OTTAWA – The federal Liberals last week laid out some of the terms for their sale of CN Rail.
And agriculture minister Ralph Goodale repeated his plea to farmers and their companies that they consider buying a piece of the railway.
“I think it would be timely for those that have some real interest in the possibility here … to see if it’s practically and financially feasible for them to become a part of the purchasing process,” he said. “The opportunity is there.”
Transport minister Doug Young presented the CN Commercialization Act to Parliament May 5 with a vow to get the first batch of shares to the market by October or November.
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He said he expects to raise between $1.5 billion and $2 billion in the sale. Net profits after debt will go into government coffers.
To those who might accuse the Liberals of selling off The National Dream, Young had a quick response.
“CN is no longer part of our national dream,” he said. Freight cars filled with wheat rolling across the Prairies are no longer the stuff of national myth.
There will be no limit on foreign investment but no one investor will be able to buy more than 15 percent of the crown railway.
Customers encouraged to buy
“We want to be sure nobody gets control,” he said.
Goodale said the CN sale offers “some pretty exciting possibilities” for farmers.
“The notion of those customers who are among the most significant users of the service … to take a part ownership of the enterprise strikes me as something that deserves to be very seriously considered,” he said.
Goodale acknowledged it would take a large chunk of cash and suggested shippers as diverse as agriculture, potash and forestry might want to form an alliance to gain more shares.
By Young’s figures, to buy the 15 percent maximum allowed could cost as much as $300 million.
He told reporters that selling CN and then deregulating the rules of the game next spring is the best way to ensure maintenance of the railway as a national line. CP Rail, by abandoning operations east of Montreal, has become a “regional railway.”
Young said there will be efforts to get CN’s $2.6 billion debt down before the sale. The new owners will have to maintain the head office in Montreal and adhere to the Official Languages Act that now applies, he said.
However, they will have no obligation to keep the prairie branch line system in place.
“There are no guarantees.”
Those branch lines are being reviewed and if the government decides a money-losing branch line should be saved, it will be up to taxpayers to cover the losses, he said.
No foreign restrictions
Saskatchewan New Democrat MP Vic Althouse denounced the government for not restricting foreign ownership of CN. He said the Liberals are selling out the country and encouraging north-south grain movement.
“The plain fact is this government is not just talking about selling a railroad. They’re talking about selling our nationhood,” he said.
