Resolving Rail Disputes
For more information on resolving rail-related disputes,
go to www.cta.gc.ca/eng/rail-disputes.
Part of the Agency's mandate is to help resolve disputes between railway companies and other parties, or between railway companies.
In most cases, railway companies and other parties can resolve disputes by negotiating agreements themselves. When negotiations break down, a number of dispute resolution alternatives are available, ranging from facilitation to formal adjudication.
In 2008-09, the Agency resolved 50 rail dispute cases
Of these,
15 were resolved through facilitation;
15 were resolved through mediation; and
20 were closed through formal adjudication.
In addition, the Agency determined three disputes were eligible to be referred to Final Offer Arbitration.
The Agency investigates complaints and applications on the following topics:
- Rail noise and vibration
- Railway line construction, and road, utility and private crossings
- Transfer and discontinuance of railway lines
- Interswitching
- Running rights and joint track usage Level of service
- Public passenger services
- Incidental charges, such as fuel surcharges
Rail noise and vibration
"[The Rail Noise and Vibration Guidelines] are a great first step and we'll monitor them to see how they work out in the real world during the next three years. [The Agency] wants the process to produce a settlement that all parties are satisfied with."
– Jeff McConnell, Federation of Canadian Municipalities
In October 2008, after extensive consultations, the Agency published its Guidelines for the Resolution of Complaints Concerning RailwayNoise and Vibration. Developed to assist individuals, municipalities, railway companies and other parties in resolving these types of disputes, the Guidelines explain clearly:
- 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.
In 2008-09, the Agency received eight new rail noise and vibration complaints, and closed seven others
Of these,
6 were resolved through mediation;
1 complaint was dismissed after being referred to formal adjudication.
Construction of rail lines
In 2008-09, the Agency was involved in eight ongoing environmental assessment processes for proposed rail line construction projects, from coast to coast. Another 23 environmental assessment processes for projects such as road and utility crossings required Agency involvement.
After assessing the environmental impact of the projects under the Canadian Environmental Assessment Act, the Agency approved the construction of two new railway lines, both located in the Alberta Industrial Heartland area. The Agency approved the construction of a spur line to serve Petro-Canada's Fort Hills upgrader facilities. The Agency also issued a cease-and-desist order to CN for railway operations at its Scotford Yard transload facility, where construction of a railway line had begun without an environmental assessment and prior approval by the Agency. Once a mitigation plan was in place, construction was approved and the operation was allowed to continue.
Performance Target to be achieved by 2008
100% compliance with prescribed mitigation conditions to reduce environmental, economic and social impacts of railway construction projects
Status as of March 31, 2009: no applications for projects requiring mitigation conditions received in 2008-09
For detailed statistics on railway infrastructure and construction,
go to www.cta.gc.ca/eng/rail-stats.
Crossings
In 2008-09, the Agency processed 127 agreements filed by parties that had successfully conducted their own negotiations related to crossings. These agreements became Orders of the Agency. Where no agreement could be reached, the Agency was called upon by the parties involved to assist them in reaching a fair and equitable resolution.
The Agency issued decisions on 12 crossings through its formal adjudication process, and closed a further 14 cases through facilitation or mediation. In addition, four cases were closed internally or withdrawn.
Of these,
23 concerned private or road crossings; and
7 concerned utility crossings.
Applications dealing with recent legislative changes
Section 120.1 of the Canada Transportation Act aims to protect shippers from unreasonable charges or terms. On the basis of this new provision, Peace River Coal, a shipper, argued to the Agency that it was being charged an unreasonable fuel surcharge. However, as it operates under a confidential contract with a railway, the case was dismissed.
A level of service complaint filed by the Central Alberta Transloading Terminals Limited along with a related issue under section 120.1 was being heard at year end.
Additionally, under a new dispute resolution provision designed for public passenger service providers, VIA Rail Canada and the Hudson Bay Railway have requested that the Agency determine the rate VIA Rail will pay for the use of Hudson Bay Railway infrastructure.
Shipper complaints and determinations
Shippers using railways to transport Western grain and other types of goods are turning to the Agency on a more frequent basis to resolve related disputes. The Agency received six new level of service complaints from shippers against railways in 2007-08 and four in 2008-09, compared to only one in 2006-07.
In 2008-2009, 36% more disputes and applications involving shippers were brought to the Agency's attention than in 2007-08. Among them, the Agency received:
4 new level of service complaints from shippers against railways;
3 applications for interswitching or extended interswitching;
1 request for clarification of the applicability of specific sections of the Canada Transportation Act related to running rights;
1 application for the production of a rail tariff;
1 request by a public passenger service provider to set rates for use of a rail line; and
2 applications for review of the reasonableness of a railway's terms and conditions.
Level of service
On September 25, 2008, the Agency ruled on complaints received from six shippers that CN was not providing an adequate and reasonable level of service for the movement of Western grain for crop year 2007-2008.
The Agency found it appropriate to set a performance-based benchmark to assess if CN was meeting its basic level of service obligations.
Based on this benchmark, the Agency found that while CN had fulfilled its obligations to the Canadian Wheat Board and Providence Grain Group Inc., it was providing an inadequate level of service to four smaller grain companies. The Agency ordered CN to immediately provide a level of service to these four shippers as set out in the benchmark. The Canadian Wheat Board was granted leave to appeal the Agency's Decision to the Federal Court of Appeal.
Benchmarks specify a required outcome, but leave the means
of achievement up to the service provider.
Interswitching disputes
CN asked the Agency to resolve an interswitching dispute with American railway company BNSF. Interswitching allows traffic to be transferred from the lines of one railway company to another, at prescribed rates set by the Agency.
CN argued that some of its movements of BNSF rail cars did not constitute interswitching within the meaning of the Canada Transportation Act, and as such should be subject to commercial discussions. Furthermore, BNSF and CN disagreed on what constitutes an interchange, which is defined under the Act as a place where regulated interswitching occurs.
In deciding that rail activities between BNSF and CN do constitute interswitching, the Agency applied a broad interpretation of what constitutes a "place," as a narrow interpretation would eliminate many existing interchange points and restrict competition. CN has applied for leave to appeal the Agency's Decision to the Federal Court of Appeal.
