The national railways received more than $48 million in excess payment for maintaining the government’s 12,000-car fleet of hopper cars in 2004, according to a Parliament Hill source who has seen an analysis of a confidential report prepared more than a year ago by Canadian Transportation Agency.
According to the report, the CTA concluded the actual cost of maintaining the government hopper car fleet that year was $1,686 per car.
Under the costing formula set out in federal legislation, the railways were paid $4,329 per car for maintenance.
“That means they were paid $48.6 million more than they actually spent for maintenance,” said the source.
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It would mean that over more than a decade, the railways received hundreds of millions of dollars in excess maintenance payments.
The issue of maintenance costs is at the heart of a controversy over whether the new Conservative government will honour a deal in-principle signed days before the last election by the out-going Liberal government to transfer the cars to the prairie-based Farmer Rail Car Coalition.
The FRCC says it can maintain the cars for approximately $1,500 per year, passing the savings on to farmers. Railways dispute those claims and a year ago, the CTA completed an analysis of the actual costs.
The study has not been made public and as the new Conservative government signals that it may back away from the FRCC deal, there are growing calls from FRCC, its supporters and MPs from all sides of the House of Commons to have the CTA report released.
FRCC president Sinclair Harrison has the report and says it supports his group’s analysis of realistic maintenance costs but he cannot release a confidential government document.
New Democratic Party agriculture critic Alex Atamanenko said if the numbers are correct and there has been significant over-payment to the railways, the report should be released before the government makes any final decision. “We have to get to the bottom of this.”
Last week, Liberal agriculture critic Wayne Easter joined the chorus calling for release of the CTA report.
He said the government should not back away from the deal forged by the Liberals and the FRCC in the dying days of the last government. It took almost a decade from the 1996 Liberal announcement that the cars were for sale to make the deal.
“I’ll admit we waited too long and we should have completed the deal four or five years ago,” he said April 24. “But in the end, we did the deal, it is good for farmers and the present government should honour it.”
Easter said if the Conservatives back away from the deal, they will be allowing ideological considerations to trump good government.
“Once they have the facts, any second guessing of the deal will be the triumph of ideology over practical measures that will help farmers.”
