The federal Conservative government has proposed changes it says are designed to protect shippers “from the potential abuse of market power by railways.”
Prairie shippers have hailed it as a significant gesture to appease traditional western grievances.
Amendments to the Canada Transportation Act tabled in Parliament by transport minister Lawrence Cannon would also respond to long-standing shipper demands that the government launch a full level-of-service review of railway performance within 30 days of the new rules being passed by Parliament.
The proposals, not likely to be debated in Parliament until MPs return from summer recess, would give shippers more power to launch complaints against the railways, allow shippers to complain in groups and reduce the standard of damage necessary to win a favourable judgment.
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Canadian National Rail said the proposals are unnecessary and go too far, but grain industry players that usually compete with one another lined up together to praise Cannon’s announcement.
“My first indication that the bill is a good one is when I heard that CN hates it,” Canadian Wheat Board commercial rail manager Jacqueline Cassel-Vernon said with a laugh. “Generally speaking, I see it as a positive step forward.”
Western Canadian Wheat Growers’ Association president Cherilyn Jolly-Nagel said the government proposal will give farmers tools to fight the power of railway monopolies.
“The proposed amendments go some distance to addressing the rail service issues that have plagued our industry and imposed costs on farmers.”
Agricore United government relations manager Cam Dahl, who appeared before a Senate committee in April on behalf of the Western Grain Elevator Association to plead for government action, said the proposals are overdue.
“We’re mostly pleased at the fact that we now actually have a bill to discuss,” he said. “That is the most important point, although the details obviously are important as well.”
A representative of CN Rail told Reuters News Agency that the legislation is an unnecessary regulatory intervention and “commercial forces should continue to rule the marketplace for transportation services.”
Cannon’s proposed Bill C-58 delivers on many of the points agreed to in negotiations between a western shippers coalition and Transport Canada on May 5, 2006 but not acted upon until May 30, 2007, with the legislative proposal.
Adjustments, requirements
Key elements of the Conservative plan include:
- Allowing groups of shippers to band together to complain about freight costs or conditions imposed by the railways, subject to final offer arbitration.
- Lowering the bar on the level of commercial harm expected before the Canadian Transportation Agency can rule in favour of a complainant.
- Increasing the notice period for rate hikes to 30 days from 20.
- Requiring the railways to publish a list of rail sidings where producer car loadings are possible and requiring a 60 day notice before those sidings can be removed and a car-loading site closed.
- Allowing shipper challenges of “incidental” service charges by the railways that can include passing on to farmers the costs of demurrage charges or cleaning rail cars.
Cassel-Vernon from the CWB said the proposed tighter rules on producer car sites are an important change.
“One of the real problems was the number of producer car sites being closed and the fact they could be there today and gone tomorrow,” she said.
Western Grain Elevator Association executive director Wade Sobkowich said the increased accountability proposed for the railways is important.
“Farmers and grain companies are held accountable to perform,” he said. “The railways are not required to perform to the same standard as grain shippers. This will become evident through a review of railway service and accountability, which must result in some material levelling of the playing field between shippers and railways.”
However, the level of service review will not start until Cannon’s amendments are approved by Parliament and an election within the next year could delay that.
Shippers said last week that they will suggest some changes to the bill but mainly they will urge that Parliament deal with it as quickly as possible.
