Good for ag sector | Bill C-52 will level the playing field between shippers and railways: shippers
To cheers from shippers and jeers from the railways, the Conservative government has introduced Canada Transportation Act amendments to strengthen shipper rights in dealings with quasi-monopoly carriers.
The legislation would give shippers the right to appeal for arbitration if a service agreement cannot be negotiated with a railway. The arbitration process would take 45 days with the possibility of a 20-day extension.
The arbitration decision, overseen by the Canadian Transportation Agency, would be binding and fines for not meeting the terms of the agreement could be as high as $100,000 per violation.
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The legislation, introduced to the House of Commons Dec. 11 and unveiled at a Winnipeg news conference by transport minister Denis Lebel and agriculture minister Gerry Ritz, follows a shipper lobby that spanned years, strong resistance from the railways and a four-year process of consultation.
With Parliament adjourned until late January, Bill C-52 will not be debated until this winter at the earliest and could be months from being enacted. It depends on the priority the Conservative government gives it when the House of Commons resumes sitting.
“Today our government is taking action to bring guarantees and predictability to rail service,” Lebel said.
Ritz said the bill and the potential for an arbitrated settlement should be an incentive for shippers and carriers to reach level-of-service agreements privately.
“This will be a strong tool for the agricultural sector,” he said, noting it is part of a series of government actions including an end to the CWB monopoly and reform of the Canadian Grain Commission.
Bob Ballantyne, chair of the Coalition of Rail Shippers, said the legislation will “provide a better balance for shippers in their negotiations with railways.”
It was more shipper-friendly than he had expected, he added.
Prairie agricultural commodity shippers praised the bill as a significant move to correct the “market power imbalance” between shippers and the two national railways.
Canadian Federation of Agriculture president Ron Bonnett called the bill a “good first step in improving rail service and costs to industry.”
Bonnett, along with the National Farmers Union, called for the government to take a next step and set up a rail costing review.
The railways have argued throughout the debate over rail service legislation that new regulations are not necessary because service performance has improved since discussion of possible legislation began in 2008.
Canadian Pacific Railway had the most muted response.
“CP has maintained there is no need for additional regulation between railways and shippers as it is the company’s belief that commercial undertakings coupled with a stable regulatory regime remains the best approach to support supply chain co-ordination and investment.”
Canadian National Railway warned that increased regulation could undermine the improvements that have been made.
And with that, Ritz and Saskatchewan Liberal MP Ralph Goodale found themselves on unaccustomed common ground.
“The railways have argued that service has improved at least in part because of a discussion going on about a legislative framework, which begs the question, if that discussion ends and there is no legislative framework, will all the service problems begin to re-emerge?” said Goodale.
Ritz was on the same page, seeing a connection between the threat of legislative action and railway improvements.
“As soon as the railways saw themselves under the lens, their service has stepped up exponentially,” he said.
“They’ve rolled up their sleeves and worked quite well with a lot of shippers who have signed contracts.”
Goodale said the Conservatives could have the new rules in place by spring if they give the legislation priority when Parliament returns.
