100 Years at the Heart of Transportation Dealing with Persons with Disabilities

A Centennial Historical Perspective of the Canadian Transportation Agency and its Predecessors

Available in multiple formats © Minister of Public Works and Government Services Canada, 2004 Printed and bound in Canada ISBN 0-662-34905-9 Catalogue No. TT4-2/2003E-PDF

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Cover photos: First passenger train to Edmonton from Winnipeg – Canadian Northern Railway Company, 1905, Photographer: G.D. Clark, CSTM/CN002380 • Ferry MV Federal Avalon, St. John’s, Newfoundland and Labrador, 1975, Photographer: M. Segal, CSTM/CN001689 • Porter assists passengers with their luggage, Halifax, Nova Scotia, 1951, CSTM/CN002828 • A TCA Canadair DC-4M North Star ﬂying over Kinley Airport, Bermuda, 1950, CSTM/CN000261 • Other 6 images are stock photography held by the Canadian Transportation Agency, ©Digital Vision. Acknowledgments

Acentury ago, on February 1, 1904, Committee, chaired by Claude Jacques, the Board of Railway Commissioners Arun Thangaraj and Judie Carrigan. began work as Canada’s ﬁrst independ- Other members of the Committee are: ent regulatory body with jurisdiction over Vice-Chairman Gilles Dufault, former transportation matters. The structure and Member Keith Penner, Craig Lee, Alison scope of that ﬁrst Board evolved over the Hale, Nancy Hay, Katie Fillmore, Paul years to its present form as the Canadian Juneau, John Corey, Louise McCreadie, Transportation Agency, with jurisdiction Michelle Raby and Julie Leroux. The over air, rail and marine matters, as well French text revision was done by Paul as the responsibility to remove undue Houle. Preparation and publication were obstacles in transportation for persons co-ordinated by Judy Deland, the Agency’s with disabilities. Chief of Publishing.

This history was commissioned as a The Agency would like to thank the centennial project by the Canadian following organizations for use of Transportation Agency to mark the their photos: the Canada Science and signiﬁcance to Canadians of trans- Technology Museum Corporation, the portation regulation and how it has Paciﬁc Pilotage Authority Canada and evolved over the past 100 years. The the Greater Toronto Airports Authority. Agency is the oldest tribunal in Canada. Design and layout prepared by Acart Communications Inc. Freelance writer Cecelia McGuire researched and wrote the history under the guidance of the Agency’s Centennial

A cknowledgments

Contents

Chairman’s Message 1

Chapter One: All Aboard, The Board of Railway Commissioners, 1904 to 1938 5

Chapter Two: Engines of Change, The Board of Transport Commissioners, 1938 to 1967 29

Chapter Three: Taking Control, The Canadian Transport Commission, 1967 to 1988 51

Chapter Four: Shifting Gears, The National Transportation Agency, 1988 to 1996 73

Chapter Five: Keeping Pace, The Canadian Transportation Agency, 1996 to 2004 87

Appendix: Members’ List 100

Bibliography 105

iii

Chapter One — AContentsLL A BOARD 1904 TO 1938

Chairman’s Message

In 2004, the Canadian Transportation development. Over time, uniquely Agency marks 100 years of service to Canadian institutions have been created Canadians in motion. to ensure that the public I believe, as this history of good is protected in the transportation regulation development of our chronicles, that the Agency transportation systems. and its predecessors reflect nothing less than the That first Board of Railway evolution of Canada itself, Commissioners, with its economic development jurisdiction over railway and its changing place in freight rates, construction the world. and abandonment, among other things, was quite On February 1, 1904, regimented in its approach. the Board of Railway It existed for 34 years, from Commissioners, with its authority over the heyday of railway expansion when railways, was established as the Canadian railway promoters rushed hither and yon government’s first independent to lay down new tracks, until the regulatory body. Depression-era retrenchment of railways and the emergence of competition from That first board, with the full powers of automobiles and aircraft. a Superior Court, became the model for not only the transportation agencies that The Board of Transport Commissioners succeeded it, but for federal regulators in was created in 1938 to succeed the first other fields as well. It is not surprising board and assume additional authority that the Canadian government’s over air and marine matters. However, regulatory history would have been the Government of Canada, seeking a pioneered by a transportation board. tighter rein on the airline industry, went The sheer vastness of our country has on to create a separate Air Transport made transportation perhaps the most Board in 1944. In 1947, the Canadian fundamental and critical component of Maritime Commission assumed authority Canadian economic and political over marine matters.

Chairman’s Message The Canadian Transport Commission (CTC), market entry and exit, as well as freedom which emerged in 1967, was created to to abandon operations. Airlines are still deal with all modes of transportation as regulated under the terms of interna- a competitive whole. Part of its mandate tional agreements but, domestically, they was to rationalize the over-built and can operate with relatively little intrusion under-used railways. It was a difficult by government. time for the Canadian railways and their customers, a time I recall from when I Today, the Agency deals much differently was living on the Prairies. A railway was with its clients and constituents than in allowed to apply to abandon rail lines; the past. Whereas its predecessors but the CTC was required to hold maintained a distance from their clients, hearings to determine if the service was the Agency today reflects how the world required in the public interest, in which has changed to become more user-friendly, case the service would be continued and more citizen-focused. Still mindful that the railway would be compensated. we are a court and must maintain Otherwise, lines were abandoned. independence and impartiality, we at It was an unwieldy and costly process. the Agency feel strongly that we have a responsibility to the public, carriers and In the early 1980s, Canada embraced the consumers to ensure they are fully aware international trend toward deregulation. of their rights and obligations under the The most notable development during Agency’s governing legislation. Our that period was the Staggers Act, which emphasis now is on communication and deregulated railways in the United States. outreach. At the same time, we strive Deregulation of airlines followed. The to keep up with developments in the move to deregulation in Canada was more transportation industry, to be informed gradual and balanced, and it led to the and tuned in. National Transportation Agency in 1987. We have shifted away from regulatory That trend toward less-intrusive regula- means whenever possible to finding tion has continued with the Canadian solutions through voluntary approaches. Transportation Agency in 1996, and its This is especially true in the area of regime is certainly the least regulated in accessible transportation for persons with our country’s history. Competition and disabilities. The mid-1990s saw two market forces are now the drivers, as significant sets of regulations develop, opposed to strict regulation. Railways the Terms and Conditions of Carriage and airlines are mainly free of rate for People with Disabilities and the regulation and they have freedom of Training Regulations for Personnel

Canadian Transportation Agency — 100 Years at the Heart of Transportation Dealing with Persons with Disabilities. resolve disputes through mediation. Our Both are far-reaching and apply to all experience to date indicates a 95 per cent federally regulated carriers. In the years success rate in helping the parties ﬁnd since these initiatives were introduced, their own solutions, quickly and inexpen- we have increasingly sought voluntary sively. We intend to continue to provide compliance through codes of practice, mediation as an alternative dispute rather than by formal regulation. resolution process.

These codes of practice were hammered The role of transportation regulation has out by the Agency, the community of always been to balance the interests of persons with disabilities and the carriers; shippers and consumers against the of course, they involved lots of consulta- interests of carriers. There is a natural tion, listening and refinement. But we tension between users and providers of were successful in putting the codes in transportation. Users always want better place and in setting target dates for their service and lower costs while providers implementation; with service standards want more business and more revenue. for all modes of transportation—rail, air and marine. That has been quite a Balancing those interests was the significant shift in our regulatory challenge presented to the Board of approach—from enforcement to Railway Commissioners when it first met voluntary compliance and monitoring. on a snowy February day 100 years ago. Since then, the one constant has been The position of Air Travel Complaints the need for a regulatory body commit- Commissioner, established in 2000 and ted to balancing these diverging interests now held by Liette Lacroix Kenniff, in a fair and transparent manner. That represents another method of resolving will remain the Agency’s goal as it complaints through facilitation and continues to adapt to a changing persuasion, rather than through a landscape in transportation in Canada. regulatory process. The Commissioner reports to the Transport Minister and to Parliament twice a year and uses public awareness to encourage carriers to treat customers fairly. Marian L. Robson In the past two years, the Agency has Chairman and Chief Executive Officer been offering a new service to clients to February 2004

CanadianChairman’s Transportation Message Agency

CHAPTER ONE All Aboard The Board of Railway Commissioners 1904 to 1938

1904 1938 1967 1988 1996 2004

February 1, 1904, the Board of Railway Commissioners was inaugurated. • August 4, 1914, Canada joins Britain in the war effort. • 1930s, the Great Depression hits–many Canadians experience difﬁcult times.

5 The Board of Railway Commissioners 1904 to 1938 The Canadian Transportation Agency in Council will have to be passed making had its origins 100 years ago in an the appointments.” atmosphere of intense commercial competition and vigorous—even Even Nature conspired against the new strident—political rivalry. It has emerged Board. Local newspapers ran stories about as a vital though largely low-key player the record snowfall in the Dominion’s in shaping the Canada we know today. capital that February, making it difficult to travel. “Snow clearing seems to be the The Agency’s story began with the principal industry in Ottawa this winter,” establishment of the Board of Railway the Citizen glibly reported. Commissioners in Ottawa on a snowbound February day in 1904. It was not an auspicious beginning, but the newly appointed Railway Commissioners CSTM/CN002380 plunged ahead. On February 9, Andrew G. Blair, as chairman of the Board, addressed a group of railway executives and business luminaries. He was an imposing figure, a large, dour-looking man, a month short of his 60th birthday, his face, beneath a heavy white beard, worn by the tense months of political fighting, and then, lately, by inertia.

First passenger train to Edmonton from Winnipeg But his voice didn’t waver when he Canadian Northern Railway Company, 1905 spoke: “The powers and jurisdiction conferred upon this Board are compre- From the beginning, the Railway hensive in their scope, far-reaching in Commissioners faced obstacles. According their effects and they will touch at a vital to the Railway Act of 1903, the Board point the already immense and was to be inaugurated on February 1, constantly increasing business interests 1904. However, as the Ottawa Citizen of the country on the one hand, and the noted on February 2, in a procedural great and always growing interests of glitch, the appointments to the Board the railway interests on the other.” had been made “by Order in Council and gazetted before the date of the coming Moments later, however, he added, “We into force of the Act which established are without a staff and without quarters the commission.” The ofﬁcial launch to transact our business… Although we would be delayed because “new Orders are quite unequipped, we thought we

Canadian Transportation Agency — 100 Years at the Heart of Transportation would take up two or three applications Canada. The result of that provision was at this date.”1 If his comments verged on Canada’s ﬁrst transcontinental railway, whining, he could be forgiven. Blair had completed in 1885 by the Canadian been working toward this goal for Paciﬁc Railway (CPR). Aid for Prince several years and was anxious to see it Edward Island’s debt-ridden railway, and accomplished. a year-round link to the mainland, lured that province into the union in 1873. As far back as 1896, he had seen the necessity of establishing a permanent At the dawn of the 20th century, shiploads and independent regula- of immigrants were pouring tory body to ensure that into the country’s ports, and the public interest was The powers and the railways, with their huge served in the race to jurisdiction conferred land grants, were largely 2 expand Canada’s railways. upon this Board are responsible for where they settled. Railways also comprehensive in their Railways had been at the controlled the movement of centre of economic growth scope, far-reaching in goods and passengers across in Canada since the 1850s. their effects and they the country, and were vital In fact, they had played a will touch at a vital to the Dominion’s industrial dramatic role in the point the already growth. creation of Canada. The Grand Trunk Railway, immense and But as Canada’s business completed between constantly increasing interests became more Toronto and Montréal in business interests dependent on rail travel for 1856, linked Canada West of the country. supplies and markets, with Canada East (now shippers began to complain Ontario and Québec), and about freight prices and helped to lay the groundwork for about the railways’ near monopolies on Confederation.3 transportation. Railways argued that they needed to charge rates that would The promise of a railway was instrumental pay their costs, which indeed they did. in the decision of Nova Scotia and New But they weren’t charging everyone the Brunswick to join as well. (The Inter- same rate, and that was the crux of colonial Railway was completed in 1876, the problem.4 linking Nova Scotia and New Brunswick to Québec.) In 1871, British Columbia Freight-rate competition was healthy in was drawn into Confederation with the Central Canada, where several rail promise of a rail link to the rest of companies vied with one another, with

Canadian TransportationChapter One AgencyChapter — ALL A BOARD 1 —1904 ALL TOABOARD1938 1904 to 1938 water transportation and with American and the railways had largely ignored railways south of the border for customers. them and set their own rates.)5 The railways had to set competitively low rates, often offering special deals to their The Railway Committee of the Privy bigger and better customers. Council was intended to regulate railway freight rates and to hear complaints as a But in regions where competition was judicial body. But Blair soon discovered low or non-existent, freight rates were that it had serious defects: it was made set higher. The railways reasoned that up of politicians who could not be called they were recouping the profits that they unbiased; it was based in Ottawa and had shaved off in the more competitive didn’t travel; committee members didn’t regions. It made good business sense to have any technical training; and there them, but not to the shippers being was no permanent staff. charged the higher rates. Inevitably the complaints were heard by the politicians A lawyer and a seasoned politician, Blair in Ottawa. was known for his canny political mind and his unwavering determination. He Some of the loudest complaints came had sat for 18 years in the New Brunswick from the Western provinces where the legislature, 14 years of that time as only transcontinental railway, CPR, had premier. When he joined Sir Wilfrid held a virtual monopoly since 1885. Laurier’s Liberal government, he was 52 Successive governments in Ottawa, years old. He brought with him to which had heavily subsidized much of Ottawa his wife, Anne, a welcome the railway construction across Canada, addition to the capital’s social circle, and sought a solution to the debate. those of his ten children who were still living at home.6 When Andrew G. Blair became Canada’s Minister of Railways and Canals in 1896, As Minister of Railways and Canals, he set there was already a Railway Committee to work to find solutions to the freight- of the Privy Council, of which he became rates problem. In 1897, Blair worked on chairman. The Committee had been the Crowsnest Pass Agreement in which created by the Railway Act of 1888. (This the government gave the CPR a subsidy Act was a revision of the General Railway for construction of its Crowsnest Pass line Act of Canada of 1868, the first railway in return for the company reducing legislation after Confederation, which rates—the so-called Crow rate—on grain itself was drawn from the Railway going to the Lakehead and to many Clauses Consolidation Act of 1851. westbound routes. Neither of these acts had any real force,

Canadian Transportation Agency — 100 Years at the Heart of Transportation In 1899, Blair commissioned Simon J. The Grand Trunk Railway—with lines McLean, a noted political economist of within Central Canada that reached the time, to study railway commissions in from North Bay, Ontario in the north, Britain and the United States, and then, to Chicago in the U.S. Midwest, and to in 1901, to examine railway rates in Portland, Maine in the east—proposed, Canada. With the results of McLean’s two with government support, to build a reports, Blair introduced a bill in 1902 to Western system from its northern establish a railway board. That bill was terminus at North Bay to Winnipeg, and rejected, so Blair went back to work to on to the West Coast. Promoters of the draft another proposal.7 Canadian Northern Railway (CNR), with links from Edmonton to Port Arthur On March 20, 1903, he introduced a (now Thunder Bay), proposed branches revised bill to establish a Board of extending east and west to both coasts. Railway Commissioners, an independent At ﬁrst, Laurier attempted to work out body with regulatory powers over a deal in which the two railways would railways. That bill passed, and with the combine their efforts into one Governor General’s assent in October 24, transcontinental network, but an 1903, it would become law. agreement could not be reached.8

Meanwhile, the government was Laurier remained determined to have a considering another solution to the second transcontinental railway. He freight rates issue—competition. And Sir favoured the Grand Trunk and proposed Wilfrid Laurier had taken the matter into a deal in which the government would his own hands. Two railways had been build the eastern section of the new line lobbying for several months for and the Grand Trunk would build the government funds to expand their lines western portion. in the West. Blair objected, chiefly because the Laurier held the view that, with compet- Grand Trunk already had an eastern ition, the CPR would lower freight rates, terminus at Portland, Maine, completely Western shippers would be happy, and bypassing the Maritime provinces. Blair the competing railways would flourish. had his own proposal—the Canadian He also had visions of the grain-rich West Northern, with an extension to the expanding with new settlers and new West Coast, would hook up with the industry. He reasoned that a second government-owned Intercolonial at railway would be needed to accom- Québec City, which would take traffic modate this burgeoning wealth. through the Maritimes to Halifax.

Chapter One — ALL A BOARD 1904 TO 1938 Laurier would not be deflected from his faltering steps was an opportune route own developing plan. Blair would not for retreat. And so there he sat on that support him. In the resulting impasse, frosty February day in 1904, in an office Laurier decided to ignore Blair, excluding he had known well as a cabinet minister. him from the railway discussions. On The Board had been given temporary July 13, 1903, Blair resigned as Minister quarters in the Railway Committee’s old of Railways and Canals. offices, in the West Block of the Parliament Buildings. On July 30, Laurier presented his bill giving the go-ahead for the Grand Trunk But, despite the familiar surroundings, Pacific Railway. Blair stood as a private Blair had entered a whole new realm, an member in the House of uncharted course in Canadian Commons on August 11, regulation. No one could 1903, to deliver a speech The doubt the tremendous condemning the Grand Board of Railway authority that had been Trunk plan. It was a stirring bestowed on the Board. It Commissioners was bit of rhetoric, but it had had the full powers of a little effect on the plan. the first independent Superior Court to hear all On September 29, the bill regulatory body railway complaints and its passed its third reading. established by the decisions had the force of Dominion law. It had regulatory powers In December, Laurier over construction, operation appointed Blair to head government. and safety of railways the new Board of Railway (except those owned by the Commissioners. The two government), and on such men had not resolved their differences, matters as freight rates, fares, demurrage but the veteran politicians had made and other charges. expedient choices. Laurier saw that Blair’s proven abilities would be put to good According to the Railway Act, the Board use as chairman of the new Board, and was to consist of three commissioners, appreciated the advantage of removing each appointed for a ten-year term. him from the House of Commons where Michel E. Bernier, who had been in he could cause trouble. Laurier’s cabinet as Minister of Inland Revenue and who had sat on the Railway Blair, for his part, had failed to stop the Committee of the Privy Council with Grand Trunk bill and was short of allies in Blair, was appointed the Deputy the House. The task of leading the new Commissioner. The other member of the Board, his brainchild, through its first Board was James Mills, who had been

Canadian Transportation Agency — 100 Years at the Heart of Transportation called from his post as the ﬁrst president and approved construction and repairs of the Ontario Agricultural College in on railways and crossings. The Accident Guelph, Ontario. Branch investigated railway accidents.

Together the three men set to work to The Board was also establishing its establish rules and regulations for the credentials with the Canadian public. new body. They had no models to In July 1904, the Canada Law Journal follow. Theirs was the first independent reported that “we doubt if even the regulatory body established by the Dominion Government, which Dominion government. They would lay constituted the Board, has yet realized the groundwork for a new method of that it has created a Court of such public regulation in Canada. extended jurisdiction as this Board possesses, and which jurisdiction, if The first Annual Report of the Board wisely exercised by a tribunal of shows that the commissioners took up competent members, will be both a their tasks with a great deal of energy. safeguard to the public and a speedy Between February 9 and October 18, the method of settling differences between Board held 62 days of public sittings. railway companies.” Although 38 of those days were spent in Ottawa, the Board travelled to Toronto But the 60-year-old Blair, busy as he was for six days of hearings in June and, marshalling the Board through its between August 8 and September 18, it formative days, had not hung up his held 18 days of sittings in 15 different gloves in the political ring. The fall of locations between Winnipeg and Victoria. 1904 brought the excitement of a federal election and fresh battles to be fought. The Board also hired 19 permanent Laurier led his campaign with promises employees—one of them being Blair’s of a bigger and better Canada. son and namesake, A.G. Blair Jr., as the Board’s law clerk—and set up four The election would yield one of the departments to handle routine work. most often repeated—and misquoted— phrases in Canadian political history. The Records Department dealt with the On October 15, The Globe newspaper paperwork—complaints received by the reported on an election rally for Laurier, board, orders and decisions issued by the at Massey Hall in Toronto. “Let me tell Commissioners as well as investigations you, my fellow countrymen, that all the carried out. The Traffic Department dealt signs point this way, that the twentieth with tariffs and freight classifications. century shall be the century of Canada The Engineering Department inspected and of Canadian development,” Laurier

Chapter One — ALL A BOARD 1904 TO 1938 declared. Among Laurier’s promises was Another story in the Telegraph that day the second transcontinental railway that carried Blair’s last address as chairman to his deal with the Grand Trunk Railway the Board of Railway Commissioners. would provide. “I feel that this infant child, at whose birth I closely attended, has been nursed Four days later, the October 19 edition of by this time into some degree of strength the Daily Telegraph in Saint John, New and vigour. What little abilities and Brunswick carried a blaring headline, energies I possess have been applied in “BLAIR RESIGNS AND WILL STUMP that direction. I think it has now got COUNTRY AGAINST G.T.P. SCHEME.” fairly well on its feet, that it will be able According to the Telegraph, Blair had to move along and that it will grow in sent the following telegram to its editor: favour. I believe that this commission will “I authorize the announcement that I grow in strength and usefulness and have resigned my position as Chairman come to be regarded as one of the most of the Railway Commission and have important and useful institutions in the notified the Prime Minister that, beyond country.” He also alluded to “prospects” re-affirming my strong objection to the in his future, suggesting that he might Grand Trunk Pacific scheme I have no have other job opportunities. present intention of re-entering public life.” Blair’s warning about the Grand Trunk was repeated on October 22 in the Saint Laurier’s deal with the Grand Trunk John Telegraph: “It is vital that the Railway had stipulated that the Government should not only own but Dominion government would build the operate the railway, because in no other eastern half of the system, from way can you guarantee that the traffic Winnipeg to Moncton, New Brunswick, will go through a Canadian outlet. We to be called the National Trans- are spending the money, and we are continental. After completion, the getting nothing for it.” Blair again government would lease that section trumpeted the advantage of the to the Grand Trunk’s still-to-be-built government-owned Intercolonial Railway subsidiary, the Grand Trunk Pacific, which system through the Maritimes. would extend across the Prairies to the port of Prince Rupert in British Columbia. The Conservative-aligned papers However, Blair, along with many others, promoted the view that Laurier’s Grand raised doubts that the Grand Trunk Trunk deal was selling Eastern Canada would use Moncton as its eastern down the river. The Maritimes fretted terminus when it already had one in that they would be thrust out in the cold Portland, Maine. if the Grand Trunk project went ahead.

