Canada’s new Fair Rail Freight Service Act, which requires Canadian rail companies to offer a service agreement to companies shipping goods by rail, if the shipper requests one, has become law, according to Denis Lebel, the nation’s minister of transport, infrastructure and communities.
In the event that rail companies and shippers cannot reach an agreement through commercial negotiations, shippers can use the new arbitration process created by this legislation to establish the terms of service to which they are entitled. This arbitration process will operate under the Canadian Transportation Agency, and for each violation of an arbitrated service agreement, a penalty of up to C$100,000 could be issued against the rail company by the CTA.
“Our government is proud to have taken concrete action to strengthen our economy by passing legislation that will improve the predictability, clarity and reliability of rail freight service across Canada,” Lebel said in a written statement. “We have delivered the promise we made after receiving recommendations from the Rail Freight Service Review’s panel of experts.”
The railroad industry had disapproved of the Canadian government’s regulation of service agreements when the legislation was introduced last year.