The Canadian Transportation Agency review panel is right to go slow in its study of rail competition, say officials with the two national railways.
The panel’s interim report made no recommendations on issues like open access or regional railways. It raised questions that it said need further study before the final report is released this summer.
Some grain shippers and farm groups have criticized the panel for making no recommendations, but the railways disagree.
“We think slow is the proper approach,” said CN Rail spokesperson Jim Feeny. “There are very significant issues that have to be studied further before action can be taken.”
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The railways say measures to impose competition, such as granting open access to their rail lines to competitors, could have wide-ranging and damaging consequences.
Anything that reduces railway revenues means less money will be available to re-invest in the system, said CP Rail assistant vice-president Ray Foot. A $5 a tonne cut in the freight rate may provide a short-term gain to shippers and farmers, he said, but if it results in an uneconomical rail system and a run-down rail bed, that benefits no one in the long run.
Some shippers have characterized the report as being overly concerned with protecting railway profits, but the railways don’t see it that way.
“We don’t think it’s one-sided at all,” said Feeny. “The report quite clearly states there has to be a balanced approach.”
Asked if railways’ viability would be threatened by open access, Feeny said that can’t be answered until proposals are known and that’s why the panel’s decision to study it further is the right one.