Canadian Transportation Agency — 100 Years at the Heart of Transportation Reports speculated that Blair would run message was clear. Blair had withdrawn as a Conservative, that Laurier’s defeat from the election campaign. He had was imminent. Liberal-backed papers given his final performance on the minimized the impact of Blair’s political stage. opposition and even questioned the authenticity of Blair’s telegram that had On November 3, 1904, Laurier and his been quoted in the Saint John Telegraph. Liberal government were re-elected and the Grand Trunk Pacific deal went ahead, A week earlier, William Mackenzie though it would be several years before and Donald Mann, the promoters the railway construction was completed. behind the CNR, had bought La Presse And, as it happened, the promoters of newspaper in Montréal. A rumoured the CNR expansion managed to beg and conspiracy to turn La Presse, a long-time borrow enough financial backing to build Liberal supporter, into a weapon against their own transcontinental route that Laurier sent the prime minister scurrying would link with the Intercolonial line. to Montréal to root out the suspected Canada would have not two, but three perpetrators.9 transcontinental railways, to cross its great expanse from sea to sea. Then, on November 1, Blair’s withdrawal from the political campaign was Back at the offices of the Board of announced. Under the headline, “BLAIR Railway Commissioners, Albert C. Killam ON THE RAILWAY JOB”, the Telegraph moved into the chairman’s spot on reported: “Hon. A.G. Blair stated, before February 7, 1905.10 He was a career jurist, he resigned as Minister of Railways (he although he had spent a brief time in the had resigned from that post in 1903), Manitoba legislature. Born in Nova that he could not stand up in Parliament Scotia, the son of a sea captain, he had and attempt to steer through the Grand gone to Ontario to study and practise Trunk Pacific bill without wearing a mask law, and then on to Winnipeg where he and carrying a dark lantern, so great was had risen to the position of Chief Justice the swindle of public money.” of the Court of Queen’s Bench in 1899. In 1903, he had become a justice of the But, the front-page story continued, Supreme Court of Canada. “And it is only (now in November 1904) the sudden illness in Mr. Blair’s family With Killam in charge, politics were that prevented him from taking the pushed aside while the Board turned to stump against this outrageous the pressing business at hand. In the next expenditure of the people’s money.” two years, the Commissioners made two There was no other explanation. But the major decisions regarding freight rates

Chapter One — ALL A BOARD 1904 TO 1938 that illustrate the early acceptance of the transmission. In the telephone industry, principle of different rates according to a similar principle was used when Bell region. In 1906, the Board allowed the Telephone, which had a monopoly in a use of the ‘mountain scale’, a higher large part of Canada, was prohibited tariff charged by the CPR on freight from providing content-based services. going through British Columbia. The Board had decided that the higher rate Another major area of regulation for was justiﬁed because the cost of moving the Board was railway safety. In 1907, freight through the Rockies was greater the Board received a petition from the than elsewhere. In 1907, at a Toronto Ontario Trainmen’s Association hearing on international rates, the Board expressing concerns about safety reduced tariffs on freight carried in regulations for railway workers. The Ontario and Québec in response to lower workers had reason to be concerned. tariffs south of the border. In the twelve-month period ending in March 31, 1908, the death toll in railway In 1908, the Board assumed jurisdiction accidents was 529 with 1,309 people over express, telephone and telegraph injured. Among the dead were 246 tolls. The Board approved tariffs and the employees. An alarming 806 rail workers licensing of new companies, and settled had been injured. The Board’s Accident disagreements. Not only did the new Branch reported that year that duties represent conﬁdence in the Board, derailments and head-on collisions but they also underscored the link accounted for about 40 per cent of the between telecommunications and the casualties and added, “This is a state of railway. The telegraph system followed affairs that calls for the Board’s the railways’ rights of way and was used immediate attention.” by the railways for signalling. The Board had already created the Newspapers also relied on the telegraph Railway Equipment and Safety to transmit news. In 1910, the Board Appliance Department, but the rail ruled that the CPR, which was operating employees proposed a Uniform Code a telegraph news service, was using of Train Rules for Canadian Railways that discriminatory pricing by charging a would ensure that employees were well higher price for delivering messages trained, trains were properly equipped that originated with other news services. and hazardous practices were eliminated. The Board’s ruling established a basic The Board invited railways and other principle of Canadian telecommuni- interested parties to respond and, cations—the separation of control on July 12, 1909, the new Uniform of message content from control of Code was adopted.

Canadian Transportation Agency — 100 Years at the Heart of Transportation On March 1, 1908, Chief Commissioner judge of the Superior Court of Canada or Killam died of pneumonia. It was a great of any province, or who is a barrister or loss to the Board as described in the advocate of at least ten years’ standing Annual Report of that year: “Mr. Killam at the bar of any province.” never spared himself and… he was indefatigable in his efforts to carry into D’Arcy Scott, a prominent lawyer and the effect the purposes for which this Board mayor of Ottawa, was appointed the was created… Mr. Killam realized that the Assistant Chief of the Board. Simon J. Railway Act was ‘on trial’ and that it was McLean, the political economist who had well to proceed carefully and cautiously. written the railway reports that had He felt that when action was taken by formed the basis for Blair’s bill to create the Board, there should be, as far as the Railway Board, was another worthy possible, no uncertainty in regard to the appointment. The third was Thomas propriety and correctness of such action.” Greenway, who had been Premier of Manitoba from 1887 to 1900, and for a CSTM/CN002526 time its Agriculture Minister, and who had ﬁrsthand knowledge of the West’s attitude to railway rates. Greenway, however, was 70; he took ill upon arrival in Ottawa and died without ever sitting on the Board.

On May 19, 1909, a further amendment to the Railway Act gave the Board of Railway Commissioners jurisdiction over

First train into The Pas–railroad employees electric power rates. The Board, with its and passengers with luggage increasing workload and growing staff, The Pas, Manitoba 1908 began to lobby for larger quarters. (Since its early days, it had ofﬁces and a court- On March 28, 1908, James Pitt Mabee, room at 64–66 Queen Street in Ottawa.) a judge from Ontario’s High Court of Justice, became the new chief A Railway Grade Crossing Fund was commissioner, and then on July 29, the introduced in 1909, to be administered Railway Act was amended to enlarge the by the Board with an annual injection of Board to six members from three. A new $200,000 from government, which would requirement stated, “Any person may be help provide devices like signs, lights appointed chief commissioner or assistant and fencing to protect the public at chief commissioner who is or has been a railway crossings.

Chapter One — ALL A BOARD 1904 TO 1938 In the Annual Report of 1910, the avalanche killed 62 CPR workers west Accident Branch stated: “Accidents for of Rogers Pass. The workers had been the period ending March 31, 1910, would clearing the tracks of snow from an be a record (low) had it not been for the earlier avalanche, according to a unfortunate accident at Spanish River.” Vancouver Province report the next day. They were buried in snowbanks more A CPR train travelling from Montréal to than twenty feet high. The train’s engine, Minneapolis derailed on January 21,1910, sitting on the tracks, was overturned by about 37 miles west of Sudbury, Ontario. the impact. There were no survivors. According to the weekly newspaper, the Renfrew Mercury, “at least half a hundred The Board dealt with other safety human beings had been hurled to concerns. In March 1911, it issued a immediate death or almost immediate circular to the attorneys general of destruction when a train, called the Soo the nine provinces. “During 1911, Express, left the rails on a straight piece 140 persons were killed and 69 injured of track just east of the bridge over the while trespassing on railway property. Spanish River.” Companies are doing their utmost to prevent this unnecessary killing… but “The engine, tender, mail, express and when they prosecute… many magistrates baggage cars remained on the rails and look upon the matter as so trivial that it the second-class car narrowly escaped has been found most difficult to obtain going off where the rails spread.” convictions. Unless offenders are However, the next second-class car swung prosecuted, it will be impossible to around to hit the bridge and burst into lessen this death rate.” flames. “Following these (cars) came the diner and the first-class car, which plunged In November 1911, the Board of Railway downward into the river on the north Commissioners and its staff, now side of the bridge. The sleeper following numbering 63, moved to the newly plunged down an embankment twenty constructed Grand Trunk Railway Station feet high, and turned over on its side at building at the corner of Rideau and the edge of the ice.” The death toll was Elgin Streets. reported at 42, though newspaper reports speculated that some bodies Meanwhile, shippers and railways would never be recovered from the ice- continued to bicker about the various bound river. Twenty people were injured. freight rates charged in different regions and for different commodities. Six weeks later, there was another Hopes were diminishing that the two dreadful accident. On March 4, a sudden new transcontinental railways would

Canadian Transportation Agency — 100 Years at the Heart of Transportation eliminate the imbalance in rates. The The Manitoba Free Press in Winnipeg Grand Trunk and Canadian Northern ran this headline on April 8, “RAILWAY were both struggling under the COMMISSION REFUSES WESTERN financial burden of their expansion DEMAND FOR EQUALITY OF RATES WITH projects, while Canadian Pacific, with EASTERN CANADA” and went on to good management, was continuing to explain: “The lowest scale in the West, operate at a profit. namely the Manitoba standard tariff, will apply to the other two Prairie In 1910, boards of trade in the Western provinces and the British Columbia provinces had raised an outcry against lake section. A somewhat higher but what they called “discriminatory freight decreased standard is to apply to the rates” and Chief Commissioner Mabee Pacific section.” began an investigation into the rates and the so-called mountain scale. But Mabee Although Manitoba was unhappy with didn’t get a chance to finish his task. On the decision, others in the West gave it April 29, 1912, while presiding over a a warmer reception. sitting of the Board in Toronto, the robust 52-year-old Chief Commissioner The Regina Leader was full of praise: suffered an appendicitis attack and died “The Board of Railway Commissioners, on May 6. and particularly its chairman, Mr. H.L. Drayton, are deserving of credit for the Henry L. Drayton, a distinguished lawyer, comprehensive manner in which they left his job as counsel for the City of have dealt with what was admittedly a Toronto to replace Mabee on June 29. He complicated and difficult problem. was just 43, but already had made an The creation of the Railway Commission impression in Canada’s legal community. was one of the best acts of the Laurier Drayton quickly set to work on the government. It has revolutionized railway freight rates case. By November 24, 1913, matters in Canada.” hearings were wrapped up and a decision was issued on April 6, 1914. The Calgary Herald noted “the great advantage of having a permanent The Board found that although the Board of experts on the job.” A large higher freight rates in Western Canada photograph of the handsome Chairman might be discriminatory, they were Drayton was carried on the front page, justified by the greater competition with a caption that explained, “This is that the railways faced in the Eastern the man who made the decision,” provinces and that the rates were, as if he was particularly deserving in fact, reasonable. of gratitude.

Chapter One — ALL A BOARD 1904 TO 1938 Meanwhile, the Board’s staff was dealing ominous rumble could be heard from with other urgent matters. Fires had across the Atlantic. German troops were been a persistent hazard along the charging through neutral Belgium in railway lines, especially in forested areas, their advance on France. Great Britain and on January 1, 1913, the Board issued an ultimatum for Germany to appointed a full-time fire inspector. withdraw from Belgium. When the ultimatum’s deadline expired on “A condition of unusually severe drought August 4, Britain declared itself at war. obtained during the spring and summer Canada followed suit, and suddenly— season of 1914,” the Annual Report for almost overnight—the country’s that year stated. “A total of 1,346 fires domestic problems were shoved aside. are reported as having started within 300 feet of the railway track, throughout The hopes of the debt-laden Grand Trunk the Dominion, during the fire season of and CNR for more government support 1914. These fires burned over a total area or for foreign investment evaporated of 191,770 acres, of which 49,326 acres with the onset of war. The War Measures were young forest growth… and 107,496 Act of 1914 conferred emergency powers were merchantable timber.” Of the on the federal cabinet. The whole 1,346 fires, 904 were reported to have machinery of government was directed been caused by railways. The Board to the war effort, and gradually all issued orders to clear brush from rights of facets of Canadian industry and trade— way, and to install fireguards. The Board from food and clothing to fuel— also began to study the sparking hazards fell under special regulation. As the presented by certain types of coal. years dragged on, the cost of supporting It suggested that oil-burning engines the war took its toll and shortages were less likely to emit sparks. developed.

The Grand Trunk Pacific had completed The human sacrifice was tremendous as its tracks from Prince Rupert to Winnipeg more and more soldiers signed up for on April 7, 1914. The Canadian Northern service. In its annual reports during the wouldn’t finish construction of its war years, the Board of Railway transcontinental route until 1915. Both Commissioners carried its own honour companies were struggling financially roll, listing employees who had joined the and made repeated pleas for Canadian Expeditionary Forces Overseas. government aid. Canada’s workforce shrank; at the same time, industries slowed peacetime-style Then, as Canadians moved through the production, shortages developed and sultry days of the summer of 1914, an prices rose. Workers at home, seeing

Canadian Transportation Agency — 100 Years at the Heart of Transportation themselves at an advantage with the because U.S. rail workers had won a reduction in manpower, demanded significant increase in wages and their higher wages and prices continued Canadian counterparts were threatening to climb. to strike. This time, the increase was issued by Borden’s government upon the In 1915, the railways applied for rate Board’s recommendation. increases in Eastern Canada, and in 1916 the Board granted their demands. The The increases came too late, however, railways themselves sought remedies to for the Grand Trunk and the Canadian their financial woes. On Northern. Both railways October 23, 1917, the teetered near bankruptcy. In Canadian Railway In its 1915, the Grand Trunk had Association for National annual reports reneged on the deal made Defence was formed, with Laurier over a decade during the war years, and railways began co- earlier to take over the operating to avoid the Board of Railway National Transcontinental, duplication of services Commissioners which had been completed and to deal with rail-car carried its own on June 1, 1915, with 11 shortages. honour roll, listing government funds. It also offered to hand over its employees who had As the price of the First Western subsidiary, the World War mounted, joined the Canadian Grand Trunk Pacific, to the Board of Railway Expeditionary Forces the government. Commissioners granted Overseas. further nationwide railway In May 1916, Borden rate increases in 1917. But appointed a Royal the Western provinces and agricultural Commission on Railways. He chose the organizations appealed the decision to Chief Commissioner Drayton from the the government. Prime Minister Robert Board of Railway Commissioners to Borden responded by making the serve on the royal commission along increase effective for only one year after with W. M. Acworth, a British railway the war, and by imposing a war tax on economist, and A.M. Smith, president CP, which was still managing to keep its of the New York Central Railway. Their accounts in the black. The increase went findings were released in May 1917. into effect in March 1918. Although Smith dissented, Drayton and Acworth agreed that the CN, the Grand A few months later, in July, the railways Trunk and the Grand Trunk Pacific asked for another rate increase, this time should be united into a single national

Chapter One — ALL A BOARD 1904 TO 1938 railway with other railways that the in a violent clash with the Royal NorthWest government already owned, including Mounted Police. Thirty people were the Intercolonial.12 injured and one died. Other strikes broke out across the country that summer. A revised Railway Act of 1919 provided for the incorporation of the Canadian At the Board of Railway Commissioners, National Railways Company with a board changes were afoot. Chief Commissioner of trustees to oversee its management. Drayton had been granted a knighthood By 1923, with the addition of the Grand for his war effort. On August 1, 1919, he Trunk and Grand Trunk Pacific, the left the Board to become finance minister amalgamation was completed and the in Borden’s Union government. The next Canadian National Railways system was day he was replaced by Frank Carvell, in operation. who had just jumped ship from his post as Public Works Minister. The war alone could not be blamed for the failure of the competing railways. The new chairman was popularly known Over-building and duplication of services as Fighting Frank Carvell. He had none of had crippled them with debt. The Drayton’s polish or charm. At 57, he was enormous growth that had been a lawyer and a politician who, after a anticipated in the West at the turn brief excursion to the New Brunswick of the century had not materialized. legislature in 1899, had resigned to run Immigration had been curtailed by the federally. He lost in the election of 1900, war, as had industrial development. but won in 1904 and sat with Laurier’s Liberals. He then broke with Laurier over The war had taken a terrible toll on the conscription issue and joined Borden. Canada. When peace finally arrived, Carvell was brusque in demeanor, a the country was weighed down with legacy from his early training in the enormous debt, high inflation and Canadian militia, and had a reputation shortages in food and other staples. Its for being outspoken and feisty. His industries were in disarray. It had lost a character was perhaps not ideal for large part of its workforce on Europe’s a judicial position. battlefields. Many of those who came home were maimed in body and spirit. The railways continued to seek increases to their rates. Although the CPR was still The Winnipeg General Strike, in 1919, operating in the black, the higher cost lasted from May 15 to June 25, involved of labour and fuel was hurting all the more than 30,000 workers, and resulted railways. When Arthur Meighen’s

Canadian Transportation Agency — 100 Years at the Heart of Transportation Conservatives took over the government government. Prime Minister Meighen on July 20, 1920, there was an asked the Board to review its decision, application from the railways for a although he didn’t raise any real 35 per cent advance before the Board of objections to it. Upon review, the Railway Commissioners. But objections Board restated its decision. The Board had been raised by shippers and was displaying its independence and regional interests. resistance to political pressure, a laudable response, but the shippers weren’t Carvell called for a Board hearing in appeased.13 Ottawa for August 10. He refused requests to hold hearings around the In the spring of 1921, at the request country on the issue. An article in the of Cabinet, Carvell set out with Manitoba Free Press on August 6, 1920, Commissioner A.C. Boyce to hold offered some reaction to Carvell’s hearings in Western Canada on rate decision: “Curtly declining to consider equalization, that is, charging shippers the request of the Calgary board of trade the same rates no matter in what part of for a Western sitting of the Railway the country they did business or what Commission before applications for rates commodity they shipped. The hearings increases are disposed of, and charging that followed revealed just how his telegram ‘collect,’ Hon. Frank B. Carvell, impossible an equalization scheme would chairman of the Railway Commission, be in a country with so many diverse wired the Board yesterday as follows, regional interests. It was becoming ‘Telegram received. All principles therein painfully obvious that there would be no set forth can be argued in Ottawa as well satisfactory solution, within the Board’s as in the West.’ “ regulatory powers, to the divergent regional interests and the proﬁt The Free Press story continued, “His lack objectives of the railways. Carvell, for of courtesy, and his departure from the his part, made some public speeches universal business practice of prepaying defending previous Board decisions, and messages of this character, cause was criticized for expressing his opinions widespread comment.” so openly. He was straying from the impartiality required in his position.14 Carvell wrapped up the rates hearing by August 21, and issued a judgment on The governments of Arthur Meighen and August 27, raising rates between 35 and his successor, William Lyon Mackenzie 40 per cent. Provincial, municipal and King, continued to grapple with the shipping representatives appealed to the equalization of freight rates. At the same

Chapter One — ALL A BOARD 1904 TO 1938 time the Canadian economy entered a In October, after a seven-day hearing, the downturn that lasted into the mid-1920s. Board decided to help the railways by The railways reduced some rates of their dispensing with the Crowsnest Pass own accord and the railway commission Agreement, despite the 1922 statute that lowered some more. had reinstated the relatively low Crow rate on grain. In 1922, the government appointed a special committee to study the Crowsnest An appeal to the Supreme Court by the Pass Agreement of 1897, in which the Western provinces resulted in a ruling in CPR had agreed to certain rate reduc- 1925 that the Board couldn’t drop the tions. The committee restored some parts Crow rate. The railways could, however, of the original Crow agreement—which use the narrow interpretation of the had been lifted during the war—to agreement as set in 1897. In response, reduce rates for shippers.15 King’s government stepped in to cancel the Crow-based rates, except those on In 1923 the Board, at the request of grain and ﬂour. Parliament also ordered cabinet, reduced railway rates on grain the Board to hold a general inquiry into exports from Vancouver. other rate issues.16

On August 9, 1924, Frank Carvell died On September 2, McKeown and amid a clamour for an investigation of Commissioner Frank Oliver, a Westerner the Crow rate. who had founded the Edmonton Bulletin, approved ﬁxing the grain rates Prime Minister Mackenzie King to Vancouver based on the Crow rate. appointed Harrison A. McKeown, the They did this despite the opposition of chief justice of New Brunswick’s Supreme three other Board members, who had Court, to replace Carvell. McKeown had made a decision on the same issue in served in the New Brunswick legislature 1923. Simon J. McLean, who had been as Solicitor General and Attorney with the Board for 17 years, A.C. Boyce General. In 1908, he was appointed a and Calvin Lawrence, were concerned, justice of the province’s Supreme Court in fact, by the lack of impartiality in and later Chief Justice. He had also McKeown’s decision. McLean summed taught law, and had been dean of the up their objection “that fairness and law faculty at the University of New reasonableness of the rate is to be Brunswick from 1922 to 1924. McKeown determined on the facts after due was 61 when he joined the Board and he enquiry; that the order was issued on a soon found problems of his own. record partially heard and incomplete”.17

Canadian Transportation Agency — 100 Years at the Heart of Transportation A new method of answering the needs of stock market suffered a drastic fall in the shippers and the railway companies values. On the same day, the Winnipeg was found in the Maritime Freight Rates Grain Exchange was hit by falling prices. Act that was adopted in 1927. The Act The Great Depression had arrived. reduced by 20 per cent the local tariffs Hundreds of thousands of Canadians and rates on freight originating in the were unemployed, some starved, others Maritimes and bound for other parts of lost their homes, and families were Canada. The Act also allowed for the broken apart. compensation of railways for any losses resulting from the reductions. The Board The government looked for ways to offer was given the task of determining the assistance. By 1933, more than a million annual compensation for the railways. Canadians were on government-funded relief. Make-work projects were estab- Also in 1927, the Railway Board issued a lished to give jobs to the unemployed. decision in the General Rates Investigation by Among the projects were several which it maintained the higher mountain supported by the Railway Grade Crossing tariff and transcontinental rates to interior Fund. From 1930 to 1938, the govern- points; it also ordered a lower rate on grain ment increased its financial allotment to over the Canadian National route from the Fund, which had been administered the West to Québec City, and required by the Board since 1909, to contribute railways to adopt a more liberal interpre- to safety improvements at highway tation of the 1925 grain legislation. crossings, now with the added objective of providing work. In 1929, approval of tolls for international bridges and tunnels was added The railways also made use of govern- to the Board’s jurisdiction. ment relief funds to clear the railway rights of way. A huge clearing effort in In the Annual Report for that year, the 1936 led to this report from the Board’s Board stated that the fire season was fire inspector: “During the season of one of the worst seen in 40 years in the 1936 the railways… carried out a large Prairie provinces. What the report amount of right-of-way clearing with described as a “long period of extreme special gangs recruited from the ranks of drought and high winds in the West” the unemployed who had heretofore resulted in a poor grain crop that fall. been domiciled in labour camps throughout the country. This work will There was more bad news to come. have beneficial results in greatly reducing At the end of October, the Wall Street the fire hazard.”

Chapter One — ALL A BOARD 1904 TO 1938 The next year, the fire inspector reported, and asked the 64-year-old Fullerton to “A minimum of major clearing of rights head the board.19 of way was carried on during 1937. Work in the previous year accounted for At the same time, the government 1,700 miles, on both sides of the tracks.” adopted the Canadian National-Canadian To no one’s surprise, the number of fires Pacific Act of 1933 to encourage co- along railway lines was greatly reduced operation and co-ordination of the that year. railway system. In the coming years, the two railways, crippled by the economic Meanwhile, McKeown retired on March 1, standstill and loss of customers, would 1931, as chief of the Railway Board. agree to pool certain passenger services, Charles P. Fullerton, a and eliminate unprofitable justice of the Manitoba duplication of services. Court of Appeal, was By the mid-1930s appointed on August 13, air travel was In 1933, the Board of Railway 1931 to replace him. becoming more Commissioners assumed jurisdiction over the In November, in the depth common with several abandonment of rail lines, of the Great Depression, small airline in which they were given R.B. Bennett’s Conservative companies operating discretion to weigh the government appointed a in Canada. railways’ financial royal commission to look responsibilities against the into the condition of users’ transportation needs. Canada’s transportation system. Mr. Justice Lyman Duff, of the Supreme During 1934 and the first half of 1935, Court of Canada, was named head of no chief was appointed to the Railway the commission. The Canadian National Board, and the position was temporarily Railways system was suffering financially filled by Assistant Chief Commissioner and the government sought a solution Simon J. McLean, who had been one of to the public railway’s problems.18 the original designers of the Board, and now had served on it for more than In 1932, Sir Henry Thornton resigned as 25 years. head of the CNR, a position he had held for close to ten years, amid rumours of On August 12, 1935, Hugh Guthrie took lavish spending. The next year, the over as Chief Commissioner. Guthrie was government set up a three-member a lawyer from Guelph, Ontario, with a board of trustees to govern the CNR, long career in politics. He had entered

Canadian Transportation Agency — 100 Years at the Heart of Transportation the House of Commons in 1900 and sat By the mid-1930s air travel was becoming with Sir Wilfrid Laurier’s Liberals until the more common with several small airline conscription bill of 1917, when he had companies operating in Canada. moved to Borden’s Union government, CSTM/CN000246 and later to the Conservatives.

