OTTAWA – The people who carry grain on the Great Lakes fear that deregulated railways could steal their business.
Norman Hall, president of the Canadian Shipowners Association, said last week that the new Canada Transportation Act should be amended to prevent that from happening.
The association wants the Commons transport committee to amend the legislation so the railways are required to charge a minimum compensatory rate.
Such a rate would reflect their actual costs of moving a product to market and would prevent them from offering cutthroat prices to lure traditional business away from lake vessels.
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“One of our main concerns is the loss of the grain business,” Hall told the committee.
Harm to related businesses
Such a development would do significant harm not only for ship owners but also for the viability of the St. Lawrence Seaway, ports in Ontario and Quebec and other businesses which serve the shipping industry.
The marine industry is willing to compete for business with the rail companies, as long as there is a “level playing field,” Hall said, but given the amount of government investment and subsidy the railways have received over the years, that’s clearly not the case.
“We welcome railway deregulation and competition in Eastern Canada but not if there is going to be continuing government subsidy.”
Unfair subsidy
Hall added that the sale of 13,000 government-owned hopper cars for anything less than replacement value, which he estimated at about $1 billion, would constitute an unfair taxpayer subsidy to the railways at the expense of the privately owned marine industry.
Meanwhile, Canadian Wheat Board chief commissioner Lorne Hehn told the same committee he sees no reason to trust the railways to provide good service at reasonable rates in a totally deregulated environment.
“When I look to the U.S. and I see a system with a minimal amount of regulation, I get concerned,” he said, adding that Burlington Northern is currently moving record volumes of grain but is also charging record high premiums of $400 (U.S.) per car above the tariff rate for guaranteed service.
