Bill C-49: Some Welcome Improvements to Rail Service Level Arbitration

The Government of Canada’s proposed “Transportation Modernization Act” (Bill C-49), upon which we have previously reported, would amend the service level arbitration (“SLA”) provisions of the Canada Transportation Act (the “Act”). 

The SLA provisions allow a shipper, upon failure of negotiations with a railway company, to submit certain railway service matters to the Canadian Transportation Agency (the “Agency”) for arbitration.  Currently, the SLA provisions do not provide for financial consequences payable to a shipper upon a rail carrier’s failure to perform its obligations of carriage.  This stands in stark contrast to the ability and regular practice of rail carriers of unilaterally imposing numerous penalties and restrictions on shippers, even for circumstances not of a shipper’s making.  Bill C-49 would permit, but not compel, a shipper to seek financial penalties in certain circumstances.  Bill C-49 also provides that such penalties do not limit the