After Arthur Meighen resigned as Conservative leader, Guthrie had been a frontrunner in the 1927 leadership campaign. At the convention, Guthrie was the ﬁrst candidate invited to speak. In a fateful slip-of-the-tongue, however, he had announced: “Ladies and gentle- men, I welcome this, the greatest Liberal convention in all history.”20 R. B. Bennett would go on to win the leadership race and to become prime minister. It was now Bennett’s government that People, airplanes and the R.100 at Saint-Hubert, Québec August 1930 appointed Guthrie in 1935 to the Board of Railway Commissioners. Guthrie was 69 years old, and the Board had entered In 1935, a plan for a national airline its fourth decade. was being considered by Bennett’s government. However, a fall election Railways were no longer the only means brought the Liberals back to power and of transporting freight or passengers Prime Minister William Lyon Mackenzie across the country. Road construction— King put the transportation portfolio including major projects like the Trans- into the hands of Clarence Decatur Howe. Canada Highway—and technological advances were making motor vehicles Howe had been born in the United States a viable source of competition. and trained as an engineer. In Canada, he had made a successful business of The civilian aviation industry had also been building grain elevators. As the Minister developing in Canada since World War I. of Railways, Howe disbanded the board Bush-ﬂying had long been an accepted of trustees that had been overseeing the method of carrying passengers and goods Canadian National Railways, and to areas of Canada’s North where no dismissed Fullerton, the former Chief of other transportation was available. the Board of Railway Commissioners.

Chapter One — ALL A BOARD 1904 TO 1938 Then he set about reforming Canada’s Symbolic of that change were two transportation system. The Transport Act retirements announced in the final of 1936 created the first federal Depart- Annual Report of the Board of Railway ment of Transport with Howe at its Commissioners: Simon J. McLean, who helm. The department consolidated the had written the reports at the turn of functions of three departments: Railways the century that had assisted A.G. Blair and Canals, the Civil Aviation section in designing the Railway Act of 1903, which had been under the umbrella retired as Assistant Chief Commissioner of National Defence, and the Marine to become a technical adviser. And Department. A.G. Blair Jr., the son of the founder and first chairman of the Board, retired as In 1938, the Transport Act was passed legal counsel on November 28, 1938. creating the Board of Transport He had been with the Board since 1904. Commissioners from the old Board of Railway Commissioners.

The era of railway supremacy had ended. It was time to move on.

Canadian Transportation Agency — 100 Years at the Heart of Transportation Notes for Chapter One

The Board of Railway Commissioners’ annual reports (1906 to 1937) were the main source of information for this chapter. House of Commons Debates were consulted for details about parliamentary discussions and policy statements. Newspapers were also used as noted in the text.

1 The Ottawa Citizen, February 11, 1904, 9Ibid, p. 441–444. reported on the ﬁrst hearing of the Board 10 Biographical information about Albert C. of Railway Commissioners. Killam and his successors on the Board of 2 The limitations of the Privy Council’s Railway Railway Commissioners can be found in Committee are discussed in W.T. Jackman’s Annual Reports and in various editions of Economics of Transportation, p. 659–660, and Who’s Who in Canada. Ken Cruikshank’s Close Ties, p. 57–64. 11 Cruikshank, Close Ties, p. 135. 3Two histories that describe the early trans- 12 Jackman, Economics of Transportation, portation system in British North America and p. 688–9. in the ﬁrst years after Confederation are Oscar D. Skelton’s The Railway Builders, and 13 Both A.W. Currie’s Economics of Canadian G.P. de T. Glazebrook’s A History of Transportation and Ken Cruikshank’s Close Transportation in Canada, Volumes I and II. Ties deal at some length with various freight rate decisions. 4 Accounts of the development of Canada’s freight rate structure can be found in 14 Cruikshank, p.151–3. A.W. Currie’s Economics of Canadian 15 Cruikshank, p.164. Transportation, Ken Cruikshank’s Close Ties and W.T. Jackman’s Economics 16 Cruikshank, p.186–9. of Transportation. 17 Board of Railway Commissioners’ Annual 5 Ken Cruikshank, Close Ties, p. 48. Report, 1925.

6 The Dictionary of Canadian Biography, 18 A.W. Currie, p. 448–9. Volume XIII, (1901–1910) describes A.G. Blair’s 19 Donald MacKay, The People’s Railway, political and personal life. Mrs. Blair’s social A History of Canadian National, p.114. skills are mentioned in Sandra Gwyn’s The Private Capital. 20 John G. Diefenbaker, One Canada, Memoirs of the Right Honourable John G. Diefenbaker, 7Cruikshank, Close Ties, p. 65. p. 156. 8 Joseph Schull, Laurier, p. 422.

Chapter One cover photo: Grand Trunk Railway “Ten Wheeler” steam locomotive No. 986, 1900 CSTM/CN003833

Chapter One — ALL A BOARD 1904 TO 1938

CHAPTER TWO Engines of Change The Board of Transport Commissioners 1938 to 1967

1904 1938 1967 1988 1996 2004

July 1, 1942, Canadian Paciﬁc Air Lines started operations. • August 1950, railway unions held the ﬁrst nationwide strike in Canada– legislation was passed to send the strikers back to work after nine days.

29 The Board of Transport Commissioners 1938 to 1967 As Canada approached its 71st “Governor General Lord Tweedsmuir was birthday in the spring of 1938, on hand for the prorogation ceremony at newspapers delivered daily reports of the midnight Thursday night (June 30) but latest skirmishes in Spain’s civil war and when it was found impossible to wind up of the growing menace of fascism as business by that time, Prime Minister Adolf Hitler’s shadow crept ominously Mackenzie King advised him not to across Europe. postpone his vacation trip to England… Mr. Justice At home, the national C.D. Howe Cannon, acting as deputy economy was shaking oversaw the creation of to the Governor General, off the lethargy that had prorogued the session at Trans-Canada Air Lines, gripped it for almost a 3:40 p.m. (on July 1).” decade in the Great the country’s ﬁrst Depression. publicly owned airline, The House had been as a subsidiary of the occupied with the passage On May 17, the Canadian publicly owned of several bills in its last Press reported that “more days before the summer than 585,000 motor Canadian National break. One of the bills vehicle licences have been Railways, and with passed was the Transport taken out in Ontario this a monopoly over the Act, which created the year, 61,000 more than in international and Board of Transport the same period last year.” Commissioners with transcontinental routes, authority over inland A few days later, the and over airmail service. waterways and airlines, Ottawa Citizen reported along with jurisdiction that “three days ahead over railways, telegraphs, of schedule, the Dibblee Construction telephones, and express companies, Company started work this morning on inherited from its predecessor, the grading Uplands Airport for Trans- Board of Railway Commissioners. Canada Air Lines, preparatory to laying two runways… Work on the airport is The press made little mention, during being rushed so that the runways will those formative days, of the man who be ready by June.” had directed the Board’s creation. But for the next 19 years of its existence the On July 2, the Citizen reported that Board of Transport Commissioners the federal Cabinet was still working, would constantly be aware of C.D. although Parliament had been prorogued Howe’s presence and of his power the day before, on the Dominion holiday. over transportation policy.

Canadian Transportation Agency — 100 Years at the Heart of Transportation Howe was 49 years old in 1935 when For instance, with inland water trans- he won the Port Arthur riding in portation, the Board had jurisdiction over Northwestern Ontario. Mackenzie King, licensing and rates, but not over other recognizing him as a shrewd, tough- matters. In the aviation sector, the Board minded businessman, pulled him into his had power of approval for licensing and new cabinet.1 rates for air service between speciﬁed

CSTM/CN000256 By 1938, as the Minister of Transport, Howe had made major policy changes to the transportation industry. He had no patience, however, for the political life and he made no bones about it. A typical remark was: “I don’t think I’m doing anything useful when I sit in the House and listen to the kind of blather that’s being talked here.”2

Despite his shortcomings in diplomacy, Howe was one of Mackenzie King’s most successful cabinet ministers. In 1937, he had spearheaded the organization of operating and ground services for A TCA crew aboard a Canadair DC-4M North Star, 1950 Canada’s first transcontinental air system. He then oversaw the creation of Trans- points in Canada, or between specified Canada Air Lines, the country’s first points in Canada and outside, but the publicly owned airline, as a subsidiary actual points and places of its jurisdiction of the publicly owned CNR, and with a would be determined by cabinet. monopoly over the international and transcontinental routes, and over airmail The Transport Act also gave the Board service. Throughout his political career, the power to approve agreed-upon TCA would remain Howe’s favourite charges between carriers and shippers. project. This section of the Act allowed the heavily regulated railways to compete According to the Transport Act, the in specific areas with the unregulated Board was given authority over air and truckers, for instance, by making water transport, but its powers over agreements for special rates with these two modes were much more large-volume shippers for a minimum limited in scope than over railways. quantity of freight.

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 The new Board continued with the same In the 1940 Annual Report, Chief commissioners who had been appointed Engineer D.G. Kilburn wrote that besides to the previous Board, and with the the normal work of the department, same staff. “war conditions have imposed additional duties. Many new industrial war plants The Annual Report of 1939 describes the and air fields have been constructed and added workload: “A great deal of existing plants enlarged. The consequent correspondence, discussion and detailed increased traffic on the railways brought work has been necessary in respect to the about additions to existing railway track licensing provisions of the Transport Act, facilities and, to meet growing war-time particularly so in respect to aviation,” demands for railway transportation wrote W.E. Campbell, director of the services, further additions are under Traffic Department. “A large amount of consideration. These increased facilities educational work has been necessary in involve examination, inspection the preparation and the filing of tariffs; and approval.” also, it has been necessary to investigate alleged violations of licences, tariffs, etc., World War II created a boom in Canada’s much of which might have been avoided transportation industry. By the second had there not been such an extraordinary year of the war, CNR reported revenues lack of co-operation among the various of over $300 million and, for the first companies, and a greater appreciation time in many years, it wasn’t dependent of the necessity to comply with the on the public purse.3 principles laid down in the Act.” Meanwhile, the approval of freight The Annual Report made no mention of rates was removed from the Board’s the cataclysmic events of the late summer jurisdiction during the war. As noted in of 1939 that would take Canada into the Annual Report of 1941, “Order in another world war. For several years, Council P.C. 8527 of November 1st, 1941, tensions had been building in Europe imposed restrictions upon the rates as Germany’s Hitler led a campaign of charged for transportation and aggression against neighbouring communication services. The facilities of countries. In 1938, there were plans afoot this department are being utilized to for a British Commonwealth Air Training assist the Wartime Prices and Trade Board program to be set up in Canada. When in carrying out the provisions of the Hitler invaded Poland in the fall of Order in Council.” The government froze 1939, there was no turning back. On prices and wages to the level prevailing September 10, 1939, Canada declared between September and October 1941. war on Germany.

Canadian Transportation Agency — 100 Years at the Heart of Transportation As the Board reiterated in later war-time Throughout his career, Howe maintained reports, “There can be no increase in any a protective interest in Trans-Canada Air rates or charges for transportation of Lines. He considered the airline his own goods or passengers… without the creation, and watched closely any Board concurrence of the Wartime Prices and decisions that affected the air industry. Trade Board.” (In fact as late as June 20, 1950, when Howe was Minister of Trade, Opposition Meanwhile, the Board carried on with its Leader George Drew passed a motion in regular duties of issuing licenses, the House of Commons to have approving abandonment and construction jurisdiction over TCA turned over to the of railway lines, administering the Transport Minister, and out of Howe’s Railway Grade Crossing Fund, and control. The motion was voted down.) investigating railway accidents and fires. The Board’s role in aviation was unclear On November 3, 1939, Hugh Guthrie, the from the first. The Transport Act stipu- Board’s chief commissioner, died at the lated that the Board had jurisdiction over age of 73. Guthrie’s successor was points and places that were specifically Colonel James Albert Cross who had been named by cabinet. In several instances, Saskatchewan’s attorney general from when the Board made a decision 1922 to 1927, under two Liberal regarding an air licence, the cabinet premiers. In World War I, he had served overruled the Board by “unnaming” the as an officer with the 28th Battalion and route, and thus removing it from the had been made a companion of the Board’s jurisdiction. Also, if the Board Distinguished Service Order. turned down a licence for an air operator to fly to a place which had been named On April 1, 1940, the Ottawa Journal by cabinet, the ruling could be described Cross as “a modest soldier- circumvented by the air operator flying lawyer, who once was elected to the to an “unnamed” place near the Saskatchewan legislature without making named place.4 a single speech” and “at 63, he looks a good ten years younger.” Soon after TCA was created, Canadian Pacific Railways, which briefly had been On April 9, C.D. Howe became Minister included in a proposal to create the of Munitions and Supply, a department national airline, decided to create its own specifically created to give the govern- air service. On July 1, 1942, Canadian ment control over industry during the Pacific Air Lines started operations. war years. He also kept the post of It had bought up several air routes from Minister of Transport. smaller operations, and with Board

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 approval had air licences that expanded later, there was only one independent air its territory into several markets. operation. Every other air operation in the Dominion was owned and operated One of its purchases was an air company by the railway companies.” Canadian that flew between Victoria and Pacific, under Board approval, had Vancouver. At the time, TCA didn’t fly bought more than 40 air operations in between the two cities because there those years. Howe was concerned that wasn’t a proper landing site at Victoria the private railway company had been for its larger planes. But when an airport allowed to purchase such a large share was built that TCA could use, it applied of the domestic air services. to the Board of Transport Commissioners for a licence to deliver mail and provide On the matter of the Victoria-Vancouver passenger service to Victoria. route, Howe said: “The Board ruled that Trans-Canada Air Lines must operate The Board was faced with a difficult from Vancouver to Victoria with empty decision that would, on the one hand seats, because there was another air allow the duplication of services, and on operation connecting the two centres. the other hand block the publicly owned The fact that the other operation was TCA from fulfilling its transcontinental overcrowded and could not begin to mandate. The Board ruled that TCA could handle the traffic, and could not obtain deliver mail between Vancouver and planes sufficient to carry the traffic did Victoria and also that it could provide air not weigh with the Board.” passenger service, but only as a contin- uation of its transcontinental route. That On September 11, 1944, the Transport left the local passenger service, which Act was amended to provide for “the represented the majority of the traffic, removal of commercial air services from to Canadian Pacific Air Lines.5 the jurisdiction of the Board of Transport Commissioners.” In the House of Commons, on June 11, 1944, Howe expressed his opinion of the The Aeronautics Act, at the same time, Board’s performance: “The Board of created a new Air Transport Board to Transport Commissioners is bound by the provide licensing and regulatory Transport Act and is concerned chiefly functions. In the House of Commons, with railway problems. The effect of the Howe explained the new Aeronautics administration of the Board was this. In Act: “A much more scientific as well as a 1938, when the Act was passed, there fairer method, a method more in keeping were a great number of independent air with the supremacy of Parliament is operations in this country. Four years being adopted.”

Canadian Transportation Agency — 100 Years at the Heart of Transportation Mackenzie King had made an earlier Another policy change introduced by policy statement about the airline C.D. Howe involved ownership of the industry. “Competition between air airlines by the railways. On March 17, services over the same route will not be 1944, Howe stated: “It is becoming permitted,” he had baldly stated in the obvious that ownership of airways by House of Commons on April 2, 1943. And our competing railway systems implies although he had added that there would extension of railway competition into be areas where private enterprise would transport by air, regardless of the participate, Mackenzie King made it clear government’s desire to avoid competition that the government’s air between air services. The policy was to effect for government has decided Canada “a freedom of Mackenzie King that the railways shall not action in international had made an earlier exercise any monopoly of air relations because it wasn’t services. Steps will be taken policy statement limited by the existence of to require our railways to private interests in about the airline divest themselves of international air services.” industry. ownership of airlines to the At the end of World War II, “Competition end that, within a period of the government wanted to between air services one year from the ending of control the air industry and the European war, transport over the same route ensure its development, by air will be entirely avoiding the problems the will not be permitted,” separate from surface railway industry had he had baldly transportation.” suffered at the hands of stated in the private enterprise. The effect of requiring the House of Commons CPR to divest itself of the The Air Transport Board’s on April 2, 1943. Canadian Paciﬁc Air Lines role was clearly laid out in would be considerable the Act as an administrative expense and time spent on body, subject to close ministerial control. the reorganization. As was apparent in The Air Transport Board could issue this and other policy statements, Howe licences and regulations, but only subject was determined to advance the cause to the approval of the Minister of of the publicly owned Trans-Canada Transport. Also, the Air Transport Board Air Lines at the expense of private was responsible for recommending policy enterprise. (The divestiture policy was changes to the Minister. In effect, it had reversed, however, in 1946 and CPR was none of the independence of the Board allowed to keep its airline.) of Transport Commissioners.

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 The first chairman of the Air Transport of air transportation in Canada, the Board was R.A.C. Henry, who had worked volume of traffic is such that there is not for CNR and had been deputy minister of room for competing services and it is Railways and Canals in 1929 to 1930. In considered uneconomical to try to divide 1940, he had assisted in the development the small available business between two of the Department of Munitions and or more carriers. While at some later Supply. The two other members were date a policy of competition might be Air Vice Marshall Alan Ferrier of the justified, at the present time it would be Royal Canadian Air Force, an aeronautical disastrous and is considered to be against engineer, and J.P.R. (Roméo) Vachon, a the public interest.” pioneer in the Canadian aviation industry with experience in both flying and As Minister of Reconstruction, Howe aeronautical engineering. had a mandate to direct the post-war reorganization of industries and In future years, many of the members manpower. He still held the portfolio for appointed to the Air Transport Board Munitions and Supply, and was on his were drawn from the civil service. This way to earning the sobriquet “Minister practice reinforced the already close of Everything.” relationship between the Board and government.6 Howe was also still in a position to direct transportation policy after the war. The The Air Transport Board was not required Board of Transport Commissioners’ to submit its own annual reports, another Annual Report, covering the period of indication of its lack of autonomy. 1945, stated: “During the year the Board However, it did issue one report for the of Transport Commissioners was asked period September 11,1944 to December 31, by the Department of Reconstruction 1946. That document was directed to the to make a survey of possible railway Minister of Reconstruction and Supply, crossing eliminations at certain priority a new position created for C.D. Howe points throughout Canada, having in in late 1944. mind public convenience and necessity, together with possible post-war That Air Transport Board Annual Report, employment.” which was published in 1947, clearly advanced the government’s thinking: A Bureau of Transportation Economics “In accordance with laid down policy, was created in 1946 to provide economic direct competition is not permitted on and statistical studies for both the Board scheduled air routes. The reason is that, of Transport Commissioners and the Air at the present stage in the development Transport Board.

Canadian Transportation Agency — 100 Years at the Heart of Transportation Wage and price controls were dropped at Mackenzie King’s announcement in the end of the war, and soon a clamour the House of Commons that he would for higher wages was heard. In 1946, be retiring. both the Canadian National and Canadian Paciﬁc railways raised their Justice Archibald had been appointed to wages in response to union agitation.7 the Supreme Court of Nova Scotia in 1937, and was appointed to the Exchequer Inevitably, the Railway Association of Court of Canada on the same day that he Canada, representing CNR and CPR, was appointed to the Board of Transport applied for a general increase in freight Commissioners. The Board’s Annual Report rates to offset the increased operating for 1948 explained that an amendment costs and declining volume of post-war to the Railway Act that year provided trafﬁc. After 150 days of hearings, the that the Chief of the Board of Transport Board rejected the railways’ application Commissioners would be a judge of the for a 30 per cent increase. Exchequer Court (now the Federal Court).

On March 30, 1948, the Board settled on Meanwhile, the Board continued to hear an increase of 21 per cent, using a cost- the Railway Association’s second request revenue methodology. Seven of the nine for a freight rate increase. The Board provinces (not Ontario or Québec) decided to give an interim increase of appealed the decision to cabinet, 8 per cent on July 27, 1948. CPR appealed claiming the Board had lost the public’s to the Supreme Court and the Court conﬁdence by its methodology. While ruled that the Board should make a the government reviewed the decision, ﬁnal decision. it asked the Board on April 7, 1948, to conduct a general freight rates In October 1948, the government investigation. Meanwhile, the Railway rejected the appeal by the provinces Association sought another 20 per cent in what came to be known as the increase from the Board.8 21 per cent case, the rate increase originally approved by the Board in On June 30, 1948, Chief Commissioner March 1948, and asked the Board to Cross, now 72, in poor health and worn review its decision. The government also down by the contentious freight rates decided to set up a royal commission to issue, resigned. There was nothing in the study transportation. In January 1949, local papers on July 1, 1948, about Cross’s W.F.A. Turgeon, formerly a judge in resignation—or about his replacement, Saskatchewan, was appointed to head Justice Maynard Brown Archibald. The a royal commission that would study big news on that day was Prime Minister freight rates and transportation policy.

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 And the Board, following the Supreme and express companies. In 1949, it was Court order, authorized a freight-rate given jurisdiction over licensing of oil increase of 16 per cent, but again the and gas pipelines. But the majority of Railway Association returned, claiming the Board’s workload remained railway the Board had miscalculated the shortfalls. regulation. The Board’s final decision was a 20 per cent increase announced on July 27, 1949. In August 1950, railway unions seeking higher wages and better benefits held a In 1948, the Board had also dropped the nationwide strike, the first in Canadian mountain scale (established in 1914 as history. Legislation was passed to send a higher railway rate for traffic in the the strikers back to work after nine days. Rockies) in response to an application The government appointed Mr. Justice from British Columbia. R.L. Kellock, of the Supreme Court of Canada, as an arbitrator to settle the It was a tumultuous time for the railways dispute. After hearing both sides, Kellock and by extension for the Board of granted a wage increase and directed Transport Commissioners. The combination that a 40-hour, five-day week should of fierce competition from trucking and be instituted as of June 1, 1951. This air operations exacerbated by higher ultimately would put more pressure on operating costs was putting extreme the railways to increase their rates.9 pressure on the railways, which were already shackled by stiff regulations. The Board of Transport Commissioners, meanwhile, was the target of criticism Meanwhile, the shipping industry had from various quarters for its handling of experienced a huge burst of expansion in the railway problems. A particularly the war years, most of it created by the scathing attack against the Board was federal government. In 1947, in an effort delivered in the House of Commons on to stem the post-war decline in the June 21, 1950, by Opposition Leader industry, the government created the George Drew. At this point, the Liberals Canadian Maritime Commission. The had been in power in Ottawa for 15 Commission’s responsibilities included consecutive years and Louis St. Laurent administering subsidies and recommen- had been the prime minister for two of ding policies to the Minister of Transport. those years.

The Board of Transport Commissioners Drew began with a denunciation of the continued to approve licences and rates Board of Transport Commissioners, saying for inland water transport, and still had “it had demonstrated itself to be jurisdiction over telegraph, telephone incompetent by its own actions during

Canadian Transportation Agency — 100 Years at the Heart of Transportation this extended period (of freight rate recommended that the Board deal with hearings).” Then he launched into a long applications at a speedier rate. diatribe liberally laced with the word “incompetent”, and recommended that On October 30, 1951, Transport Minister the Board be disbanded and that a new Lionel Chevrier dealt with more criticism board be created. In response to the about the Board of Transport criticism, it was noted in the House that Commissioners. The resignation of the Justice Archibald, the Board’s chief 60-year-old Justice Archibald was set for Commissioner, was “gravely ill.” the next day, and Opposition members took the opportunity to attack the CSTM/CN000238 Board again. In defending the Board’s members, Chevrier blamed the problems on staff shortages.

“The Board is lacking in expert staff. That is a fact,” Chevrier told the House of Commons. “The Board has not the required traffic advisers that it should have… Traffic experts are almost impossible to find in this country.”

