Chair and CEO Scott Streiner addresses the Chartered Institute of Logistics and Transport in North America (CILTNA) on November 14, 2016
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I want to thank Tom and Bob for the invitation to speak today. As many of you know, Tom is a former Member and employee of the Canadian Transportation Agency. Indeed, many of the Agency's Members and staff have long played – and continue to play – key roles in CILTNA.
The audience this evening includes Members Stephen Campbell, who is a CILTNA Director, Paul Fitzgerald, and William McMurray. One of our most experienced and effective mediators, John Corey, is your national Treasurer. And one of my predecessors as Agency Chair and CEO, the indefatigable Marian Robson, heads up your Pacific region.
So, for me, an address to CILTNA is more like a Sunday afternoon get-together over nachos and beers than a formal high school prom. But instead of watching the game or discussing last year's bestseller, let's look at the state of the national transportation system and talk about some of the steps the Agency is taking to help ensure that the system runs efficiently, stays competitive, and serves the needs of Canadian businesses, travellers, workers, and investors.
The Agency was established in its initial incarnation as the Board of Railway Commissioners in 1904 and is Canada's longest-standing quasi-judicial tribunal and arms-length regulator. The fact that this model was first developed for transportation and then extended to other sectors should come as no surprise. Canada, after all, is a nation whose very existence and continued prosperity are inextricably connected to transportation.
- $1.7 trillion of the national economy was tied to the transportation system;
- 300 million metric tonnes of commodities were shipped by rail;and
- 133 million passengers got on and off planes in Canada.
Canadians rely on the transportation system every day to do business, get goods to market, see family and friends, and visit new places.
In short, transportation – and the logistics that make it work – is a foundation on which this vast trading nation's economic and social well-being are built. When a foundation is stable, we can almost forget that it's there. But when it begins to crack, we quickly take notice.
The Agency's job is to help keep the foundation strong. To do so, we need to pay attention to the opportunities and challenges facing transportation service providers and users. And we need to examine how we deliver our mandates.
A world of opportunities and challenges
Major forces are re-shaping the world in which transportation services are organized, marketed, and purchased:
- The first is the globalization of trade and travel, which provides opportunities for growth, along with constant pressure on both transportation providers and shippers to find efficiencies. Even in a climate where some countries are pulling back from formal trade deals, the internationalization of supply chains is likely to continue, as production tracks the comparative advantages of different regions.
- The second force is the emergence of new technologies and precision logistics, which are transforming how transportation companies are run and their services bought – allowing for increased automation, faster movement, shorter turnaround times, and greener operations.
- The third force is shifting social norms. It's become a cliché, but one grounded in truth, to say that Canadians are less and less deferential. The expectations of shippers, travellers, and communities have risen. And the ability of every citizen to make her voice heard through social media is without precedent.
These changes, by and large, are for the better – but they require adaptation. Railway companies and airlines have to adapt. Ports and airports have to adapt. Manufacturers and farmers have to adapt. Retailers and shippers have to adapt.
And so do public policy and public administration organizations.
Possible legislative changes
You heard from Shawn Tupper about the Government's Transportation 2030 agenda, which the Minister of Transport outlined in a speech on November 3. Decisions on legislative amendments lie squarely with the Government and Parliament. As an independent tribunal and regulator, the Agency may have information or analysis that would be of assistance as Ministers and Parliamentarians weigh options, but the legislative choices are theirs to make.
Of course, given its experience, the Agency does have some observations on what's working well and what isn't. Our 2015-2016 Annual Report, which was tabled in the House of Commons on November 4, suggests that consideration be given to legislative adjustments that would:
- codify the Agency's distinct adjudicative and regulatory functions and allow the Agency to delegate routine regulatory determinations to staff;
- confirm the Agency's exclusive jurisdiction for complaints and regulations related to the accessibility of the national transportation system, and align the remedies available to persons with disabilities under the Canada Transportation Act and the Canadian Human Rights Act;
- extend the Agency's authority to look into issues on its own motion, if there's evidence of a possible problem;
- allow the Agency to make general orders to resolve systemic issues that cut across a sector; and
- give the Agency the ability to require parties to an adjudication to produce expert reports and carriers to provide performance data.
Whether or not such amendments are made, the Agency has to think carefully about the evolving environment and ensure that the rules it administers and services it provides remain relevant, efficient, and effective. After all, the Agency is not an end in itself, but a means to helping markets function and advancing public policy goals that markets alone can't achieve.
We have some important strengths as an institution, including deep subject-matter expertise and an abiding commitment to impartiality and evidence-based decision-making. But to keep pace with changing conditions, we also need to be agile, engaged, and innovative. We require up-to-date approaches that draw on the experience of tribunals and regulators from across Canada and around the world. And we have to reach out to stakeholders, and Canadians in general, through the full range of channels people now use to communicate.
The bottom line: we need to combine the competence and professionalism that come from 112 years in the business with the creativity and dynamism that 2016 demands.
A key step in that direction was the launch, last May, of a major initiative to modernize the full suite of regulations the Agency administers.
Many of these regulations date back 20 or 25 years and have failed to keep pace with changes in business models, user expectations, and best practices in the regulatory field. An update is overdue.
The Regulatory Modernization Initiative, or RMI, has three goals:
- Ensuring industry’s obligations are clear, predictable, and relevant to a range of existing and emerging business practices.
- Ensuring the demands associated with compliance are only as high as necessary to achieve the regulations’ purposes.
- Facilitating efficient and effective identification and correction of instances of non-compliance.
