The iconic literary masterpiece Two Solitudes, written by Montreal professor Hugh MacLennan in 1945, has defined for generations of Canadians the French-English divide that once was Canada’s defining dynamic.
That famous description perfectly applies to today’s debate between commodity shippers and commodity carriers — let’s say farmers and railways.
A rail car and a steamer passing in the night.
As Parliament has been dealing with the government’s attempt to push through Bill C-52, rail freight legislation addressing persistent shipper complaints about excessive railway power in their quasi-monopoly position on most parts of the Prairies and rural Canada, MPs have been presented with two solitudes, two universes really.
Here is Bob Ballantyne, chair of the Coalition of Rail Shippers, at a Feb. 26 meeting of the House of Commons transport committee studying the bill.
“The fundamental underlying problem is one of market dominance,” he told MPs. “The rail freight market is not a normally functioning competitive market. It is dominated by the sellers.”
Transport minister Denis Lebel made the same point when he appeared before the committee to defend the bill, arguing that there is a clear market imbalance that government — even a market oriented Conservative government — must try to fix.
“The shipper will be in the driver’s seat,” said Lebel. “He gets to trigger arbitration, identify the type of service desired and frame the issues to be addressed in front of the arbitrator.”
The rural Quebec Conservative MP began by saying there is nothing about the commercial relationship between shippers and railways that represents the free market ideal of equal partners negotiating terms.
Fast-forward several weeks to March 5 when Railway Association of Canada president Michael Bourque was before the same committee in his self-described role as “chief myth buster for the railway industry.”
Myth one, he said, is that freight shippers are served by only two national railways “that don’t compete for business. Nothing could be further from the truth.”
Instead, Canada has a “vibrant rail industry” that includes 55 railways ranging from national to shortline.
“Railroads, and especially CN and CP, compete with each other, with other modes of transport and as part of a globally competitive supply chain with various carriers in other countries,” he told MPs. “Railways are competing all the time, which is why they constantly work with customers to improve their productivity.”
And what about that “not a normally functioning market” argument, he asked.
“Just because there are few players doesn’t mean that there isn’t competition, does not mean there is an abuse of market power.”
What are members of the transport committee to do since most of them have never met a captive shipper nor understand what trucking or alternative rail options a farmer or grain terminal has if a train doesn’t show up as promised?
Next week will tell the tale when Conservative MPs decide whether to support railway arguments for weaker legislation. They will not.
Nor are they likely to support shipper arguments for tougher legislation against the railways.
Expect a Conservative compromise.