MONTREAL — CN today said Transport Minister David Collenette’s transportation vision for Canada misses an opportunity to further deregulate the nation’s world-leading rail transportation system.
Collenette introduced his transportation statement, Straight Ahead – A Vision for Transportation in Canada – today in Ottawa.
E. Hunter Harrison, president and chief executive officer of CN, said: “Canada has the best rail transportation system in the world – the lowest freight rates, the best service, and the most efficient operators in CN and CPR as a result of an enlightened policy of rail de-regulation since 1987.
“The minister’s vision document fails to build on these strengths, and it fails to further de-regulate the grain transportation sector.”
CN said it is concerned that the vision paper recommends that a regulated connection rate (RCR) provision be incorporated in the Canada Transportation Act (CTA). A RCR – a regulated rate for moving goods over an originating railway to an interchange point for transfer to a connecting railway – would be an unprecedented regulatory measure, replacing the Competitive Line Rate under the current CTA regime.
Harrison said: “There is no need for a RCR, given the conclusions of the Canada Transportation Act Review Panel – a panel established by the minister – that effective rail competition in Canada produced a 26 per cent decline in freight rates over the past decade, and that Canada’s railways are neither anti-competitive nor do they abuse their market position. The RCR risks putting the rail industry on a path toward re-regulation and may ultimately lead to unfair treatment of the railways.
“Of equal concern is the fact that RCRs would not be reciprocal – shippers in Canada could use them to access U.S. railroads, but there would be no comparable right for U.S. shippers to access Canadian carriers. This could confer unfair and unwarranted advantages on our U.S. competitors.”
CN also expressed concern about the minister’s plan to remove the “substantial commercial harm” test that shippers must satisfy to qualify for regulatory relief in certain situations. The removal of this test would invite shippers to resort increasingly to the regulator, rather than a commercial agenda, on rate- and service-related issues.
“This is not the right approach,” Harrison said. “Even the minister’s CTA Review Panel said government transportation policy should be driven by market forces and that regulatory intervention should be a very last resort.
“CN will make its views known fully to the minister and will participate actively in the continued evolution of his transportation vision document and in the legislative process that will follow.”