Canada Transportation Act (S.C. 1996, c. 10)

Confidential Contracts

Marginal note:Confidential contracts

• 126 (1) A railway company may enter into a contract with a shipper that the parties agree to keep confidential respecting

  • (a) the rates to be charged by the company to the shipper;

  • (b) reductions or allowances pertaining to rates in tariffs that have been issued and published in accordance with this Division;

  • (c) rebates or allowances pertaining to rates in tariffs or confidential contracts that have previously been lawfully charged;

  • (d) the manner in which the company is to fulfil its service obligations under section 113; and

  • (e) any conditions relating to the traffic to be moved by the company, including any amount to be paid by the company or the shipper in relation to a failure to comply with any condition related to the service obligations referred to in paragraph (d).

• Marginal note:Request for confidential contract

  (1.1) A shipper may request that a railway company make it an offer to enter into a contract under subsection (1) with the railway company respecting

  • (a) the manner in which the company is to fulfil its service obligations under section 113; or

  • (b) any amount to be paid in relation to the company’s or the shipper’s failure to comply with a term related to those service obligations, the purpose of which is to encourage the efficient movement of the shipper’s traffic and the performance of the railway system.

• Marginal note:Restriction

  (1.11) The shipper may only make a request in respect of an amount described in paragraph (1.1)(b) if the amount relates to a term that is included in the request under subsection (1.1).

• Marginal note:Content of request

  (1.2) The request must describe the traffic to which it relates, the services requested by the shipper with respect to the traffic and any undertaking that the shipper is prepared to give to the railway company with respect to the traffic or services.

• Marginal note:Offer

  (1.3) The railway company must make its offer within 30 days after the day on which it receives the request.

• Marginal note:Exception to offer

  (1.4) Subject to subsection (1.5), the railway company is not required to include in its offer terms with respect to a matter that

  • (a) is governed by a written agreement to which the shipper and the railway company are parties;

  • (b) is the subject of an order, other than an interim order, made under subsection 116(4);

  • (c) is set out in a tariff referred to in subsection 136.4(1) or 165(3); or

  • (d) is the subject of an arbitration decision made under section 169.37.

• Marginal note:Clarification

  (1.5) The railway company must include in its offer terms with respect to a matter that is governed by an agreement, the subject of an order or decision or set out in a tariff, referred to in subsection (1.4) if the agreement, order, decision or tariff expires within two months after the day on which the railway company receives the request referred to in subsection (1.1). The terms must apply to a period that begins after the agreement, order, decision or tariff expires.

• Marginal note:No investigation or arbitration of confidential contracts

  (2) No party to a confidential contract is entitled to submit a matter governed by the contract to the Agency for final offer arbitration under section 161, without the consent of all the parties to the contract.

Interswitching

Marginal note:Application to interswitch traffic between connecting lines

• 127 (1) If a railway line of one railway company connects with a railway line of another railway company, an application for an interswitching order may be made to the Agency by either company, by a municipal government or by any other interested person.

• Marginal note:Order

  (2) If the point of origin or destination of a continuous movement of traffic is within a radius of 30 km of an interchange, the Agency may order

  • (a) one of the companies to interswitch the traffic; and

  • (b) the railway companies to provide reasonable facilities for the convenient interswitching of traffic in both directions at an interchange between the lines of either railway and those of other railway companies connecting with them.

• Marginal note:Interswitching limits

  (3) If the point of origin or destination of a continuous movement of traffic is within a radius of 30 km of an interchange, a railway company shall not transfer the traffic at the interchange except in accordance with the regulations and the interswitching rate.

• Marginal note:Extension of interswitching limits

  (4) On the application of a person referred to in subsection (1), the Agency may deem a point of origin or destination of a movement of traffic in any particular case to be within 30 km of an interchange if the Agency is of the opinion that, in the circumstances, the point of origin or destination is reasonably close to the interchange.

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:Regulations

• 128 (1) The Agency may make regulations

  • (a) prescribing terms and conditions governing the interswitching of traffic, other than terms and conditions relating to safety; and

  • (b) establishing distance zones for the purpose of determining the interswitching rate.

  • (c) [Repealed, 2018, c. 10, s. 28]

• (1.1) [Repealed, 2014, c. 8, s. 7]

• (2) and (3) [Repealed, 2018, c. 10, s. 28]

• Marginal note:Transfer of lines does not affect entitlement

  (4) 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 any entitlement to an interswitching rate.

• Marginal note:Review of interswitching regulations

  (5) The Agency shall review the regulations when the circumstances warrant and at least once in every five year period after the regulations are made.

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 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.