The new Fair Rail Freight Service Act is now law. The bill received Royal Assent on June 26. As a result, rail companies in Canada will now be required to offer a service agreement to companies shipping goods by rail, if the shipper requests one. In the event that rail companies and shippers cannot reach an agreement through commercial negotiations, shippers can use the new arbitration process created by this bill to establish the terms of service to which they are entitled.

The goal of the legislation is to encourage railways and shippers to work together. Through enhanced collaboration, shippers and railways can increase the efficiency of the supply chain. The Act will help strengthen the Canadian economy by creating jobs and make Canada more competitive in international trade.

This new arbitration process will operate under the Canadian Transportation Agency. For each violation of an arbitrated service agreement, a penalty of up to $100,000 could be issued against the rail company by the Canadian Transportation Agency.