On June 25, 2014, the federal Transport Minister launched a review of the transportation economic and associated regulations in Canada. The study provides a once in a decade opportunity to consider how the national transportation network can best be leveraged to support Canada’s continuing economic growth. The last Canada Transportation Act Review (CTAR) occurred in 2001, and many things have changed since then. A critical question for the present review is what, if any, policy changes are required to ensure that Canada’s multimodal transport and logistics system services the needs of those who rely on global supply chains to reach international markets.
An important issue in the past review was the railway sector. The impact of railway behaviour on freight shippers and the broader economy was a very hot topic. The 2001 CTAR review examined the data on railway industry performance after deregulation. The CTAR 2001 analysis in the adjacent graph legitimately concluded that economic deregulation had resulted in lower costs for rail transportation. The CTAR 2011 provided an index of railway revenues per tonne kilometre (in constant 1988$ from 1988 to 1999) to support their findings. The analysis clearly showed that revenue per tonne km on a constant 1988$ basis was on a downward trend from 1988 to 2003.
In the adjacent graph, the Wave Point team extended the CTA
R 2001 index using CN’s annual revenue per tonne mile figures and the earlier downward trended has not held up. The CTAR 2014 review will no doubt consider evidence on whether economic deregulation has gone too far and if the railways are abusing their market power. This topic and other issues will be at the heart of this review for many shippers.
To gather perspectives on matters of importance to freight interests Darryl Anderson, Managing Director interviewed some organizations for this BC Shipping News article. Competition, infrastructure capacity, safety and market access were some of the shared policy objectives. The question is what, if any, policy and practical changes are required to ensure that Canada’s multi-modal transport and maritime logistics system meets the needs of those who rely on global supply chains to serve both domestic and international clients. Readers of the Shipper Matters blog are encouraged to engage in a robust exchange of ideas, especially as it pertains to possible solutions. While many stakeholders will agree on the objectives, there will no doubt be heated debate about the best way to reach them. The voices and perspectives of the shipping, port and marine sectors need to be at the forefront of this important national discussion. Read the CTAR 2014 scope below, provide your comments and let us know what you think are the most important issues that need to be addressed.
Canada Transportation Act Review 2014 Scope
The Transport Canada website indicates that the scope of the Canadian Transportation Act Review including provisions of the Act that are relevant to the transportation of grain by rail, and more broadly to the rail-based supply chain for all commodities. This will take into account the broader goal of a commercially based, market-driven multimodal transportation system that delivers the best possible service in support of economic growth and prosperity. Also, the Minister of Transport has asked the Review to pay particular attention to the following issues:
Given the urgency created by the recent backlog in grain deliveries from the 2013-14 crop year, grain transportation will be given priority consideration. The Review will consider the provisions of the Act that are relevant to the transportation of grain by rail, some of which could apply more broadly to the rail-based supply chain for all commodities, taking into account the broader goal of a commercially based, market-driven, multi-modal transportation system that delivers the best possible service in support of economic growth and prosperity.
The Review will also examine the extent to which the national transportation system has the capacity and adaptability that will allow it, and its users, to respond effectively to evolving international and domestic conditions and markets. This will include examining major global and national trends relevant to transportation; projecting freight capacity needs across the system; examining whether existing or planned capacity and performance improvements will be responsive to these needs and periodic demands for surge capacity; and advising on possible steps to help ensure that the national transportation system has the capacity and nimbleness to support economic activity across all sectors over the medium and long-term.
The Review will be asked to give consideration to a number of specific issues, including:
• Whether adjustments to the current transportation legislative and policy framework are required to support Canada’s international competitiveness, trade interests, and economic growth and prosperity;
• How strategic transportation gateways and corridors can be developed and leveraged to support Canadian prosperity through linkages to global markets;
• How the quality and utilization of transportation infrastructure capacity can be optimized through, for example, improved alignment of transportation policies and regulations and/or the use of innovative financing mechanisms;
• How technological innovation can contribute to improvements in transportation infrastructure and services;
• Whether adjustments to transportation safety and environmental regimes are needed to continue achieving high standards for safe and sustainable transportation, given increasing system volumes/demands;
• How safety and well-being concerns related to rail transportation (including the movement of dangerous goods) through communities can be addressed;
• How to address rapid changes in the North and associated challenges for the continued safety, security, and sustainability of the northern transportation system, and specifically, the federal role in supporting the northern transportation system;
• How federally-regulated passenger rail services can be delivered to meet travellers’ needs while minimizing costs to the public purse;
• How the vitality of the Canadian aviation sector, air connectivity, and Canada’s ability to attract visitors and transiting travellers can be maintained and augmented in light of the range of cost factors and competitive global markets; and
• Whether current governance and service delivery models for key federal operations, assets, and agencies — including the Canadian Transportation Agency, Canadian Pilotage Authorities, the St. Lawrence Seaway, and airport and port authorities — can be improved.