Transportation Modernization Act (S.C. 2018, c. 10)

Marginal note:Interswitching rate

• 127.1 (1) The Agency shall, no later than December 1 of every year, determine the rate per car to be charged for interswitching traffic for the following calendar year.

• Marginal note:Considerations

  (2) In determining an interswitching rate, the Agency shall take into consideration

  • (a) any reduction in costs that, in the opinion of the Agency, results from moving a greater number of cars or from transferring several cars at the same time; and

  • (b) any long-term investment needed in the railways.

• Marginal note:Limit on rate

  (3) In determining an interswitching rate, the Agency shall consider the average variable costs of all movements of traffic that are subject to the rate and the rate shall not be less than the variable costs of moving the traffic, as determined by the Agency.

• Marginal note:Publication of method

  (4) The Agency shall, when it makes its determination under subsection (1), publish the method that it followed for determining the rate.

• Marginal note:Interswitching rate to be published

  (5) The Agency shall cause the interswitching rate to be published in the Canada Gazette no later than December 31 before the beginning of the calendar year for which the rate applies.

Marginal note:Power to require information

128.1 No later than August 31 of every year, a railway company shall provide to the Agency, in the form and manner specified by the Agency, the information or documents that the Agency considers necessary to exercise its powers or perform its duties or functions under section 127.1.

Long-haul Interswitching

Marginal note:Long-haul interswitching order

• 129 (1) A shipper may apply to the Agency for a long-haul interswitching order against a railway company that is a class 1 rail carrier if

  • (a) the shipper has access to the lines of only that railway company at the point of origin or destination of the movement of the shipper’s traffic in the reasonable direction of the traffic and its destination;

  • (b) a continuous route between those points is operated by two or more railway companies;

  • (c) the shipper is dissatisfied with a rate charged or proposed to be charged by the railway company referred to in paragraph (a) or with the proposed manner in which that railway company is to fulfil its service obligations for the movement of the shipper’s traffic between the point of origin or destination that is served exclusively by that railway company and the nearest interchange in Canada with a connecting carrier; and

  • (d) the matter described in paragraph (c) cannot be resolved between the shipper and the railway company.

• Marginal note:Restriction

  (2) If, at both the point of origin and the point of destination of the movement of the shipper’s traffic, a shipper has access to the lines of only one railway company that is a class 1 rail carrier, the shipper is entitled to apply for only one long-haul interswitching order, which is to be in respect of either the movement of the traffic from the point of origin to the nearest interchange in Canada or the movement of the traffic from the nearest interchange in Canada to the point of destination.

• Marginal note:No entitlement

  (3) A shipper is not entitled to apply to the Agency for a long-haul interswitching order

  • (a) if the point of origin or destination that is served exclusively by the local carrier is within a radius of 30 km, or a prescribed greater distance, of an interchange in Canada that is in the reasonable direction of the shipper’s traffic and its destination;

  • (b) if the point of origin or destination that is served exclusively by the local carrier or the nearest interchange is located within the Quebec–Windsor corridor or the Vancouver–Kamloops corridor;

  • (c) if the point of origin or destination that is served exclusively by the local carrier is located on a track that

    • (i) serves a reload or distribution compound, a container terminal or any other facility operated by the local carrier or for the local carrier’s own purposes, or

    • (ii) is used by the local carrier for the transfer of traffic between cars or between a car and a warehouse owned by the local carrier;

  • (d) for the movement of vehicles, as defined in section 2 of the Motor Vehicle Safety Act, or of parts of those vehicles;

  • (e) for the movement of TIH (Toxic Inhalation Hazard) material;

  • (f) for the movement of radioactive material;

  • (g) for the movement of oversized traffic on flat cars, if the dimensions of the traffic require exceptional measures be taken;

  • (h) for the movement, on flat cars, of containers or trailers;

  • (i) if the traffic to be moved is already the subject of a long-haul interswitching order;

  • (j) if an order or consent agreement made under Part VIII of the Competition Act, which followed an application made by the Commissioner of Competition, addresses the rate for the traffic to be moved; or

  • (k) in any other case specified in the regulations.

• Marginal note:Deeming — interchange

  (4) For the purpose of paragraph (3)(b), an interchange located in the metropolitan area of Montreal is deemed to be the nearest interchange and to be located outside the Quebec–Windsor corridor if

  • (a) the point of origin of the movement of the shipper’s traffic is located in Quebec and north of the Quebec-Windsor corridor;

  • (b) the shipper has access to the lines of only one class 1 rail carrier at the point of origin; and

  • (c) the nearest interchange is located in the Quebec–Windsor corridor.

