CN: Disturbed by Canadian Government Legislation

CN said it is disappointment with Canadian government legislation tabled today by Agriculture Minister Gerry Ritz and Transportation Minister Lisa Raitt to increase regulatory intrusion and oversight for rail grain transportation, and to introduce new rules for the extension of interswitching limits in the rail industry.

“CN is disturbed that the government has decided to punish railways with re-regulation for an outsized crop and winter conditions totally beyond their control,” Claude Mongeau, CN president and chief executive officer, said in a statement. The legislation does not address the root cause of the current grain situation and will do little to move more grain, now or in the future. We also have deep concerns about the potential consequences of the government’s proposed new interswitching rules.”

Interswitching involves the transfer of traffic from the lines of one railway to the lines of another railway. Currently, where a shipper is served by only one railway, the shipper is entitled to transfer its traffic to another railway at a regulated rate set by the Canadian Transportation Agency if the shipper’s facility (either at origin or at destination) is located any point within a 30-kilometre radius of where the two railways connect.

“The government is opening the door to extended interswitching limits for specific regions or goods without any due process to assess the potential consequences for railways and the Canadian economy,” Mongeau said. “This action could hit Canada’s railways by opening their business to unfair poaching by U.S. railways without any reciprocity. Beyond causing financial harm to CN, it could drain traffic away from Canadian ports and cause the loss of jobs, reduce investment and undermine tax revenues across Canada.”