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Canada Transportation Act Review

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Canada Transportation Act Review FINAL CANADA TRANSPORTATION ACT REVIEW OVERALL POSITION PAPER for consideration by the CTA Review Panel Government of Alberta November 17, 2000 FOREWORD This paper has been prepared subsequent to the Canada Transportation Act Review Panel’s request for positions, and follows a stakeholder consultation process. The paper also clarifies positions on competitive rail access, as previously transmitted to the Panel on a tentative basis in order to meet its October 6, 2000 target date. Alberta Department of Infrastructure [on behalf of Government of Alberta Interdepartmental Steering Committee on the CTA Review] November 17, 2000 [ctar overall pos paper final] CONTENTS FOREWORD EXECUTIVE SUMMARY.................................................................................... iii 1.0 INTRODUCTION ..........................................................................................1 2.0 CHALLENGES, OPPORTUNITIES AND FUTURE NEEDS ...................3 2.1 Challenges and Opportunities.................................................................3 2.2 Government of Alberta’s Overall Approach...........................................6 3.0 ENSURING A TRULY COMPETITIVE AND RESPONSIVE AIR SYSTEM.................................................................................................8 3.1 Government of Alberta’s Approach – Air ...............................................8 3.2 Airline Competition and Predatory Actions ......................................... 10 3.3 Airline Service and Fares...................................................................... 13 3.4 International Air Policy .......................................................................... 16 3.5 Viability of Large Airports...................................................................... 18 3.6 Viability of Local and Regional Airports .............................................. 21 4.0 BALANCING THE RELATIONSHIP BETWEEN SHIPPERS AND RAILWAYS........................................................................................ 24 4.1 Government of Alberta’s Approach – Rail .......................................... 24 4.2 Access to the Canadian Transportation Agency................................ 27 4.3 Competitive Line Rates......................................................................... 28 4.4 Interswitching ......................................................................................... 31 4.5 Expanded Running Rights .................................................................... 33 4.6 Final Offer and Other Arbitration Mechanisms ................................... 37 …/ii - ii - 5.0 ADDITIONAL RAIL AND MARINE ISSUES ........................................... 41 5.1 Level of Service and Car-allocation in Grain Sector ......................... 41 5.2 Rail Line Abandonments and Transfers ............................................ 42 5.3 Rail Mergers and Acquisitions.............................................................. 43 5.4 Marine Pilotage ...................................................................................... 44 5.5 Shipping Conferences Exemption Act................................................. 45 6.0 IMPROVING ACCESSIBILITY FOR PERSONS WITH DISABILITIES ............................................................................................ 46 7.0 A NEW TRANSPORTATION AND LOGISTICS POLICY FOR CANADA..................................................................................................... 48 7.1 Federal Transportation Policy and CTA Declaration......................... 48 7.2 Towards a New Vision for Transportation in Canada ........................ 49 7.3 Canada’s Future Transportation and Logistics System .................... 51 8.0 CONCLUDING REMARKS....................................................................... 54 LIST OF WORK SHOP PARTICIPANTS .................................................. 56 LIST OF ADVISORY COMMITTEE MEETING PARTICIPANTS........... 58 SELECTED DOCUMENTS CONSULTED ................................................ 59 EXECUTIVE SUMMARY Introduction: Following guidelines issued by the federal Minister of Transport, this Government of Alberta Position Paper assesses “whether the [Canada Transportation] Act [CTA] and related legislation provide Canadians with an efficient, effective, flexible and affordable transportation system”, and recommends “amendments to the national policy and to the legislation where necessary or desirable”. The Paper incorporates the contents of a document already provided to the CTA Review Panel in accordance with its October 6, 2000 target date, entitled, Canada Transportation Act Review: Tentative Positions on Competitive Rail Access Provisions. The present overall paper holds to these tentative positions, but makes a number of important clarifications. Government of Alberta’s Approach to Transportation: The Government of Alberta’s approach to transportation has been based on one overarching policy objective: that every traveller and shipper must have effective, competitive options, preferably through the workings of the marketplace but, where necessary, through legislative measures. It is Alberta’s belief that the current CTA, related legislation and federal government policies should be judged against this objective. This approach is based on the premise that a trading country like Canada, with more than 40 percent of its Gross Domestic Product generated by international trade, must meet global challenges by taking a thoroughly collaborative approach, and by thinking “outside the box”. We must start by defining what will be needed well into the future to ensure the prosperity of all Canadians, then tailor our transportation and logistics policy accordingly. It should be noted that this is a policy, not a research paper, whose purpose is to set forth a reasoned set of positions based on long-standing policies advanced by the Government of Alberta, but updated to take current and future needs fully into account. …/iv - iv - It makes use of extensive consultation performed by the Alberta Economic Development Authority at the request of the Government, as well as documents already provided to the Panel by various stakeholders. Key Government of Alberta Positions – Air: Air travel is absolutely crucial, given Canada’s huge geographical extent. Residents must be able to visit friends and relatives virtually everywhere in the world; good business connections are vital, to ensure that existing companies remain and new ones locate here; and tourism must be encouraged in what has become a hugely competitive international market. The air provisions of the CTA, as amended by Bill C-26 to address concerns following the merger of Air Canada and Canadian Airlines, attempt to deal with the reality that Air Canada is now very much the dominant carrier in this country. It is Alberta’s contention that effective competition will not be achieved through regulation; rather, impediments to new entrants, whether Canadian or foreign owned, will need to be removed. Therefore, the Government of Alberta recommends that the Review Panel call upon the federal government to: · remove current CTA restrictions on foreign ownership of airlines operating within Canada; · ensure that, where the dominant carrier (or regional affiliates) serve low-volume, regional air routes, the same range of fares is available as is provided on high-volume routes, and that these fares are proportional to those available on the high-volume routes; · greatly liberalize the current approach to international air policy by aggressively moving to expand open-skies agreements with other countries, beginning with a push to include air-cargo traffic rights under the General Agreement on Trade in Services; and …/v - v - · reduce the rents now being extracted from airport authorities, to cover only those expenses now being directly incurred by the federal government where each airport is concerned, and transfer ownership to the operator of each large airport as it reaches sustainable financial viability; · request an independent body to evaluate what it will take to make local and regional airports viable (including removal of unnecessary impediments). For additional important air recommendations, please refer to the body of this paper. Key Government of Alberta Positions – Rail: The competitive rail provisions of the CTA’s predecessor legislation, the National Transportation Act, represented at best a first step in addressing issues involving an industry which still exhibits natural monopoly characteristics. The changes made in the CTA weakened these initial provisions. Because the Government of Alberta would much prefer that the needs of rail shippers be met through the workings of the marketplace, it recommends legislative measures with considerable reluctance. The reality is that highways, airways and waterways feature publicly owned way/infrastructure, meaning that shippers have more choices. In contrast, the rail mode consists of privately owned way/infrastructure, requiring competitive access mechanisms for those captive to rail, or worse, to one railway. Therefore, the Review Panel should call for the: · repeal of both the “substantial commercial harm” and “commercially fair and reasonable to all parties” sections of the CTA, on the grounds that these provisions have significantly reduced the effectiveness of the shipper-relief provisions; …/vi - vi - · adoption of the Competitive Access Rate concept, on the understanding that it would be reviewed after
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