Victoria inner harbour looking southeast The new Chief Commissioner was British Columbia 1947 Photographer: W. Atkins John D. Kearney, a lawyer and career diplomat.10 He had held several foreign posts that had earned him a reputation The report from the Turgeon Royal as an incisive and astute arbitrator. Commission was tabled in the House He had headed the Canadian mission in of Commons on March 15, 1951. Dublin from 1941 to 1945, and, in 1947, It recommended an equalization of became the first Canadian High freight rates; that the Board of Transport Commissioner to India after that country Commissioners establish a uniform achieved independence. Kearney’s system of classification of rates through- appointment to the Board coincided out Canada, excluding the Maritimes; with his appointment as a Justice of the that the Board establish a uniform system Exchequer Court of Canada. An of accounts and reports for the railways; amendment to the Railway Act in 1952 and that the lower rates on grain and would make the appointment of Chief flour as set out in the Crowsnest Pass Commissioner an automatic appointment Agreement of 1897 continue. It also to the Court of the Exchequer.

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 In January 1952, the Board began hearings The Liberal government, in 1955, commis- on rate equalization. After a long series of sioned Walter Gordon, an accountant consultations, equalization on class rates who had worked for the Bank of Canada ﬁnally went into effect in March 1955. and the Finance Department, to head a royal commission on Canada’s economic A new department of Accounts and Cost prospects. One section of that study was Finding was set up by the Board to dedicated to transportation, under the handle the uniform classiﬁcation of rates supervision of J.C. Lessard, a former and associated accounting systems. deputy minister of transport. The report, issued in 1956, highlighted the changing While the Board continued to deal with trends in passenger and freight trans- freight-rate applications, other issues portation in the 25-year period from were brewing. 1928 to 1953. In 1928, almost 60 per cent of passenger travel had been by private In 1949, Newfoundland joined automobile while close to 40 per cent Confederation. The new province’s used rail transport. In 1953, close to railways became part of the CNR system, 80 per cent was by private car and just over and eventually decisions about the 10 per cent by railway. Buses represented province’s freight rates and other railway close to 7 per cent of passenger travel in issues fell within the Board’s jurisdiction. 1953 and airplanes 3 per cent.

In 1955, the Railway Act was amended Similarly, the 1950s saw widened freight to increase Parliament’s annual competition with the expansion of appropriation of funds to the Railway long-haul trucking companies, the Grade Crossing Fund to $5 million. The introduction of gas and oil pipelines and amendment was based on a report submit- the construction of the St. Lawrence ted on May 10, 1954, after the Board Seaway, which allowed larger ships to carried out a Canada-wide investigation travel from Montréal through the Great of railway-highway crossing problems. Lakes as far as Thunder Bay.

An amendment to the Transport Act The discovery of oil in Leduc, Alberta, on in 1955 removed the necessity of the February 13, 1947, had created a new Board’s approval for agreed charges. domain over which the Board was given The amendment gave greater freedom to jurisdiction—oil and gas pipelines carriers to make specific agreements on crossing interprovincial or international charges, the only requirement being that boundaries. Other oil fields had been the charges be filed with the Board opened up in Canada in previous years, 20 days prior to their taking effect. but the Leduc find set off a burst of oil

Canadian Transportation Agency — 100 Years at the Heart of Transportation development. The Board’s Annual TransCanada soon realized, however, Reports document a succession of that the cost of construction was beyond applications and approvals for pipeline its means. The company, which was construction over the next few years. partly American owned, applied to Ottawa for financial aid, but was refused. As the wealth of Alberta’s oil and gas In August 1955, Howe proposed a Crown resources became apparent, the search corporation that would build the for profitable markets got under way. unprofitable section of the pipeline from Although U.S. markets could easily be the Manitoba border to Kapuskasing, reached over Alberta’s southern border, in northern Ontario. Northern Ontario Ottawa expounded a policy of serving Pipe Line Crown Corporation would then Canadian markets first. In practice, lease the pipeline back to TransCanada. however, companies were allowed to Howe’s plan was a circuitous way of build pipelines to both American and helping the company, without giving Canadian destinations because Canadian it money outright. markets alone could not support the costs of constructing the lines. TransCanada PipeLines then sought financial backing to buy the actual pipe In 1953, C.D. Howe, now in the Trade needed for the project. An American and Commerce portfolio, seized upon company agreed to supply the pipe in a scheme put forth by TransCanada return for part ownership. That deal PipeLines, to build a gas pipeline from brought American ownership of the Alberta to Ontario and Quebec. Howe cross-Canada pipeline to more than envisioned the cross-Canada pipeline as a 75 per cent, along with a stipulation that national project reminiscent of previous the order for the pipe would expire on transcontinental endeavours, like the June 7, 1956. Canadian Pacific Railway in 1885.11 Construction problems didn’t end there. In 1954, TransCanada PipeLines applied Howe introduced legislation to set up for a permit to construct the 2,188-mile the Northern Ontario Pipe Line Crown pipeline from the Alberta-Saskatchewan Corporation in March 1956. By May, the border through Manitoba and Ontario as Federal Power Commission in the United far as Montréal. The Board of Transport States still hadn’t approved import of gas Commissioners granted the application to that country, part of the scheme that subject to the company satisfying the would see a branch pipeline crossing into Board that it had financing for the project Minnesota. This rejection dissolved hopes by December 31, 1954, and that it had a for American financial help to build the completion date of December 31, 1957. rest of the line.

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 On May 8, 1956, the Canadian govern- The battle that ensued in the House of ment proposed lending to TransCanada Commons was one of the most ferocious PipeLines 90 per cent of the cost of the of the 1950s. The opposition parties line between Alberta and Winnipeg. claimed that the government was By then, the deadline for passage of the subsidizing a pipeline that was owned TransCanada PipeLines bill was a month largely by American interests. A united away, on June 7. front of Conservatives and the Co-operative Commonwealth Federation Opposition to Howe’s plan had been conducted a ﬁlibuster with long speeches, building in the House of Commons. On a steady barrage of questions, points of May 14, the Toronto Globe and Mail order and objections to prevent the announced that the government planned tabling of the bill and to stall voting. The to use closure “to ram through its government retaliated with closure, a pipeline legislation in short order.” rarely used device to put the bill to a vote at various stages without further debate. When the Opposition complained, the Globe wrote: “Howe sprang to the attack In the early morning of June 6, 1956, the charging his opponents with ‘a vacancy TransCanada PipeLines bill was passed in of mind, a refusal to face the facts, or the the House of Commons, and then quickly easy irresponsibility of those who need not passed in the Senate. It was given royal produce a workable course of action.’ ” assent on June 7, six hours before the option for the purchase of the pipe When the Opposition cried that the would have expired. pipeline legislation was a “sellout,” Howe dismissed it as words “one might Opposition Leader George Drew called expect to hear from a banana republic for a vote to censure Speaker René revolutionary, but not from any Beaudoin for “subordinating the rights Canadian statesman.” of the House to the will of the government.” That vote was lost, but the On May 24, the Board of Transport Liberals continued to be derided for their Commissioners gave permission to undemocratic methods in pushing the TransCanada PipeLines for construction pipeline bill through Parliament. of the Western section from Alberta to Winnipeg. Mitchell Sharpe, then the On January 15, 1957, Justice John D. assistant deputy minister of Trade and Kearney resigned as Chief Commissioner of Commerce, attended the hearing on the Board. At the age of 63, he went to behalf of Howe. Sharpe read a statement sit on the Exchequer Court. Clarence Day supporting the permit. Shepard, a 42-year-old corporate lawyer,

Canadian Transportation Agency — 100 Years at the Heart of Transportation moved into the Chief Commissioner’s to send his staff ahead. The Globe chair on the same day. Shepard had the reported: “The next prime minister has distinction of being the youngest man to been left to answer his own telephone serve as Chief Commissioner since the today, and to carry and check his own first Board was appointed 53 years before, and his wife’s baggage tonight.” and the first veteran of World War II. He had served on the boards of several The TCA episode had nothing to do with major companies, and had the vigour the Conservative government’s later and energy of his youth. announcement that it would allow competition on the The country went to the The TCA episode transcontinental air route. polls on June 10, 1957, and But it couldn’t have had nothing to do ended more than 20 years endeared the publicly owned of Liberal rule. The new with the Conservative airline to the new prime government would be government’s later minister. The airline would formed by the Conserv- announcement now be in a precarious atives, under John that it would allow position, with its main ally, Diefenbaker, a firebrand C.D. Howe, gone from the lawyer from the Prairies competition on the House of Commons. Howe who had already estab- transcontinental had lost his Port Arthur seat lished himself as a tough air route. in the election and subse- opponent in the House quently retired from politics. of Commons. Diefenbaker’s campaign platform had In the next few days, however, while included calls for more competition and Ottawa eagerly awaited the arrival of the less government interference in business. new prime minister, Diefenbaker was If he were to keep his election promises, occupied with travel arrangements. He TCA’s monopoly position was in jeopardy. and his wife, Olive, wanted to fly with his staff to Ottawa on an overnight TCA It was not the first time that TCA’s routes flight from Saskatoon. But as the Globe had been threatened. In the early 1950s, and Mail reported on June 14: “The Canadian Pacific Air Lines and another Diefenbakers have been dickering with Western-based airline, Pacific Western, had TCA in an attempt to get at least one made applications to the Air Transport staff member on the all-night flight.” Board for transcontinental freight and passenger services. The Board had held In the end, TCA couldn’t accommodate cross-country hearings, but then had passed the staff members and Diefenbaker had the matter to the cabinet, where it had

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 died. (In 1945, the Air Transport Board had The Wheatcroft report, meanwhile, had been given jurisdiction to hear complaints been delivered on February 7, 1958. It with the powers of a superior court and suggested that limited competition on in 1950, it had been given the power to the transcontinental route would initiate hearings, but it still remained under be healthy. the authority of the Minister of Transport.) In 1952, Transport Minister Lionel Chevrier On October 6, the Air Transport Board had announced that TCA’s monopoly on began country-wide hearings into the the transcontinental route would remain Canadian Pacific’s application for a in place, but that competition would be transcontinental route. The Air Transport allowed on regional routes. Board issued its report in December and Transport Minister Hees announced the Although TCA continued to hold the decision on January 21, 1959. The Board trans-Atlantic routes in 1957, its had recommended against additional monopoly was already being eroded. transcontinental air services. But it did Canadian Pacific held the Pacific routes, recommend a single daily return service and had won South American and for Canadian Pacific from Vancouver to Mexican routes in 1952. It was granted a Winnipeg, Toronto and Montréal to polar flight to Amsterdam in 1955, and connect with its international service.13 was given the Lisbon and Madrid routes early in 1957.12 A Globe editorial on January 23, 1959, suggested that the Air Transport Board When Diefenbaker installed George Hees decision had not gone far enough in as the new transport minister, both introducing competition in the skies. Canadian Pacific and Pacific Western were working on applications to the Air “The Board’s logic is surrounded by Transport Board for transcontinental befuddlement,” The Globe stated. routes. Hees hired Stephen Wheatcroft, “Transport Minister Hees reiterated last a British economist, to conduct a study February (while he was campaigning for of airline competition in Canada. re-election) that the prime responsibility for introducing competition would rest After just a few months in office, with the Air Transport Board. That Board Diefenbaker called another election, has now done the government a seeking to strengthen his weak minority disservice by suggesting that when its government. In March 1958, the present members (of government) were Conservatives received the largest in opposition, they did not mean what majority yet seen in Canadian they said about ending the TCA government—208 seats. monopoly (a Conservative campaign

Canadian Transportation Agency — 100 Years at the Heart of Transportation platform). The Board’s policy appears to In May 1960, and again in 1961, the be ‘Competition if necessary, but not Freight Rates Reduction Act was necessarily competition.’ ” extended, as the royal commission, headed by M.A. MacPherson, held Although there was some discontentment hearings. with TCA’s monopoly on transcontinental routes, the daily Canadian Pacific flights The Board of Transport Commissioners put a dent in the publicly owned airlines’ continued its regular business. An budget. In 1960, TCA reported its first interruption to normal proceedings deficit—others would follow.14 arose in 1958 when Chief Commissioner Shepard was seconded to the Air The railways were not faring much Transport Board, while the chairman of better. Through the late 1950s, they that board was ill. Then late in 1958, continued to deal with union demands Shepard resigned to take a position as for higher wages, and declining vice-president of the British American passenger travel. Meanwhile, they Oil Corporation. Mr. S. Bruce Smith, an continued to seek higher freight rates. Edmonton lawyer, was appointed, but The Board of Transport Commissioners because of family illness, resigned before had granted a rate increase of 17 per taking office. In a quick succession of cent effective December 15, 1958. In events, Roderick Kerr, who had served April 1959, the railways demanded a the Board of Transport Commissioners for further 12 per cent increase. several years as senior counsel and then briefly as Assistant Chief Commissioner, In response to shippers’ complaints, took over the Chief’s position. Parliament passed the Freight Rates Reduction Act, directing the Board to Another change for the Board involved reduce the 17 per cent rate increase to its loss of jurisdiction over gas and oil 10 per cent, while the government would pipelines in 1959, when legislation was reimburse the rail companies for their passed to create the National loss in revenue. The legislation would be Energy Board. a temporary measure. The Board was put in charge of the reimbursement fund.15 The MacPherson Commission issued its findings in three volumes in 1961–1962. At the same time, the government The Commission defined the objective of established a Royal Commission on Canada’s national transportation policy Transportation that would look, not only as “the movement of Canadian goods at the railway freight rates, but at all and people with minimum demands on aspects of transportation in Canada. the human and material resources.” The

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 Commission recommended that the ﬁnancial aid to particular shippers transportation policy be achieved through should not be disguised as transport- competition rather than regulation, a ation subsidies. radical shift from the government’s approach for the past 60 years.16 The ﬁnal recommendations of the MacPherson Commission were released CSTM/CN001777 in 1962, at a time when the Conservative government was nearing the end of its four-year mandate. On January 23, Diefenbaker tabled the second volume of the report, saying the documents would be “thoroughly examined.”

On April 12, 1962, Finance Minister Donald Fleming said, “The recommendations contemplate a radical departure from the basis of rate-making as provided for in the present provisions of the Railway CN passenger train Newfie Bullet en route to St. John’s, Port aux Basques, Newfoundland Act. The two volumes would involve a and Labrador, 11 September 1967 fundamental reconstruction of much of Photographer: G. Richard our railway legislation, particularly on the financial and regulatory side.” The report foresaw a reduced role for railways, and recommended that railways With an election in the offing, it was not could only compete with other modes of the time to start “a radical departure” transport if the burden of regulation was or “a fundamental reconstruction” in lifted. Where the obligations couldn’t be transportation policy. It was time to lifted, the railways should be compensated campaign for re-election. for the expense of service. Four areas in which the railways were hindered, The Conservatives won a minority according to the commission, were government in June 1962. But, unhappy passenger services, branch lines, grain with the small win, they returned to the rates and free transportation privileges. polls on April 8, 1963—and lost.

The report also recommended that all The Liberals returned to power with a modes of transport should be treated minority government and a new prime equally, and that each mode be allowed minister, Lester B. Pearson, a former civil to compete with another, and that servant and winner of the Nobel Peace

Canadian Transportation Agency — 100 Years at the Heart of Transportation Prize. On November 8, 1965, the third secretary to the prime ministers, a election in just over three years was popular comment had been “Clear it called and this time another Liberal with Jack.”17 As a politician, he earned minority government was voted in. the nickname Jumping Jack because he popped up from his seat so often in the Although transportation policy and the House of Commons. Unlike his prede- MacPherson Commission had been cessor, C.D. Howe, Pickersgill revelled in shoved to the sidelines, they had not parliamentary debate. In fact, he had been forgotten in the intervening years. been involved in planning the closure Subsidies to railways, initiated by the tactics used in 1956 to get the pipeline Freight Rates Reduction Act in 1959 as bill through Parliament. a temporary measure, were still being doled out. The Conservative government, Now he was ready to take on the and then the Liberal government in 1963, reconstruction of transportation policy, continued to work on legislation to and he was determined to create a bill change the freight rates policy. A bill that would stand the test of time. was introduced in 1963. Then, a cabinet shuffle put John Whitney Pickersgill in On January 27, 1967, the Winnipeg Press charge of the Transport portfolio. reported, “A massive transportation bill that will revolutionize Canadian Jack Pickersgill had earned legendary railroading passed its final debating stature on the Hill by the time he took hurdle on Thursday night. Transport over transportation policy in February Minister Pickersgill won a round of 1964. Originally a professor of history, applause from both sides of the chamber Pickersgill had joined the civil service in as the final vote was taken to end the late 1930s and was quickly promoted 15 days of clause-by-clause study. to the office of Mackenzie King. He Only routine third reading and Senate became King’s personal secretary and approval remain before the bill goes to confidant, and later St. Laurent’s. He had royal assent.” served as Clerk of the Privy Council and Secretary of State. The National Transportation Act was based on the MacPherson Royal In 1952, he won a seat in the House of Commission completed five years before. Commons and became a major player in It had been introduced in the House in Liberal politics. There was nothing about September 1966, before it was sent to the running of government or the committee for two months of study. The workings of Parliament that Pickersgill 30,000-word bill had 60 amendments, did not know. When he had worked as but remained mostly intact.

Chapter Two — ENGINES OF C HANGE 1938 TO 1967 The main points of the bill were: the to add Calgary, Edmonton and Ottawa to establishment of the Canadian Transport its transcontinental route. (The route had Commission to direct all forms of been Vancouver, Winnipeg, Toronto and transportation under federal control— Montréal.) The policy decision was based railways, shipping, airlines and inter- on a study by Stephen Wheatcroft, the provincial trucking; that railways would British economist who had recommended have the freedom to set freight rates the first expansion of Canadian Pacific without regulation; and that railways into transcontinental service in 1958. would be able to abandon uneconomic branch lines and passenger services unless The first intimations of change at the the government specifically ordered Board of Transport Commissioners came otherwise in the public interest, and then in the Annual Report for 1966, published paid their deficits. early in 1967. The opening pages of the report contained this announcement: There was one point in which Pickersgill “While this report deals with the work did not manage to change transportation of the Board during the 62 years since its policy, and that was the Crowsnest Pass establishment in 1904, it may well mark Agreement. A legacy from the time of a historic turning point in the field of Andrew G. Blair, the Crow rate had been transportation regulation in Canada passed in 1897, giving the CPR a subsidy and may be the last report submitted for Crowsnest Pass construction in return by the Board… If legislation (Bill C-231) for a reduced freight rate in perpetuity. is enacted, the Board of Transport Although there was no political desire to Commissioners for Canada will be remove the Crow rate, Pickersgill did merged with the Air Transport Board and attempt to put an amendment into the the Canadian Maritime Commission into bill that would allow for a cost study of it a new Canadian Transport Commission.” at a later date. That was soundly defeated. A historic turning point had indeed been On March 27, 1967, another major policy reached. The National Transportation Act shift was announced, this time regarding was passed and became law. And it was airlines. Canadian Pacific was allowed to Canada’s centennial year. The nation was double its transcontinental service to two getting ready to celebrate. return flights a day. It also was allowed

Canadian Transportation Agency — 100 Years at the Heart of Transportation Notes for Chapter Two

The Board of Transport Commissioners’ annual reports (1938–1966) are the main source for this chapter. The House of Commons Debates were used for relevant discussions or decisions in Parliament. Canadian newspapers were used as noted in the text.

Other sources include:

1 Reginald Whitaker, The Government Party, 9Ibid, p. 405. Organizing and Financing the Liberal Party 10 Who’s Who in Canada, 1957. The Board of of Canada, 1930–1958, p. 88 and p.180. Transport Commissioners Annual Reports also 2John Robert Columbo, Columbo’s Canadian carried some biographical information about Quotations, p. 269. the Board chairmen.

3 G.R. Stevens, History of the Canadian National 11 Two sources discuss C.D. Howe’s role in the Railways, p. 383. TransCanada PipeLine debate: C.D. Howe: A Biography by Robert Bothwell and William 4 A.W. Currie, Economics of Canadian Killbourn, and Seeing Canada Whole, A Transportation, p. 544. Memoir, by J.W. Pickersgill. 5Ibid, p. 549. 12 Peter Pigott, National Treasure, The History of 6Fred Paul Gosse, in his unpublished thesis, the Trans-Canada Air Lines, p. 382–385. The Air Transport Board and Regulation of 13 Ibid, p. 387. Commercial Air Services, for Carleton College, Ottawa, April, 1955, commented that civil ser- 14 Ibid, p. 382. vants were posted to the Air Transport Board. 15 Board of Transport Commissioners, Annual Two chairmen of the Air Transport Board, J.R. Report, 1959. Baldwin and W.J. Matthews, were both senior civil servants in the Department of Transport. 16 John Saywell, editor, Canadian Annual Review, 1962, p. 209. 7 A.W. Currie, p. 403. 17 John Robert Columbo. Columbo’s Canadian 8 Ibid. p. 101–152. Currie gives a good explana- Quotations, p. 475. tion of the series of freight rate cases heard between 1946 and 1951.

Chapter Two cover photo: A TCA Canadair DC-4M North Star ﬂying over Kinley Airport, Bermuda, 1950 CSTM/CN000261

Chapter Two — ENGINES OF C HANGE 1938 TO 1967

CHAPTER THREE Taking Control The Canadian Transport Commission 1967 to 1988

1904 1938 1967 1988 1996 2004

1967, the Centennial Expo held in Montréal, Québec was a huge success. • February 1, 1972, proclamation of the Pilotage Act. • 1983, the Western Grain Transportation Act replaces the Crowsnest Pass Agreement.

51 The Canadian Transport Commission 1967 to 1988

entennial year was a time of 25 per cent increase over the previous C 2 euphoria. Throughout the spring year. Airlines experienced a spike in and summer of 1967, Canadians business as well, with a 20 per cent rise in enthusiastically waved their flag—the traffic (from 1966) at Montréal’s Dorval new maple leaf that had been adopted airport alone.3 by Parliament in 1965—and expressed their national pride with countless In the cooling winds of autumn, the parades and costume parties. celebratory mood drifted away. Party streamers were swept from dance-hall Expo 67 in Montréal, the centrepiece of floors, Centennial tartan sports jackets— the Centennial, was a huge success. Expo just slightly garish—were relegated to officials clocked more than 50 million the backs of closets where they would paid admissions to the site from April 28 stay, and colonial-style dresses with to October 27.1 matching bonnets were stuffed into boxes to gather dust in patriotic attics. The influx of tourists brought heightened activity to the transportation industry. On September 20, 1967, the Canadian CNR reported that 18 million people used Transport Commission (CTC) met for its passenger rail services that year, a the first time. The new president was

CSTM/CN001689

Ferry MV Federal Avalon, St. John’s, Newfoundland and Labrador 1975 Photographer: M. Segal

Canadian Transportation Agency — 100 Years at the Heart of Transportation John W. (Jack) Pickersgill, most recently managed to ﬁnd a third way. It is not the Minister of Transport who had every member who can write his own personally escorted the new National ticket or draft the bill for his own ﬁnal Transportation Act through Parliament. haven of rest.”

