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Section II — Analysis of Program Activity by Strategic Outcome

2.1 Analysis by Program Activity

Detailed Analysis by Program Activity

The Canadian Transportation Agency's program activity architecture is simple. The Agency pursues one strategic outcome:

• Transparent, fair and efficient economic regulation of the federal transportation system.

Performance Indicator	Target	Date to Achieve Target
Feedback from users of, service providers within and others affected by the national transportation system on perceived transparency, fairness, and efficiency of the decision-making process.	Design survey.	2008–2009
	Conduct benchmark surveys and set targets.	2009–2010
	Conduct subsequent survey.	2010–2011
Percentage of discretionary rulings overturned by the Federal Court of Appeal on basis of procedural fairness.	0%	April 2008
Percentage of cases resolved within prescribed time limits.	Disputes resolved formally: 65% resolved within 120 days. Determinations: 95% issued within 120 days. Licences: 85% issued within 14 days.	April 2011
	Charter permits: 92% issued within 30 days. Mediation: 100% completed within 30 days (when no extension request).	April 2008

The architecture contains one program activity:

• The economic regulation of the federal transportation system.

Expected Result	Performance Indicator	Target
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.	Design survey	2008–2009
	Conduct benchmark surveys and set targets	2009–2010
	Conduct subsequent survey	2010–2011

2.1.1 Program Activity Description

The Canadian Transportation Agency manages the 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, Infrastructure and Communities, the Canadian Transportation Agency makes decisions on a wide range of matters affecting Canadian transportation.

All decisions on matters before the Agency, whether they relate to air, rail, marine, or accessible transportation matters, are made by Agency members appointed by the Governor in Council.

The Agency's single program activity is divided into four program sub-activities:

• air transportation;
• rail transportation;
• marine transportation; and
• accessible transportation.

2.1.2 Human Resources Management Capacity

In delivering on its mandate, the Agency faces two major challenges in the coming years in relation to human resources management. The first of these challenges is to implement the new organizational structure to address evolving workload and resource challenges, while the second relates to succession planning to deal with pending retirements and to improve internal mobility. The Agency is addressing these challenges as management priorities, and a more detailed description of plans to address these issues is described in Section I.

In general, the Agency has implemented a comprehensive, integrated human resource planning framework that focuses on corporate priorities in human resources management and reflects a philosophy of strategic staffing and recruitment. As part of this framework, a three-year strategic human resources plan, and a succession plan, are being implemented.

2.2 Analysis by Program Priority

2.2.1 Air Transportation

Financial Resources ($ thousands)

	2008–2009	2009–2010	2010–2011
Planned Spending	8,012	8,012	8,012

Human Resources (full-time equivalents)

	2008–2009	2009–2010	2010–2011
Planned	83	83	83

Description

Under air transportation, the Agency:

• licenses air carriers that provide domestic or international publicly available air transportation services to and from Canada to ensure that carriers hold adequate liability insurance, a valid Canadian aviation document, and other licensing requirements specified in the Canada Transportation Act, and that Canadian carriers are owned and controlled by Canadian citizens;
• administers a permit system for international charter operations to ensure the protection of advance payments received by airlines in respect of international passenger charter flights originating in Canada;
• administers 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;
• resolves complaints related to the carriers' application of tariff provisions (particularly the terms and conditions of transport) and to prices applied by carriers to non-competitive routes within Canada in order to ensure that air carriers licensed to operate in Canada meet the legislative requirements in place to protect Canadians;
• helps to negotiate and implement international air transport agreements and to administer international air tariffs to ensure that bilateral agreements are implemented fairly, while balancing the interests of all parties;
• rules 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; and
• acts as the aeronautical authority for Canada on matters related to the economic regulation of air carriers.

Expected Results	Performance Indicator	Target	Date to Achieve Target
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	April 2008
		85% of licences issued within 14 days	April 2011
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. 85% compliance with all other requirements of the Act and regulations.	April 2008
The Agency efficiently resolves complaints on air services, weighing the evidence submitted by the parties in a fair and reasonable manner.	Percentage of disputes resolved formally within 120 days.	70%	April 2011

In meeting the needs of a highly operational industry where timely and predictable delivery of services is necessary to be competitive and meet client expectations, the Agency will continue its focus on the timely issuance of regulatory authorities required by carriers to conduct their air transportation services. Changes to the Agency's Web site and information provided to carriers, as well as further changes to internal processes, will assist the Agency in meeting its performance targets.

As part of the Agency's activities to ensure compliance by carriers with the legislation and regulations, Agency staff is awaiting the granting of authority to make new regulations to require carriers to post their international terms and conditions of carriage on Internet sites used by the carrier to sell its service.

