noise and Vibration. Developed to assist individuals, municipalities, railway companies and other parties in resolving these types of disputes, the Guidelines clearly explain:

• what collaborative measures parties must follow before the Agency investigates a complaint;
• what elements are considered in determining whether railway construction or operations have caused only such noise and vibration as is reasonable; and
• how to file a complaint, what information must be submitted, as well as the process to be followed.

The guidelines require parties to a rail noise or vibration issue to engage in a meaningful dialogue in an effort to explore available solutions in a constructive manner prior to coming to the Agency with a formal complaint. A newly formed technical advisory committee will provide expert advice to the Agency on an ongoing basis.

Federally regulated railway companies use the Uniform Classification of Accounts (UCA) to report their operating expenses, revenues and other statistics, while the costing regulations set out the items and factors for making railway costing determinations, including cost of capital and depreciation. A comprehensive, two-phase technical review by the Agency of the UCA is underway. Phase one of this review was completed in February 2009, while phase two was officially launched in January 2009. The Agency also intends to initiate a review of the Railway Costing Regulations to bring them up to date.

Rail Transportation

2008–2009 Financial Resources ($ thousands)			2008–2009 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
5,615	6,221	4,814	51	41	10

Description and expected results

Economic regulation

• making fair and reasonable determinations of the Canadian National Railway Company (CN) and the 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 third-party 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.

Dispute resolution

• 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; and
• resolving disputes between railway companies and municipalities, road authorities, landowners and others that interact with them to ensure a balance between parties and a lower-cost, more efficient process to resolve disputes.

Expected Results	Indicator	Target	Target Date	Performance Status
The Agency efficiently balances the interests of shippers, farmers, landowners, road authorities, utility companies, all levels of government and railway companies in a commercially fair and reasonable manner	Percentage of disputes resolved formally within 120 days	75%	2011	55%
Environmental, economic and social impacts of railway construction projects, railway lines and yards are mitigated	Percentage compliance with prescribed mitigation conditions as determined on follow-up	100%	2008	No applications for projects requiring mitigation conditions were received

Marine Transportation

The Agency is responsible for determining if Canadian or non-duty ships are suitable and available to operate commercial services proposed to be operated by foreign ships in Canadian waters. Once the Agency has determined that no Canadian or non-duty ship is suitable and available for the proposed service, it is the responsibility of the Minister of Public Safety and Emergency Preparedness to issue the licence. In 2008–2009, the Agency considered 135 coasting trade applications.

A review of the Agency's coasting trade guidelines was started in 2008–2009, with expected completion in 2009–2010. Updated guidelines will further clarify the Agency's expectations with regards to coasting trade applications. To streamline the coasting trade application process, the Agency is currently implementing an online and e-mail application notification system, as well as creating a subscription-based contact list. These new measures will allow the Agency to continue to provide efficient service and meet its performance target for processing coasting trade applications.

In 2008–2009, tariff proposals or amendments were published by the country's four pilotage authorities:

• the Great Lakes Pilotage Authority;
• the Atlantic Pilotage Authority;
• the Pacific Pilotage Authority; and
• the Laurentian Pilotage Authority.

The Agency did not receive objections to these tariff changes.

No complaints were filed with the Agency in 2008–2009 regarding fees set by port authorities.

Marine Transportation

2008–2009 Financial Resources ($ thousands)			2008–2009 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
871	975	805	8	5	3

Description and expected results

Economic regulation

• determining if Canadian or non duty-paid ships are suitable and available to operate commercial services proposed to be provided by foreign ships upon request by a resident of Canada to ensure that no foreign ships will be allowed to operate such services if a Canadian or non-duty paid ship is available.

Dispute resolution

• 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.

Expected Results	Indicator	Target	Target Date	Performance Status
The Agency efficiently determines that pilotage charges are in the public interest and that port fees and seaway tolls are not unjustly discriminatory	Percentage of disputes resolved formally within 120 days	70%	2008	100%
The Agency efficiently protects the interests of operators of Canadian registered ships while allowing access to foreign ships when suitable Canadian registered ships are not available	Percentage of applications processed prior to the specified deadline	95% prior to commencement date when no offer is made	2008	100%
		80% issued within 90 days when offer is made	2011	100%

Accessible transportation

In 2008–2009, a significant backlog of accessibility cases was closed, which has contributed to the Agency's substantial progress in meeting its performance targets on the resolution of accessibility disputes. The Agency is now well on its way to meeting these goals.

That being said, the issues raised in accessibility cases are often highly complex and have wide-ranging implications for stakeholders. This complexity, along with the in-depth analyses required, can have a significant impact on the length of time required to issue fair and reasonable rulings.

