The Canadian Transportation Agency can’t tell Canadian National Railway how to run its grain shipping business, the rail company has told the agency.
In its formal response to a level of service complaint launched by Great Northern Grain of Nampa, Alta., the railway said GNG’s application goes too far.
“GNG seeks to transform what is on its face a level of service application into a frontal attack on CN’s tariffs and programs for the entire grain handling and transportation system,” said CN lawyer W. J. Kenny.
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“This is beyond the scope of the level of service provisions of the CTA.”
The railway also says the agency should ignore interventions filed in support of GNG by nearly a dozen other small grain companies, as well as producer car shippers, farm organizations, the government of Alberta and the Canadian Wheat Board.
They say recent changes to CN’s freight programs discriminate against small shippers who don’t have the capacity to consistently load 100-car trains.
“This case has obviously ignited an issue that has been simmering across the Prairies,” GNG chief executive officer Bruce Horner said in a News release
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The intervenors support GNG’s request that the CTA order CN to implement sweeping changes to its grain shipping programs and policies. The submission touches on a variety of issues, such as the size of the rail car fleet, car rationing policies, the size of car blocks that qualify for certain discounts, an end to car auctions and increased reporting rules for the railway.
In its response, CN says that goes way beyond the scope of a level of service application.
The only issue for the CTA to consider is whether the rail company has fulfilled its level of service obligations to GNG at its Nampa elevator.
“The agency cannot be asked as part of this application to rule on the level of service being provided by CN to all grain customers generally or to specific categories of shippers in particular,” it said.
The submission notes that the federal government changed the law in 1987 that had allowed the CTA’s predecessor to consider the public interest in such cases.
Under the legislation, rail tariffs and programs are considered to be commercial matters between a railway and a customer, with disputes settled by final offer arbitration or the courts.
“The agency is not required, or indeed permitted, to enter in any assessment of the adequacy or suitability of CN’s programs,” the rail company said.
As to the specifics of the complaint, CN rejects GNG’s allegations that it has received inadequate service.
The railway cites a number of statistics that it says show it has provided GNG with enough cars to meet its shipping needs.
For example, it says, GNG shipped 1,488 rail cars in 2005-06, well above the five-year average of 1,043, and shipments so far in 2006-07 are on a similar pace. It also says GNG has been able to turn over its elevator capacity at a rate above the industry average.
CN concludes by saying that even if the CTA finds that CN has breached its level of service, the relief requested by GNG and the intervenors is out of proportion to the alleged breach of service.
Among the intervenors is Pulse Canada, which says CN’s car distribution policy is inadequate to meet the pulse industry’s needs.
Alberta Agriculture asks the CTA to use its powers to establish a “competitive service balance between large and small grain companies” as well as a reliable car allocations system for GNG and other shippers.
