A panel of eminent Canadians appointed to review federal transportation legislation has urged Ottawa to step up efforts to get regulation and government out of the grain hauling system.
Grain should be treated like any other commodity, said the Canadian Transportation Act review panel chaired by Liberal Halifax lawyer Brian Flemming.
“We are concerned that the current crisis in the grain industry results in part from failure to move quickly enough to a system where commercial forces are allowed to work,” the panel said in its 340-page report published July 19.
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“The panel recommends that the grain handling and transportation system could be moved to a more commercial basis, which could lead to repeal of the revenue cap on grain rates.”
While it made other recommendations setting out proposed rules on how one railway could be allowed running rights on the tracks of another railway as a way to increase competition, friends and foes of the report both saw the commercialization recommendation as the core of the advice given to transport minister David Collenette.
It immediately re-ignited the long-running debate over the role of regulation and the Canadian Wheat Board in the transportation system.
“The panel recommendations, if implemented, would leave individual farmers at the mercy of the railways,” said CWB chair Ken Ritter. “It appears that the panel was more concerned about railway profitability than the viability of farmers.”
CN Rail president Paul Tellier said that while the panel has confirmed that deregulation has been good for the Canadian economy and transportation system, proposals to broaden running rights and to expand the ability of shippers to appeal to the Canadian Transportation Agency for relief raise the spectre of re-regulation.
“This menu of recommendations, if adopted in its entirety and stripped of the context provided by the panel, could at the end of the day constitute a fundamental reversal of policy, a step back to unnecessary re-regulation of the industry,” he said.
Ted Menzies, president of the Western Canadian Wheat Growers Association, issued a statement claiming that the panel conclusions vindicate 25 years of wheat grower lobbying.
“The panel has confirmed what the wheat growers have been saying, that the over-regulated and over-centralized system we have for controlling grain movement is a major factor in the current depressed state of our industry,” he said.
Terry Boehm, chair of the National Farmers Union transport committee, said one of the most “dangerous” proposals in the panel report is that levels of service guarantees be tied to freight rate levels.
In December, the panel issued an interim report which enraged pro-wheat board partisans by appearing to lean toward making sure any regulatory changes not undermine railway profits.
In its final report, the panel said the interim document and the debate it inspired was useful. “Although basic positions altered little (indeed some have not changed in a generation), a key aim of the interim report, to clear the rhetorical thicket of competing claims and identify key issues, was realized.”
And it stuck to its guns about the benefits of deregulation to increased rail profits and a more efficient transportation system. “The panel believes that the anticipated results of new regulations must be weighed against the real costs they will entail.”
Among its recommendations are that:
- Railways be able to apply for running rights over the rail lines of another railway, and be allowed to solicit grain business along that line, but only if the “host” railway receives significant compensation.
- Regional railways could increase competition and broader running rights rules could help. However, it said it does not support the Omnitrax proposal for legislated status because “the panel cannot endorse a system where one operator is treated differently from others by statute or regulation.”
- There should be no rule against railways dividing abandoned lines into segments for sale, making short line creation more difficult. A prohibition “would interfere with the business decisions of the track owner,” it said.