Marginal note:Conditions

• 130 (1) Subsection (2) applies if

  • (a) a shipper has access to the lines of only one railway company at the point of origin or destination of the movement of the shipper’s traffic;

  • (b) the railway company referred to in paragraph (a) is not a class 1 rail carrier; and

  • (c) there is a junction between the lines of the railway company referred to in paragraph (a) and the lines of a railway that is operated by a class 1 rail carrier and the shipper has access to only those railway lines at that junction.

• Marginal note:Deeming

  (2) For the purposes of sections 129 and 131 to 136.6,

  • (a) the junction referred to in paragraph (1)(c) is deemed to be the point of origin or the point of destination, as the case may be;

  • (b) the junction referred to in paragraph (1)(c) is deemed to be served exclusively by the class 1 rail carrier referred to in that paragraph; and

  • (c) the class 1 rail carrier referred to in paragraph (1)(c) is deemed to be the local carrier.

Marginal note:Transferred railway lines

131 For greater certainty, the transfer of a railway line, or an operating interest in it, under Division V or section 158 of the National Transportation Act, 1987 does not affect the right of a shipper to apply for a long-haul interswitching order.

Marginal note:Contents of application

132 The shipper shall, in its application for a long-haul interswitching order,

• (a) provide an undertaking to the local carrier to move the traffic by rail with the local carrier between the point of origin or destination that is served exclusively by the local carrier and the nearest interchange in Canada with a connecting carrier in accordance with the long-haul interswitching order; and

• (b) indicate the continuous route that the shipper has chosen for the movement of the shipper’s traffic.

Marginal note:Dismissal of application

133 The Agency shall dismiss the application for a long-haul interswitching order if the shipper does not demonstrate, to the Agency’s satisfaction, that an attempt has been made to resolve the matters referred to in the application.

Marginal note:Determination by Agency

• 134 (1) Within 30 business days after receiving the application for a long-haul interswitching order, the Agency shall, by order, determine any of the following matters in respect of which the shipper and the local carrier do not agree:

  • (a) the long-haul interswitching rate that applies in respect of the movement of the shipper’s traffic between the point of origin or destination that is served exclusively by the class 1 rail carrier and the nearest interchange in Canada with a connecting carrier;

  • (b) the continuous route from the point of origin to the point of destination;

  • (c) the nearest interchange in Canada; and

  • (d) the manner in which the local carrier is to fulfil its service obligations in respect of the movement of traffic described in paragraph (a).

• Marginal note:Maximum portion of traffic

  (2) The Agency shall not make a long-haul interswitching order if the movement of the shipper’s traffic between the point of origin or destination that is served exclusively by the class 1 rail carrier and the nearest interchange in Canada exceeds the greater of

  • (a) 1 200 km; and

  • (b) 50% of the total number of kilometres over which the traffic is moved by rail in Canada.

Marginal note:Long-haul interswitching rate

• 135 (1) The following rules apply to the determination of the long-haul interswitching rate:

  • (a) for the first 30 km, or a greater distance prescribed in regulations made under paragraph 128(1)(c), the rate is to be the interswitching rate; and

  • (b) for the remainder of the distance, the Agency shall determine the rate by having regard to the revenue per tonne kilometre for the movement by the local carrier of comparable traffic in respect of which no long-haul interswitching rate applies.

• Marginal note:Minimum rate

  (2) The Agency shall not determine the rate described in paragraph (1)(b) to be less than the average of the revenue per tonne kilometre for the movement by the local carrier of comparable traffic in respect of which no long-haul interswitching rate applies.

• Marginal note:Factors to consider — comparable traffic

  (3) For the purpose of paragraph (1)(b), the Agency shall determine what constitutes comparable traffic by having regard to

  • (a) the type of traffic;

  • (b) the distance over which the traffic is moved;

  • (c) the conditions of the movement of the traffic, including whether it is moved as single cars, blocks of cars or unit trains;

  • (d) the type and ownership of the cars used to move the traffic;

  • (e) the handling requirements for the traffic;

  • (f) the volume and frequency of the traffic;

  • (g) any undertaking given by the shipper in respect of the volume of the traffic;

  • (h) any incentives, rebates or any similar reductions in respect of the traffic; and

  • (i) any other factor related to the requirements of the shipper and the local carrier that the Agency considers appropriate.

