The Rail Freight Service Review was launched in 2008 to address ongoing issues with rail freight service and to fulfill a government commitment as part of the 2008 process that amended the Canada Transportation Act. On December 22, 2010, after extensive consultations with stakeholders, the Panel submitted its Final Report to the Minister of State (Transport). The Report recommended commercial and, if necessary, regulatory solutions to address the issues identified.
On March 18, 2011, the federal government announced its response to the Review, indicating that it accepted the Panel’s commercial approach and that it intends to implement a number of steps to improve the performance of the entire rail supply chain. As part of its response, the government committed to the facilitation process and indicated its intent to introduce a bill which would give shippers the right to a service agreement with the railways and provide a process to establish such an agreement should commercial negotiations fail.
On October 31, 2011, the government announced the appointment of Jim Dinning as the independent facilitator leading a 6-month facilitation process to develop a template service agreement and a streamlined commercial dispute resolution process between railways and stakeholders. The process, which concluded on April 16, 2012, is a key part of the government’s response to the Rail Freight Service Review. The Minister received the Facilitator’s report on June 4, 2012. The facilitation and Mr. Dinning’s recommendations are distinct from the bill which the government is planning to introduce this fall to give shippers the right to service agreements with the railways and a process to establish such agreements should commercial negotiations fail. The latter bill will be introduced following a stakeholder consultation process which will end in July. The bill will be another component of the government’s response to the Rail Freight Service Review’s recommendations.
Rail Freight Service Review Facilitator Report Recommendations include the following:
• Transport Canada should make the service agreement template (in Table 2 of the Report) available to rail freight stakeholders as a guide to all parties (including small shippers), as they negotiate a service agreement.
• Transport Canada should make the commercial dispute resolution process publicly available for stakeholders to use.
• Railways should be encouraged to revise their current dispute resolution processes to address rail service issues, to make them consistent with the process described in Table 3 (of the Report).
• Industry should be encouraged to review and update the service agreement template and commercial dispute resolution process as business conditions warrant. These updated tools should be available from industry or government sources.
• Transport Canada should monitor the use of the service agreement template and commercial dispute resolution process. Transport Canada should encourage all parties to improve the process as required.