The Canadian Wheat Board is outraged that Canadian Pacific Railway is threatening to let its main grain shipping line become clogged if the federal government doesn’t bury the idea of running rights.
“It borders on unreasonable blackmail,” said Canadian Wheat Board director Ian McCreary in an interview.
In meetings and at conferences CPR officials have been saying that their main rail line between Moose Jaw and Vancouver may become clogged and unable to carry all the goods shippers want to send if trade with Asia keeps increasing at present rates.
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The railway is willing to invest in new infrastructure to increase capacity so the line won’t get clogged, but won’t spend the money unless Ottawa definitively states that it will not give third parties the right to run trains down the railway companies’ tracks, officials say.
McCreary said these sorts of statements prove that shippers, such as farmers, already have too few rights in the present rail transportation system.
“The fact that railways can make such powerplay statements are indicative of how much change is required in the policy environment to make sure they are competitive,” said McCreary.
“(Companies in) competitive industries never make these kinds of statements. Competitive businesses invest because they know that their competitor will catch up with them if they don’t invest.”
Farm groups have pushed the federal government to allow third parties to run trains on the main rail lines as a means of ensuring there is competition within the transportation system.
Some have described the present two-railway system as a “duopoly” within which there is no true competition.
The railways have said there is fierce competition between railway companies within Canada and across North America.
The railways have often complained about various provisions in the Canada Transportation Act, saying that loosening the regulations would allow them to be more efficient and offer overall better rates.
Critics of the railways, such as the wheat board, have argued the opposite.
“The farmers of Western Canada need to be connected to our customers with competitive rail rates, and we cannot continue to live in an environment where rail rates continue to escalate with inflation and none of the productivity gains in the rail industry are passed back to customers,” said McCreary.
“Canadian Pacific Railway has been deregulated on the understanding that they wanted a competitive industry. If they wanted a competitive industry, then they’re going to have to live with a competitive industry (that contains running rights for third parties).”
