Speaking Notes for the Honourable Marc Garneau, Minister of Transport Bill C-49 Transportation Modernization Act House of Commons’ Committee on Transportation, Infrastructure and Communities

September 14, 2017

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Introduction

Madam Chair and Honourable Members, I am pleased to meet with the Committee today to talk about Bill C-49, the Transportation Modernization Act.

I would like to thank the Committee for studying the bill before the House is scheduled to resume.

A strong transportation system is fundamental to Canada’s overall economic performance and competiveness. This bill, once passed, would make amendments to the Canada Transportation Act, and other related legislation, that would position our country to capitalize on global opportunities and make improvements to better meet the needs and service expectations of Canadians.

The measures included in Bill C-49 reflect what Canadians told us they expect during the extensive consultations we undertook last year. We held over 200 meetings and roundtables across the country with transportation and trade stakeholders, Indigenous groups, provinces and territories, and individual Canadians to hear their views on the future of transportation in Canada.       

Our goal is aimed at creating and facilitating the conditions to achieve long-term success, and this is precisely what this bill proposes to do.

Overview

C-49 is an important first step toward delivering on early and concrete measures in support of Transportation 2030 – a Strategic Plan for the Future of Transportation in Canada.

This bill focuses on our immediate priorities in the air, rail and marine sectors. It aims to implement a series of measures to promote an integrated transportation system that is safe and secure, green, innovative, and that will contribute to our economic growth, a cleaner environment, and not to mention the well-being of Canadians when they travel.

Traveller Initiatives

Air Passenger rights

Madam Chair, the concerns of Canadians have been highlighted in recent months with much publicized cases of the unacceptable treatment of air travellers, both in this country and elsewhere.

Bill C-49 proposes to mandate the Canadian Transportation Agency to develop, in consultation with Transport Canada, new regulations to enhance Canada’s air passenger rights. These new rules would ensure air passenger rights are clear, consistent and fair for both travellers and air carriers. Some examples of issues the new regulations would address, include:

• Denied boarding in case of overbooking, delays and cancellations;
• Lost or damaged baggage;
• Tarmac delays over a certain period of time;
• Seating children next to a parent or guardian at no extra cost; and,
• Ensuring carriers develop clear standards for transporting musical instruments

Clear information will be provided to travellers in plain language about carriers’ obligations, how to seek compensation and file complaints.

Under this proposed legislation, Canadians and anyone travelling to, from and within Canada would benefit from a uniform, predictable and reasonable approach. My objective is to ensure that passengers would have a clear understanding of their rights as air travellers while ensuring that this new approach would not negatively impact on access to air services and the cost of air travel.

I have been clear that regulations would include provisions whose intent would be that any denied boarding due to overbooking is done voluntarily and that under no circumstance, someone be involuntarily removed from an aircraft after they have boarded. As Canadians, we expect that air carriers that serve our country treat their passengers with the respect that they deserve and that they live up to their commitments.

This bill also proposes that regulations be made to require data from all air service providers to be able to monitor the air traveller experience, including compliance with the proposed air passenger rights.

Liberalized International Ownership Rules

Madam Chair, the legislation also proposes to liberalize international ownership restrictions from 25 to 49 per cent of voting interests for Canadian air carriers, with accompanying safeguards, while retaining the 25 per cent limit for specialty air services.

These safeguards limit a single international investor to hold no more than 25 per cent of the voting interests of a Canadian air carrier and that no combination of foreign air carriers could own more than 25 per cent of a Canadian carrier.

The direct impact of higher levels of international investment would be that Canadian air carriers or companies wishing to create new air services would have access to a wider pool of risk capital. Consequently, that pool of capital, from both international and domestic sources, would allow the Canadian air sector to become more competitive, and would lead to more choices and lower prices for Canadians.

Joint Ventures

Another improvement in the bill is that it proposes a new, streamlined and predictable process for the authorization of joint ventures between air carriers, taking into account competition and wider public interest considerations.

In Canada, air carrier joint ventures are currently examined from the perspective of possible harm to competition by the Competition Bureau, under the Competition Act. Unlike many other countries, notably the United States, Canada’s current approach does not allow for the consideration of the wider public interest benefits with respect to specific routes. Furthermore, the Bureau’s review is not subject to specific timelines.