• Marginal note:Factors to consider — rate

  (4) The Agency shall determine the rate described in paragraph (1)(b) by having regard to the factors described in subsection (3), the density of traffic on the lines of the local carrier on which the traffic is to be moved and any long-term investment needed in those lines.

Marginal note:Continuous route

• 136 (1) The Agency shall, in determining the continuous route from the point of origin to the point of destination, have regard to the continuous route that has been chosen by the shipper for the movement of its traffic in its application.

• Marginal note:Route in Canada

  (2) If the point of destination of the continuous route of a movement of the shipper’s traffic is in Canada, the Agency shall determine a continuous route that is wholly within Canada, unless there is no cost-effective continuous route wholly within Canada that is available to the shipper and over which it is reasonable to move the shipper’s traffic.

• Marginal note:Export and import

  (3) For the purposes of subsections (1) and (2),

  • (a) if the traffic is to be moved through a port in Canada for import into Canada, that port is the point of origin; and

  • (b) if the traffic is to be moved through a port in Canada for export out of Canada, that port is the point of destination.

Marginal note:Nearest interchange

136.1 The Agency shall determine the nearest interchange in Canada to be the one nearest to the point of origin or destination, whichever is served exclusively by the local carrier, in the reasonable direction of the movement of the traffic from the point of origin to the point of destination on the continuous route, unless the local carrier can demonstrate that the interchange cannot be used for engineering reasons.

Marginal note:Service obligations

136.2 The Agency shall determine the manner in which the local carrier is to fulfil its service obligations by having regard to the considerations set out in paragraphs 116(1.2)(a) to (i).

Marginal note:Duration of order

136.3 The long-haul interswitching order applies to the parties for a period of one year as of the date of the order, unless the parties agree otherwise.

Marginal note:Incorporation in tariff

• 136.4 (1) The local carrier shall, without delay after the long-haul interswitching order is made, set out in a tariff the terms established by the order, unless the shipper and local carrier agree to include those terms in a confidential contract.

• Marginal note:Publication not required

  (2) Subsection 117(3) does not apply in respect of the tariff.

Marginal note:No final offer arbitration

136.5 If a long-haul interswitching order is made by the Agency, the shipper is not entitled to submit any matter related to the movement of the traffic that is the subject of the order to the Agency for final offer arbitration under section 161.

Marginal note:Obligation of carriers to provide cars

• 136.6 (1) Subject to any agreement to the contrary, if a long-haul interswitching order is made, the connecting carrier is responsible for providing the shipper with an adequate supply of cars for the traffic being moved, in addition to its other service obligations in relation to the movement of the traffic.

• Marginal note:Additional obligations

  (2) Subject to any agreement to the contrary, the connecting carrier is, in respect of the interchange referred to in paragraph 129(1)(c), responsible for

  • (a) a prorated share, determined in accordance with subsection (3), of the costs of operating and maintaining the interchange during the period in which the long-haul interswitching order applies; and

  • (b) the capital cost of making any change to the interchange that may be necessary for transferring the traffic that is the subject of the long-haul interswitching order.

• Marginal note:Determination of prorated share

  (3) The prorated share is the proportion that the traffic that is the subject of the order transferred at the interchange and moved by the connecting carrier during the period in which the order applies is of the total traffic transferred at the interchange during that period.

• Marginal note:Share of capital cost

  (4) If more than one connecting carrier moves the traffic that is the subject of the order, the capital cost is to be shared between the connecting carriers based on each connecting carrier’s share of the amount of traffic moved.

Marginal note:Regulations

136.7 The Governor in Council may, for the purpose of paragraph 129(3)(k), make regulations specifying cases in which a shipper is not entitled to apply for a long-haul interswitching order.

Marginal note:Suspension of operation

136.8 If the Governor in Council is of the opinion that the financial viability of a railway company is seriously affected by the operation of sections 129 to 136.7, the Governor in Council may, by order, suspend the operation of those sections during the period specified in the order.

Interchanges

Marginal note:List

• 136.9 (1) A railway company shall prepare and keep up to date a list of the locations of the interchanges on the railway that the company operates. It shall publish the list on its Internet site or the Internet site of an association or other entity representing railway companies.

• Marginal note:Notice

  (2) A railway company may remove an interchange from its list only after the expiry of 120 days after it

  • (a) has published a notice of its intention to do so on its Internet site or the Internet site of an association or other entity representing railway companies; and

  • (b) has sent a copy of the notice to the Agency.

• Marginal note:Service obligations

  (3) For greater certainty, the removal of an interchange under subsection (2) does not relieve a railway company from its service obligations.