OTTAWA – The House of Commons agriculture committee has urged the government to be “balanced” and transparent when it sets a policy this summer on how to sell its rail car fleet.
In a letter to transport minister David Anderson, the committee reported nervousness among farmers and other shippers that the government might be favoring the railways.
The terms of the bidding are expected to be announced within weeks.
MPs who held Parliament Hill hearings on the issue through the winter and spring were convinced a number of potential buyers exist.
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“The committee has, however, heard disturbing claims that the railways have the ‘right of first refusal’ to any sale, under their current operating agreement with the federal government,” said the letter signed by committee chair Lyle Vanclief.
“Is it not the responsibility of the government to ensure that no impediments limit the fairness of the sale? How can all parties have an equal opportunity to bid if each does not have the same opportunity to win the bid?”
The MPs also urged Anderson to make it clear to farmers how they will benefit from efficiency savings which flow from branch-line abandonment and how the railways will be kept accountable for sharing the savings.
Don’t want American system
And they warned the government against moving toward an unregulated rail system similar to the American model “with its horror stories of transportation delays and captive shippers subject to high freight rates.”
But the issue of who will own the cars and how access will be arranged was the committee’s major concern.
The railways claim that a 1993 operating agreement gives them the right to match any bid from other potential buyers.
Anderson and his senior officials have said they dispute that interpretation, but neither side will release the agreement, claiming commercial confidentiality.
However, the government has publicly given the railways one advantage in the bidding. It has said any non-rail bidder will have to prove it has an operating agreement with the railways as part of its bid.
Members of the all-party committee said the car allocation process should give a voice to all user groups.
And it urged the government to guarantee that while the 13,000 car fleet to be sold is to be used mainly to move Western Canadian grain, shippers in Ontario and British Columbia also will have leasing access to the cars they need to move their product.
