OTTAWA (Staff) – Under new rail deregulation laws, the federal government is punishing prairie commodity shippers in order to pump up the sale price of CN Rail, a prairie business leader charged last week.
Kevin Doyle, president of sulphur producer Sultran Ltd. of Calgary, told senators studying the proposed Canada Transportation Act that it gives the railways too much power.
He was leading a delegation of prairie companies that ship via rail that is trying to convince senators to do what the House of Commons would not do – change the legislation to give shippers more power to challenge railway rates or service levels before the Canadian Transportation Agency.
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“I think the government wants to give the railways more market leverage in order to make CN shares more salable, particularly to American investors,” he said in a later interview.
Shipper representatives, including Saskatchewan Wheat Pool president Leroy Larsen, told senators that the legislation as written will discourage investment on the Prairies.
He said railways will have too much power to decide the level of service they give and the prices they can charge. Grain companies will invest based on what service they expect to get from the railways in any area.
“The railways will have an unreasonable influence over our business decisions,” said Larsen.
CN president Paul Tellier fought back with a later appearance before the same committee and a letter to senators arguing that companies that use the railway are well taken care of in the legislation.
“It is difficult to understand the continued opposition to the bill by some shipper groups,” wrote Tellier.
“While regulation must accommodate and balance the contending views of all stakeholders, the regulated industry must, in the final analysis, be allowed to prosper.”
He suggested senators toughen the legislation by restoring a clause which ends the maximum grain freight rate on July 31, 2000.
