The House of Commons transport committee is poised to approve the government’s Fair Rail Freight Service Act in mid-April without the amendments that shippers requested.
Bill C-52 will then return to the House for final debate by the end of the month before it is sent to the Senate and likely passage into law by summer.
Coalition of Rail Shippers chair Bob Ballantyne said the group is disappointed that proposals to strengthen shipper rights by making the legislation more specific about railway obligations will likely not make it into the legislation.
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“The concern on the shipper side is that without more precision in the definition of obligations, the railways will use every trick in the book to fend off any complaints, and most shippers don’t have the deep pockets to pursue it,” he said after sitting through the committee meeting.
However, Ballantyne said the coalition still supports passing the bill, even if it is not strengthened.
“My members see it as a step in the right direction.”
After the meeting, Liberal MP Ralph Goodale said: “The Conservative lack of regard for the shipper proposals is breathtaking. Without those amendments, this bill becomes more of an empty shell.”
After hearing the criticism, transport minister Denis Lebel issued a statement that argued the legislation offers shippers more power in an unequal marketplace.
“The Harper government is delivering on its commitment to shippers with the Fair Rail Freight Service Act,” said the statement.
“Service agreements with railways will help Canadian shippers to grow their business.”
The government has made the bill a priority in its legislative agenda. It follows years of shipper complaints about rail service and was introduced over the objections of the railways.
For the first time, the legislation would give shippers the right to demand an imposed arbitrated settlement and redress if railway-shipper negotiations over service levels break down.
Lebel argued before the committee that the prospect of fines up to $100,000 for each service failure will encourage the railways to make the system work without invoking legal rules.
He told MPs the bill “puts shippers in the driver’s seat,” which may be enough to fix the system.
“The intent is to create the conditions that will allow for successful commercial negotiations that (would) normally be possible in a free market,” he said.
“Ideally, the legislation will never have to be used.”
Transport Canada officials testified at the committee that the more “prescriptive” the legislation is, the less scope it would give an arbitrator to consider broader issues raised by shipper complaints.
Proposed opposition amendments would also allow an arbitrator to assess damages to be paid to the shipper for railway breach of a service agreement.
The bill allows a penalty of up to $100,000 for a service contract breach, but the money goes to the government. Shippers would have to go to court for damage payments.
Transport Canada officials said there is no precedent for giving regulators the ability to impose damage settlements because the arbitration process would be mandatory under the bill.
Such settlements typically can be awarded when both sides to the dispute agree voluntarily go to arbitration with damages as part of the settlement.
