The Alberta government is off track in its support of joint running
rights, says the president of Canadian National Railway.
In a hard-hitting speech to the Calgary Chamber of Commerce, Paul
Tellier took the provincial government to task for supporting the
implementation of running rights in its submission to a federal
government panel reviewing the Canada Transportation Act.
He said that’s not the position he would expect Alberta’s free
enterprise government to take.
“Alberta’s political leaders are champions of free enterprise and
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market forces,” he said Sept. 5. “And yet at the same time Alberta’s
department of transportation recommends re-regulation and market
intervention.”
He described running rights as the first step toward open access, under
which rail operators can apply for permission to run on someone else’s
track and “cherry pick” their traffic at regulated rates.
“Why should other railways be given the right to use our track?”
Tellier said. “They did not build it. They do not maintain it. They are
not responsible for the service it provides.”
He said CN is not opposed to sharing its line with other railways, and
in fact, routinely negotiates such arrangements with other shippers.
The big difference is those arrangements are the result of commercial
negotiations, with rates that reflect fixed and variable costs and the
impact of lost traffic.
“Rates must be negotiated, not imposed by bureaucrats in Ottawa,” he
said.
He described running rights as “regulated poaching” that wouldn’t be
tolerated in other industries such as oil.
But it’s a different matter in the agriculture industry, he said, where
there is a long tradition of “railway bashing” among western farmers.
“I know that CN and CP are never going to win popularity contests on
the Prairies, Hay West notwithstanding,” he said. “But the legacy of
past conflicts must not blind us to 21st century realities.”
Tellier said Canada’s rail regulatory system already has plenty of
safeguards.
For example, under competitive line rates, shippers served by only one
railway can ask a regulator to fix a rate to the nearest interchange
with another railway.
There is also final offer arbitration, whereby shippers can ask the
regulator to choose between the rate proposed by the shipper and the
rate offered by the railway.