The Agency will monitor and track its performance in resolving air transportation disputes, as well as implement further changes to its procedures, to assist in meeting its performance targets. Many complaints before the Agency are resolved informally and efforts will continue in this regard, as the use of facilitation and mediation results in a more timely and efficient resolution of issues.

2.2.2 Rail Transportation

Financial Resources ($ thousands)

	2008–2009	2009–2010	2010–2011
Planned Spending	5,615	5,615	5,615

Human Resources (full-time equivalents)

	2008–2009	2009–2010	2010–2011
Planned	51	51	51

Description

Under rail transportation, the Agency:

• resolves disputes between shippers and rail carriers on various 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;
• resolves disputes between railway companies and municipalities, road authorities, landowners, and others to ensure a balance between parties;
• makes 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;
• issues rail certificates of fitness to federally regulated rail carriers to ensure that they hold adequate liability insurance; and
• assesses the environmental, operational, social, and other impacts of proposed railway construction projects, and orders corrective measures as required to ensure the requirements of the Canadian Environmental Assessment Act and the interests of localities affected by the proposed lines are taken into account.

Expected Results	Performance Indicator	Target	Date to Achieve Target
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%	April 2011
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%	April 2008

The Agency has a new mandate from Parliament to resolve complaints concerning noise and vibrations that may emanate from the construction or operation of a railway by a Canadian railway company. As Canadian railways operate 24 hours a day, seven days a week, coast-to-coast through most major municipalities and countless smaller towns and villages, they affect the lives of a significant portion of the Canadian population. Therefore the potential for complaints about unreasonable noise and vibration is considerable and the Agency must prepare itself to address the volume and complexity of such complaints. Agency decisions on these matters will have significant impact upon the lives of thousands of Canadians as well as the day-to-day operations of the Canadian railway industry.

The Agency is conducting extensive consultations with railways, municipalities, environmental experts, and other interested parties. The purpose of the consultations is to develop and issue prescribed guidelines on measures that parties in conflict will have to undertake to resolve their issue prior to a complaint to the Agency, and to develop criteria the Agency will consider in making any decision concerning complaints. Any such guidelines will encourage the use of the Agency's proven ability and now legislated mandate to mediate matters prior to formal adjudication.

The Agency must also address the potentially significant resource implications of this new mandate. Based on a preliminary analysis of anticipated volume, it is expected that the Agency will be requested to resolve 60 to 70 cases over the next three years. To do so, the Agency is examining the feasibility of re-allocating existing dispute resolution resources, of restructuring to consolidate related competencies and expertise, of adding additional resources where required, and of recruiting additional environmental and engineering expertise. The Agency will absorb this additional mandate within its current budget resources.

A review of processes and procedures will also be undertaken. These will be amended and adapted as necessary in order to resolve conflicts that account for the complexities involved in balancing the service obligations of a major Canadian industry with the well-being of Canadian citizens. The Agency expects to be operating with new guidelines, appropriate resource allocation, and amended procedures by the end of 2008-2009.

Canada will be replacing current Canadian Generally Accepted Accounting Principles (GAAP) with International Financial Reporting Standards (IFRS) for publicly accountable enterprises. The conversion is expected to be effective as of January 1, 2011 and could have a significant impact on the Agency's Uniform Classification of Accounts (UCA) which is based on current GAAP. The UCA, established by the Agency, is used by railway companies to classify their accounting and operating expenses, revenues and other statistics. The Agency will be monitoring this transition and the impact on the UCA. The Agency will update the UCA in 2008-2009 and intends to review it biennially.

CN and CP plans indicate 1,300 miles of railway lines are intended for discontinuance over the next three years. When a railway company decides to discontinue operations of a railway line, it advertises the availability of the line for continued operation and its intention to discontinue the line. The interested parties are free to negotiate an acceptable sale price and any party to the negotiation for transfer of a line can request that the Agency set the Net Salvage Value (NSV) of the line for continued operation. If the line is not transferred to an interested party for continued operation, the railway company then offers to transfer all of its interest in the railway line to all levels of government and urban transit authorities at a price that is not more than the NSV. In the past, governments who agreed to acquire the line were bound to the acquisition, but could negotiate the price. If an agreement on the price could not be reached, either party could apply to the Agency for an NSV determination. The amendments to the Canada Transportation Act made by the enactment of Bill C-11 now allows governments and urban transit authorities to apply to the Agency for an NSV determination prior to accepting the railway company's offer to acquire the railway line. As a result of these factors, the number of NSV determinations brought before the Agency is expected to increase in 2008-2009 and future years.