Since passage of the legislation in January, Whether Pickersgill got any rest at the Pickersgill had assessed his own future newly formed commission remained a and decided it was time matter of lighthearted for a career change. As conjecture in the House of he related in his memoir, The Canadian Commons for some time, Seeing Canada Whole, he Transport Commission’s but the CTC set to work, saw little ahead for mandate was to deal nevertheless, at an earnest himself in politics, after and steady pace. with all modes of sitting in the House of Commons for 14 years. At transportation as a The Canadian Transport the age of 62, however, competitive whole Commission absorbed most he was not ready for “with the object of of the members from the retirement. After some co-ordinating and previous boards—the Board discussion with Prime of Transport Commissioners, Minister Lester Pearson, harmonizing the the Air Transport Board, Pickersgill resigned from operations of all carriers and the Canadian Maritime cabinet and the House of engaged in transport by Commission. (Roderick Kerr, Commons. Then on railways, water, aircraft, who had been chairman of September 20, he took the Board of Transport extra-provincial motor the top spot at the newly Commissioners, moved to created Canadian vehicle transport and the Exchequer Court.) The Transport Commission.4 commodity pipelines”. National Transportation Act had provided for a Pickersgill’s new job did maximum of 17 members not go unremarked in the House of who would serve for 10 years and to a Commons. On September 25, Tommy maximum age of 70. According to the Douglas, leader of the New Democratic Act, there would be a president and two Party, commented that it had been said vice-presidents, one to supervise legal “a Member of Parliament could get out and administrative matters, the other to of politics in one of two ways, either by oversee research. dying or by being defeated. The ﬁrst is so ﬁnal, and the second so humiliating.” The CTC also absorbed the staffs of the But Douglas added: “Mr. Pickersgill has previous boards, which numbered 377 in

Chapter Three — TAKING C ONTROL 1967 TO 1988 1967. In late 1968, the CTC set up head- by the Crowsnest Pass Agreement), and quarters at 275 Slater Street in Ottawa. they would be allowed to abandon uneconomic branch lines and passenger The Canadian Transport Commission’s services, unless required in the public mandate was to deal with all modes of interest. The Railway Transport transportation as a competitive whole Committee would make decisions on “with the object of co-ordinating and abandonment applications. harmonizing the operations of all carriers engaged in transport by railways, water, The Air Transport Committee held aircraft, extra-provincial motor vehicle responsibility, under the government’s transport and commodity pipelines.” new policy of restricted competition, for regulating air licencing and tariffs. In The ultimate aim of the Act was “an considering licences, the committee was economic, efficient and adequate” instructed to consider “present and transportation system. To achieve that, the future public convenience and necessity.” CTC was instructed to provide regulation The aim was for broader competition without restricting competition among without endangering the privileged the modes of transportation; to ensure status of the publicly owned airline, the fair distribution of costs of services newly renamed Air Canada. provided at public expense; to provide compensation for services that carriers The CTC also created a Motor Vehicle were required to provide in the public Transport Committee with the intention interest; and to ensure that rates set by of assuming some authority over the carriers should not be unfair. extra-provincial commercial trucking and bus industries. Truck companies had The CTC established separate committees become the railways’ main competition to handle the five modes of transport- for freight traffic, but they were largely ation: rail, air, water, motor vehicle and unregulated. The federal government commodity pipeline (except oil products). had handed control of interprovincial Most of the authority and responsibilities commercial trucking to the provinces in held by the CTC’s predecessors in the the Motor Vehicle Transport Act of 1954. areas of rail, air and marine were Regulations between the provinces were assumed by the new committees, with uneven or non-existent. Part III of the a few striking differences. National Transportation Act allowed for the cabinet to make exemptions to the Under the new National Transportation 1954 Act that would give the CTC Act, railways would be able to set their jurisdiction in specific areas. The own rates (other than on grain covered provinces, however, were reluctant to

Canadian Transportation Agency — 100 Years at the Heart of Transportation give up their powers. Part III of the Act commodity pipelines to regulate in 1967, was not proclaimed until 1970, and then however. The National Energy Board had was seldom put to use. assumed control of oil and gas pipelines in 1959. The Motor Vehicle Transport Committee did, however, assume other responsibili- The National Transportation Act had also ties. In 1969, the CTC began to implement provided for a Research Branch, which the Atlantic Region Freight Assistance Pickersgill had envisioned as setting Act, which extended to truckers in the priorities for transportation studies and Atlantic provinces the same subsidies that recommending policy. By the end of 1968, railways had received since 1927, under a full-time staff of 23 was employed in the Maritimes Freight Rates Act. The the Research Branch and an advisory subsidies were intended to reduce the board of interested citizens had been burden on shippers in the Atlantic established to help determine priorities provinces for moving their goods either for study. As it turned out, however, the out of the region to Central or Western Research Branch never functioned as Canada, or to other parts within the Pickersgill had intended. Atlantic region. In Seeing Canada Whole, written According to the 1969 Annual Report, many years later, Pickersgill wrote, the Motor Vehicle Transport Committee “Unfortunately a good deal of made “another step in equality of frustration developed largely because regulation” when it began to allow the planned scope of the Research exemptions for trucking companies from Branch was not adequately explained.” the Lord’s Day Act. When the Act, which He continued, “My hope of an basically prohibited work on Sunday, independent and permanent entity was drafted in 1906, it had speciﬁcally available for research into transport exempted railways and shipping problems and opportunities faded companies. Now, upon application, away.” In 1970, the Ministry of Transport trucking companies could be exempted established its own research facility, the as well. Canadian Transportation Development Agency, and recruited some of the CTC’s In 1967, the Commodity Pipeline research staff. Transport Committee was also created to handle the ﬁfth mode of transportation The CTC set up the International under the new CTC’s jurisdiction— Transport Policy Committee in 1968, pipelines for commodities other than oil which took over responsibility for or its products. There were no actual monitoring international agreements

Chapter Three — TAKING C ONTROL 1967 TO 1988 for the different modal committees. CNR-operated bus service was passed And in 1970, yet another committee was to the Newfoundland Board of Public formed, the Review Committee, set up to Utility Commissioners that year. review appeals of decisions that had been made by the modal committees. In 1969, the Railway Transport Committee, after months of hearings The majority of the CTC’s work, however, and consultations, issued the Costing was concentrated on the rail and air modes. Order, which outlined the method to determine railway operating costs and The Railway Transport Committee’s ﬁrst to calculate losses in order to apply for priority was to set out the framework for discontinuance of service. rationalizing passenger rail service and CSTM/CN000543 branch lines. Since 1959 when the Railway Reductions Act had been enacted as a temporary measure, freight rates had been frozen and the government had been paying annual subsidies to railways for their losses. By 1967, the government had paid out over $500 million.

The CTC’s goal was to eliminate the subsidies by gradual reduction within eight years; to allow railways to set their own rates according to competition; Freight train transporting potash in yard and to allow railways to abandon the Melville, Saskatchewan 1967 uneconomic branch lines and passenger Photographer: Gerry Richard service, unless required in the public interest, at which time the government As soon as the Costing Order was issued, would compensate the railways. the CTC received 31 applications for passenger-train discontinuance, including In 1968, the CTC allowed CNR to 18 applications from CPR to discontinue discontinue its trans-Newfoundland all of its passenger service, except passenger rail service, known as the commuter lines. CPR claimed more than Newﬁe Bullet. The decision was based $30 million in losses in 1968. CNR ﬁled on CNR’s assurance that it would applications for 13 services, claiming establish its own service for the province losses of more than $11 million. The CTC of “unquestionably clean, modern and set to work to determine actual losses, fast buses.” Jurisdiction of the and then, as required by statute, to begin

Canadian Transportation Agency — 100 Years at the Heart of Transportation public hearings into each application was set up to examine passenger service for discontinuation. That in itself was a from Montréal to the Maritimes. mammoth task since every public hearing could involve submissions from several By the end of 1971, CNR had filed for parties and several days of hearing. The discontinuance of all of its passenger CTC was required to consider the public services. With the CNR filings, the CTC interest in every discontinuance, and as had received applications for discontinu- laid out in the Act, it had to ensure ance of all the passenger rail service of “efficient, economic and adequate” any significance in Canada. Annual losses service. for passenger services from CNR were reported at $76.3 million in 1970. CPR On June 18, 1970, after the required annual losses were set at $31 million. public hearings, the CTC rejected CPR’s The total, including some small passenger application to discontinue the Canadian, lines, was $108 million. its daily transcontinental passenger train service. The Canadian’s losses in 1968 were The CTC’s Annual Report for 1971 set at more than $15 million. carried a message that, considering the escalating compensation to be paid out As the CTC’s Annual Report for 1970 for uneconomic services, might have stated, “Because of the probable annual been a plea for help: “The figures level of subsidy required to continue ($108 million) emphasize the importance the Canadian—more than $1 million a of the commission’s rationalization month—the CTC directed CPR to produce program which is aimed at discontinuing a plan of rationalization.” One can those services no longer required by almost hear an intake of breath from public need, ending unnecessary the CTC—and the government—as duplication and eliminating any over- that monthly sum was considered. capacity that may exist on services that are required to continue operating in In February 1971, the CTC rejected CNR’s the public interest.” application for discontinuance of the Super Continental, its transcontinental The railways were working to reduce passenger service, and set CNR losses for costs on those lines. “The total annual 1969 at $14 million. savings from rationalization effected by the CNR and CPR during the last three On April 14 of that year, the CTC years are $17.5 million,” the 1971 CTC announced that it would conduct a report stated. “Without such steps most study of an integrated transcontinental of that amount would have become a passenger service plan. Another study recurring subsidy charge on the taxpayers.”

Chapter Three — TAKING C ONTROL 1967 TO 1988 The railways had also started to introduce exceeded the amounts that they were some cost cutting in local train stations. receiving in previous subsidy payments. New technology had introduced the use of computers and the centralization of By 1973, the CTC had issued decisions on communications. Gradually in the early all 70 applications for discontinuance of 1970s, the major railways began to passenger-train service it had received since remove local station agents from the 1967. Of those, it had ordered 59 services smaller centres. All these continued and approved the factors helped the railways discontinuance of 11. to cut some costs. The railways had been relieved of huge Similarly, by the end of 1973, However, a substantial the CTC had decided that all losses for running amount would still have branch lines in the Prairies to be paid from the public uneconomic services should be protected from coffers for uneconomic that the CTC deemed abandonment until the end services that the CTC had to be in the public of 1974. In turn, the railways ordered to continue in the interest, but the price running the uneconomic public interest—to the tune branch lines would be paid by taxpayers was of 80 per cent for passen- compensated for their losses. ger lines and 100 per cent constantly mounting. on branch lines. The CTC’s Annual Report for 1974 remarked on the sharp Under the National Transportation Act, increases in operating costs for “every the plan was to phase out general segment of the transportation industry.” railway subsidies, or “normal payments,” That year, “the total payments for which had been agreed upon prior to various statutory subsidies administered 1967. A schedule was set up so that by the CTC for rail, water, road and air payments that totalled $110 million in transport rose to more than $232 million, 1967 would decline by $14 million a year up $52 million from 1973. The major to reach $12 million by 1974. No railway outlay was in payments to the railways as would receive any other subsidy—for compensation for uneconomic services instance, for running uneconomic they were required to provide in the passenger service or branch lines—until public interest during 1973.” those claims exceeded the amount of subsidy they were already receiving Furthermore, the Annual Report stated, under the normal payments plan. Only “Total claims from railways for losses too quickly, however, the railways caused by running uneconomic services reached the point where their losses in the public interest amounted to

Canadian Transportation Agency — 100 Years at the Heart of Transportation $160.4 million.” Another $26 million was charges by private wire-service paid in claims through a continuous companies. In 1971, the CTC set up a process of veriﬁcations from 1969–72. separate Telecommunications Committee to deal with the increasing rate issues. That same Annual Report announced a The CTC’s workload continued to grow new “railway branch-line freeze in the and so did its committees. Now it three Prairie provinces. The new policy had eight. designates a basic network of 12,413 miles of track to be protected Meanwhile, the Air Transport Committee from abandonment until the year 2000. was occupied with the steady stream of Another 6,283 miles will be protected applications for commercial air licences. until the end of 1975. A total of As with CTC decisions on the 525 miles of track, not currently in use, discontinuance of rail service, the Air is open to abandonment procedures.” Transport Committee considered the licencing applications on a case-by-case The railways had been relieved of huge basis, to determine present and future losses for running uneconomic services public convenience and necessity. The that the CTC deemed to be in the public volume of applications increased— interest, but the price paid by taxpayers from 377 in 1967 to 695 in 1974. was constantly mounting. In 1969, CP Air (formerly Canadian Paciﬁc The Railway Transport Committee had Airlines) was allowed a larger share of other concerns, among them railway the transcontinental route—20 per cent, safety. A rash of accidents in 1970 on as had been outlined in the government’s the main lines between Montréal and air policy of 1967. By 1970, CP Air was Toronto led to an inquiry and later the providing 25 per cent. formation of a task force to establish safety measures for the movement of Regional carriers were also taking over dangerous commodities by rail. A Railway more routes, often in areas where the Safety Advisory Committee was large carriers chose to withdraw their established in 1973. services. Subsidies were used as encouragement for the regional airlines The railway committee also continued to supply uneconomic routes, where no to hear rate applications for telephones other transportation was available. and telegraphs, part of the mandate Although more competition was being passed on from the previous Board of allowed in the air mode, Canada’s Transport Commissioners. In August 1970, publicly owned airline was still the committee took over regulation of granted priority.

Chapter Three — TAKING C ONTROL 1967 TO 1988 The CTC’s policy in this regard is International Intermodal Transport and illustrated in its 1974 Annual Report. Facilitation Branch. The branch would “Nordair was denied authority for a “co-ordinate, harmonize and develop route linking Montréal, Ottawa, Sudbury policy on economic regulation of and Thunder Bay. The Nordair decision international multimodal transport, followed public hearings at Sudbury and including movement of containerized Thunder Bay during which Air Canada and break-bulk cargo.” One area of study announced plans to add the same route would be a single through bill-of-lading to its schedule early in 1975.” for entire intermodal transport of goods from the point of origin to the destination. Successive annual reports in the 1970s hint at the fast pace of developments in Since the CTC’s early days, there had the transportation industry since the CTC been a power struggle with the Ministry had been formed in 1967. of Transport over policy-making. As early as November 22,1968, an Opposition In 1971, the CTC’s Marine Transport Member of Parliament had put his Committee conducted a study on finger on the problem. Conservative MP coasting trade and recommended that Thomas Bell had asked in the House of traffic between Canadian ports be Commons: “Who is really the boss in reserved for Canadian vessels and that transportation? Is it the minister or is restrictions be broadened to offshore it the new chief dictator of the CTC activities like dredging, salvage and (referring to Pickersgill)?” drilling. Proclamation of the Pilotage Act of February 1, 1972, gave the Marine Pickersgill’s retirement on August 31, committee new jurisdiction over tariffs of 1972, did little to deflect the rivalry with pilotage charges for the country’s four the Ministry of Transport. He was pilotage authorities—Pacific, Atlantic, replaced by Edgar J. Benson, who had Great Lakes and Laurentian. served as finance minister during Prime Minister Pierre Trudeau’s first term in In 1973, the CTC reported that “a major office. Benson, a chartered accountant, round of negotiations with the United had overhauled Canadian tax laws in the States gave 46 new Canadian and U.S. late 1960s and was still young—only scheduled air routes, bringing the 49—when he turned his energies to total to 81.” overseeing the CTC.

The Annual Report for 1974 announced In the early months of 1974, a jurisdic- that the CTC’s International Transport tional dispute between the CTC and the Policy Committee had established an Ministry of Transport surfaced in the

Canadian Transportation Agency — 100 Years at the Heart of Transportation House of Commons. A shortage of railway CTC’s responsibilities to order the railways cars that winter had caused a slowdown of to purchase additional equipment. freight trafﬁc in the West, including the Marchand had further reason to take movement of grain to export markets. policy-making into his own hands.5

Transport Minister Jean Marchand On April 8, Marchand reported to the described his quandary on March 7, 1974, House that he was preparing a policy in the House of Commons: “About the paper on transportation. same number of boxcars are available this year as we had last year. This means that A July election returned Trudeau’s Liberals no provision was made for any growth in to power and Marchand set to work on the economy. So, what do we do in this his transportation policy proposals. A situation? Honourable Members might year later, on June 16, 1975, he tabled a say, ‘You are the minister; you do it.’ It is document called Transportation Policy— true that Honourable Members gave A Framework for Transportation in responsibilities to the minister, but they Canada, along with an Interim Report on forgot to give any authority at all in Inter-City Passenger Movement in Canada many instances.” and an Interim Report on Freight Transportation. “We have the CTC,” Marchand continued, “which has final authority Marchand’s policy paper envisaged “the over almost everything, except in a few use of transportation as an instrument of cases where there is provision for an national policy rather than as a passive appeal to the minister.” support service.” It further explained “that the transportation system should Marchand, who was well known for his be accessible, equitable and efficient, blunt manner, concluded: “We have rather than economic, efficient and everything in Canada. We have water, air, adequate. The notion of efficiency is not surface—we have ice, we have snow and lost, but the emphasis is on service to we have distance—we have everything Canadians.” to have fun in transportation. Something we do not have is a real policy and I hope The paper also stressed that it would that sooner, rather than later, it will be “rely on competition where economic possible to have such a policy.” and technical conditions permitted, rather than relying almost exclusively on Under questioning from the House competition.” In effect, Marchand was Standing Committee on Transportation, changing the course of national Benson said that it was not within the transportation policy—directing it away

Chapter Three — TAKING C ONTROL 1967 TO 1988 CSTM/CN000559 things, I want to be able to say to the CTC that this is a new policy and that they will follow it.”

Marchand did not get a chance to have his way with the CTC. On September 25, he was removed from the Transport post in a cabinet shufﬂe. The Montreal Gazette explained the next day that “Mr. Marchand, deservedly popular for his human qualities, his frankness and his negotiating skills, came to the point where he needed the lighter load he has been given.” Marchand became a Minister without Portfolio, while Justice Minister Otto Lang was appointed to the Aerial view of a westbound train near Kamloops, Transport job. British Columbia 1975

According to Trudeau, The Gazette from competition and back to regulation reported, the economy was “in a serious with the top priority being service situation.” And the prime minister was to Canadians. “determined to take whatever measures are necessary to achieve positive results.” Marchand defined the Canadian Transport Commission’s role in this way: The Gazette had reported on September 16 “Transportation in Canada is too big a that CPR had announced a new round of business to dispense with an organization layoffs as part of the railway’s austerity such as the CTC. But we would like to see measures in response to “low levels of the policy made by the Ministry of freight traffic and rising costs. CPR Transport and applied by the CTC. Right reported it was curtailing spending in a now, there are many fields where it is the variety of ways, besides layoffs, including CTC that is making the policy, not the storing locomotives and boxcars, department at all.” reducing administrative costs and postponing capital projects.” Marchand continued, “I do not mind if they (the CTC) have a lot of authority but In October 1975, Trudeau’s government what I do mind is that if we think it is in introduced wage and price controls, a the interests of Canada to do certain three-year program to tackle rocketing

Canadian Transportation Agency — 100 Years at the Heart of Transportation inflation. The country had been struggling Canadians continue to be determined for several months with spiralling costs and taken into account in arriving at a in the face of a world-wide oil crisis. The national passenger service network.” government’s belt-tightening measures would be felt in all areas of Canadian On June 11, Lang described in the life, including transportation policy. House of Commons his interpretation of Canada’s transportation problems: As the CTC’s 1975 Annual Report “The conglomeration of approaches to explained, the anti-inflation program transportation in Canada which has “placed an increased responsibility on the developed over the years is full of CTC to regulate or monitor rate increases inconsistencies and contradictions, that and profit margins in those areas of have built into it tremendous costs and transportation and telecommunications non-productive expenditures.” that fall within federal jurisdiction.” Lang answered critics of his “user-pay” A commission of inquiry, headed by Emmett approach to controlling costs in Hall, a retired Justice of the Supreme transportation with the response, “If it Court of Canada, was appointed in 1975 isn’t the user who should pay, then who to investigate the railway requirements should pay—the non-user?” of grain producers, elevator operators and related businesses. Meanwhile, the Lang went on to say: “Productivity in this freeze on abandonment of 6,283 miles of country will be improved by the rational branch lines in the Prairie provinces was approach to transportation and the extended for another year to the end of lowest cost alternatives being selected. 1976. While the Hall Commission held Productivity will also be improved as hearings throughout the four Western users of transportation face the real cost provinces, the CTC allowed 362 of the to this country of what we are trying to 525 miles of unprotected Prairie trackage do and not the artificial rates based on to be abandoned. some Band-Aid, political opportunity subsidy. Those subsidies we will want to On January 29, 1976, Transport Minister remove and that will be our task.” That, Otto Lang issued a directive for develop- as Lang and others were to discover, was ment of “a basic single network of rail easier to say than do. passenger services across Canada” with the expressed purpose of “avoiding Another government plan was duplication of services.” The CTC was mentioned in the CTC’s 1976 Annual asked “to conduct a series of public Report. “Transport Minister Otto Lang hearings to ensure that the views of announced in mid-year that the

Chapter Three — TAKING C ONTROL 1967 TO 1988 government was willing to provide up ment of a Prairie Rail Action Committee. to $2 million for start-up costs involved The CTC subsequently began to consider in the establishment of air services to applications for abandonment of the certain points in Manitoba and eligible branch lines. Saskatchewan. The Minister directed the CTC to invite proposals on the operation The CTC Annual Report for 1977 reported of specific routes and to provide him that restrictions had been eased on with a detailed assessment of the CP Air’s transcontinental routes to allow submissions received.” The routes were turnarounds at western points other than jet service between Regina, Brandon Vancouver. The CTC also noted that the and Toronto, and jet or non-jet service government would allow CP Air to linking Saskatoon and Yorkton in provide air services to Saskatchewan, Saskatchewan to Dauphin, Brandon and also to consolidate all of its licences and Winnipeg in Manitoba. into one, which would allow the airline to operate flights between any two In 1976, CNR’s Roadcruiser bus service, points named in the consolidated licence. the only public passenger service in Newfoundland, was put under the CTC’s The Air Transport Committee also jurisdiction. A dispute between CNR and warned, “Continued cost pressures, its provincial regulator had led Ottawa to including world-wide increases in fuel make an exemption to the Motor Vehicle prices, caused air carriers to file for Transport Act, according to Part III of the increases in international and domestic National Transportation Act. fares and rates in 1977.”

In another jurisdictional change that Meanwhile, Bill C-31, the bill based on year, the Canadian Radio-Television Marchand’s policy plan to amend the Commission assumed authority over National Transportation Act, was stalled telecommunications from the CTC. in its ﬁrst reading in the House of Commons in January 1977. Enthusiasm In May 1977, the Hall Commission on for the bill gradually waned as efforts for Grain Handling and Transportation change in transportation policy were released its report called Grain and Rail directed elsewhere. in Western Canada. It recommended the abandonment—in stages from 1977 to The Air Canada Act of 1977 removed the 1981—of 2,165 miles of grain-related airline from CNR control and made it a Prairie branch lines and the retention separate Crown corporation, under the of the other branch lines until 2000. The jurisdiction of the CTC and subject to the report also recommended the establish- same regulations as its competitors.

Canadian Transportation Agency — 100 Years at the Heart of Transportation In 1978, the CTC allowed the airlines to Also in May, a member of the Canadian introduce a variety of new fare discounts. Transport Commission attended a meeting in London, England, to discuss Between April 1978 and October 1979, the Bonn Declaration on Terrorism. In the the Western and Eastern transcontinental declaration made in 1978, seven Western passenger services of both CP and CNR nations, including Canada, had agreed were absorbed into a new Crown that sanctions—in the form of cancelling corporation called VIA Rail. air services—would be directed at any country that refused to extradite or In March 1979, the CTC issued a report prosecute hijackers, or to return hijacked on a meeting about public transportation aircraft. The airline industry had entered for people with disabilities, and created a a chilling new era in which peacetime special advisory panel. Among its recom- was no protection against violence in mendations were changes to tariffs to the skies. allow self-reliant passengers with wheelchairs to travel alone and to require VIA Then in the fall of 1979, danger hit closer Rail to provide lifting devices for to home. On November 10, 1979, their assistance. 24 CPR cars carrying liquified chlorine and other flammable compressed gases The Canadian Transport Commission derailed in Mississauga, a suburban opened a Western division in Saskatoon community west of Toronto. A raging fire on May 1. In response to a government resulted, forcing the removal of 230,000 policy that enunciated a need for a citizens from the area. Although no Western presence, the CTC 1979 Annual deaths were reported, the catastrophic Report stated, “Its mandate is to perform possibilities of the derailment alerted the all those functions of the CTC that are nation to potential disasters ahead. delegated to the modal committees: A Board of Inquiry was appointed, under from Thunder Bay to Pacific Coast for rail Ontario Appeal Court Justice Samuel and from the Ontario-Manitoba border Grange, to investigate the derailment. to Pacific coast for other modes.” Two commissioners were appointed to the The Canadian Transport Commission CTC’s Western division. It took over became the focus of the federal Auditor’s responsibility for the Prairie branch-line Report in 1979. “The commission, in rehabilitation program, and Prairie common with some 30 other federal branch-line abandonment applications. government departments, is currently The CTC pointed out, “Although it is in engaged in an intensive review of its charge of all modes, its primary concerns management practices and controls,” at this time are the rail and air divisions.” the CTC reported at the end of the year.