On June 26, 2008, the Agency released its final decision on 25 complaints against Air Canada and one complaint against WestJet regarding the mobility of persons who require medical oxygen to travel by air.[6] In its decision, the Agency determined that passenger-supplied oxygen, in whatever form permitted by safety and security regulations, is the most appropriate accommodation.

In another matter, following unsuccessful attempts to appeal the Agency's decision to the Federal Court of Appeal and the Supreme Court of Canada, Air Canada, Jazz Air and WestJet implemented a one-person-one-fare policy for persons with severe disabilities who travel within Canada as required by January 10, 2009.[7] The decision means that, for domestic services, the airlines may not charge more than one fare for persons with disabilities who:

• are accompanied by an attendant for their personal care or safety in flight, as required by the carriers' domestic tariffs; or
• require additional seating for themselves, including those determined to be functionally disabled by obesity for purposes of travel.

The Agency's five voluntary Codes of Practice on accessibility and regulations on the carriage of persons with disabilities are now supported by a new monitoring framework intended to foster greater industry compliance with their provisions. Extensive outreach and educational initiatives continue to be an integral part of the framework, as they help parties to know their rights and responsibilities regarding accessibility.

The meeting of the Agency's Accessibility Advisory Committee, held in March 2009, brought together members of the transportation industry with groups representing persons with disabilities.

Accessible Transportation

2008–2009 Financial Resources ($ thousands)			2008–2009 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
2,171	2,429	2,443	19	20	(1)

Description and expected results

• resolving complaints, promulgating regulations, developing Codes of Practice and standards concerning the level of accessibility in modes of transportation 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.

Expected Result	Indicator	Target	Target Date	Performance Status[8]
The Agency efficiently resolves complaints about obstacles to the mobility of persons with disabilities, weighing the interests of persons with disabilities with those of the industry in assessing whether the obstacle is undue	Disputes resolved formally within 120 days	50%	2011	33%

More information about the Agency's accessible transportation program can be found in the Annual Report for 2008–2009 available on the Agency's Web site at http://www.cta.gc.ca/eng/annual-reports and in the Accessible Transportation section of the Web site.

Internal Services

Internal Services refers to both the corporate functions that support the delivery of the Agency's plans and priorities as well as the specialized tribunal services that are an integral part of the delivery of the operational mandate of the Agency.

Internal Services

2008–2009 Financial Resources ($ thousands)			2008–2009 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
9,425	10,606	9,915	90	73	17

Description

Corporate functions

• develops, maintains and implements integrated systems, policies, procedures, services, strategic planning and internal audit for the effective acquisition and stewardship of financial and material resources;
• provides effective and timely human resources services and advice to managers, employees and unions;
• provides advice and support regarding internal and external strategies, activities and products in order to effectively meet the information needs of our clients and stakeholders; and
• provides advice and support on the management and use of information and technology;

Specialized tribunal services

• provides legal advice and counsel;
• provides editing, translation and quality control services for Agency proceedings; and
• provides registrar services and coordinates ministerial correspondence.

Results

Succession plan

• Gap analysis and identification of key positions and Agency vulnerabilities completed in 2008
• Ensure that recruitment strategy and knowledge management activities address vulnerabilities in 2009–2010

Recruitment strategy

• Agency Student Employment Program launched in March 2009
• Pools of qualified candidates created through selection processes in 2008–2009 used to fill vacancies
• Approach for proactive use of resourcing pools to be developed in 2009

Knowledge management strategy

• Generic competencies updated for all positions
• Pilot projects on knowledge management conducted in 2008–2009 to identify best practices

Operational plans integrate multi-year budgeting and planning into resource management allocations

• Three-year budgeting and strategic planning process was introduced incorporating the following into Agency operational plans:
  • Performance measures and reporting
  • Human resource and information management and technology planning
  • Risk management

Internet site

• New Agency Web site was launched

Communications

• The Agency conducted an internal communications survey
• Consultations were held to expand upon and refine ideas generated by the survey
• The survey and the consultations provided innovative ideas that will help shape the Agency's approach to internal communications, as well as the development of a new intranet site

Benefits for Canadians

In exercising its court-like powers, the Agency employs processes that are responsive, fair and transparent, and considers the interests of all parties to disputes involving the national transportation system. Its adjudicative formal decision-making process is governed by the rules of natural justice and fairness.

Through its actions and by working closely with Transport Canada, other departments, its clients and stakeholder groups, the Agency supports the goal of a Canadian transportation system that is competitive, efficient and accessible — and that meets the needs of those who provide or use transportation services.

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