Transport Minister Lisa Raitt says the review is to take place in 2014 — a year earlier than required — to address challenges that include moving grain.
The review is also to look at the safe movement of goods through communities, federally regulated passenger rail services and the aviation sector.
Recommendations from the review panel are expected to be submitted to Raitt by late next year.
Agriculture Minister Gerry Ritz says he hopes the railway part of the review will be completed by the end of this year.
Western Canadian farmers harvested a record 76 million tonnes of grain last year, but rail companies said the size of the crop and an unusually cold winter delayed movement.