Government of Canada News Release
June 22, 2012

Minister Lebel Issues Statement on the Final Report of the Facilitator of the Rail Freight Service Review

OTTAWA – The Honourable Denis Lebel, Minister of Transport, Infrastructure and Communities, and Minister of the Economic Development Agency of Canada for the regions of Quebec, made the following statement upon the release of the final report of the Facilitator of the Rail Freight Service Review.

“I would first of all like to thank Mr. Jim Dinning for his diligent work on this facilitation process. Mr. Dinning approached the task with objectivity, professionalism and a results-oriented approach, and I want to acknowledge all of his efforts in this regard. I also want to thank the members of the Stakeholders Facilitation Committee for their dedication and the time they committed to this process throughout its duration.

“We knew from the outset that this process would be challenging. I understand that valuable progress was made in increasing the mutual understanding of the key business needs and constraints faced by both shippers and railways. While the parties were ultimately not able to reach consensus on all issues, I hope that stakeholders can build upon that progress.

“Mr. Dinning’s report provides clear direction for both shippers and rail companies moving forward. He proposes five commercially–oriented recommendations which build upon recent service improvements. I urge the parties involved to use these additional tools in their commercial negotiations.

“Mr. Dinning’s advice to industry stakeholders is, ‘Try these tools; they just might work.’ I support this statement.

“Finally, it is important to note that the facilitation process served its intended scope and purpose – to bring the parties to the negotiating table in a common pursuit of commercial solutions. The facilitation and Mr. Dinning’s recommendations are distinct from the bill which our government is planning to introduce this fall. The bill will be another component of our response to the Rail Freight Service Review’s recommendations. I will be engaging with stakeholders before the government introduces a bill in fall 2012, to give shippers the right to service agreements with the railways and a process to establish such agreements should commercial negotiations fail. The stakeholder engagement process will be completed at the end of July 2012.

“By working together, we can accomplish our shared goal – to improve rail freight service in Canada, which ultimately benefits the entire economy in the long term. Thank you.”

Background on the Rail Freight Service Review and Facilitator Report

The Rail Freight Service Review was launched in 2008 to address ongoing issues with rail freight service and fulfill a government commitment as part of the 2008 process that amended the Canada Transportation Act. On December 22, 2010, after extensive consultations with stakeholders, the Panel submitted its Final Report to the Minister of State (Transport). The Report recommended commercial and, if necessary, regulatory solutions to address the issues identified.

On March 18, 2011, the federal government announced its response to the Review, indicating that it accepted the Panel's commercial approach and that it intends to implement a number of steps to improve the performance of the entire rail supply chain. As part of its response, the government committed to the facilitation process and indicated its intent to introduce a bill which would give shippers the right to a service agreement with the railways and provide a process to establish such an agreement should commercial negotiations fail.

On October 31, 2011, the government announced the appointment of Mr. Jim Dinning as the independent facilitator leading a 6-month facilitation process to develop a template service agreement and a streamlined commercial dispute resolution process between railways and stakeholders. The process, which concluded on April 16, 2012, is a key part of the government’s response to the Rail Freight Service Review. The Minister received the Facilitator’s report on June 4, 2011.

The facilitation and Mr. Dinning’s recommendations are distinct from the bill to give shippers the right to service agreements with railways and a process to establish such agreements should commercial negotiations fail, which the government is planning to table later this fall. The bill will be another component of the government’s response to the Rail Freight Service Review’s recommendations.

Rail Freight Service Review Facilitator Report Recommendations:

Recommendation 1

Transport Canada should make the service agreement template (in Table 2) available to rail freight stakeholders as a guide to all parties (including small shippers), as they negotiate a service agreement.

Recommendation 2

Transport Canada should make the commercial dispute resolution process publicly available for stakeholders to use.

Recommendation 3

Railways should be encouraged to revise their current dispute resolution processes to address rail service issues, to make them consistent with the process described in Table 3.

Recommendation 4

Industry should be encouraged to review and update the service agreement template and commercial dispute resolution process as business conditions warrant. These updated tools should be available from industry or government sources.

Recommendation 5

Transport Canada should monitor the use of the service agreement template and commercial dispute resolution process. Transport Canada should encourage all parties to improve the process as required.

The final report of the Facilitator of the Rail Freight Service Review can be found at http://www.tc.gc.ca/eng/policy/acg-acgb-menu-3011.htm.

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