OTTAWA – Suggestions were growing on Parliament Hill recently that in the government’s rush to deregulate the prairie grain transportation industry, it may be tilting the power balance too much in favor of the railways.
Farm lobbyists, some MPs and senior Canadian Wheat Board officials asked whether sufficient controls on the railways will exist in the new system after the year 2000.
“I’m worried about the direction we’re going here,” said Liberal Wayne Easter, chair of a Commons committee looking at the implications of the end of the Western Grain Transportation Act subsidy. “We may be going backwards to a time when the railways were in control.”
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Canadian Wheat Board chief commissioner Lorne Hehn joined the chorus in an early May appearance before Easter’s committee.
He warned that the government must be careful to leave farmers and grain shippers some bargaining power since the railways in some prairie areas are an effective monopoly.
Hehn said in the post-WGTA world, farmers should still have the security of maximum freight rates.
The government is proposing that after five years, a maximum freight rate rule promised as a transition protection will be ended unless it can be proven necessary.
“I would prefer the onus be reversed,” said Hehn. The maximum rate should extend past the year 2000 unless a review proves it unnecessary.
He proposed that:
- Shipper relief provisions of the National Transportation Act should apply to the grain industry, giving government the power to order railways to provide service if farmers or grain companies can prove inadequate service.
- Rail cars should remain in the hands of farmers or the government, rather than become the property of the railways.
- Car allocation decisions should be made by an industry group that includes shippers.
- Grain freight rates should continue to be determined on a cost base, rather than in simple negotiation between railways and captive grain shippers. “We believe it (cost-based freight rates) should be a permanent part of transportation policy.”
Hehn noted that for non-grain commodities such as potash, which operate under the NTA freight-setting system, effective freight rates are much higher than those that apply to grain.
“I’m a firm believer that (without controls), rates will not go down.”
Hehn’s comments echoed recent calls from Prairie Pools Inc., the National Farmers Union and other prairie groups to continue some form of railway regulation once the five-year transition period from WGTA rules is over.