Chapter Three — TAKING C ONTROL 1967 TO 1988 “The reforms that can already be fore- allowing more competition in air fares: seen as resulting from this review will “For scheduled flights, carriers can now touch upon almost every aspect of the innovate fare reductions of nearly Commission’s organization 50 per cent.” and operations.” That laissez-faire experiment was side- “In addition to improving its internal tracked in 1982, “after a number of management and financial controls, the carriers had made it known that fare- commission has an important role to play discounting had reached a point where in the realm of regulatory reform. As the revenue losses had begun to threaten largest of the federal the stability of the domestic regulatory agencies, the scheduled airline system.” CTC will be the trial agency “As the largest of The CTC imposed restrictions upon which new policies, the federal regulatory on discounts of more than aimed at lightening the agencies, the CTC 25 per cent, which included burden of regulation upon requirements such as round- will be the trial society, will be tested. trip travel and 14-day Those policies which are agency upon which advance booking. found to be workable and new policies, aimed beneficial will then be at lightening the The Grange Report on the passed on to the myriad burden of regulation Mississauga Railway Accident of other, smaller federal Inquiry was released on regulatory agencies.” upon society, January 19, 1981. On will be tested.” September 30, the CTC Regulatory reform was ordered implementation of already under way. As the several recommendations CTC reported, “Regulatory amendments including a speedier conversion to roller liberalizing domestic and international bearings, modifications of tank cars to charter rules were approved December 21, increase safety, the use of additional hot 1979, and incorporated into the Air box detectors, and a reduction in speed Carrier Regulations.” and in the length of trains.

The CTC reported in 1980 that in the air In 1981, just three years after it had sector “more flexible regulations and been created, VIA Rail was weighed simplified accounting procedures were down with a deficit and had applied to established to permit greater carrier the CTC to abandon 20 per cent of its competition and less regulatory burden.” passenger services. The CTC allowed the Among other things, the CTC was discontinuances on September 28, 1981.

Canadian Transportation Agency — 100 Years at the Heart of Transportation By the end of the year, VIA had cut nine The CTC Annual Report of 1983 trains, including the Super Continental, announced a series of public hearings to one of two transcontinental services. be held in early 1984 to discuss air fare policy at Transport Minister Axworthy’s In late 1983, the Western Grain request. It also announced an inquiry Transportation Act was passed to replace into intermodal and multimodal trans- the venerable Crowsnest Pass Agreement. portation services. And in a revision of its The Crow rate, considered sacred by general rules, the Canadian Transport Western farmers, was a reduced freight Commission set new time limits for itself rate on grain that CPR had agreed to in in issuing decisions. 1897. The Act to replace it was hammered out by Jean-Luc Pépin, who In the closing days of 1983, the Canadian had been Transport Minister since 1980. Transport Commission welcomed an old opponent into its fold. Jean Marchand But when the bill was released, it caused resigned from the Senate, where he had enough of an uproar among Western spent the past seven years, to become farm groups that Prime Minister Trudeau the CTC president on December 16. quickly moved his only cabinet minister Edgar J. Benson had completed his 10-year from the West into the Transport term on August 31, 1982, and had taken portfolio.6 Lloyd Axworthy, from an ambassadorial post in Dublin. During Winnipeg, replaced Pépin on August 12, the interim, the CTC’s John T. Gray, 1983. The new Act, allowing for a vice-president-law, had ﬁlled in as freight price increase (to a maximum president. The 65-year-old Marchand of 10 per cent on the world grain price) hardly had time to settle into his chair and federal compensation to railways before there was a ﬂurry of more changes. for losses, was passed on November 17. The CTC took over responsibilities for The 1984 CTC hearings on Canadian air the costing of grain movements, cost fare issues and domestic charters forecasting, determining rates, and determined that there was need for a payment of the government’s new air policy. Amendments to the Air commitment to railways, now at Carrier Regulations governing domestic $650 million. and international advance booking charters had been suggested. Another There were other changes afoot in the report on air services in Northern regions, early 1980s. The Liberal government based on hearings held in June and July, faced increasing public dissatisfaction stressed the necessity of providing better in the midst of economic recession and air service in remote areas between high unemployment. Labrador and the Yukon. Transport

Chapter Three — TAKING C ONTROL 1967 TO 1988 Minister Axworthy introduced a new “the effects on the Canadian Transport Canadian air policy that year, implement- Commission will be dramatic.” ing suggestions from the CTC hearings. The Annual Report quoted these words In the fall of 1984, the CTC held an from Mazankowski’s speech: “Economic inquiry into the effects in Canada of U.S. regulatory reform in transportation is rail deregulation. The study had been needed in Canada if it is to achieve requested by Axworthy “after two major economic renewal and growth to meet Canadian railways reported revenue international competition. Canada’s losses of $100 million to U.S. ability to achieve economic progress in competitors.” The Staggers Act, passed in the 1980s and 1990s will depend in a the United States in 1980, freed the large measure on a productive and more American rail industry from economic efﬁcient transportation system.” regulation and opened the way to competition. As the CTC reported, the The Transport Minister continued, “It is inquiry found that “the rail regulatory the federal government’s view that the systems of the two countries are no changing environment of regulatory longer compatible and suggested a administration, coupled with the number of legislative changes to restore determination to reduce government trans-border railway pricing harmony.” interference in the marketplace, requires the establishment of a new regulatory A federal election on September 4, 1984, agency as a successor to the Canadian brought in a Conservative government Transport Commission.” under Brian Mulroney. One of the priorities identiﬁed by the Mulroney The fate of the Canadian Transport team in its campaign platform was Commission had been decided. It would transportation policy reform. be replaced by another agency with less regulatory authority. Jean Marchand In July 1985, Transport Minister Don resigned as president on July 31, 1985, Mazankowski introduced a position soon after Mazankowski’s policy paper paper on transportation in the House of was released. J. David Thompson, the Commons. It was called Freedom to CTC’s vice-president-law, sat in the Move—A Framework for Transportation president’s chair until Erik Nielsen was Reform. The paper outlined sweeping appointed in early 1987. Nielsen had revisions to transportation policy that been a Conservative Member of involved reduced economic regulation Parliament since 1957. He served in and greater reliance on market forces. Joe Clark’s short-lived government in As the CTC Annual Report announced, 1979–1980 and then held several cabinet

Canadian Transportation Agency — 100 Years at the Heart of Transportation posts in the Mulroney government. In issued a report on June 28, 1985, on January 1987, he had resigned from the alternatives to railway branch lines. The House of Commons to head the CTC. report found that branch-line subsidies had grown from $37.1 million in 1971 to While the new legislation was drawn up, $322 million in 1982. It also found that the commission continued with its daily consideration had not been given to workload. Mazankowski had asked the competition from other modes of CTC’s Western Division to inquire into transport. The report recommended a possible alternatives to railway branch complete review of railway costing. lines in Canada. The objective, according to the CTC, was to ﬁnd better ways to On June 26, 1986, Transport Minister improve the effectiveness, efﬁciency and Mazankowski introduced Bill C-18 in reliability of the railway system at a the House of Commons. It was the new minimum cost. The Western Division National Transportation Act that would

CSTM/CN001653

Launching of the Labrador coastal ship MV Taverner, Collingwood, Ontario 1962

Chapter Three — TAKING C ONTROL 1967 TO 1988 create an agency to replace the Canadian “With the late summer passage of Bill Transport Commission. Ironically, the C-18,” the CTC reported in the 1987 CTC’s Research Branch, created by Annual Report, “and in anticipation of Pickersgill back in 1967 to serve as an the new National Transportation Act instrument of policy-making, had assisted becoming law on January 1, 1988, the the Mazankowski team in drafting the commission began to phase out its new legislation. activities.” A transitional team was set up to accommodate the relocation of staff, Among changes to the original Act which had grown in 1986 to almost of 1967, there were provisions for 1,000 people. conﬁdential contracts for rail shippers; increased intramodal competition; Among the CTC’s ﬁnal decisions in reduced regulation governing the December 1987 was the approval for commercial airline sector; rate arbitration CNR and CPR to operate their trains for shippers and carriers; and protection without cabooses. The prospect of trains of the unique nature of the North’s air running without cabooses seemed and marine transportation. strange in those days. But once discarded, they were soon forgotten. John Crosbie became Transport Minister on June 30, 1986, a couple of days after The Canadian Transport Commission the National Transportation Act was would meet a similar fate. After 20 years, tabled. He guided Bill C-18 and the it had become obsolete. Under a new accompanying Bill C-19, the new Motor agency, Canada’s transportation system Vehicle Transport Act, through Parliament. would have “freedom to move”.

Canadian Transportation Agency — 100 Years at the Heart of Transportation Notes for Chapter Three

The main sources of research for this chapter were the annual reports of the Canadian Transport Commission from 1967 to 1988 and the House of Commons Debates. Newspaper sources are noted in the text.

Other sources include:

1 James H. Marsh, The Canadian Encyclopedia, Pickersgill’s memoir focuses on his earlier p. 738. career, the later chapters discuss his time as Transport Minister and the early days of the 2 Donald MacKay, The People’s Railway, Canadian Transport Commission. A History of Canadian National, p. 246. 5H.N. Janisch, The Regulatory Process of the 3F.H. Leacy, Historical Statistics of Canada, Canadian Transport Commission, p. 16. This a collection of data from Statistics Canada document, a study prepared for the Law (previously the Dominion Bureau of Statistics). Reform Commission of Canada, gives a lengthy The ﬁgure for Dorval airport comes from the analysis of the workings of the CTC based on Transportation and Communications section, a six-month research project in 1974–75. Civil Aviation. T240-246, titled “Arriving and departing civil ﬂights at selected Canadian 6 Stephen Clarkson and Christina McCall, international airports, 1960 to 1975.” Trudeau and Our Times, Volume 1, p. 292, and Volume 2, p. 327–8. 4 J.W. Pickersgill, Seeing Canada Whole, A Memoir. Although a large part of

Chapter Three cover photo: The Turbo Train under testing, Saint-Hyacinthe, Québec, 1967 CSTM/CN000564

Chapter Three — TAKING C ONTROL 1967 TO 1988

CHAPTER FOUR Shifting Gears The National Transportation Agency 1988 to 1996

1904 1938 1967 1988 1996 2004

1988, the government divested Air Canada. • 1992, the National Transportation Act was amended to expand the role of the Agency with respect to making the federal transportation accessible to persons with disabilities. • February 24, 1995, Canada signed an “Open Skies” agreement with the United States.

73 The National Transportation Agency 1988 to 1996 The Canadian Transport Commission earned in World War II. He also had a had moved across the Ottawa River reputation as a scrapper, picked up to Hull in the late 1970s. More than 800 during a 30-year career in the House of employees now occupied the top five Commons as the representative for floors of the fortress-like brick building Whitehorse, Yukon. His appointment at 15 Eddy Street. In its 20 years of signalled a changing of the guard, a guard existence, the CTC had amassed a large that the Mulroney government decided organization that would have to be over- had become entrenched in a regulatory hauled to implement the government’s system that was no longer viable. new vision for transportation policy. As the Ottawa Citizen reported on Erik Nielsen, a former Cabinet minister November 28, 1987, “Transport Minister in Brian Mulroney’s government, was John Crosbie said he was fed up with appointed to head the new National regulations so severe they required Transportation Agency. Nielsen had a law airlines to fill in a form ‘to go to the degree and a Distinguished Flying Cross bathroom.’ So he hired Erik Nielsen.”

Crosbie had outlined the agenda for change in a more serious vein on June 17, 1987: “The current regime was put in place in 1967. Since then, the world economy, the Canadian economy and Canada’s transportation industry have changed signiﬁcantly. The regulatory regime simply did not keep pace. As a result, at the present time it impedes rather than supports growth and development, it stiﬂes competition in all modes of transportation, it reduces the competitiveness of producers and it hinders the free movement of goods and people.”

Eleven of the 13 incumbents in the A passenger information representative assists Canadian Transport Commission were travellers at Toronto Pearson International Airport, given their walking papers in the restruc- Ontario turing that followed. The new Act called

Canadian Transportation Agency — 100 Years at the Heart of Transportation for a maximum of nine full-time Members, Agency has authority to grant transport- including a Chairman and Vice-Chairman, ation licences, review public complaints to be appointed by Cabinet for five-year and help resolve disputes between renewable terms, and six part-time shippers and transportation firms.”1 Members. To provide some regional representation, the Act required that The new Act stated that safety was a there be one Member from each of five priority, that competition should be the Canadian regions: Pacific, Prairie, prime force to drive the Canadian Ontario, Québec, and Atlantic Region. transportation industry, and that shippers and travellers should be the Micheline Beaudry, a chief considerations in Montréaler with “The powers establishing policy. management experience in of the new Agency The Act also directed that energy and transportation, competition should be not are designed to ensure was appointed Vice- only intermodal (between Chairman. Six other full- responsiveness to different modes of time Members were public interest, transport), but also intra- appointed to five-year industry needs and modal (between carriers terms. Two former within a particular mode). policy direction from members of the CTC were Regional economic appointed as temporary the government.” development was an Members. expressed goal. Also, all modes should be treated The 1988 Annual Report indicates that fairly, and carriers should pay for the Agency did not stint on staff training. facilities provided at the public’s expense. “As employees were placed in new positions,” the report stated, The new Agency’s operations were “considerable emphasis was placed on restructured to reflect the Act’s training to ensure that all employees philosophy. Unlike the CTC, which had understood their new responsibilities.” separate divisions set up according to transportation mode, the new Agency A government booklet, Freedom to Move, was divided into branches according to published in 1988, explained the Agency’s the duties performed. The Dispute role: “The powers of the new Agency are Resolution Branch settled rate or service designed to ensure responsiveness to disputes and monitored acquisitions and public interest, industry needs and policy mergers of transportation companies; direction from the government. The the Market Entry and Analysis Branch

Chapter Four — SHIFTING G EARS 1988 TO 1996 was responsible for licensing within all policy and for the actions of the Agency. modes; the Transportation Subsidies The government may issue general policy Branch dealt with subsidy payments, or other binding directions to the Agency determination of Western grain rates and may alter any decision, order or and railway rationalization proposals. regulation made by the Agency.” The Legal Services, Corporate Management and Human Resources and With a move toward deregulation, the Secretariat branches provided the Agency’s regulatory duties were relevant expertise and support to the also redefined. other branches. Regional offices were set up in Moncton for the Atlantic region, As laid out by Transport Minister Lloyd and Saskatoon for the Prairie region. Axworthy’s Canadian air policy in 1984, air services were no longer required to The National Transportation Agency prove “present and future public would continue to hold public hearings convenience and necessity,” except in into transportation matters and settle Northern Canada, where the airline disputes between shippers and carriers, industry was still considered fragile. but now only in response to specific complaints or at the government’s In the rest of Canada, an air service request. The Agency would also provide needed only to be “fit, willing and able,” final-offer arbitration along with that is, able to operate a safe air service mediation, but the services would be with proper insurance coverage. Earlier offered only upon request. conditions regarding routes, schedules, fares and equipment had also been “In most cases the Agency can only take removed. Air services could now negotiate action upon request. In keeping with the confidential contracts and they needed emphasis on minimal regulation, it is to give only 120 days’ notice to reduce or intended to respond to problems rather stop service. In instances of monopolies than seek them out,” the government in service, the public could appeal fares booklet, Freedom to Move, explained. to the Agency.

The Agency no longer had a pro-active The new Act reduced regulations in role in policy-making, but was bound the rail sector so that shippers could to follow the policy directives of negotiate conﬁdential contracts with government. As the booklet explained, individual railways, and ﬁle the “the Minister of Transport is accountable agreements with the Agency. The to Parliament for national transportation new Act required only that rates be

Canadian Transportation Agency — 100 Years at the Heart of Transportation compensatory to cover the actual cost of mergers and acquisitions in all modes shipping. The interswitching limit was of transportation. The Agency was also also extended, from 6.4 kilometres required to conduct annual reviews of (four miles) set in 1908 to 30 kilometres the National Transportation Act. A major (18 miles). Captive shippers beyond the review of the Act was required in the 30-kilometre limit could ask their local fifth year of operation. carrier for a competitive line rate. If a rate could not be agreed upon, the The new legislation stated that Agency, on request, would set the rate. transportation services must be offered without undue obstacles to public The new National Transportation Act mobility, particularly for travellers with also made it easier for railways to sell disabilities. The Agency was instructed to an unprofitable line, and ensured a investigate any complaints in that regard. government subsidy to the public to In July 1988, the Agency was further establish other means of transportation empowered to prescribe, administer where necessary. If a line had future and enforce regulations for accessibility economic potential, the Agency could standards of persons with disabilities for order the railway to continue service on all of the modes of transportation. a subsidy basis. If the line was found to be uneconomic, the railway had to give The creation of the Canadian 90 days’ notice of abandonment, during Transportation Accident Investigation which time the public had 60 days to and Safety Board in 1989 removed the appeal. The Agency then had to make Agency’s role in investigating railway a decision within six months. accidents. But the Agency continued to distribute subsidies and set the annual Marine transportation in the North was rate scale for the movement of protected in the same way as Northern air Western grain. services. No new service would be allowed to enter an area that would endanger In its first Annual Review, the National existing services. The Agency continued its Transportation Agency reported that other administrative duties in the filing confidential contracting was the principal of tariffs, under the Pilotage Act and the competitive mechanism used in the St. Lawrence Seaway Act, and would hold railway industry in 1988. hearings in response to complaints. It also reported that fare wars continued A new assignment for the Agency was throughout the year in the air industry. the monitoring of major company “The major airlines flew more passengers

Chapter Four — SHIFTING G EARS 1988 TO 1996 and transported more cargo farther, but and air carriers to ensure that the fare competition forced yields downward advance payments were adequately with corresponding effects on cash flow protected. and profits,” the Agency reported. In 1988, VIA Rail’s discount fares had In 1988, the government had sold Air become the focus of Agency hearings. Canada. The Annual Review remarked The Voyageur bus company complained that “one of the most prominent about VIA’s proposed discounts in the developments associated with the Montréal-Ottawa-Toronto corridor. deregulation of Canada’s air transport The bus company claimed that the fares industry in the 1980s has been the would hurt its business, charging that VIA creation of two large carrier families already had an unfair advantage because headed by Air Canada and Canadian it was a Crown corporation with Airlines International.” Canadian Airlines government funding. The Agency International was owned by Calgary- decided that the discount fares were based PWA, formerly called Pacific prejudicial to the public interest, and Western, which had bought out CP Air recommended to Cabinet that an inquiry in 1987. into VIA Rail pricing policy be established.

When the Agency allowed Wardair, An Agency inquiry into VIA pricing was hurting and close to bankruptcy, to be halted in April 1989 when Transport purchased by PWA, the Montreal Gazette Minister Benoit Bouchard announced reported on January 20, 1989 that “air a plan to slash funds to VIA Rail. The fares are bound to rise and fare wars are government’s five-year plan would cut likely to be less frequent.” But that VIA passenger service in half, mainly in prediction turned out to be wrong. the Atlantic provinces. Bouchard also set Charter air services continued to enter up a Royal Commission on Passenger and leave the market, creating enough Transportation, under Lou Hyndman, competition for the major airlines that a former Alberta Cabinet minister. fare wars persisted. Meanwhile, the major railways continued In response to the rapid turnover of to rationalize their lines. The Montreal charter air services, the Agency made Gazette reported on October 18, 1989, revisions to the Air Transportation that “the National Transportation Agency Regulations in 1991 to protect advance has been besieged by a flood of payments by consumers. The Agency also applications for closing freight railway conducted field audits of tour operators lines throughout Canada.” According to

Canadian Transportation Agency — 100 Years at the Heart of Transportation the newspaper report, CNR and CPR In 1992, the National Transportation Act were planning to close 65 freight lines of 1987 was amended to include the covering 2,102 kilometres in 1989, “more words “accessible” and “persons with than double the applications ﬁelded in disabilities” in its declaratory clause. The 1989 from all 15 railway companies.” amendment made the needs of travellers with disabilities an integral part of the CNR had ceased rail operations in Agency’s jurisdiction. Newfoundland in 1988 and discontinued service in Prince Edward Island in 1992. In January 1992, the Agency released an By 1993, CPR no longer had any rail lines interim report on the accessibility of east of Québec. federally regulated ferries. An interim report on the accessibility of ground A Southam News report on July 23, 1991, transportation at Canadian airports was questioned the success of transportation issued in December of that year and a deregulation. “With airline losses up, report on accessibility of motor coach competition down and gasoline prices services was released in May 1993. and taxes higher, touring Canada this summer is costly.” The report continued, Meanwhile the fare wars being fought “While deregulation was supposed in the Canadian skies were making some to open Canada’s skies to new airlines, people nervous. PWA had announced in the effect has been quite the opposite. This summer Canada’s market is clearly dominated by Air Canada, Canadian Airlines International, a unit of Calgary’s PWA Corp., and 11 regional airlines within their control.” The Southam report dubbed the Canadian air industry a “duopoly.”

But the Agency stated in its 1992 Annual Review that “in spite of apparent concentration in the industry, the level of domination at the route level has decreased considerably. There has been a signiﬁcant reduction of the dominant carriers’ market share on most Canadian A passenger with visual impairment and guide dog routes, and no monopolization of key aboard a VIA Rail train ©Canadian Transportation Agency hub airports by dominant carriers.”

Chapter Four — SHIFTING G EARS 1988 TO 1996 1992 that Canadian Airlines was in finan- finished on November 31. With Nielsen’s cial trouble and that it was looking for a departure, Vice-Chairman Micheline buyer. When negotiations for a merger Beaudry became the acting Chairman. with Air Canada failed, PWA started talks with the U.S.-owned American Airlines. The government, meanwhile, appointed a lawyer from Québec City to head a On September 12, 1992, NDP Leader review committee of the National Audrey McLaughlin, was quoted by Transportation Act. Gilles Rivard’s Southam News, after a debate in the committee would conduct the mandatory House of Commons over airfare wars, as five-year review of the Act. Included in saying: “if we don’t have some kind of the review would be an assessment of regulation, the only thing we’ll have the operations of the Agency. The Rivard flying over Canadian airspace will be committee report, released on March 9, Canadian geese.” 1993, found that the National Transportation Act of 1987 had accom- However, the Mulroney government held plished much of what it had set out to its ground on deregulation, and federally do. But the committee encouraged the funded research supported its stand. government to move even further toward deregulation by opening On November 19, 1992, the Royal Commis- Canada’s transportation sector to sion on National Passenger Transportation, more competition. chaired by Lou Hyndman, released its report. “Government departments should Rivard told Canadian Press on March 9 no longer own, finance, maintain or that deregulation was working: “The operate Canada’s transportation system,” changes, while painful, were necessary. the report recommended. “It must be sup- Canadian shippers and travellers ported by travellers and not by taxpayers.” are benefiting.”

