ARCHIVED - Canadian Transportation Agency

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Section I – Overview

1.1 Chairman's Message

I am pleased to present the 2006–2007 Departmental Performance Report of the Canadian Transportation Agency, which demonstrates the Agency's role in the achievement of an efficient and accessible transportation system for Canadians.

One of the Agency's key responsibilities as the country's economic regulator for air, rail and marine transportation is resolving issues and disputes fairly, efficiently and effectively.

In 2006–2007, the Agency issued some 3,000 rulings which dealt with diverse issues such as those involving air carrier licences and permits, the use of foreign ships in Canadian waters, the movement of Western grain by railway companies, and the removal of undue obstacles to the mobility of persons with disabilities. In all cases, the Agency prides itself on ensuring a fair decision-making process that takes into account the interests of both transportation users and providers, and other affected parties.

The Agency continued to address significant pressures experienced as a result of the Government Expenditure Review exercise and the elimination of temporary funding of the Air Travel Complaints Program. To meet this challenge, a comprehensive resource review was implemented which allowed the Agency to fully absorb the funding reductions while continuing to manage the Air Travel Complaints Program and the workload related to its other legislative and administrative responsibilities.

Efforts were also undertaken to improve processes and practices to deal with the volume of increasingly complex issues being brought before the Agency. A major focus in this regard was in the area of alternative dispute resolution which assisted parties in reaching settlements faster and in a less costly manner than the formal dispute resolution process. In fact, our work in this area is reflected in recent amendments to the Canada Transportation Act, which formally recognizes the Agency's highly successful mediation pilot program.

Working closely with users and providers of transportation services has also brought alternative solutions for ensuring an effective and accessible transportation system. In consultation with the community of persons with disabilities, transportation industry, and other government organizations, a voluntary code of practice was developed to remove undue obstacles for persons with disabilities within air, rail and marine passenger terminals. This is the fifth code of practice, complementing other codes for aircraft, passenger rail car and ferry accessibility, and for removing communications barriers for travellers with disabilities.

As a small organization, the Agency is also particularly sensitive to the effects of an aging workforce. The Agency has taken a risk-based approach to address its strategic priorities emerging from its three-year Strategic Human Resources Plan, integrating succession planning, ethics, values and learning, and the flexibility from the new staffing reforms to maintain its level of expertise. This, coupled with the continued integration of performance measurements into management practices, is enabling the Agency to maintain its focus on optimal resource allocation and improved service delivery to Canadians, while managing the major challenges associated with the potential retirement of a sizable percentage of Agency staff over the next three years.

It is no secret that our country's transportation sector has gone through tremendous change in recent years - at a rapid pace that for the moment shows no sign of abating. The Agency has continuously adapted its work and services to this environment of constant change. In 2007–2008, the Agency will develop a multi-year strategic plan to better prepare for the challenges of change ahead in Canada's transportation network and to ensure that the Agency continues to effectively deliver on its mandate.

Geoffrey C. Hare
Chairman and Chief Executive Officer

1.2 Management Representation Statement

I submit for tabling in Parliament, the 2006–2007 Departmental Performance Report for the Canadian Transportation Agency.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2006–2007 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

• It adheres to the specific reporting requirements outlined in the Treasury Board Secretariat guidance;

• It is based on the Agency's approved Strategic Outcome and Program Activity Architecture that were approved by the Treasury Board;

• It presents consistent, comprehensive, balanced and reliable information;

• It provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and

• It reports finances based on approved numbers from the Estimates and the Public Accounts of Canada.

Geoffrey C. Hare
Chairman and Chief Executive Officer
September 05, 2007

1.3 Summary Information

Reason for Existence

In its administration of federal transportation legislation and government policies, the Canadian Transportation Agency helps create an efficient and accessible federal transportation system for the benefit of Canadians.

The Agency is an independent, quasi-judicial, administrative tribunal that makes decisions on a wide range of matters affecting federally-regulated Canadian transportation. It licenses rail and air carriers, and has the authority to resolve some transportation rate, service and other complaints in the rail, air and marine modes and to make regulations when required. It also has the authority to remove undue obstacles to the mobility of persons with disabilities who use the federally-regulated transportation network. In addition, the Agency implements the transportation policy established by Parliament in the Canada Transportation Act and other legislation. It is also the aeronautical authority for Canada on matters related to the economic regulation of air carriers.

