The Farmer Rail Car Coalition may try to recover some of the money it spent in its unsuccessful bid to buy the federal grain hopper cars.
“We spent a lot of money over the last 10 years and we’re looking at ways of recovering that from the federal government and the railroads,” said coalition president Sinclair Harrison.
“Our lawyers are busy examining what action might be taken.”
He said the coalition of 17 farm groups spent some $3 million in cash pursuing its proposal, along with about another $2 million of in-kind transactions and volunteered time from member organizations.
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Much of that has been spent since March 5, 2005, when Transport Canada entered into direct negotiations with the FRCC for the sale of the 12,000 hoppers.
“There was no end of information they asked us to supply and we had no choice but to provide it,” Harrison said. “We spent a pile of money negotiating in good faith.”
He said it seems in retrospect that Transport Canada was never really interested in reaching an agreement and was negotiating in bad faith.
“I think we have a very strong case, at least since March 9 and maybe even going further back,” he said.
The coalition has been funded by a variety of sources, including the federal government’s western diversification department, the governments of Saskatchewan and Manitoba, the Canadian Wheat Board and it members organizations.
Most of that funding was in the form of loans that were to be repaid only in the event that the coalition gained ownership of the cars. Harrison said about two-thirds of the $3 million would be repaid if the coalition is successful in getting the government to reverse its decision.
“If not, I guess that money will be seen as investments by the various parties,” he said.
Saskatchewan transportation minister Eldon Lautermilch said the province invested about $1.2 million in FRCC over 10 years and considers it money well spent, especially if the federal government reduces the revenue cap as a result of the FRCC’s work on maintenance costs.
“We wouldn’t ask them to pay it back,” he said. “They have no ability to do so and we see it as an investment.”
The FRCC had also entered into numerous business contracts with rail logistics and management companies. Harrison said the coalition’s understanding is that financial obligations associated with those contracts are dependent on owning the cars, although he acknowledged that some of the partners involved might challenge that interpretation.
