The Fair Rail Freight Service Act Amendment Bill would require railways to enter into service level agreements with shippers or the shipper could have one imposed through arbitration. The Canada Transport Agency would have oversight and enforcement powers.

Agricultural interests welcomed the Bill, with the Canadian Federation of Agriculture President Ron Bonnet calling it “a legislative tool needed to make railways more accountable to their customers.” Agricultural shippers have long complained about a lack of service level agreements with railways and see regulation as a necessary step in making railways transparent and accountable with regard to service levels.

Canadian Pacific (CP) and Canadian National (CN) opposed any form of “additional regulation” throughout the review, but CP seems resigned to it now. CEO Hunter Harrison said it has been implementing many aspects of the review, including service level agreements and a commercial dispute resolution process. “As such, we are confident that strong commercial relationships will continue to emerge with little need for the processes described in the legislation,” he said.

CN’s President and CEO Claude Mongeau was much more forthright, expressing his belief that there is no sound basis for service regulations. “CN addressed every commercial recommendation of the review panel to improve service, entering framework cooperation agreements with a wide array of stakeholders and level of service agreements with many of its customers to increase supply chain collaboration and deepen customer relationships,” he said. CN believes it has shown plenty of commitment to improving customer service and a “relentless focus on continuous improvement.”

Rather than introduce a broad regulation, CN “invites the government to identify specific, systemic service issues that warrant this legislation. We are ready to address any legitimate problems brought to our attention, in the same way we addressed all the commercial recommendations of the review panel. We will continue to make our case that a commercial framework for the rail industry is what Canada needs to foster prosperity,” said Mongeau.