Insights Header image
Insights Header image
Insights Header image

The Rail Shippers’ Guide

Aug 8, 2023 Publications < 1 read

Authors: The Transportation Group

The Rail Shippers’ Guide provides a high-level overview of your rights and remedies when shipping freight by rail under the Canada Transportation Act (the Act) and related regulations. Should you have any questions regarding its content, please contact a member of McMillan’s Rail Transportation Group.


This guide does not constitute legal advice.

Rate Authorities
(Contracts and Freight Tariffs)

As a shipper, you have the right to request and receive a rate from a railway company, or companies, should two or more operate the route of your destination. The Act provides for two ways to establish a rate: by confidential contract and by tariff.

Learn more about your rights as a shipper when it comes to rail freight rates.

Accessing a Second Carrier
(Regulated, Extended, and Long-Haul Interswitching)

The shipper has the right to choose the routing of its traffic. There may come a time that you want your freight to use rail lines operated by two or more different railway companies. In this situation, you have the right to require the railway companies to transfer your freight at an interchange. Interswitching (regulated and extended) and long haul interswitching are remedies available for shippers to access a second railway company.

Learn more about accessing a second carrier

Remedies for Rates and Charges
(Final Offer Arbitration and Unreasonable Charges)

The Act provides remedies if you believe a railway company is failing to meet its obligations or imposing unreasonable rates or conditions: (i) final offer arbitration (FOA), (ii) summary FOA, (iii) multi-party FOA, and (iv) complaints that ancillary charges/ associated terms and conditions are unreasonable.

Learn more about each of these options

Service
(Level of Service Complaints, Agency Own Motion Powers, and Service Level Arbitration)

Under the Act, a railway company must provide you with “adequate and suitable” accommodation for your freight and the “highest level of service … that it can reasonably provide in the circumstances.” Should a railway company fail to meet those obligations, you can file a level of service complaint with the Canadian Transportation Agency, which has to investigate and issue a decision within 90 days.

The Canadian Transportation Agency also has the authority to launch an investigation on its own motion.  Service level arbitration is available should you not be able to reach agreement with the railway company.

Learn more about service obligations, LOS complaints, Agency investigations and SLAs

Liability
(Cargo Claims and Third Party Liability)

The Railway Traffic Liability Regulations set forth rules pertaining to the railway company’s liability to a shipper for lost, damaged or delayed freight; however, you and the railway company may agree to different terms in a confidential contract.

Learn more about these regulations and related issues, including third party liability

Transfer and Discontinuance of Rail Trackage
(Process)

A railway company has the right to dispose of or abandon railway lines it no longer wishes to operate, but it must maintain and publish a three-year plan indicating whether it plans to continue operating or discontinue any of its rail lines within the next three years. No regulatory approval is required to transfer a railway line to a willing purchaser for continued operation. Apart from such a transfer, if a railway company wishes to abandon a railway line or no longer wishes to operate the railway line, it must follow several steps before it can do so.

Learn more about railway line transfer and discontinuance

Railway Crossings
(Private, Road, and Utility Crossings)

The Act contains other remedies tailored to specific situations, including if you are having difficulty establishing a road or utility crossing of a railway company’s line, and issues arising in respect of public passenger rail service providers.

Learn more about these other remedies and how best to navigate them

Alternative Dispute Resolution
(Agency Facilitation, Mediation, and Arbitration)

The Canadian Transportation Agency also offers alternative dispute resolution mechanisms including facilitation, mediation and arbitration that are less formal and sometimes more easily accessible. However, these alternative mechanisms require the consent of all parties and are not available if the railway company refuses to participate.

Learn more about alternative dispute resolution options 

Insights (5 Posts)View More

Featured Insight

Investor Relations Activities Require Clear and Conspicuous Disclosure

BC Notice 51-703 emphasizes that investor relations activities must be “clearly and conspicuously” disclosed pursuant to Section 52(2) of the Securities Act.

Read More
May 22, 2024
Featured Insight

Unpacking Ontario’s Proposed Strengthening Cyber Security and Building Trust in the Public Sector Act, 2024

Unpacking Ontario's Bill 194: Strengthening Cyber Security and Building Trust in the Public Sector Act, 2024. Key changes & compliance strategies detailed.

Read More
May 17, 2024
Featured Insight

Navigating International Student Worker Restrictions: Post-Expiry Guidelines for Employers

On April 30, 2024, Canada’s temporary waiver allowing international students to exceed 20 hours of work per week expired.

Read More
May 14, 2024
Featured Insight

Understanding the Consumer-Driven Banking Framework: Key Insights from the Budget Implementation Act, 2024, No.1

On April 30, the federal government introduced the Budget Implementation Act, 2024, No. 1, which provides the legislative framework for open banking in Canada.

Read More
May 13, 2024
Featured Insight

Legal Risk Assessments – An Essential Risk Management Tool

The best way to address the legal issues that arise in any business is to focus on their identification and resolution before they become legal problems.

Read More
May 9, 2024