Mandate and Mission

The Agency performs the functions vested in it by the Canada Transportation Act and related legislation (refer to section 4.4 for a list of legislation and regulations that the Agency administers in whole or in part).

Education and consultation are integral to the Agency's effectiveness in carrying out its mandate. The Agency works closely with those who use and provide transportation services in Canada and others directly affected by them. It helps travellers, shippers, carriers, municipalities and others to fully understand not only their rights and obligations under the Canada Transportation Act, but also the Agency's roles and responsibilities. When appropriate, the Agency encourages parties to resolve disputes informally before issues escalate and affect the efficient functioning of the transportation system. The Agency consults as widely as possible on issues that are important to the transportation industry. By remaining open and by listening to all affected parties, the Agency strives to ensure that its decisions are both responsive and responsible.

More information about the Agency can be found on its Web site at www.cta.gc.ca. More specifically, information about the Agency's structure, its mission, its values and its operation can be found at www.cta.gc.ca/about-nous/index_e.html.

Operating Environment and Context

Parliament funds the Agency's program through an operating expenditures vote. The Agency operates within the context of the very large and complex Canadian transportation system (for details, refer to Transport Canada's Web site at www.tc.gc.ca).

As an independent, quasi-judicial tribunal, the Agency makes decisions on a wide range of matters involving federally-regulated modes of transportation (air, rail, marine and for certain accessibility matters, extra-provincial bus transportation). Most of the Agency's activities and workload are generated by demand from users and operators of the federal transportation system. The tribunal's decisions are rendered by Agency members, who are appointed by the Governor in Council. They include the Chairman, who also acts as the Chief Executive Officer, and the Vice-Chairman, who are both members of the Executive Committee.

The Agency applies a decision-making process that is governed by the rules of fairness and the legislation, regulations and legal principles applicable to each case to ensure that all parties to a complaint or an application are dealt with fairly and equitably. The Agency also ensures that Agency members and staff maintain a high level of expertise in the transportation field and keep abreast of the constant evolution of the industry and its players. More information on the process is available on the Agency's Web site at www.cta.gc.ca/about-nous/decision_process_e.html.

Where possible, the Agency offers facilitation and mediation as alternatives to its formal process. These alternatives allow parties to resolve their issues in an informal manner that is simple, rapid, less litigious and less costly than the Agency's traditional hearing process. In facilitation and mediation, the disputing parties work together to develop solutions and produce collaborative outcomes resulting in better understanding between the parties and in agreements that inspire high levels of satisfaction and commitment.

During 2006–2007, a number of factors have influenced the delivery of the Agency's activities and services, notably the following:

Legislative changes

In 2000 and 2001, the Canada Transportation Act Review Panel conducted a statutory review of the Canada Transportation Act. In 2001, the Minister of Transport initiated a blueprint exercise to establish a framework for transportation policy for the future.

As a result of these two initiatives, two bills to amend the Canada Transportation Act were introduced in Parliament. Bill C-26, an Act to amend the Canada Transportation Act, was introduced in February 2003, but not passed by Parliament. Bill C-44, an Act to amend the Canada Transportation Act and to make consequential amendments to other acts was introduced in Parliament in March 2005, but did not receive Royal Assent before the federal election was called in November 2005. A revised proposal, Bill C-11, was introduced in Parliament in early 2006–2007 and received Royal Assent on June 22, 2007.

The proposed Canada Airports Act, which was introduced in the House of Commons in June 2006, includes a fee-setting regime for affected airports, with basic charging principles and notice requirements for setting aeronautical and passenger fees. Pursuant to the proposed Act, the Canadian Transportation Agency would be assigned the responsibility for hearing appeals on non-compliance with the required principles which guide the airports in setting these fees as well as the consultation processes similar to the role it has respecting appeals on user fees set by NAV CANADA.

Outcome of appeals of key agency decisions

In 2005, the Federal Court of Appeal decided an appeal of a significant Agency decision in the area of accessible transportation (Council of Canadians with Disabilities v. Via Rail Canada Inc.). In March 2007, the Supreme Court of Canada upheld the Agency's initial decision. The Agency analysed and addressed the impact the Supreme Court of Canada's decision will have on the way in which it deals with accessible transportation matters.

