Canada bill provides penalties for rail service failures

WINNIPEG, Manitoba Tue Dec 11, 2012 10:37am EST

WINNIPEG, Manitoba Dec 11 (Reuters) - Shippers will have the right to service agreements that could lead to penalties for Canada's railways for violating agreed levels of service, under long-awaited federal legislation unveiled on Tuesday.

The bill, unveiled by the federal government in a press conference in Winnipeg, seeks to address complaints by grain handlers, miners and shippers of commercial goods, who want better service from Canadian National Railway Co and Canadian Pacific Railway Ltd.

The new provisions provide incentives to shippers and the railways to negotiate commercially, and give the Canadian Transportation Agency the power to issue a fine up to C$100,000 ($101,000) for each violation of an arbitrated service level agreement.

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