The federal government’s intervention in the CP rail strike affirms that rail shipping is vital to the Canadian economy, and that rail transportation of freight in Canada must be monitored and regulated, said Keystone Agricultural Producers president Doug Chorney.
“KAP has always expressed concern over the impact that rail transportation has on farmers,” he said. “Without any true competition, it leaves the agricultural economy – and the Canadian economy as a whole – vulnerable. It also allows the railways to be highly profitable relative to their investment, while offering poor service at excessively high freight rates.”
He noted that railway profits generated in this uncompetitive environment are the reason the government maintains the revenue cap program which limits the amount of revenue that can be made from transporting western Canadian grain. Unfortunately, the railways were recently allowed to change components of the formula that calculates this cap, clearing the way for them to hike grain-shipping rates.
“It is clear that all of these issues are symptoms of larger problems that will persist until there is true competition in the industry, or until the government steps up and forces the railways to respect the needs of their customers – and in this case, of CP employees, as well.”
KAP is urging the federal government not to view this strike as an isolated incident, but instead to take it in a larger context – and to begin immediately implementing the recommendations of the Rail Freight Service Review that were made in March of 2011.
“One of the most important recommendations from the review is a shipper’s legal right to a Service Level Agreement with the railways,” said Chorney. “The federal government indicated, at the time it announced the recommendations a year ago, that it would table a bill to give shippers the right to a service agreement – and this has not yet occurred.
“We depend on Ottawa to take measures to mitigate unfair practices by the railways – for farmers and for others who may be affected in the same manner.”