As of April 1, 2006, there were four appeal cases pending before the Federal Court of Appeal or the Supreme Court of Canada. During the 2006–2007 fiscal year, five new appeal cases were filed before those Courts. The Courts have rendered decisions on five of the appeals; therefore, as of April 1, 2007, four cases remain before de Courts.

Expenditure Review and managing with fewer resources

The Agency's reductions under the Expenditure Review exercise relate to the Air Travel Complaints program, which had been funded on a temporary basis through annual transfers from Transport Canada since the program's introduction in July 2000. With the elimination of the Office of the Air Travel Complaints Commissioner, Transport Canada began phasing out its transfer to the Agency as part of its Expenditure Review commitments. However, the Agency retains the mandate for the program. As a result, beginning in 2005–2006, the Agency began absorbing reductions in Transport Canada funding of approximately $2,645,000 over the three-year implementation horizon.

Several measures were implemented in the previous fiscal years to absorb the funding reduction. These measures included reducing office space requirements and reallocating internal resources. In 2006–2007, the Agency undertook a comprehensive resource review that allowed it to fully absorb the funding reductions while continuing to manage air traveller complaints as required by law and the workload related to the Agency's other legislated and administrative responsibilities.

While the Agency has effectively responded to this challenge, it continues to focus significant effort on identifying ways to manage an increasingly complex workload with its existing resources.

Government-wide initiatives

One of the key challenges facing all government departments is the need to renew their workforces, given an aging public service. This challenge is particularly acute even for small organizations such as the Agency, which require highly specialized expertise to fulfill their mandate. In addition to succession planning, other considerations such as employment equity, requirements of the Public Service Modernization Act, values and ethics and learning are all integral to organizational performance. Given the interdependence of these dimensions and their effect on performance, the Agency has developed a three-year strategic human resources plan. This plan identifies several key measures to enable and facilitate organizational renewal.

As part of the public service modernization initiative, all public service managers who had delegated authorities were required to successfully complete an assessment of their knowledge of procurement, human resources, finance and information management by December 31, 2006. All Agency managers successfully completed this requirement.

Facilitation and mediation

In addition to formal adjudication, the Agency has started offering facilitation services to attempt to informally resolve, at the staff level, disputes or concerns regarding future travel. Unlike other dispute resolution methods, facilitation does not require parties to file a formal complaint. However, if they have already done so, facilitation provides a means of resolving their concerns on a more timely basis and to the parties' satisfaction.

The Agency has offered mediation as an alternative to its formal complaint resolution process, since 2000. Voluntary and informal, mediation is confidential and relatively non-confrontational, allowing disputing parties to understand other perspectives, identify facts, check assumptions, recognize common ground and test possible solutions. The process allows disputing parties to develop creative solutions that may not be available through formal adjudication.

In 2006–2007, the Agency continued to offer mediation and facilitation, reaffirming its belief in voluntary dispute resolution as one of its core processes. A diverse range of accessible transportation issues, commercial disputes and infrastructure matters were referred to mediation in 2006–2007. The Agency received 25 new requests for mediation, as compared to 29 in 2005–2006.

In addition to the 25 new requests in 2006–2007, there were 10 mediation requests carried over from the previous year, resulting in a total of 35 mediation requests. Of these:

• one case was settled in pre-mediation discussions;

• ten cases went to mediation, with nine resulting in a full settlement and one resulting in a partial settlement;

• six cases did not proceed; and

• eighteen cases were pending at year-end.

The Agency used facilitation to successfully resolve 22 accessibility-related complaints and eight concerns regarding future travel.

The Agency has used mediation and facilitation to resolve a number of disputes with Canada's major rail carriers, Canadian airport authorities and major air carriers, as well as private citizens. Based on their positive experience, the country's two largest rail carriers consider mediation their first alternative for dispute resolution. An increasing number of service providers continue to demonstrate a positive, cooperative and collaborative approach toward the Agency's mediation program. The Agency will encourage facilitation and mediation for all transportation-related disputes in 2007–2008.

