A government announcement in September that it had won a promise from Canadian National Railway to postpone planned closure of 53 prairie producer car loading sites was not entirely correct.
CN officials told surprised MPs on the Commons agriculture committee last week that farmers cannot get cars spotted to 40 of those sites and the same will apply to the remainder later this year.
What the railway promised, said senior sales and marketing vice-president Jean-Jacques Ruest, is that the tracks and switches at the 53 sites will not be dismantled until at least Jan. 1, 2010, to give farmers, groups or municipalities time to come forward with promises to supply traffic in the future.
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Sean Finn, CN executive vice-president and chief legal officer, reinforced the point.
“They are delisted,” he said of 40 sites that are no longer on the CN website.
“You cannot order cars. We are happy to sit down with anyone with a plan for those sites.”
He said a guarantee by farmers to use the sites in the future could have them relisted.
But for the moment, he said, traffic is nonexistent or too meager to justify the up to $12,000 per year it costs to maintain the sites so that the rail line remains safe for traffic.
Ruest said producers essentially abandoned the targeted sites.
“If you don’t use it, the site disappears.”
Critics were not sympathetic. They argued that with producer car use increasing, those sites should be retained in anticipation of future business.
Canadian Wheat Board chair Larry Hill said the $800 to $1,200 a farmer can save by shipping a producer car “can be the difference between making and losing money.”
Last year, a record number of cars were shipped.
He argued that the law should be changed to make it more difficult to abandon rural producer car sidings. The notice is 60 days in the grain system and 12 months for urban sidings.
Finn said urban and grain service abandonment processes cannot be compared, while Ruest insisted the railway is not trying to get out of the producer car business.
“We’re in the business of moving cars,” he said. “We’re seeing more business.”
Then MPs from all parties piled on, denouncing CN for its producer car loading site decision, its level of service to farmers, its attitude and its complaint that with revenue caps, grain movement is the least profitable part of the business.
Saskatchewan Conservative Randy Hoback accused the railway of abusing farmers.
“It’s horrible, it’s absolutely horrible the service you provide on the Prairies and how you take farmers for granted …. Absolutely horrible,” he stormed.
“You know you’ve got your revenue. You know you’ve got the movement, and you ignore us.”
Ontario Liberal Francis Valeriote insisted the sites should not be abandoned or dismantled and accused the railway executives of complicating “a not very complicated thing” for their own corporate purposes.
Northern Alberta Conservative Brian Storseth said farmers in his area receive poor service from CN.
“The level of service we have experienced in our area of the Prairies is atrocious.”
He challenged the truthfulness of railway claims that it costs $8,000 to $12,000 per year to regularly check the track and switches at little-used sites to make sure they are safe for main-line traffic and demanded proof.
“I highly doubt you are spending $12,000.”
When CN executives denied an MP suggestion that the railways are guaranteed a return on investment while farmers have fluctuating income, Liberal critic Wayne Easter jumped in.
He had a Transport Canada official at the meeting confirm that when the revenue formula under the Canadian Transportation Act was devised after the 1995 loss of the Crow Benefit payment, the formula incorporated a figure to guarantee a return-on-capital using capital totals for the day.