The Hyndman Commission recommended The review committee recommended the withdrawal of government transport- that the air sector be opened to more ation subsidies, the application of a foreign investment and that if a user-pay concept, and a restriction of monopoly developed in the domestic the government’s role in transportation market, foreign carriers should be to policy-making. allowed to enter. In the rail sector, the committee recommended privatization Meanwhile, the Agency said goodbye of CNR and more liberal rationalization to Erik Nielsen when his ﬁve-year term rules so that railways could reduce costs

Canadian Transportation Agency — 100 Years at the Heart of Transportation more quickly. The committee also that included the Rail Branch, the Air recommended that CPR and CNR should and Accessible Transportation Branch be encouraged to share trackage. and the Marine, Trucking and Regulatory Operations Branch. Legal Services, the For the National Transportation Agency Secretariat and Communications Services itself, the review committee were merged into another branch, while recommended an examination of its Corporate Services was combined with the organization, and its human and Planning, Review and Quality Manage- financial resources. The staff of the ment and Internal Audit branches. Agency had been greatly reduced since the days of On May 27, 1993, the Agency the Canadian Transport “If we don’t issued a major decision Commission. In 1986, the have some kind allowing AMR Ltd., owner CTC had more than 800 of American Airlines, to of regulation, employees and an buy a 33 per cent stake in administrative budget of the only thing we’ll Canadian Airlines, ruling $43 million. By 1992-93, have flying over that the airline would the agency operated with Canadian remain Canadian owned 508 employees and a airspace will be and controlled. On June 24, budget of $35 million.2 the federal Cabinet upheld But with the Agency’s Canadian geese.” the decision, dismissing an reduced regulatory role, appeal by Air Canada. the committee suggested that it be assessed for cost-effectiveness A fall election in 1993 brought the and efficiency. Liberals to power, under Jean Chrétien. While the new government settled in to On March 16, 1993, a week after the work, the Agency was conducting National Transportation Agency Review hearings into another complaint from the Committee report was released to the Voyageur bus company about VIA Rail’s public, Rivard was appointed chairman of discount fares. Voyageur continued to the Agency. Meanwhile, the Rivard commit- complain that the Crown corporation tee’s report was sent to the Parliamentary had an unfair advantage and that by Standing Committee on Transport, and cutting fares in Ontario and Québec, further consultations were held. VIA damaged the bus company’s business. The Agency decided this time The Agency was reorganized that year that VIA’s discount fares didn’t endanger to create departments along modal lines the bus business.

Chapter Four — SHIFTING G EARS 1988 TO 1996 On December 1, 1993, the Coasting Trade Young pointed out that Canadian Act was enacted, in which the Agency taxpayers in 1994 were directly would recommend to the Revenue subsidizing the federal transportation Minister whether foreign vessels should system to the tune of $1.6 billion, and receive temporary licences for work in to the tune of $700 million in indirect Canadian waters, taking into account subsidies. Young also said, “We support whether Canadian vessels were available. the government’s overall review of boards and agencies, On June 3, 1994, Transport including the National Minister Douglas Young Douglas Young Transportation Agency.” delivered a policy added, “We intend He added, “We intend to statement in the House of to eliminate outdated, eliminate outdated, Commons: “The current unnecessary and often unnecessary transportation system is stiﬂing regulations.” becoming a handicap and often stiﬂing rather than an advantage regulations.” The government had set its to Canadian businesses and goals for transportation consumers. We must policy. The coming months modernize quickly. Much of our system is would reveal how successful it would be overbuilt and we can no longer afford it.” in implementing them.

Young pointed out the flaws in the CPR and CNR had been negotiating transportation system, echoing concerns a merger of their freight services east that had been raised in the past. “We of Winnipeg and Chicago. Their have too much spare capacity—too many negotiations broke down in July 1994. ‘empty cars’ that are not being utilized. CPR then offered to buy CNR’s rail Many services are now being heavily operations east of Winnipeg. That bid subsidized and for the wrong reasons. was rejected by the government. In The profitability and long-term viability September, Transport Minister Young of many segments of the industry are in set up a task force to consider peril. Intermodal links are more preached privatizing CNR. about than used. Clients of our systems are being shielded from the real costs The Agency’s 1994 Annual Review that are being subsidized by taxpayers. expressed some optimism that Canada’s The environmental consequences of economy was recovering from a lingering transportation, especially in urban areas, recession amid reports of higher traffic are becoming more acute.” in all modes of transport. The Annual

Canadian Transportation Agency — 100 Years at the Heart of Transportation Review also noted an increase in On June 20, 1995, Transport Minister intermodal transportation as shippers Young tabled Bill C-101, otherwise used more than one mode of transport known as the Canada Transportation to deliver goods. Act, that would continue the National Transportation Agency as the Canadian An intermodal complaint had come to Transportation Agency 95 per cent. the Agency’s attention early in 1994. CNR claimed that the purchase of A story in the Ottawa Citizen a week Montréal’s troubled Cast container later, on June 28, reported that the shipping company by Canadian Pacific National Transportation Agency “has to would hurt competition on the main cut 200 of its 500 jobs over the next transportation route from North America 18 months.” The Agency was attempting to Europe. CNR claimed that merging the to find work for its employees in other two companies would involve 80 per cent government offices. of container business at the port of Montréal, which was the largest On November 2, 1995, the Ottawa container port in Canada. The Agency Citizen reported that “hard economies decided, however, in favour of the dictated CPR relocation to Calgary from purchase and Canadian Pacific bought Montréal where it was created 127 years Cast in March 1995. ago.” The Citizen explained that the area between Thunder Bay and the Pacific Meanwhile, the Canadian government Ocean generated 80 per cent of CPR’s signed an “Open Skies” agreement with revenue. Ironically, the Western rail line the United States on February 24, 1995, that had been so unprofitable for the that allowed unlimited access of airlines railway for so many years in its first between the two countries. century had now become the railway’s main source of revenue. On February 27, 1995, three subsidy programs administered by the Agency On December 14, when the Transport were put on the chopping block. Finance Minister announced plans for a new Minister Paul Martin announced in the Marine Act in the House of Commons, federal budget that railway subsidy he was in an optimistic mood about programs established under the Western Canada’s transportation system. Grain Transportation Act, the Maritimes Young listed the government’s recent Freight Rates Act and the Atlantic Region achievements in the area: an agreement Freight Assistance Act would be cut in with NAV Canada to commercialize the summer. Canada’s air navigation system; an

Chapter Four — SHIFTING G EARS 1988 TO 1996 international air transportation policy to The new Canada Transportation Act ensure that Canadian carriers made use essentially reiterated the same policy that of the routes they were allotted; the had been declared in the earlier National signing of the “Open Skies” agreement Transportation Act. But the Act with the United States; the privatization introduced regulations that would of CNR; and the elimination of transform the Agency itself. As the $700 million in subsidy payments under Agency’s Annual Report for 1996 related, the Western Grain Transportation Act “what made these changes exceptional and the Atlantic Region Freight was the magnitude of their impact.” Assistance Program.

The Canada Transportation Act, also called Bill C-14 (formerly C-101), went to third reading on March 25, 1996. It received royal assent on May 29.

Canadian Transportation Agency — 100 Years at the Heart of Transportation Notes for Chapter Four

This chapter is largely based on annual reports of the National Transportation Agency from 1988 to 1992. The Agency also published annual reviews from 1988 to 1994, which gave comprehensive analyses of the Canadian economy and the transportation industry. Annual reports were not published by the Agency in 1993, 1994 and 1995. However, performance reports were published for those periods. Information regarding government initiatives and policy statements are taken from the House of Commons Debates and government policy documents. Newspapers were also consulted, as mentioned in the text.

Other sources were:

1Freedom to Move: in Canada’s New 2Margaret M. Hill, Recasting the Federal Transportation Environment, a series Transport Regulator: The Thirty Years’ War, of pamphlets published in 1988 when 1967–1997, an essay contained in the book, John Crosbie was Transport Minister. Changing the Rules: Canadian Regulatory The information quoted in the text comes Regimes and Institutions, G. Bruce Doern, from the pamphlet subtitled The National editor, p. 57. Transportation Act and The Motor Vehicle Transport Act.

Chapter Four — SHIFTING G EARS 1988 TO 1996

CHAPTER FIVE Keeping Pace The Canadian Transportation Agency 1996 to 2004

1904 1938 1967 1988 1996 2004

July 1, 1996, regulation of motor vehicle transport and commodity pipelines was removed from the Agency’s mandate. • August 2000, Canada’s ﬁrst Air Travel Complaints Commissioner was appointed. • December 21, 2000, Air Canada was allowed to take control of Canadian Airlines. • September 11, 2001, terrorist attacks in the United States using highjacked commercial airlines changes air travel forever.

87 The Canadian Transportation Agency 1996 to 2004 The Canada Transportation Act was Members appointed by Cabinet for a proclaimed on July 1, 1996, when, maximum term of five years, and a as the Ottawa Citizen reported, “For maximum of three part-time Members one sweet day, there were no clouds in appointed by the Minister of Transport. the sky and few in the minds of 140,000 The requirement of regional represent- Canada Day revellers who packed ation among the Members was removed Parliament Hill to mark the nation’s along with the regional offices. 129th birthday.” Marian Robson, who had Spring had been slow in According joined the National coming and then the cool, Transportation Agency on to the Canada wet weather lingered March 27, 1995, was into summer. Transportation Act, appointed Chairman. the Canadian Mrs. Robson had 25 years of As the Annual Report for Transportation experience in the transport- that year related, the Agency, which began ation field, including National Transportation executive positions in the operations on Agency was dealing with Canadian port system, as a the upheaval involved in July 2, would be a manager for CNR and, in the reducing a staff of 500 by streamlined version 1970s, as special assistant to almost half. “The closure of of its former Transport Minister Otto Lang. the National Transportation Jean Patenaude, a policy incarnation. Agency’s Moncton office adviser at Transport Canada, presented a particular was appointed to the Agency challenge, as this office as Vice-Chairman. Two Members administered the Atlantic Region moved from the old Agency to the new. transportation assistance program. Employees in Moncton had the The existing national transportation demanding task of closing the books on policy had remained largely intact in the the subsidy program, while their jobs Canada Transportation Act: namely, that were being terminated.” “a safe, economic, efficient and adequate network of viable and effective According to the Canada Transportation transportation services accessible to Act, the Canadian Transportation Agency, persons with disabilities ... that makes which began operations on July 2, would the best use of all available modes of be a streamlined version of its former transportation at the lowest total cost incarnation. The Agency membership was is essential to serve the transportation reduced to a maximum of seven full-time needs of shippers and travellers,

Canadian Transportation Agency — 100 Years at the Heart of Transportation including persons with disabilities, and to a timely manner, allowing no more than maintain the economic well-being and 120 days from the receipt of an applica- growth of Canada and its regions.” tion or a complaint. The Agency was also granted the authority to levy ﬁnes for non- The Agency would continue in its role as compliance with regulatory provisions. a quasi-judicial tribunal and an economic regulator with responsibilities that included issuing licences to air carriers and railways, resolving disputes over various air, rail and marine transportation rate and service matters, and the determination of the annual maximum rate scale for Western grain movements. The Agency also had powers to remove undue obstacles to the mobility of travellers with disabilities.

The Canada Transportation Act provided for an easier process for railways to sell Stock photo held by the Canadian Transportation rail lines or to discontinue service; Agency eliminated the Agency’s role in ©Digital Vision monitoring mergers and acquisitions of rail carriers and airlines; removed rail The Canada Transportation Act required subsidies for continuing uneconomic the Agency to conduct an annual assess- freight and passenger service; and ment of the Act and to report on any removed entry restrictions for Northern difficulties observed in its administration. air services so that all domestic air service This requirement provided a checkpoint was put under the same licensing regime. for the Agency to report loopholes encountered in the Act, as had been the Regulation of motor vehicle transport case in the Atlantic subsidies program and commodity pipelines was removed under the previous legislation. from the Agency’s mandate. The Agency was given a new role in consumer protec- As the Canadian Transportation Agency tion with a financial fitness requirement opened its doors, the approach of the for air services. Under the new Act, air new millennium presented a whole new services were prohibited from advertising array of challenges in Canada’s trans- if they didn’t have a licence. The Act portation system. An aging population required the Agency to make a decision in raised increasing concern about the need

Chapter Five — KEEPING P ACE 1996 TO 2004 to make transportation accessible to people with disabilities. Passenger air travel was expanding in a ﬁercely competitive market at the international level, while on the domestic side Air Canada and Canadian Airlines were the major players in a market that saw little growth. A balance would have to be maintained between the twin objectives of encouraging competition and protecting Canadian interests.

Rail and marine carriers were exploring new frontiers in intermodal container trafﬁc. Meanwhile, as the two major freight railways, CPR and CNR, sold off their branch lines, short-line railway operations were springing up in large numbers. A coastal pilot disembarking a vessel at Brotchie Ledge, Victoria, British Columbia 2003

But even as the Agency was adapting to meet these new challenges, it still was two-month Agency hearing began in occupied with many of the same concerns Saskatoon on March 30, 1998, with CPR that had brought about the creation of involved. CNR had settled earlier with the first Board of Railway Commissioners the Wheat Board, paying an undisclosed almost 100 years before. One of the first figure in compensation. On September 30, major complaints addressed to the 1998, the Agency decided that CPR had Agency involved the railways’ movement not met its service obligations for of grain for export markets. That westbound traffic, had breached some complaint would also eventually lead aspects in regards to U.S. bound traffic, to some amendments to the Act. but had met its service obligations for eastbound traffic. The Agency also found On April 14, 1997, the Canadian Wheat that weather-related disruptions had Board filed a complaint with the Agency hampered traffic in the westbound against CPR and CNR, claiming that they corridor. The Agency concluded that no had not fulfilled their service obligations relief was necessary for the Wheat Board. and that farmers had incurred transport- related losses of more than $50 million In December 1997, Minister of Transport that winter. After several delays, a David Collenette had appointed Supreme

Canadian Transportation Agency — 100 Years at the Heart of Transportation Court Justice Willard Estey to undertake The new legislation also improved the a review of the grain transportation final-offer arbitration process, making and handling system. Estey’s report in it more efficient and extending it to December 1998 called for a more designated commuter authorities and to commercial grain-delivery system that passenger railway service. In ruling on continued to protect the public interest. procedural matters, the Agency could Arthur Kroeger, a former deputy minister defer the appointment of an arbitrator. of Transport, was appointed in May 1999 to There were also provisions for develop a system of grain-transportation simultaneous submission of offers, the reforms. Kroeger sought the Agency’s option of using three arbitrators, and a help in estimating transportation costs streamlined process for disputes valued and to determine the extent to which at less than $750,000. The bill also the railways shared their profits with required that the Agency’s list of shippers. Among Kroeger’s recommend- arbitrators include information about ations, submitted to the Transport their specific areas of expertise. Minister in September 1999, was a cap on railway grain revenues. Although the Agency continued to hold formal hearings into a variety of On August 1, 2000, the government complaints, it began to look for speedier, passed Bill C-34 which replaced the more efficient ways to deal with disputes. regulation of maximum rates for the In 2000, a pilot project was started in the movement of grain with a regulation of Rail and Marine Branch, in which maximum revenues, or a revenue cap, mediation was used to settle disagree- that CNR and CPR could earn for the ments between two parties, without the movement of grain. The Agency was time and cost of public hearings. The given responsibility for establishing the Agency began to train mediators, and revenue cap each year. made them available upon request, to shippers, carriers and other parties. Bill C-34 also put a limit on the tariff rates for grain originating on branch Meanwhile, the Agency’s role in the lines, provided for longer notice and Marine sector had undergone other negotiation periods for discontinuance changes. In 1998, the Canada Marine Act and transfers of service and included established new port authorities, handed provisions for level-of-service complaints over some ports and harbours to local on branch lines. The Bill also gave the governments, commercialized the Agency the power to grant running St. Lawrence Seaway and created the rights in level-of-service complaints. Federal Bridge Corporation to manage federal bridges. The Agency, for its part,

Chapter Five — KEEPING P ACE 1996 TO 2004 would be responsible for investigating Transport Canada statistics in 1999 any complaints regarding changes in showed a sharp rise in air passenger tariffs or fees at the new facilities. travel since 1987, most of that to points outside Canada, with less growth in the Another provision in the Canada Marine domestic market.1 Despite the expansion Act called for a ministerial review of the in air travel, however, Canadian Airlines pilotage system. At the request of the was teetering close to bankruptcy that Transport Minister, the Agency conducted year. After a series of negotiations with the review, which specifically looked at different parties, it became apparent that the training and licensing of pilots; Canadian might negotiate a merger with compulsory pilotage area designations; Air Canada. and measures related to financial self- sufficiency and cost reduction. The In anticipation of the re-establishment Agency issued a report in August 1999 of an air monopoly in Canada, Transport with 21 recommendations. Among other Minister David Collenette introduced things, the Agency suggested that A Policy Framework for Airline pilotage authorities use a risk-based Restructuring in Canada on October 26, methodology to establish criteria for 1999. The policy laid out a series of compulsory pilotage. The Agency’s conditions necessary for the Air Canada- recommendations were adopted and Canadian Airlines agreement to be tabled in Parliament in November 1999. permitted, including one that required Transport Canada then developed the Air Canada to continue all of Canadian’s Pilotage Risk Management Methodology, routes for at least three years. On which could be applied consistently by all December 21, Air Canada was allowed four authorities. to take control of Canadian Airlines.

In November 2001, an amendment to On February 17, 2000, Collenette tabled the Shipping Conferences Exemption Act the new policy in the House of Commons. changed the Agency’s role in that area. Bill C-26 would, among other things, give The Act exempts shipping conferences the Agency increased authority to review from the Competition Act and allows passenger fares and cargo rates on them to set common tariffs and monopoly routes, to review domestic conditions of carriage. The amendment terms and conditions of carriage and to removed the requirement that shipping require notice of discontinuance of conferences ﬁle tariffs with the Agency, services on monopoly domestic routes. requiring them only to make their tariffs available to the public electronically. The return to a dominant-carrier situation was now making it necessary

Canadian Transportation Agency — 100 Years at the Heart of Transportation to increase regulatory powers for the referee,” borrowing the term from his Agency to ensure competition. It was a former career as a National Hockey far cry from the days of C.D. Howe when League referee for 21 years.2 regulations were put in place to deter competition for Air Canada’s predecessor, As Transport Minister Collenette explained, Trans-Canada Air Lines. “The government and the members of the House of Commons Standing Committee Air Canada’s takeover of Canadian on Transport agreed that there needed Airlines inevitably caused some to be someone in the federal machinery turbulence, despite efforts toward a of government to act as the champion smooth transition. On July 9, 2000, the for consumers who are dissatisfied with Montreal Gazette described the early their treatment by airline companies. The days of the new service: “A growing key duties of the Commissioner will be to number of people now hate to fly.” review complaints, to ensure that all The Gazette’s description of the chaotic alternative solutions have been conditions included “longer lineups, exhausted and, where appropriate, to more lost luggage, more delays, mediate an outcome that satisfies both declining quality of meals and frequent the consumer and the airline.” over-booking.” An Air Canada employee told the newspaper that “efforts to integrate the airlines’ operations are nothing short of Herculean.”

Bill C-26 had, luckily, foreseen the need for some assistance to airline customers who were increasingly frustrated by airline problems. The position of an Air Travel Complaints Commissioner was created to work within the Agency to review and attempt to resolve complaints of airline customers. The ﬁrst appointee to the position, on August 1, 2000, was Bruce Hood, a travel agency owner, president of the Association of Canadian Travel Agents (Ontario branch) and a board member with the Travel Industry Council of Ontario. Mr. Hood explained View of container ship from pilot boat near Brotchie, Victoria, British Columbia 2003 his new task as being an “airline

Chapter Five — KEEPING P ACE 1996 TO 2004 The Commissioner was required to make A major part of the Agency’s mandate semi-annual reports to the Transport was to ensure that there were no undue Minister, listing the complaints received obstacles in the transportation system for and the carriers involved, and high- people with disabilities. In 1995, the lighting any systemic problems detected Agency had established regulations for in the airline industry. By the end of the Personnel Training for the Assistance of year, the Air Travel Complaints Persons with Disabilities. The Air Commissioner had received more than Transportation Regulations also 1,200 complaints, many of them about addressed terms and conditions for quality of service, lost luggage and carrying persons with disabilities. Agency scheduling problems. inspectors monitored carriers and facilities across the country to ensure As time passed and the new office that the regulations were followed. became more widely known, complaints would increase and their substance The Agency was also working on codes would vary. One kind of complaint, of practice for the transportation so-called air rage, arose from disputes industry. The codes were intended to about how airlines handled unruly encourage voluntary compliance within passengers. Airlines had the right to the industry rather than using a impose sanctions on passengers; in regulatory approach. In November 1996, fact, they could refuse to carry them. the Agency launched its first Code of However, the airlines were required to Practice, Aircraft Accessibility for Persons establish in their tariffs the sanctions with Disabilities. The Air Code, applicable they would use for unruly passengers. to operations using aircraft with more than 30 seats, was followed by codes of Air Canada, in the closing days of 2000, practice in the marine and rail sectors. was feeling the strains of its expansion The Rail Code was introduced in February and had announced plans to cut jobs and 1998, and in June 1999 the Code of raise air fares. WestJet, a discount carrier Practice for Ferry Accessibility for Persons that had started operations in Western with Disabilities came into effect. The Canada in February 1996, had better codes outlined areas where transport- news.3 It had expanded eastward and ation facilities and equipment should be was managing to make a profit. improved, including features such as Competition on the domestic scene was handrails, elevators, lighting, lettering on alive and well, both in the scheduled and signs and provisions for wheelchairs. As charter air businesses, but Air Canada the codes went into effect, the Agency was having cash-flow problems. carried out monitoring surveys to assess industry compliance.

Canadian Transportation Agency — 100 Years at the Heart of Transportation In 2002, the Agency ﬁnished work on a barriers to the mobility of persons with new Code of Practice called Removing disabilities in the federal transportation Communication Barriers for Travellers network, the Agency addressed an with Disabilities (the Communication increasing number of complaints from Code). The Communication Code set persons with disabilities. Some of these criteria for improving communications complaints raised jurisdictional questions and access to information for travellers as to whether certain health conditions with disabilities. It would apply to air, rail constitute disabilities for the purposes of and ferry transportation service providers the Canada Transportation Act. and terminals. In 1997, Linda McKay-Panos The Agency developed an complained about the education program for the The September 11 seating accommodation transportation industry and tragedy had sent provided to her by Air for consumers with shudders through Canada and the carrier’s disabilities and provides policy of charging passengers the world’s ﬁnancial workshops and reading for additional seating material on an ongoing markets, already hit because of obesity. Before basis to increase aware- by a crash in the considering the complaint, ness. An Accessibility high-tech industry the Agency needed to Advisory Committee, with and scandals determine that obesity was representatives from in fact a disability for the disability groups, involving major purposes of the Canada government agencies, the U.S. corporations. Transportation Act. The transportation industry and Agency issued a decision in other interested people, was December 2001 that obesity originally established on January 30, in itself is not a disability for the purposes 1990, as the Equipment Accessibility of the Act, but that there might be Committee. The committee offers individuals who are obese and have a guidance to the Agency in developing disability for the purposes of the Act. regulations, codes of practice, and The Agency decided to rule on obesity industry guidelines on accessibility. complaints on a case-by-case basis. In the The Agency meets annually with the McKay-Panos case, the Agency ruled, in committee and consults it regularly a split decision on October 23, 2002, that on regulatory projects. the Calgary resident did not have a disability for the purposes of the Act. In addition to the regulations and codes The complainant appealed that decision of practice designed to address systemic to the Federal Court.

Chapter Five — KEEPING P ACE 1996 TO 2004 In another obesity case, also involving opportunity to submit evidence before seating on Air Canada, the Agency finalizing the determinations. On decided on December 17, 2002, that the October 29, 2003, the Agency issued its person had a disability for the purposes final decision, finding 14 undue obstacles. of the Act. However, the Agency found During the writing of this historical that Air Canada provided another seat document, VIA has appealed the Agency’s for the passenger, and so there was not decision to the Federal Court. an obstacle to the person’s mobility. The Agency has received other obesity New methods of dealing with complaints complaints against both Air Canada and were introduced by the Agency in recent VIA Rail, but those cases would not be years. The mediation pilot project, heard until the Federal Court ruled on started earlier in the rail and marine the McKay-Panos appeal. sectors, was introduced to the Accessible Transportation Branch in 2002. The The Agency decided on May 10, 2002, in Agency also began an experiment with response to several complaints, that an modified hearings, in which Members allergy in itself is not a disability for the met disputing parties in a more informal purposes of the Act, but that there might setting than the traditional hearing be people who, because of allergies, process. Both parties of a dispute gave have a disability for the purposes of the oral presentations, and Members Act. The Agency decided, in other words, questioned the parties directly, avoiding to consider allergy applications on a the paperwork, cost and more lengthy case-by-case basis. process of formal hearings.