As it considers how best to achieve these goals, the Agency wants to hear from stakeholders, experts, and the general public. So it has initiated consultations that will use everything from traditional written submissions to crowdsourcing. These consultations will proceed through four stages. The first, now under way, covers accessibility. The second, which will start soon, will look at air transportation, including how the Agency issues air licences and how it will make determinations regarding the control-in-fact of a Canadian airline in light of the new rules on foreign investment announced as part of the Government's Transportation 2030 package. The third and fourth phases, which will begin in 2017, will deal with consumer protection for air travellers and rail regulations.
Our plan is to complete consultations by next summer, release a document summarizing what we heard in the early fall, draft modernized regulations before the end of 2017, and move those regulations through approvals and into implementation in 2018.
This is an ambitious but achievable timetable. I encourage all of you to have a look at our discussion papers as they're released and give us your feedback.
Improving dispute resolution processes
Let me turn now from regulatory reform to steps we're taking to improve to dispute-resolution processes.
It's neither surprising nor inherently problematic that disagreements arise between transportation service providers, customers, and communities. But if left to fester, those tensions can pose serious risks to the efficiency and competitiveness of the transportation system.
Many of you will recall the winter of 2013-2014, which witnessed two significant dramas, other than the release of season 2 of House of Cards. The first involved a record-breaking grain harvest, difficult weather conditions, noisy public sparring between grain shippers and railway companies, and the passage of special legislation by Parliament. The second involved trucking at the Port of Vancouver and threatened to significantly slow the movement of goods through Canada's largest gateway. Both would have had significant implications for the national economy if they hadn't been de-escalated.
The Agency's job is to reduce frictions in the system by offering fair, effective dispute-resolution services, which can take different forms:
- informal facilitation and mediation;
- interest-based arbitration for conflicts between railway companies and shippers over service contracts;
- final offer arbitration for conflicts over rates between shippers and any rail, air, or marine carrier; and
- formal adjudication, where the Agency functions like, and has the powers of, a court of law.
Informal methods like facilitation and mediation have real advantages. They allow parties to better understand each other’s perspectives, search for common ground, and test possible solutions – and as a result, they typically cost less, take less time, and do more to preserve relationships than arbitration and adjudication. That said, some cases are so complicated or contentious – or raise such fundamental questions of principle – that formal, binding approaches are more appropriate.
The Agency has a good track record. The vast majority of air travel complaints are resolved through facilitation. Our confidential mediation discussions often produce settlements. Our adjudicative decisions are well-reasoned and carefully written. But we also know that there are some issues. Parties sometimes feel that their files get stuck in the queue for too long. And when cases enter the more formal processes of arbitration and adjudication, there's concern about the cost and time required to get to an outcome.
We're taking steps to address these issues.
First, as part of a reorganization implemented last April, we've created specialized units to offer alternative dispute-resolution services for rail and marine disputes and for air and accessibility disputes. And we're sending staff into the field for some close-up learning about those sectors.
Second, we've eliminated a backlog of 200 complaints awaiting facilitation and, going forward, will introduce firm timelines for all dispute resolution processes. Each time a facilitator or mediator takes on a case, there will be a deadline – normally 30 calendar days – by which the dispute must either be resolved or moved along to more formal processes. The exception will be when discussions are making progress and the parties jointly request an extension.
Third, Agency experts will be available to provide increased levels of technical assistance to arbitrators appointed to deal with disputes between shippers and carriers over rates or service levels. This assistance will help reduce the cost and complexity of arbitration applications.
Fourth, the Agency will implement an expedited process for adjudicating relatively straightforward disputes, including many of those between air travellers and airlines. And for more complex files, we'll convene early case management calls with the parties, which will allow for common understandings around matters like timelines and the length of written submissions.
Finally, after a nine-year hiatus, the Agency has returned to oral hearings for selected cases. The first was held on October 13 and 14 in Vancouver. Oral hearings are more efficient than paper pleadings alone where competing arguments and evidence need to be tested. They enhance the transparency of adjudicative processes.
Outreach and engagement
Oral hearings also have the advantage of raising stakeholder and public awareness of the Agency's roles. This is important. Parliament has given the Agency the mandate and funding to deliver a set of services that support Canadians' economic and social well-being. A key success factor is making sure that the businesses, communities, and individuals who are supposed to benefit from those services actually know they're available.
Indeed, one of the reasons I'm here today – beyond the pleasure of spending time with friends and the prospect of a free dinner – is our increased emphasis on outreach and engagement. We're taking a number of steps to get the word out:
- Agency Members, senior managers, and I have met, bilaterally and in roundtable formats, with a broad range of stakeholders, from transportation service providers to shipper coalitions, consumer advocacy associations to disability rights groups.
- We've asked the major airlines and airports to use their screens and in-flight magazines to better inform passengers about their rights and responsibilities, and about recourse mechanisms administered by the Agency.
- We're increasing our online and social media presence through greater use of tools like Twitter, Facebook, and YouTube.
These efforts will continue. If the transportation system is humming along, commercial relationships are sound, customer service is excellent, and our assistance isn't required – so much the better. But we don't want the system's efficiency and accessibility to be affected because people don't know the Agency is here to listen and to help. The "open for business" sign will stay in our window.
As I approach the end of my remarks, I'm keenly aware that there's a bottleneck in the supply chain that connects each of you to your dinner: me. But despite my unwavering belief in the importance of fluid supply chains, let me make one final observation: the best regulators and best adjudicators are the ones who understand realities on the ground. The Agency will never move away from our commitment to neutrality and following the evidence. But we don't have to live in a monastery to remain pure.
So I invite each of you, and CILTNA as an organization, to continue to engage with us, to help us stay alive to the opportunities and challenges facing the national transportation system and its users, and to offer us constructive feedback on how we can do our jobs as effectively as possible. Because in a country as huge as Canada – a country whose citizens and businesses have always depended on a well-functioning transportation system – failing to keep pace will cost us all.
Thank you for your attention. I would be happy to answer a few questions before our meal is served.