This raises concerns that the current approach to assessing joint ventures may make Canadian carriers less attractive to global counterparts as joint venture partners and may be limiting the ability of Canadian carriers to engage in this industry trend.

The bill proposes measures that would allow the Minister of Transport to consider and approve air carrier joint ventures, where it is in the public interest, taking into account competition considerations. the Minister would work in close consultation with the Commissioner of Competition to ensure that he or she be properly informed regarding any concerns with regard to competition. Air carriers that would choose to have their proposed joint ventures assessed through the new process would be given clear timelines for an expected decision.

Increased Access to Security Screening Services

Globally, airports are making unprecedented investments in passenger screening to facilitate travel and gain global economic advantages. Canada’s largest airports have also expressed an interest in investing in this area, and smaller airports have shown interest in obtaining access to screening services to promote local economic development.

The bill would create a more flexible framework for the Canadian Air Transport Security Authority to provide screening services on a cost-recovery basis, supporting efforts to maintain an aviation system that is both secure and cost effective.

Rail Initiatives

Locomotive Voice and Video Recorder

Madam Chair, Bill C-49 also proposes significant enhancements to increase the safety of the rail sector to build a safer, more secure rail transportation system that Canadians trust.

The proposed modifications to the Railway Safety Act would mandate the installation of voice and video recorders to strengthen rail safety by providing objective data about crew actions leading up to, and during, a rail accident. Beyond that, the requirement would also increase opportunities to analyze identified safety concerns to prevent accidents from occurring.

This would not only require companies to install the recorders, it would also limit how the recorded data could be used, within strict criteria. For instance, the Transportation Safety Board would have access to recorded data for post-accident investigations. Transport Canada and railway companies would also have access to the data for proactive safety management, and for following-up on incidents and accidents not investigated by the Transportation Safety Board.

The specific limits on the use of the data are designed to maximize the safety value of this technology while limiting its potential to infringe on employees’ privacy rights.

Freight Rail Policy Framework

Madam Chair, Canada’s freight rail system is critical to our economy. Bill C-49 would strengthen that system by enhancing its transparency, balance, and long-term efficiency.

Let me highlight key examples.

Under this bill, shippers could seek reciprocal financial penalties for breaches of their service agreements by the railways. They would have fair access to more timely processes for settling service and rate disputes, and more shippers would be eligible for the streamlined final arbitration process, in particular. Further, new measures would ensure the Agency offers shippers informal dispute resolution options, as well as guidance.

The bill would also introduce a new measure, Long-Haul Interswitching, to give captive shippers across regions and sectors access to an alternative railway. Rates would be set based on comparable traffic, with the Agency having discretion in determining comparability. The bill would modernize key grain measures like the Maximum Revenue Entitlement to promote railway investments, and ensure that Interswitching Rates are updated regularly and compensate railways adequately.

Further, Bill C-49 would enhance sector transparency by requiring large railways to report some performance, service and rate data about their Canadian operations. Transport Canada would have the authority to publicly report rate trends.

With these and other measures of this bill, we are taking important steps to ensure Canadians have the freight rail system they need, now and in the years ahead.

Marine Initiatives

Madam Chair, these aren’t the only ways we propose to improve trade to global markets. Bill C-49 would amend the Coasting Trade Act and the Canada Marine Act to enhance marine transportation and to allow access for marine-related infrastructure funding.

Specifically, amendments to the Coasting Trade Act would allow all vessel owners to reposition their owned or leased empty containers between locations in Canada using vessels of any registry. This would support greater logistical flexibility for industry.

In addition, modifications to the Canada Marine Act would permit Canada Port Authorities to access Canada Infrastructure Bank loans and loan guarantees to support investments in key enabling infrastructure.

Conclusion

I believe this proposed legislation advances important actions that will help to bring Canada’s transportation system into the 21st century. Ultimately, we need the system to meet the demands of today’s economy so that we can keep Canada’s travellers and cargo moving efficiently and safely.

Passage of this bill as soon as possible this fall would represent a critical milestone in achieving tangible improvements to our national transportation system that will benefit Canadians for decades to come.

Thank you.