Prime Minister Justin Trudeau’s government has spent the past year plodding forward with a legislative overhaul that affects major companies like Canadian National Railway Co., Canadian Pacific Railway Ltd., Air Canada and WestJet Airlines Ltd. Senators changed the bill a month ago, giving shippers like farmers and mines more power in disputes with railways.
Transport Minister Marc Garneau will accept some but not all of the changes made and will add tweaks of his own, meaning the proposed law will need to return to the Senate. It’s unclear how long that will take.
The bill “represents historic gains for those who depend on Canada’s freight rail system,” Garneau said in a letter to stakeholders, dated Friday. The government has “adjusted and improved the bill in response to shipper concerns.”
Once passed, the proposed law will raise the railway ownership limit to 25 percent from 15 percent — a potential boon for Cascade Investment LLC, Bill Gates’s investment company and CN Rail’s largest shareholder. The bill will also substantially change shipping rules, particularly for so-called captive shippers served by one railway, raise foreign ownership limits for airlines to 49 percent from 25 percent, and establish new airline-passenger rights.
The Mining Association of Canada — representing firms including Barrick Gold Corp., Goldcorp Inc. and Teck Resources Ltd. — expressed “profound disappointment” with Garneau’s response because it rejected one particular Senate amendment that would “have increased data transparency” and will leave captive shippers at the mercy of either CN or CP.
“This is a damaging signal to our members’ international customers,” Pierre Gratton, president and chief executive officer of the mining association, said in a statement Monday.
The government failed to overhaul laws “in a way that balances the interests of shippers and railways and ensures that our wealth and job creating industries are protected from the railway’s unbridled market power.”
The latest version, detailed in a parliamentary motion from Garneau, agrees with the Senate to accept a suggestion made by Air Canada to restrict foreign airlines from owning more than 25 percent of a Canadian competitor “directly or indirectly,” closing what Air Canada had warned could be a loophole.
Garneau’s version will go to a vote in Canada’s elected House of Commons, where it would be expected to pass as his Liberal Party holds a majority. Once it passes that vote, which hasn’t yet been scheduled, it will go to the Senate, which could accept the House’s version, make new changes or insist on its version.
(Written by Josh Wingrove and Frederic Tomesco)