CP sues Ottawa over interswitching

Canadian Pacific Railway has launched a lawsuit against the federal government, challenging the legality of new rail regulations stemming from the Fair Rail for Grain Farmers Act.

The case, which was filed with the Federal Court of Appeals Aug. 29, lists the Canadian Transportation Agency and the federal attorney general.

CP officials declined to comment, but sources familiar with the case said CP is appealing the process that led to changes in Canada’s railway interswitching rules.

Interswitching is intended to give rail shippers access to additional rail service in areas that are served by only one railway company.

CP contends that the federal government overstepped its authority and acted illegally when it imposed new regulations that extended interswitching provisions to 160 kilometres from 30 km.

The company claimed earlier this year that extending interswitching would result in financial losses, slower transit times, workforce reductions and reduced investment.

“The expansion of regulated interswitching could seriously impact Canada’s competitiveness as it effectively transfers traffic that normally would move over Canadian railways and ports to U.S. railroads and ports, potentially resulting in job losses, reduced investment and the dampening of the Canadian economy,” CP said in a news release issued earlier this year.

“Interswitching will also lead to double handling of grain shipments, which will slow down the grain supply chain negatively impacting transit times.”

Agriculture minister Gerry Ritz’s office said in an email that the Fair Rail for Grain Farmers Act and related regulations were intended to ensure the efficient movement of grain and other commodities to international markets.

“Our government introduced and passed legislation unanimously through Parliament that put into place clear and achievable solutions to ensure grain and other commodities move efficiently to market,” Ritz said.

“By extending the interswitching limit from 30 km to 160 km across the Prairies for all commodities, we are giving shippers access to greater rail competition.

“Our government is hopeful that CP and all members of the rail logistics supply chain will embrace being part of the solution as opposed to being entrenched in the problems of the past.”

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