As at March 31, 2007, Parliament was reviewing proposed amendments to the Canada Transportation Act, Bill C-11, that would entrench the Agency's mediation process in legislation and foster the greater use of such alternative dispute resolution methods to settle complaints. Bill C-11 subsequently received Royal Assent on June 22, 2007.

Strategic Outcome

The Agency's basis for reporting to Parliament is its Strategic Outcome and Program Activity Architecture (PAA) as reflected in its Management, Resources and Results Structure (MRRS). The purpose of the MRRS is to explain the relationship between the activities the Agency undertakes and the single strategic outcome it is working to achieve. The PAA seeks to describe how the Agency manages the resources under its control to achieve intended results. The performance and financial tables presented in this report were prepared on the basis of a single strategic outcome:

This strategic outcome in the MRRS is associated with one program activity which is in turn supported by a number of program sub-activities. The PAA provides a framework that links expected results and performance measures to individual activities. Actual results are reported in terms of PAA activities and five sub-activities (Air Transportation, Rail Transportation, Marine Transportation, Accessible Transportation and Members and Regulatory Support).

Corporate Services refers to the functions that support the development and delivery of the Agency's plans and priorities. Its work is ongoing and multi-faceted and its staff works together with program staff to deliver departmental and government priorities and initiatives. The financial and human resources for Corporate Services have been allocated across the five other program sub-activities.

Financial and Human Resources Information

The resources used in relation to this outcome in fiscal year 2006–2007 are summarized in the following tables.

Financial Resources (thousands of dollars)

Planned Spending	Total Authorities	Actual
26,817	27,835	26,551

Human Resources (full-time equivalents, or FTEs)

Planned	Actual	Difference
267	250	17

Summary of Performance by Priority

For 2006–2007, the Agency identified three ongoing priorities and four management priorities (refer to table on Planned and Actual Spending by priority, 2006–2007). These priorities allow the Agency to deliver its mandate, the key element of which is to make sound decisions within the time frames established in the legislation on issues and disputes affecting the transportation system and on matters specified in the legislation as the Agency's responsibility.

Planned and Actual Spending by priority, 2006–2007 (thousands of dollars)

STRATEGIC OUTCOME: A fair and transparent economic regulatory regime that helps achieve a viable and accessible national transportation system		Planned Spending	Actual
		26,817	26,551
ONGOING PRIORITIES
Fair, effective and efficient resolution of federal transportation issues	Successfully met	26,523	26,296
Removal of undue obstacles for persons with disabilities from federally-regulated transportation	Successfully met
Protection of the economic and other interests of transportation users, carriers and other affected parties	Successfully met
MANAGEMENT PRIORITIES *
Addressing Agency workload and resources challenges	Partially attained and on-going	61	48
Participating in the development of legislative amendments and implementing new or modified requirements that fall under the Agency's jurisdiction	Successfully met	0	0
Succession planning	Partially attained and on-going	183	182
Improving the dispute resolution system	Partially attained and on-going	50	25

* Spending by priority includes only incremental operating expenses that are directly related to the identified management priorities. In addition to these expenses, the organization devoted time and effort to ongoing activities which are accounted for under the ongoing priorities section.

Below is a brief summary of the Agency's achievements by priority area:

Ongoing Priorities

Ensuring fair, effective and efficient resolution of federal transportation issues

Part of the Agency's mandate is to resolve transportation issues affecting all modes in the federal transportation network: air, rail, marine, and, for certain accessibility matters, extra-provincial bus transportation. It does so either by investigating and making formal tribunal decisions on complaints and ordering corrective measures as required, or by helping parties resolve their issues through an alternate dispute resolution process, that is mediation or facilitation. In 2006–2007, the Agency:

• issued 2,980 Agency rulings;

• achieved average processing times of 12 days for charter permits and 13 days for coasting trade applications;

• put measures in place to improve service levels, as resolving more complex complaints within the 120-day statutory deadline continued to pose a significant challenge; and

• in additional to formal decisions, many transportation complaints affecting air, rail and marine transportation were resolved through mediation and informal facilitation by Agency staff.

