Pathways: Connecting Canadas Transportation System to the World

Volume 1

Her Majesty the Queen in Right of Canada, as represented by the Minister of Transport 2015. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the Department of Transport, Canada. Please contact the Civil Aviation Communications Centre at 1 800 305-2059 (EST) for assistance. The information in this publication is to be considered solely as a guide and should not be quoted as or considered to be a legal authority. It may become obsolete in whole or in part at any time without notice.

ISSN T22-216/2015E-PDFCatalogue No. 978-0-660-03926-8TP 15317E(12/2015)TC-1005772

Publi aussi en franais sous le titre : Parcours : Brancher le systme de transport du Canada au reste du monde Tome 1

Canada Transportation Act Review

Pathways: Connecting Canadas Transportation System to the World Volume 1

Issued also in French under title : Parcours : Brancher le systme de transport du Canada au reste du monde Tome 1

Volume One: Table of Contents

2 Letter to the Honourable Minister of Transport

3 Chapter 1: Points of Departure

15 Chapter 2: Governance

34 Chapter 3: Linking Trade and Transportation

52 Chapter 4: The North

71 Chapter 5: Innovation

87 Chapter 6: Climate Change

96 Chapter 7: Access and Accessibility

111 Chapter 8: Rail Transport

112 Chapter 8.1: Freight Rail

148 Chapter 8.2: Transport of Grain

170 Chapter 8.3: Passenger Rail

184 Chapter 9: Air Transport

211 Chapter 10: Marine Transport

238 Chapter 11: Canadian Transportation Agency

253 Chapter 12: Summary

261 Chapter 13: Recommendations

Notes:

1. Appendices to Volume One of this Report are printed separately as Volume Two. 2. Unless otherwise indicated, all dollar figures cited in this Report are in nominal (current) Canadian dollars.

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Letter to the Honourable Minister of Transport

Dear Minister,

I have the honour to submit Pathways: Connecting Canadas Transportation System to the World. The Report is the product of a review of the Canadian transportation system and the legal and regulatory frameworks which govern it, including the Canada Transportation Act. Consultations were held and advice received from a broad range of transportation interests, other governments, experts and members of the public.

A recurring theme in the Report is the inseparable relationship between Canadas international trade performance and the quality of the transportation and logistics systems. As a small, geographically dispersed trading economy, access to a globally competitive transportation system is vital to the prosperity of the country, the competitiveness of industry, the sustainability of communities and the ease with which Canadians can travel.

The advent of globalization has fundamentally altered the nature of industry and the evolving role of transportation and logistics in achieving competitive success. Not surprisingly, governments must also adapt policy and regulatory approaches to secure the competitive position of the country.

The Report makes significant recommendations on government decision-making and regulatory frameworks to reflect best practices in other jurisdictions. A swath of specific recommendations deal with the transport of grain, Canadas trade gateways and corridors, the north, climate change, technology and innovation, accessibility, as well as recommendations relating to each major mode of transport.

The Report is a collaborative effort that included invaluable contributions from a team of advisors: Marie-Lucie Morin, Murad Al-Katib, Duncan Dee, David Cardin and Marcella Szel. A Secretariat established independent of government, and headed by Randall Meades, worked tirelessly to make an enormous contribution. I owe all a huge vote of thanks.

Submitted respectfully,

David Emerson 2

Chapter 1:

Points of Departure

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A Review of Transportation in Canada

In a land like Canada, once described by author Pierre Burton as a long, thin country shaped like a railway, by former Prime Minister Mackenzie King as a country with too much geography, and by singer-songwriter Gilles Vigneault as not a country, its winter, transportation is key to prosperity. Our transportation system is the connective tissue that binds us together as a nation, enables us to participate in the global economy and helps to ensure our economic and social well-being. The features that define this countrya small population, separated by vast distances, spread over tough terrain, subject to the extremes of weathercreate a difficult and costly operating environment for transport. The long, thin routes that connect us are at greater risk of disruption by natural, market, and other forces. The right policy and legislative frameworks, a competitive sector, a growing economy of producers and consumers, and the supply chain players that link them together all have a part in ensuring the efficiency and integrity of the transport system.

On June 25, 2014, the federal Minister of Transport launched a review of the Canada Transportation Act (the Act). The Act is the federal framework legislation for our transportation system and for the Canadian Transportation Agencys administrative role. The Act articulates a National Transportation Policy that contributes to economic growth and prosperity by giving primacy to transportation services based on competition and market forces. Government regulation and intervention are generally focussed on cases of market failure, such as abuse of market powerwhere a dominant company exploits its advantage in a way that restricts competition. They also come into play when competition and market forces are incapable of achieving desired economic, environmental, or social outcomes.

The mandate of the Canada Transportation Act Review (the Review) is far-reaching. It extends to other Acts of Parliament that relate to the national transportation system and explicitly recognizes the import of the Review to Canadas economic health and competitiveness. It not only examines current issues in transportation, but looks at the kind of global environment in which Canada will find itself 30 years from now. It aims to provide both a navigational beacon for enlightened development of the transportation system and the critical actions required now to give Canadians the best possible shot at success. Given the breadth of the transport sector and vast number of issues touching on all aspects of the Canadian economy and society, the CTA Review has concentrated primarily on economic concerns. The Review has not examined security and safety on a systematic basis in deference to the important work already being done on these issues, for example at international fora like the International Civil Aviation Organization and, domestically, in response to specific reports like the Tanker Safety Expert Panel and the Transportation Safety Board investigation of the Lac-Mgantic disaster. Although the Review has considered only a few specific safety and security questions that have been raised during the course of the study, a number of recommendations have significant collateral safety benefits.

In a world of massive and complex webs of interconnectedness, the quality of transportation and logistics systems may be the single greatest contributor to a countrys economic performance. With rapid, often dramatic change as a modern constant, transportation investment is more complex and regulatory time frames longer and more demanding than

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ever. Ten or twenty years from inception to operational conclusion is increasingly the norm for major infrastructure projects or major framework changes. Such undertakings often involve integration with a larger transportation system and require national or international collaboration.

The CTA Review has been informed by in-depth research and consultations conducted across Canada and overseas. A broad range of stakeholders contributed content, including users and providers from the transportation industry and related sectors; other levels of government; stakeholders in Canadas north; National Aboriginal Organizations; think tanks and academics; and members of the general public. In addition to a multitude of informal communications, we received 230 written submissions, held over 480 meetings and round-table discussions, and commissioned 36 targeted research projects.1

The Act was last reviewed in 2001. There has been clear consensus among participants in the current Review that, given the global pace of change, 15 years is too long to wait for re-evaluation of the transportation landscape. In the intervening years, a significant number of problems have surfaced, giving rise to a series of reactive and impromptu policy responses. But transportation is increasingly a large, complex and finely tuned system that is not amenable to quick fixes, narrowly conceived. Looking forward, it will be important to develop a systemic framework that is adaptable, and enhances connectivity, competitive choice, and quality of service. In addition, it must provide for continuous investment in infrastructure that integrates and improves the overall transportation and logistics system. A new strategic framework will require a clear sense of future direction, updated governance structures, and renewed regulatory capacity.

Looking Back: Transformation in Transportation and Trade In the past 30 years, the Canadian transportation system