Denis Lebel, Minister of Transport, Infrastructure and Communities said the Rail Freight Service Review made progress in understanding the business needs and constraints by shippers and railways, but failed to bring about a resolution.
"While the parties were ultimately not able to reach consensus on all issues, I hope that stakeholders can build upon that progress," he said.
The review, which began in 2008, found that overall rail freight service was inadequate in part because of a market power imbalance between the country's two large railways and hundreds of shippers.
It came after friction between Canada's two large railways and shippers escalated into railway customers calling for tougher regulations to improve deliveries and a watchdog to produce an independent scorecard on service.
The shippers have asked the review panel for legislation that would set standards of performance and impose penalties to be paid to shippers if those levels were not met.
Last October, former Alberta Conservative cabinet minister Jim Dinning was appointed as the independent facilitator to lead negotiations to bring together shippers, railways and other key players to develop a template for service agreements and a streamlined commercial dispute resolution process.
Ottawa plans to introduce a bill in the fall that would give shippers the right to service agreements with the railways and a process to establish the agreements if commercial negotiations fail.
Among the review's recommendations are the advice that Transport Canada create a service agreement template and make a commercial dispute resolution process publicly available.
It also asks railways to update their current dispute resolution processes to include rail service issues.
Claude Mongeau, president and chief executive officer of CN (TSX: CNR) said the launch of the service review "was a large factor in CN stepping up its game," adding the company has already made significant improvements in customer service in the past three years.
However, he said the railway does not support the regulatory approach advocated by shippers representatives and asked the government to weigh the impact of implementing such legislation.
"Shippers' demands for greater government intervention in rail service are clearly misguided. This regulatory stance represents a missed opportunity to take supply chain collaboration to the next level.
"Make no mistake — the intrusive, regulatory-based approach to service demanded by shippers would be unprecedented in a market-based economy. Such an approach would send mixed signals to customers and suppliers around the world about the government's approach to commercial markets for rail transportation in Canada."