Short lines feel ignored by new transportation bill

‘This does nothing for us and we have come here to Ottawa several times saying we need some help:’ short-line group head

The House of Commons transport committee is set to examine Bill C-49 clause by clause on Oct. 3.

Members were asked to submit possible amendments to the transportation modernization act by Sept. 28, and after a week of testimony from 85 witnesses, it’s likely there will be some.

Concerns about long-haul interswitching top the list and Perry Pellerin, who heads the Western Canadian Short Line Railway Association, would add something for his industry.

“As this bill is written right now, if you just look at it from a straight short-line perspective there’s nothing in it,” he told the committee during his testimony.

“This does nothing for us and we have come here to Ottawa several times saying we need some help. This isn’t helping us.”

He said short lines represent 24 percent of Saskatchewan’s track. The companies employ 183 residents and move $500 million worth of commodities.

Yet, Bill C-49’s provisions don’t allow short-line customers to access long-haul interswitching. Those rules required a rail company to pick up shipments along its track and deliver the cars to a competing rail company’s line.

Pellerin said ending the long-haul provisions that permitted interswitching of up to 160 kilometres allowed under the previous legislation, the Fair Rail for Grain Farmers Act, along with the disappearance of producer cars, has put short lines and their shippers in a worse competitive position.

Shipping by truck for distances less than 500 km is generally more affordable than rail, he said.

“We are cheaper than a truck,” he said. “The problem is when we give that car over to our Class A partners, they are unable to compete at that rate.”

For example, shipping a car on the short line for about 120 km from Leader, Sask., to Swift Current, Sask., costs about $650, or half the trucking cost, he said.

But handing that car over to Canadian Pacific Railway to take it to Moose Jaw, or about 175 km, costs $2,600.

Even multi-car rates differ by about $1,000 per car, he said, leading shippers to move grain by truck to inland terminals that can load larger trains.

The previous 160 km interswitching rules provided a stronger bargaining position, Pellerin added. Returning to a 30 km zone as existed before will make long-haul interswitching available to only two of the association’s 14 members. Rates will be too high, he said.

“It is our understanding that the intent of the long-haul interswitching was to increase competition by providing expanded options to shippers,” he said.

From a short-line perspective it won’t achieve that goal.

Transport minister Marc Garneau during his appearance before the committee said that short lines were consulted while Bill C-49 was drafted and their input is reflected.

“They are not subject to long-haul interswitching orders or the new data requirements as they were considered too burdensome for them,” Garneau said.

He said short-line railway concerns generally relate to infrastructure, which is beyond the scope of this bill.

“Short lines are eligible on the other hand to apply for funding under the national trade corridor initiative announced in July,” he said.

“We realize that they’re an important element of the transportation system; they’re just not covered in Bill C-49.”

Former Transport Minister Lisa Raitt noted that David Emerson, who led the Canada Transportation Act review, told the committee that shippers will be forced to use trucks and roads if short-line infrastructure and investment aren’t addressed.

She asked Garneau if the government would include short lines in a national rail plan.

“We are looking at that issue at the moment,” Garneau replied. “We’ll see what comes out of that.”

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