Removing undue obstacles for persons with disabilities from federally-regulated transportation

The Agency contributes to improving access to the federal transportation system for persons with disabilities by resolving complaints by developing standards, and by carrying out education initiatives. In 2006–2007, the Agency:

• required transportation service providers to take corrective measures regarding 22 undue obstacles to the mobility of persons with disabilities;

• resolved 43 accessibility complaints through mediation, facilitation and formal rulings;

• promoted accessible transportation and uniform service standards for Canadians with disabilities travelling within Canada and abroad; and

• finalised a new Passenger Terminal Accessibility Code of Practice and Guide for release in June 2007.

Protecting the economic and other interests of transportation users, carriers and other affected parties

Although the Government's transportation policy promotes competition and acknowledges market forces, it also recognizes that regulation and strategic public intervention may be required to protect consumers, shippers and Canadian carriers in all modes to ensure Canada has an economic and efficient transportation system that does not unduly favour, or reduce the inherent advantages of any particular mode of transportation. In 2006–2007, the Agency:

• after reviewing compliance with the air licensing requirements, processed 1,299 air licensing applications, including applications for new licences as well as suspensions, cancellations and reinstatements;

• issued 1,637 charter permits and denied five permit requests;

• participated in negotiations or consultations with 11 countries for new or amended bilateral air agreements or arrangements;

• after investigating suspected illegal air operations, identified 14 contraventions;

• after determining that adequate liability insurance was in place, issued a certificate of fitness to one new railway company and amended four other rail certificates;

• after assessing their environmental impact, allowed four railway construction projects to proceed, and continued to monitor 15 other projects for their potential effect on the environment;

• determined that both the Canadian National Railway Company and the Canadian Pacific Railway Company had exceeded their revenue entitlements under the revenue cap regime for Western grain, and ordered the carriers to pay penalties of $2,835,996 and $1,570,312, respectively to the Western Grains Research Foundation;

• protected the interests of the Canadian marine industry when considering 118 coasting trade applications; and

• issued one ruling that passenger fees set by a port authority were unjustly discriminatory and another that proposed increases in pilotage fees were not prejudicial to the public interest.

Management priorities

The Agency also pursued the following management priorities during 2006–2007:

Addressing Agency workload and resources challenges

Over the past few years, the Agency has taken important steps to ensure that it uses the funds allocated by Parliament to attain better results for Canadians. To effectively manage its workload and resources, the Agency conducts an integrated resource allocation exercise each year. As a key basis for allocating resources, the Agency challenges requests for existing and new resources using risk principles. These principles are part of a framework that considers the overall operating environment, past and projected workloads, human resources and information management needs. This exercise has enabled the Agency to reallocate resources within the Agency to meet priorities and assist areas experiencing temporary workload pressures.

The Agency had to develop a plan to fully absorb, by the end of 2006–2007, reductions related to the elimination of funding for the Air Travel Complaints function. Consequently, it phased in resource reductions over a three-year time frame, beginning in 2004–2005. Measures included reallocating internal resources and reducing office space requirements. In 2006–2007, the Agency identified sufficient resource savings in all areas to enable the Agency to absorb the funding reduction and continue to resolve consumer complaints, as required by law. While the Agency has resolved this challenge, it continues to focus significant effort on identifying ways to address an increasingly complex workload within existing resources.

During this past year, the Agency continued to enhance its work processes and systems. For example, it piloted a streamlined Agency decision format in several areas. While maintaining its integrity as a legal document, the new format was more client friendly, more concise and less resource intensive. The Agency fully implemented other process improvements during the fiscal year that will eventually result in substantive gains in performance. It also modified information systems to provide better data on caseload and processing times.

While performance information is integrated into the Agency's planning and resource allocation process, the Agency has continued its work to develop a performance measurement framework. During the fiscal year, the Agency began developing performance measures to support its PAA. It also modified the Agency's case management system to provide enhanced performance information. While the Agency has made considerable progress it will continue this work into fiscal year 2007–2008 and beyond as performance measures become more integrated into management practices, enabling the Agency to significantly improve its performance.

Participating in the development of legislative amendments and implementing new or modified requirements that fall under the Agency's jurisdiction

Since its inception, the Agency has contributed to the continual review and improvement of transportation legislation. Each year, through its Annual Report, the Agency assesses the administration of the Canada Transportation Act.

During 2006–2007, the Agency continued assisting Transport Canada as it developed proposals to amend the Canada Transportation Act. Bill C-11 was introduced in Parliament in early 2006–2007 and received Royal Assent on June 22, 2007.

