Canadian Wheat Board against CN and CP

March 19, 1998 - The Canadian Transportation Agency is a federal administrative tribunal which is responsible for administering the Canada Transportation Act. In the case of railway transportation, the Act primarily concerns itself with the economic aspects of railway transportation and sets out the policy of the Government of Canada in this regard. The Agency's role is to resolve or settle individual cases which may arise within that framework. It is not the role of the Agency to establish transportation policy. That responsibility lies with Transport Canada and the Minister of Transport.

The Agency is composed of seven Members (including a Chairman and a Vice-Chairman) appointed by Cabinet. Hearing the CWB complaint will be a panel consisting of Chairman Mrs. Marian Robson, Vice-Chairman Jean Patenaude and Member Richard Cashin. The Members' work is supported by a staff of analysts, economists, accountants, and other professionals.

Definition of the railways' level of service obligation

Federally-regulated railways in Canada are obliged by law to provide a reasonable level of service to shippers. More particularly, railways are required (among other things):

to provide adequate facilities for the receiving, loading, carriage, unloading and delivering of shipments, and;

to carry and deliver shipments without delay, and with due care and diligence;

These obligations have been part of railway law since before the turn of the century.

Where a shipper believes that they have not received an adequate level of service, they may complain to the Canadian Transportation Agency. The Agency, on receipt of a complaint may commence an investigation and based on the results of the investigation, may determine whether the railway has met their service obligation.

What does the Agency look for in a level of service complaint?

What is a reasonable level of service depends on the particular circumstances of each case. First it must be shown that the railway had a responsibility to provide service. Secondly it must be shown that the railway did not provide the service. Lastly it must be established what could have been reasonably expected under the circumstances.

The Canadian Wheat Board complaint

Complaint filed by the Canadian Wheat Board pursuant to section 26, section 37 and sections 113 to 116 inclusive of the Canada Transportation Act

The CWB filed this complaint with the Agency on April 14, 1997. The CWB alleges that CN and CP failed to meet previously established levels for the unloading of wheat and barley at Vancouver and Prince Rupert, British Columbia, and at Thunder Bay, Ontario. The CWB also alleges that CN and CP failed to meet timely delivery commitments for wheat and barley to eastern Canadian ports and that the railway companies failed to meet commitments for rail car supply for the transportation of wheat and barley to the United States. The CWB submits that as a result of these failures, CN and CP have not met their service obligations and that substantial damages and losses have occurred or will occur to the CWB. The CWB requests that the Agency find that CN and CP have not fulfilled their service obligations from December, 1996 to the date of the complaint and order CN and CP to fulfil their service obligations as described in the complaint.

The Agency first issued a Notice of Public Hearing into this matter on June 4, 1997. As a result of various procedural matters, the scheduled public hearing was postponed. An amendment to the Notice of Public Hearing was issued on January 22, 1998. In response to these notices, 65 parties intervened, 55 in support of the CWB, 2 in opposition to the CWB, with 8 parties stating neither for nor against the CWB.

The Public Hearing - - evidence brought forward

In this case the panel has decided that it will have a public hearing to allow the CWB, CN & CP to lead evidence on whether the railways had an obligation, whether they breached that obligation and on whether, if they did breach those obligations, they have a reasonable explanation. The panel will also hear from Interveners who have information on these points.

The Public Hearing process in Saskatoon

The Public Hearing will be structured as a court proceeding, although not quite as formal. When providing evidence, parties will be under oath and will be subject to cross examination by those parties who have been granted the right to do so. After opening statements from CWB, CN and CP, the Agency will first hear the evidence from the CWB followed by cross examination. Interveners in support of the CWB will make their presentations on April 2 and 3. Upon /conclusion of their presentations and cross-examination, the CWB will complete its case.

The Agency will break for Easter from April 9 to April 14. Upon resuming April 15th, any other interveners supporting the CWB will be heard followed by cross examination. CP and CN will subsequently put in their evidence subject to cross examination followed by any interveners supporting the railways and cross examination. CWB rebuttal evidence and final arguments by CWB, CP and CN will conclude the hearing.

The Public Hearing will commence March 30th at 10:00 a.m. and is estimated to last approximately 6 weeks. Normal sitting hours after the first day will be 9:30 a.m. until 5:00 p.m. The Agency must render a ruling on CWB's complaint by June 30, 1998.

The CTA Hearing - a fair process

As a quasi-judicial tribunal the Agency is obliged to treat CWB, CN and CP with procedural fairness. This means that each of them gets an opportunity to present their point of view and to challenge the points of view put forward by others. The panel can only make its decision after this process has taken place.

The handling of commercially sensitive information

Some of the information relevant to this case is commercially sensitive to the CWB, CN or CP. The release of this information in public could case harm to the commercial relationships of either of these three parties. When the panel is hearing this kind of information in the public hearing, it may be necessary to hold the hearing in-camera. Should this occur, only those persons expressly permitted by the panel will remain in the hearing room.

The Agency's determination

After hearing all of the information, Chairman Mrs. Marian Robson, Vice-Chairman Jean Patenaude and Member Richard Cashin will determine whether the railways provided a reasonable level of service for the transport of grain during the winter of 1996-1997. If they determine that the railways did not provide a reasonable level of service CWB could go to court to sue for the damages it alleges were caused by the breach. In addition the Agency has broad powers to order fixed any deficiency identified in the railways' operations.

A decision by June 30

The Agency is obliged to render its decision by June 30, 1998. This date can only be altered with the consent of the CWB, CP and CN.