A political battle is brewing within the Liberal party over Transport Canada and minister David Collenette’s rejection of proposals to expand running rights on prairie rail lines.
“This issue is far from over,” Winnipeg Liberal John Harvard, chair of the Liberal western and northern caucus, said Feb. 27.
“Transport Canada bureaucrats have had their say and as expected, they favour the railways. I can tell you that when this gets to committee, there will be proposals to change that. This debate still has legs.”
In a long-awaited national transportation policy published Feb. 25, the department announced that existing restrictive running rights, allowing a competitor railway to apply for the right to run cars over a rival’s track, would continue to be available only in extreme cases.
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“Expanded running rights could result in inefficiencies being introduced into the system by fragmenting traffic among two or more operators or reducing the economies of scale and density that are essential to efficient railway operations,” said the policy paper written by Transport Canada bureaucrats.
“The government believes that the current running rights provisions should be retained.”
The department said “there is no evidence that the railways are earning excessive profits” and the department believes the rail system is “not inherently anti-competitive.”
It took those views from a panel that reviewed the Canadian rail system.
Collenette offered promises of small improvements to shippers’ rights and protection:
- Ending the need for a shipper to prove “substantial commercial harm” before the Canadian Transportation Agency could intervene in a dispute between shipper and carrier.
- Strengthening final offer arbitration provisions, among other things allowing a group of shippers to join in one action for common relief.
- Requiring railways to publish a list of sidings available for loading producer cars and forcing them to give a 60-day public notice before taking these sidings out of operation.
- Monitor the impact of May 2000 grain handling reforms, including continuation of the revenue cap on grain hauling.
A Transport Canada official who briefed reporters said the government opted for the running rights status quo because it thinks a good balance has been achieved through the last spate of transportation changes.
He said shippers “have some of the lowest freight rates in the world” while carriers make enough money to keep investing in the system.
Critics, including members of the Liberal western caucus and Saskatchewan New Democrat MP Dick Proctor, said the policy remains too biased toward railway power.
“I think this ends any chance of achieving open running rights, which would be a benefit for farmers and short lines,” said Proctor.
Harvard insisted internal critics have not yet lost the fight.
The rail provisions were a small part of a broad transportation policy that proposes measures in many areas such as ensuring competition between airlines and investment to reduce traffic congestion around major cities.
“We believe the transportation system of tomorrow should largely remain market driven where government sets a competitive framework and intervenes only as a last resort,” Collenette told a news conference. “That is why we will continue to take concrete steps to preserve and improve competition in the transportation sector, including improved protection for rail shippers against the market power of the railways.”
