Transportation in Canada is a shared responsibility among the federal, provincial, and municipal levels of government. The roles of the federal and provincial governments are defined in the Constitution Act of 1867. In general, the federal government has the constitutional authority to oversee international and inter-provincial transportation, while the provincial governments are responsible for intra-provincial transportation. In practical terms, the efficient operation and regulation of Canada’s transportation system relies on the close cooperation of all partners (including the private sector) to help ensure safety, efficiency, environmental sustainability, and security.
Historically, the original objectives of federal transportation policy were connecting markets and communities, while provincial and municipal policies focused more on local economic and social needs. However, in the mid-20th century, federal transportation policy placed a growing emphasis on marketplace frameworks to promote competition and efficiency while maintaining appropriate levels of safety. From the mid-1980’s to the 1990’s, the Government of Canada minimized its regulatory oversight of the transportation system and devolved the ownership of many of its transportation assets; policies that enhanced the competitiveness of the sector. With the devolution of key ports, the privatization of railways and air carriers, the productivity of Canada’s transportation sector grew 31.3% from 1986 to 2008, compared to -1.5 % for the overall economy.12
This combination of federal regulatory and marketplace frameworks and market choice is reflected in the Canada Transportation Act, specifically the Act’s National Transportation Policy. The Policy enshrines the importance of “competition and market forces” in the provision of “viable and effective transportation services” in Canada:
NATIONAL TRANSPORTATION POLICY
Declaration
5. It is declared that a competitive, economic and efficient national transportation system that meets the highest practicable safety and security standards and contributes to a sustainable environment and makes the best use of all modes of transportation at the lowest total cost is essential to serve the needs of its users, advance the well-being of Canadians and enable competitiveness and economic growth in both urban and rural areas throughout Canada. Those objectives are most likely to be achieved when:
(a) competition and market forces, both within and among the various modes of transportation, are the prime agents in providing viable and effective transportation services;
(b) regulation and strategic public intervention are used to achieve economic, safety, security, environmental or social outcomes that cannot be achieved satisfactorily by competition and market forces and do not unduly favour, or reduce the inherent advantages of, any particular mode of transportation;
(c) rates and conditions do not constitute an undue obstacle to the movement of traffic within Canada or to the export of goods from Canada;
(d) the transportation system is accessible without undue obstacle to the mobility of persons, including persons with disabilities; and
(e) governments and the private sector work together for an integrated transportation system.
1996, c. 10, s. 5; 2007, c. 19, s. 2 – Canada Transportation Act 13
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12 Transport Canada - Productivity time series data: December 2011
13 See: http://laws.justice.gc.ca/eng/acts/C-10.4/page-1.html#h-4