In another precedent-setting case, the As required by statute, the Canadian Trans- Council of Canadians With Disabilities portation Agency has offered assessments ﬁled an application with the Agency of the Act in its annual reports. regarding the accessibility features of passenger cars purchased by VIA Rail in In June 2000, Transport Minister David 2000. The Council complained that Collenette established a panel to carry several features on the Renaissance cars out a ﬁve-year review of the Canada created undue obstacles to the mobility Transportation Act. The panel, headed of persons with disabilities. by Brian Flemming, a lawyer and former policy adviser to Prime Minister Pierre In a March 27, 2003 decision, the Agency Elliot Trudeau, received more than 200 determined that, on a preliminary basis, written submissions from interested there were 14 “undue” obstacles, but parties, held public hearings across the that it would offer VIA a further country and set up an interactive Web

Canadian Transportation Agency — 100 Years at the Heart of Transportation site. It also commissioned 50 research the air sector, that foreign ownership be studies on speciﬁc transportation issues. allowed to increase to 49 per cent from 25 per cent. Vice-Chairman Jean Patenaude left the Agency to sit on the review panel. Gilles In the rail sector, panel recommendations Dufault, who had joined the Agency in included removing the onus on a shipper 1998, was appointed Vice-Chairman with of proving “substantial commercial harm” special responsibilities in the area of air in the case of a complaint, and that the travel complaints. Mr. Dufault, who had grain handling and transportation system been an adviser to Prime Minister Trudeau be put on a more commercial basis, which and an executive at VIA Rail, had more might include removing the revenue cap than 20 years of experience in senior on grain rates. For VIA Rail, the panel management in both private and suggested, among other things, that public sectors. the Québec-Windsor corridor, the most proﬁtable part of the operation, be On July 18, 2001, the Transport Minister separated from the rest of VIA and be tabled the panel’s report in the House of allowed to move toward a more Commons. It was a wide-ranging report commercial, cost-recovery basis. that recommended further deregulation of the transportation industry, and a move The main thrust of the panel review was toward greater competition including, in that Canada’s transportation networks were moving in the right direction, but that government policy could promote more deregulation.

Besides safety and economics, the panel pointed to other important considerations: “environmental goals, sustainable development, efﬁciency in energy use, co-ordination and integration of modes, and policies to sustain rural communities.”

On September 11, 2001, less than two months after the release of the report, A canine from Greater Toronto Airports Authority passenger jets hijacked by terrorists Canine Service Unit inspects luggage at Toronto crashed into the World Trade Center Pearson International Airport, Ontario 2002 in New York City, the Pentagon near

Chapter Five — KEEPING P ACE 1996 TO 2004 Washington and a field in rural prorogued in November 2003, the bill Pennsylvania, sending the global airline died on the order paper. industry into a tail spin. Two months later, Canada 3000, described in the review In 2004, as the Canadian Transportation panel’s report as the largest charter Agency celebrates its centennial year, carrier in Canada, declared bankruptcy. the transportation industry continues to evolve. In the final days of 2003, Air The September 11 tragedy had sent Canada’s financial situation was still shudders through the world’s financial unresolved after it had been granted markets, already hit by a crash in the creditor protection in April. Also, CNR high-tech industry and scandals involving had purchased BC Rail, one of Canada’s major U.S. corporations. The invasion of largest railway companies. Afghanistan by a Western coalition including Canada, added to the In the Air Travel Complaints recessionary atmosphere. Commissioner’s semi-annual report for the period July to December 2002, The Agency’s Annual Report of 2002 concerns were raised about the state of stated that “major airlines around the the air industry. Liette Lacroix Kenniff, world struggled with huge financial who was appointed in the fall of 2002, losses and insolvency in 2002, as the suggested that airlines, faced with troubled air industry continued to be financial hardships, might be less willing squeezed by lower demand and higher to deal with consumer complaints. operating costs.” In 2003, fears related to the outbreak of Severe Acute Respiratory Those are just some of the issues that the Syndrome (SARS) contributed to Agency will deal with in 2004. But, airline difficulties. whatever the future brings, the Agency will continue to adapt to the needs and In the rapidly changing landscape of the issues of the national transportation 21st century, the challenge of creating system and the Canadian public. transportation policy got tougher. In the last century , the Agency has On February 25, 2003, Transport Minister undergone several transformations. The Collenette tabled a policy statement and first Board created by A.G. Blair had been introduced Bill C-26, the Transportation a regulatory body chiefly concerned with Amendment Act, which would amend railways. Over the years, new jurisdic- the Canada Transportation Act, the tional powers were added and others Railway Safety Act and enact legislation removed. New statutes were written and for VIA Rail. However, when Parliament old ones revised. Governments changed

Canadian Transportation Agency — 100 Years at the Heart of Transportation and policy visions were redrawn. The As it steps into its second century, the Agency has undergone name changes, Canadian Transportation Agency faces role changes and a succession of new challenges. It will accept new operational reforms. Today’s Agency responsibilities as legislation dictates and bears little resemblance to the original adapt to shifts in government policies. Board of Railway Commissioners. But it will remain constant in its goal— to help achieve an efﬁcient and But there has been one constant in the accessible transportation system with intervening years. The Agency, moving Canadians’ interests at heart. through time, has reﬂected not only the evolution of the Canada’s transportation industry, but the economic reality of the nation itself.

Notes for Chapter Five The information for this chapter was taken mainly from the Canadian Transportation Agency’s annual reports, 1996 to 2002. The House of Commons Debates provided information about parliamentary discussions on transportation. Material from news media is attributed in the text.

Other notable sources are:

1 Statistical information obtained from 2 Montreal Gazette, August 2, 2000. Transport Canada charts, printed in Vision and 3 Montreal Gazette, December 22, 2000. Balance, the Canadian Transport Act Review panel’s report, published in 2001, pp. 114–5.

Chapter Five cover photo: Airplane parked at Terminal 3 of the Toronto Pearson International Airport, Toronto, Ontario

Chapter Five — KEEPING P ACE 1996 TO 2004 Appendix Members’ List

BOARD OF RAILWAY COMMISSIONERS AND TRANSPORT COMMISSIONERS

MEMBER OFFICE APPOINTED TERMINATED Andrew George Blair Chief Commissioner February 1, 1904 October 31, 1904 Michel Esdras Bernier Deputy Commissioner February 1, 1904 January 31, 1914 James Mills Commissioner February 1, 1904 January 14, 1914 Albert Clements Killam Chief Commissioner February 6, 1905 March 1, 1908 James Pitt Mabee Chief Commissioner March 28, 1908 May 6, 1912 D’Arcy Scott Assistant Chief September 17, 1908 September 16, 1918 Commissioner Simon James McLean Commissioner September 17, 1908 August 5, 1919 Assistant Chief August 6, 1919 September 16, 1938 Commissioner Thomas Greenway Commissioner September 17, 1908 October 30, 1908 A.S. Goodeve Commissioner April 4, 1912 November 22, 1920 Henry Lumley Drayton Chief Commissioner July 1, 1912 August 1, 1919 Wilfred Bruno Nantel Assistant Chief October 20, 1914 October 19, 1924 Commissioner A.C. Boyce Commissioner October 4, 1917 October 3, 1927 Dr. John Gunion Rutherford Commissioner September 17, 1918 July 24, 1923 Frank Broadstreet Carvell Chief Commissioner August 2, 1919 August 9, 1924 Calvin Lawrence Commissioner November 4, 1921 May 4, 1931 Frank Oliver Commissioner September 21, 1923 September 20, 1928 Harrison Andrew McKeown Chief Commissioner September 16, 1924 February 28, 1931 Thomas Vien Deputy Chief September 5, 1925 January 31, 1931 Commissioner Tobias Crawford Norris Commissioner March 30, 1928 March 29, 1938 John August Stoneman Commissioner March 12, 1929 March 12, 1949 Charles Perry Fullerton Chief Commissioner August 13, 1931 December 31, 1933 François Albert Labelle Deputy Chief December 16, 1931 July 15, 1933 Commissioner George A. Stone Commissioner December 16, 1931 June 30, 1948 François Napoléon Garceau Deputy Chief September 16, 1933 April 10, 1943 Commissioner Hugh Guthrie Chief Commissioner August 12, 1935 November 3, 1939 William Hugh Assistant Chief November 8, 1938 November 7, 1958 Masson Wardhope Commissioner

100

Canadian Transportation Agency — 100 Years at the Heart of Transportation Frank Mitchell MacPherson Commissioner September 21, 1939 March 29, 1959 James Albert Cross Chief Commissioner April 1, 1940 June 30, 1948 Armand Sylvestre Deputy Chief April 18, 1945 April 17, 1960 Commissioner Maynard Brown Archibald Chief Commissioner July 1, 1948 October 31, 1951 Commissioner Howard Brown Chase Commissioner July 28, 1948 May 19, 1959 William John Patterson Commissioner April 28, 1949 July 3, 1951 John D. Kearney Chief Commissioner November 1, 1951 January 15, 1957 Overton A. Matthews Commissioner January 1, 1953 September 1, 1955 Leonard James Knowles Commissioner September 1, 1955 January 2, 1962 Clarence Day Shepard Chief Commissioner January 15, 1957 January 1, 1959 Roderick Kerr Commissioner October 6, 1958 November 8, 1958 Assistant Chief Commissioner November 8, 1958 December 31, 1958 Chief Commissioner January 1, 1959 1967 Herbert Henry Grifﬁn Assistant Chief January 19, 1959 September 20, 1967 Commissioner John Miller Woodard Commissioner May 20, 1959 September 20, 1967 William Roy Irwin Commissioner August 1, 1959 September 20, 1967 Joseph Émile Dumontier Deputy Chief May 26, 1960 September 20, 1967 Commissioner Alfred Sydney Kirk Commissioner January 3, 1962 September 20, 1967 AIR TRANSPORT BOARD

NAME POSITION START DATE TERMINATION DATE Robert Alexander Cecil Henry Chairman September 11, 1944 1948 Alan Ferrier Member September 11, 1944 December 1949 J. P. Roméo Vachon Member September 11, 1944 1954 John Russel Baldwin Chairman 1949 July 1954 Alexander Daniel McLean Member January 1950 1962 Wilbert Jamieson Matthews Chairman July 1954 1958 Joseph Louis Gérald Morisset Member January 1955 August 4, 1965 Chairman August 4, 1965 September 20, 1967 Paul Yettvart Davoud Chairman March 1, 1959 1963 George Russell Boucher Member 1962 September 20, 1967 Frederick Thomas Wood Chairman October 10, 1963 1965 John Rashleigh Belcher Member and Vice-Chairman 1965 September 20, 1967 James Flood Clark Member 1966 1967

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A ppendix — MEMBERS’ LIST CANADIAN MARITIME COMMISSION

NAME POSITION START DATE TERMINATION DATE John Valentine Clyne Chairman November 1, 1947 July 7, 1950 Louis de la Chesnaye Audette Member November 1, 1947 December 31, 1953 Chairman January 1, 1954 July 31, 1959 Henry J. Rahlves Member November 1, 1947 1948 Angus McGugan Member 1948 July 7, 1956 Jean-Claude Lessard Chairman December 13, 1950 December 31, 1953 Carl William West Member January 1, 1954 1959 Alexander Watson Chairman August 1, 1959 February 20, 1965 George Alexander Scott Member February 1960 1964 Jack Clemenger Rutledge Member 1960 September 20, 1967 Howard Jackson Darling Member February 21, 1965 1966 Chairman 1966 September 20, 1967

CANADIAN TRANSPORT COMMISSION

NAME POSITION START DATE TERMINATION DATE John Whitney Pickersgill President September 20, 1967 August 31, 1972 Pierre Taschereau Vice-President September 20, 1967 July 31, 1971 John Rashleigh Belcher Member September 20, 1967 July 31, 1972 George Russell Boucher Member September 20, 1967 November 8, 1970 Alan Pengelly Campbell Member September 20, 1967 December 30, 1976 James Flood Clark Member September 20, 1967 August 31, 1976 Raymond Robin Cope Member September 20, 1967 Vice-President (Research) February 15, 1968 September 24, 1975 Howard Jackson Darling Member September 20, 1967 February 20, 1970 Joseph Émile Dumontier Member September 20, 1967 September 1, 1970 Laval Fortier Member September 20, 1967 April 18, 1974 Herbert Henry Grifﬁn Member September 20, 1967 December 31, 1975 William Roy Irwin Member September 20, 1967 January 14, 1970 David Haney Jones Member September 20, 1967 January 1, 1988 Roderick Kerr Member September 20, 1967 October 31, 1967 Alfred Sydney Kirk Member September 20, 1967 September 16, 1970 John Arthur Delamare Magee Member September 20, 1967 January 10, 1985 Joseph Louis Gérald Morisset Member September 20, 1967 February 15, 1973 John Miller Woodard Member September 20, 1967 December 15, 1978 Guy Frank Lafferty Member March 13, 1969 1979 Raymond MacDonald March Member March 19, 1970 December 24, 1981 John Barrie Glen Thomson Member June 28, 1971 June 16, 1981

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Canadian Transportation Agency — 100 Years at the Heart of Transportation Guy Roberge Vice-President (Law) August 1, 1971 December 24, 1981 Louis René Talbot Member September 9, 1971 1979 Ann Harley Sedgewick Carver Member January 28, 1972 1979 E. J. Benson President September 1, 1972 August 31, 1982 Edward Henry LaBorde Member August 21, 1973 January 6, 1981 John Teaton Gray Member June 1, 1974 December 24, 1981 Vice-President (Law) December 24, 1981 May 31, 1984 Ralph Azzie Member May 27, 1976 December 24, 1983 Yves Dubé Vice-President June 1, 1976 September 1, 1986 (Research) Malcolm Douglas Armstrong Member September 1, 1976 August 4, 1986 James Maurice McDonough Member August 4, 1977 January 1, 1988 J.A.L. Gérald Drainville Member 1979 March 31, 1988 Paul Langlois Member 1979 March 31, 1988 John Francis Walter Member 1979 March 31, 1988 Bernard R. Wolfe Member 1979 March 31, 1988 Robert John Orange Member May 2, 1981 March 31, 1988 Jean-Louis Bourret Member December 23, 1981 March 31, 1988 Anne-Marie Trahan Member December 23, 1981 June 2, 1986 David Hilton Chapman Member March 3, 1983 March 31, 1988 Jean Marchand President December 16, 1983 July 31, 1985 John Carr Munro Member June 29, 1984 March 31, 1988 John David Thompson Vice-President (Law) June 29, 1984 Acting President July 31, 1985 1987 Michael James Landers Member July 9, 1984 March 31, 1988 Marcel Lambert Member March 11, 1985 January 1, 1988 Erik Hersholt Nielsen President January 21, 1987 January 1, 1988 NATIONAL TRANSPORTATION AGENCY

NAME POSITION START DATE TERMINATION DATE Erik Hersholt Nielsen Chairman January 1, 1988 November 30, 1992 Micheline Beaudry Vice-Chairman August 15, 1988 November 30, 1992 Acting Chairman December 1, 1992 March 15, 1993 Vice-Chairman March 16, 1993 June 30, 1996 Craig S. Dickson Member January 1, 1988 1996 Marcel Lambert Member January 1, 1988 March 31, 1990 James Maurice McDonough Member January 1, 1988 December 31, 1988 James Daryl Mutch Member January 1, 1988 November 30, 1992 Edmund J. O’Brien Member January 1, 1988 1996

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A ppendix — MEMBERS’ LIST B. Keith Penner Member January 1, 1988 June 30, 1996 Edward Ehrlich Weinberg Member January 1, 1988 November 30, 1992 Nicolle Forget Member August 15, 1988 1993 Kenneth Raphael Ritter Member April 1989 June 30, 1996 George C. Minaker Member 1990 June 30, 1996 Jacques Voyer Member May 20, 1992 1993 Patricia Danforth Member June 22, 1992 1993 James A. McGrath Member March 1,1993 1995 Gilles Rivard Chairman May 3, 1993 June 30, 1996 Richard Cashin Member 1993 June 30, 1996 Marian Lorraine Robson Member March 27, 1995 June 30, 1996 CANADIAN TRANSPORTATION AGENCY

NAME POSITION START DATE TERMINATION DATE Marian Lorraine Robson Chairman July 1, 1996 Jean Dorius Patenaude Vice-Chairman July 1, 1996 June 2000 Richard Cashin Member July 1, 1996 June 30, 2003 B. Keith Penner Member July 1, 1996 June 30, 2003 Michael A. Sutton Member December 22, 1997 Mary-Jane Bennett Member January 19, 1998 Gilles Dufault Member January 19, 1998 Vice-Chairman August 2000 Bruce Melvin Hood Air Travel Complaints August 1, 2000 July 31, 2002 Commissioner Guy Delisle Member January 8, 2002 George Albert Proud Member January 8, 2001 Liette Lacroix Kenniff Air Travel Complaints October 1, 2002 Commissioner Reginald Beaton Tulk Member December 16, 2002

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Canadian Transportation Agency — 100 Years at the Heart of Transportation Bibliography

Canadian Government Publications

ANNUAL REPORTS AND REVIEWS Air Transport Board, Annual Report for the period September 11, 1944 to December 31, 1946. Ottawa 1947 Board of Railway Commissioners, Annual Reports, 1906 to 1937 Board of Transport Commissioners, Annual Reports, 1938 to 1966 Canadian Transportation Agency Annual Reports, 1996 to 2002 Canadian Maritime Commission, Annual Reports, 1947 to 1966 Canadian Transport Commission, Annual Reports, 1967 to 1987 Canadian Transport Commission, Economic and Social Analysis Branch, June 1975 National Transportation Agency, Annual Reports, 1988 to 1992 National Transportation Agency, Annual Reviews, 1988 to 1994

OTHER GOVERNMENT AND RELATED DOCUMENTS Canada. Parliament. House of Commons. House of Commons Debates, 1904–. Darling, Howard J., A Historical Overview of Direct Transit Subsidies in Canada, Canadian Transport Commission, Economic and Social Analysis Branch, June 1975. Economic Council of Canada, Reforming Regulation, Chairman David Slater, 1981. Economic Council of Canada, Responsible Regulation: An Interim Report, Chairman Sylvia Ostry, 1979. Freedom To Move: A Framework for Transportation Reform, Transport Canada, 1985. Freedom to Move in Canada’s new transportation environment, 10-part series of pamphlets, Transport Canada, 1988. Gratwick, John, The Evolution of Canadian Transportation Policy, A paper prepared for the Canada Transportation Act Review Panel, March 2001. Janisch, H.N., The Regulatory Process of the Canadian Transport Commission, Administrative Law Series, a study prepared for the Law Reform Commission of Canada, 1978. Leacy, F. H., ed., Historical Statistics of Canada, Statistics Canada, 1983. Lessard, J-C., Transportation in Canada, A study prepared for the Royal Commission on Canada’s Economic Prospects, 1956. Ross, Thomas R. and Stanbury, W.T., Policy Proposals for Enhancing Competition in Canada’s Airline Markets, A study prepared for the Canada Transportation Act Review Panel, April 5, 2001. Vision and Balance, Report of the Canada Transportation Act Review Panel, March 2001.

Public Records Records of Canadian Transport Commission (RG 46) Railway Committee of the Privy Council, Correspondence Railway Committee of the Privy Council, Minutes

Newspapers and Periodicals Calgary Herald; Edmonton Journal; Globe and Mail; La Presse; Montreal Gazette; Ottawa Citizen; Ottawa Journal; Regina Leader-Post; Saint John Telegraph; Vancouver Province; Winnipeg Free Press (also called Manitoba Free Press)

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B IBLIOGRAPHY Books and Articles Bercuson, David Jay, ed., Canada and the Burden of Unity, Macmillan of Canada, Toronto, 1977. Bothwell, Robert, Pearson, His Life and World, McGraw-Hill Ryerson, Toronto, 1978. Bothwell, Robert and Kilbourn, William, C.D. Howe: a biography, McClelland & Stewart, Toronto, 1979. Clarkson, Stephen and McCall, Christina, Trudeau and Our Times, Volume 1: The Magniﬁcent Obsession, McClelland & Stewart, Toronto, 1990; Volume 2: The Heroic Delusion, McClelland & Stewart, Toronto, 1994. Creighton, Donald G., Canada’s First Century 1867–1967, Macmillan of Canada, Toronto, 1970. Creighton, Donald G., The Forked Road, Canada 1939–55, McClelland & Stewart, Toronto, 1976. Cruikshank, Kenneth, Close Ties: Railways, Government and the Board of Railway Commissioners 1851–1933, McGill-Queen’s University Press, Montréal/Kingston, 1991. Currie, A. W., Economics of Canadian Transportation, University of Toronto Press, Toronto, 1954. Glazebrook, G. P. de T., A History of Transportation in Canada Volume II: National Economy 1867–1936, McClelland & Stewart, Toronto, 1964. Diefenbaker, John G., One Canada, Memoirs of the Right Honourable John G. Diefenbaker, The Crusading Years 1895–1956, Macmillan of Canada, Toronto, 1975. Fleming, R. B., The Railway King of Canada: Sir William MacKenzie 1849–1923, UBC Press, Vancouver, 1991. Granatstein, J. L., Mackenzie King, His Life and World, McGraw-Hill Ryerson, Toronto, 1977. Gwyn, Sandra, The Private Capital, Ambition and Love in the Age of Macdonald and Laurier, McClelland & Stewart, Toronto, 1986. Hill, Margaret M., Recasting the Federal Transport Regulator: The Thirty Years’ War, 1967–97, an essay in Doern, G. Bruce et al. Changing the Rules: Canadian Regulatory Regimes and Institutions, University of Toronto Press, Toronto, 1999. Innis, Harold A., A History of the Canadian Paciﬁc Railway, University of Toronto Press, Toronto, 1923. International Institute for Transportation and Ocean Policy Studies. Hardly a Transport of Delight, The Institute, Halifax, 1986. Jackman, W. T., Economics of Transportation, University of Toronto Press, Toronto, 1926. MacKay, Donald, The People’s Railway: A History of Canadian National, Douglas & McIntyre, Vancouver/Toronto, 1992. Morton, Desmond, Canada and War, Butterworth and Co., (Canada), Toronto, 1981. Parks, W. A., Handbook of Canada, British Association for the Advancement of Science, University of Toronto Press, Toronto, 1924. Pickersgill, J.W., Seeing Canada Whole: A Memoir, Fitzhenry and Whiteside, Toronto, 1994. Pigott, Peter, National Treasure: The History of Trans Canada Airlines, Harbour Publishing, Madeira Park, B.C., 2001. Schull, Joseph, Laurier, Macmillan of Canada, Toronto, 1965. Skelton, Oscar D., Chronicles of Canada: The Railway Builders, Volume 32, Glasgow Brook & Co., Toronto, 1920. Stanbury, W.T., ed., Studies on Regulation in Canada, Institute for Research in Public Policy, Toronto, 1978. Stevens, G. R., History of the Canadian National Railways, Railroads of America, Macmillan Company, New York, 1973. Whitaker, Reginald, The Government Party, Organizing and Financing the Liberal Party of Canada 1930–58, University of Toronto Press, Toronto, 1957.

Unpublished Work Gosse, Fred Paul, The Air Transport Board and Regulation Of Commercial Air Services, Thesis (M. A.), Carleton University, Ottawa, 1955.

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