Transportation Act review panel’s report now a public document

More than 90 recommendations which could provide a blueprint for Canada’s future transportation policy are the result of the exhaustive one-year review of the Canada Transportation Act(CTA)released in Parliament yesterday.

“The panel has produced a far-reaching report which will play a pivotal role in shaping the transportation policies of the future.” said Transport Minister David Collenette in making the report public. “The work of the CTA Review Panel will be one of the key building blocks in the development of a new transportation blueprint for Canada.”

When the Canada Transportation Act (CTA) came into effect in 1996, it required that a comprehensive review be undertaken within four years. The Minister appointed a five-member review panel on June 29, 2000, to conduct the review. The panel was to report within one year on the economic regulation of transportation activities under the legislative authority of Parliament. The Minister received the CTA Review Panel’s final report on June 28, 2001, and it was tabled in Parliament yesterday.

Following are the highlights from the report:

Competition in the freight rail and airline industries: The panel’s review focused on the concerns of shippers using rail freight services and the extent of market power exercised by the mainline railways, concerns arising from Air Canada’s acquisition of Canadian Airlines International and increased concentration in the domestic airline industry, and how to review possible future mergers in the transportation sector.

For the freight rail industry, the panel makes a number of recommendations including that interswitching provisions be retained, that competitive connection rates replace competitive line rates and that running rights provisions be enhanced.

With respect to the airline industry, the panel recommends that the Government of Canada pursue the benefits of foreign competition through multilateral negotiations to liberalize air services, raise the foreign ownership ceiling, eliminate potential barriers to market entry for domestic airlines, remove the Canadian Transportation Agency’s responsibilities for monitoring air fares, and require Air Canada to give at least 180 days notice of services it plans to terminate in the first six months of 2003.

Transport mergers: The panel recommends that, in parallel with the Competition Act review process that looks into competition issues, a process be established to review potential mergers in all transportation modes under federal jurisdiction and report to the Minister of Transport on public interest considerations.

Efficiency in other modes: The panel’s recommendations promote the principles of commercially driven competition and harmonization for a seamless transportation system.

For marine, the panel recommends full cost recovery and early negotiations with the United States to promote greater competition in the domestic shipping industry. On the trucking side, the panel recommends that federal, provincial and territorial governments establish a time frame for developing and implementing an effective framework to govern all elements of the trucking sector.

Discipline in the provision of infrastructure services: The panel commends the Government of Canada’s policy of placing the provision of transportation infrastructure on a more commercial footing over the past decade or more.

For airports, air navigation, ports and the St. Lawrence Seaway, the panel believes that it may now be the time to consider a long-term strategy to transform the major ports and airports into for-profit corporations. In the meantime, the panel recommends several measures to strengthen the accountability and control of airport and port authorities.

For roads, the panel recommends that the Government of Canada encourage provinces and territories to establish roads management and funding agencies to set charges and fees for road use. This would give road users a say in decisions about how much to charge for road use. The panel also recommends that other modes providing alternatives to road expansion should be allowed to compete for road funds.

E-business: The panel recommends service initiatives to facilitate and to encourage the development of e-business and e-commerce skills and training and that the Government of Canada continue to develop e-government initiatives.

Sustainable development: The panel believes its proposed approach to roads management offers an opportunity to achieve needed cooperation. Progress is likely to result from charging directly for road use and permitting urban transport and other potentially more sustainable modes to compete for funding with road projects.

Principles: The panel relied on principles such as competition, flexibility, harmonization and transparency to guide them in developing their report. To embed these principles in the Act, the panel has recommended that the policy statement of the Act be redrafted to reflect an efficient transportation system that makes the best use of all modes at the lowest total cost, guided by competition and market forces

Other matters: In addition, the panel suggests that all transportation policy be guided by overlying principles, proposes to increase the availability of transportation data and recommends that the Government of Canada increase its support for transportation research.

Further details on the CTA Review Panel report are provided on Transport Canada’s web site at www.tc.gc.ca/en/blueprint/ctareview.htm and the report can be accessed at www.reviewcta-examenltc.gc.ca/english/pages/finalreport.htm.