2.2.3 Marine Transportation

Financial Resources ($ thousands)

	2008–2009	2009–2010	2010–2011
Planned Spending	871	871	871

Human Resources (full-time equivalents)

	2008–2009	2009–2010	2010–2011
Planned	8	8	8

Description

Under marine transportation, the Agency:

• determines if Canadian ships are available to operate commercial services proposed to be provided by foreign ships in Canadian waters, 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;
• issues rulings 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 whether the proposed user charges are fair, reasonable and in the public interest;
• resolves complaints regarding user fees charged by Canadian port authorities and the St. Lawrence Seaway Management Corporation, and determines if they are unjustly discriminatory; and
• resolves complaints pertaining to shipping conference agreements, or actions by a member of a cartel of shipping lines that substantially reduce competition and result in an unreasonable increase in price or a reduction in service.

Expected Results	Performance Indicator	Target	Date to Achieve Target
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%	April 2008
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 offers are made. 80% issued within 90 days when offer is made.	April 2008 (no offers) April 2011 (with offers)

Disputes related to pilotage charges, port fees, shipping conferences, and seaway tolls will continue to be processed in an efficient manner so that Agency rulings can be issued within legislative time frames, while respecting natural justice, so that all parties are treated in a fair and equitable manner. The Agency has had significant success with mediation services and it will continue to advise parties of the availability of mediation services as an alternative to the formal dispute resolution process.

The Agency will also continue to process coasting trade applications in an efficient manner so that Agency rulings can be issued prior to the commencement of a proposed activity when no offers of suitable Canadian vessels are made (this applies to the vast majority of coasting trade applications). The Agency is assessing the feasibility of establishing an internet-based notification system to improve the timeliness of information provided to Canadian vessel operators on potential business opportunities and to reduce Agency staff resource efforts required to support this activity.

2.2.4 Accessible Transportation

Financial Resources ($ thousands)

	2008–2009	2009–2010	2010–2011
Planned Spending	2,171	2,171	2,171

Human Resources (full-time equivalents)

	2008–2009	2009–2010	2010–2011
Planned	19	19	19

Description

Under accessible transportation, the Agency:

• resolves complaints and orders remedial actions as required;
• promulgates regulations, and develops codes of practice and standards concerning the level of accessibility in modes of transportation under federal jurisdiction;
• monitors and assesses industry compliance with accessibility regulations and adherence with its Codes of Practice; and
• communicates with the transportation industry and the community to ensure that all modes of federal transportation are accessible to persons with disabilities by removing undue obstacles to their mobility, and to increase awareness about industry and consumer rights and obligations.

Expected Results	Performance Indicator	Target *	Date to Achieve Target
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.	Percentage of disputes resolved formally within 120 days.	50%	April 2011

* This target reflects the nature of accessibility complaints, which often involve multiple parties and unrepresented applicants, and which often raise novel and complex issues, some of which necessitate the filing of expert evidence and the holding of public hearings.

Consistent with the Agency's ongoing efforts to promote alternative dispute resolution, the Agency will continue to modify its Accessibility Complaint Guide, Web site and other written communication to emphasize facilitation and mediation.

To identify gaps in levels of accessibility and to explore practical means of addressing these gaps, the Agency will educate and disseminate information to persons with disabilities and to transportation service providers concerning their rights and obligations regarding accessible transportation. The Agency will continue to facilitate compliance with accessibility regulations and standards by transportation service providers through information seminars, exhibits at trade shows, ongoing informal dialogue and a meeting with the Agency's Accessibility Advisory Committee in 2008–2009.

In order to increase efficiency and effectiveness of its monitoring and compliance activities, and to monitor and enhance compliance with its accessible transportation regulations and standards, the Agency will develop and implement a comprehensive and integrated monitoring and compliance methodology and related tools. In the interim, the Agency will continue its existing monitoring activities and will work with industry to enhance compliance levels by providing practical advice and guidance, such as sample multiple-format policies as set out in the Communications Code of Practice, which came into effect in June 2007.

The Agency will also continue to review and improve processes and monitor performance against targeted standards.

2.3 Key Challenges and Opportunities

The upcoming year will be characterized by a number of significant challenges for the Agency:

• absorbing workload demands resulting from new responsibilities received through the Canada Transportation Act (Bill C-11);
• applying the undue hardship test in order to determine whether reasonable accommodation has been provided to a person with a disability;
• implementing and assessing the impacts of the new organizational structure;
• actualizing an ADR directorate to meet demands for facilitation, mediation and arbitration;
• improving the responsiveness and effectiveness with which disputes are resolved;
• continuing to focus on the timely issuance of regulatory authorities required by transportation service providers;
• addressing broad and systemic issues related to the administration of the Agency's mandate through regular interactions and dialogue with stakeholders; and
• adopting a multi-year strategic planning process to ensure the Agency and its staff work toward the same goals, and to assess and adjust the organization's direction in response to a changing environment.

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