Railway customers were in Ottawa last week demanding that the federal government show its willingness to force railways to improve service.
The railways immediately called it a bad idea that would make things worse.
They said commercial agreements rather than heavy-handed government intervention will fix the system.
The Coalition of Rail Shippers held a Parliament Hill news conference Nov. 16 and sent a letter to MPs denouncing a key recommendation in the recently released interim Rail Freight Service Review that the railways be given until 2013 to improve service.
The coalition that includes a number of agricultural rail shippers insisted the three-year wait and see period is unreasonable. Government must start to prepare and impose regulatory requirements now, it said.
The review panel concluded that rail service is has been substandard, although it noted improvements have been made since the review period that ended in 2008.
Coalition chair Ian May told the news conference the fundamental problem is a market imbalance that favours the railways. Regulation can help, although a better solution would be market agreements.
However, May said railway customers do not believe railways will change without the threat of government rules.
“Unless accountability is rebalanced, we are going to stifle economic recovery in Canada,” he said. “We are asking for an immediate rebalancing.”
Pulse Canada executive director Greg Cherewyk said the industry risks losing markets or sales because of inconsistent railway service. He said the government should establish performance expectations in consultation with the industry and then assign an independent body the job of measuring system performance.
Railway Association of Canada president Cliff Mackay rejected the call for tougher regulations during a panel discussion on rail service held as part of a joint Canada Grains Council-Grain Growers of Canada conference Nov. 16.
He said market solutions through agreements between railways and their customers are the best approach.
He also took umbrage at a review panel conclusion that the base issue is excessive market power held by the railways.
Mackay denied that and insisted the railways do not act as monopolies or they would be making more money.
He said the review panel did not study the market power issue and had no mandate to do so.
“There is simply no analysis (in the report),” he said. “What we have in the report is the statement of opinion. When we looked for the analysis, we couldn’t find it.”
Mackay said more regulation would be a disincentive for the railways to improve performance, just as the revenue cap is a disincentive to do the best they can.