Addressing succession planning

The Agency took the following measures to address key succession issues.

Internal language training
The Agency's Executive Committee reviewed an evaluation of the In-house Language Training program that showed acquiring second-language skills helped participants progress through the organizational ranks. While certain requirements for improvement were noted, the Executive Committee concluded that the program was a profitable investment in its succession planning strategy, especially given the Agency's demographics which point to continuing departures and retirements across the organization over the next few years.

Senior management also renewed its commitment to providing internal funding of priority language training for senior employees, particularly in relation to its succession requirements and the need to have candidates who meet the language requirements for managerial and executive positions.

Management Development Assignment Program
No significant changes were made to the Management Development Assignment Program over the reporting period. While senior management still view this program as an important tool for senior staff development and succession, the Agency is repositioning this program as part of its broader review of its three-year strategic human resources plan.

Three-year strategic human resources plan
The Agency developed work plans for implementing the Human Resources Roadmap. The work plans address the Agency's risk-based approach to addressing the seven strategic priorities emerging from the three-year strategic human resources plan: succession planning and maintenance of expertise; continuous learning; values and ethics; employment equity; official languages; staffing, and; organization and classification. While addressing the Agency's own strategic human resources priorities, the work plans are also intended to ensure that the Agency meets central agency policy and accountability requirements at a high level to focus on performance requirements and results.

Improving the dispute resolution system

The Agency monitors performance through a comprehensive case management system that provides information on all applications received and processed, including the number, type and processing times (that is, the time the Agency takes to render a decision after receiving an application). The processing time of cases varies depending on the nature and complexity of the matters raised, the number and interests of parties involved, and the amount of evidence to be collected and analysed. During 2006–2007, the Agency thoroughly analysed its case data and worked to develop plans to improve its levels of service. As a result of this analysis, key performance indicators were identified including the following:

• the percentage of disputes resolved within the statutory deadlines;

• the total average elapsed time;

• the percentage of cases for which filing or statutory deadline extensions are granted; and

• the percentage of cases referred to either facilitation or mediation.

Link to the Government of Canada Outcome Areas

The Agency's strategic outcome and program activity are directly aligned with the broader Government of Canada outcome of a fair and secure marketplace. The regulatory programs that the Agency implements are designed to resolve economic issues, to remove transportation barriers and to protect the rights of consumers, carriers and other interested parties. These programs help improve the overall quality of life in Canada, as an efficient and accessible transportation system benefits all Canadians.

The Agency is one of many players involved in transportation and maintains close ties with its various co-delivery partners, including Transport Canada, the Department of Foreign Affairs and International Trade, the Canada Border Services Agency, the Canadian Human Rights Commission, and a number of provincial governments. For details on these relationships, refer to the Agency's Web site at www.cta.gc.ca/about-nous/partners_e.html.

Number and Timeliness of Agency Decisions Issued

Agency decisions cover a wide range of issues affecting all modes of transportation in the federal transportation network: air, rail, marine and for certain accessibility matters, extra-provincial bus transportation. During 2006–2007, the Agency issued a total of 2,980 rulings (as compared with 3,238 in 2005–2006), made up of 1,637 decisions granting charter permits, 663 formal decisions, 630 orders, and 50 final letter decisions. The Agency also issued 273 interim decisions. All formal decisions and orders are posted on the Agency's Web site at www.cta.gc.ca/rulings-decisions/index_e.html. In addition, the Agency's Annual Report describes key decisions that were issued in 2006. It can be found on the Web site at www.cta.gc.ca/publications/ann-rpt/2006/index_e.html.

The Canada Transportation Act specifies that the Agency must issue a decision within 120 days of receiving an application or complaint. However, the legislation allows for extension of time if parties agree, which occurs in the more complex cases.

To meet the commercial needs of the transportation industry, the Agency renders most of its decisions within very short time frames. For example, the Agency deals expeditiously with many applications for air charter permits – often within a few hours of receiving the application – and offers a 24-hour telephone service to deal with urgent cases outside normal business hours. Similarly, it handles many urgent coasting trade applications within a few days of receipt. During 2006–2007, the Agency processed air charter permit applications, on average, within 12 days of receipt and coasting trade applications within 13 days.

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