The railways found no political friends when they went to Parliament Hill to argue against proposed legislation that would give their customers more power.
Representatives from the Railway Association of Canada, Canadian National and Canadian Pacific Railways and an Ontario short-line railway went before MPs on the House of Commons transport committee Nov. 27. They argued that proposals to give shippers the right to group applications for final offer arbitration and to lower the hurdles they must leap to win remedy from the Canadian Transportation Agency are an ill-advised move toward reregulation.
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“Deregulation has proved to be a resounding success,” railway association president Cliff Mackay told skeptical MPs. Freight rates have been lowered, railways have invested $15 billion over the past decade to improve the system and relations between the railways and their customers have been largely harmonious.
“The RAC continues to believe that bill C-8 is not necessary and we do not support the bill going forward,” he said.
Then the MPs weighed in.
“You’ve been painted by everybody as the group that needs to be looked at rather warily,” said Toronto MP and Liberal transport critic Joe Volpe. “So why don’t I revert to type and say that’s exactly where I come from.”
Windsor, Ont., New Democrat Brian Masse said his constituents have little time for the railways.
“If I go to my riding and I talk, I don’t have another business that is universally more despised than the railroad industry,” he said. “That’s just a fact.”
The government MPs on the committee were no friendlier.
Abbotsford, B.C., Conservative Ed Fast told the railways that they have had years to respond to complaints, particularly from smaller shippers, and have not done so. They should not be surprised by the legislation, which MPs are prepared to approve.
Fast challenged the railway objection to a legislative proposal that shippers have the right to band together to demand final offer arbitration. The railways said it is not necessary because mediation has been working and there also is the option of commercial dispute resolution.
“I would suggest to you that for small shippers, the ones that don’t have the financial resources available, commercial dispute resolution can be a horrific expense proposition for their bottom line,” he said. “That is why they’re unhappy with the current state of affairs.”
The railway lobby said if C-8 proceeds, it should be weakened with these changes:
- Reinsert a requirement that shippers appealing to the CTA for a ruling against the railways must prove that a lack of remedy would cause “substantial commercial harm.” Critics say that is an onerous prehearing requirement.
- Eliminate the proposal that shippers be able to challenge ancillary charges that railways apply for nonfreight rate services such as car cleaning, currency conversion and using a paper bill-of-lading rather than electronic.
- Eliminate or soften the provision that groups of shippers be able to apply for final offer arbitration remedy.
“The RAC believes that group (final offer arbitration) is simply not necessary,” said Mackay. “We think the existing system works.”
But Fast said, “we’re talking about quite an unbalanced playing field because you’ve got the financial resources of these huge railways going up against the small shippers.”
