April 2, 2015 – The federal government should not continue to unduly favour grain rail shipments at the expense of other sectors, which include forestry, mines and energy, according to a new C.D. Howe Institute report. In “Railroad Blues: How to Get Canada’s Rail Policy Back on Track,” author Benjamin Dachis argues that recent and potential future government intervention in the rail sector not only contradicts the principles of the Canada Transportation Act, but has the potential to hurt sectors critical to Canada’s economy.
“Moving products to worldwide markets is one of the most important domestic public policy topics for Canada’s energy and resources sector,” stated Dachis.
The federally regulated rail sector is critical for international exports by Canada’s energy and resources sectors. Almost $45 billion, or over half of the value of Canada’s $77 billion worth of rail exports, is comprised of energy and resources products.
Since the March 2014 decision by the federal government to prioritize grain rail shipments, moving Canada’s energy and resources products to worldwide markets has been a fraught issue.
The author argues that the ongoing Review of the Canada Transportation Act should recommend that the federal government not use its power to set minimum grain shipping levels in the future and let expire extended interswitching orders. The government should also eliminate the cap on revenues from grain shipments that rail companies can collect.
Dachis concludes: “The government should not put one sector ahead of another, otherwise it risks exacerbating system-wide congestion and harming key industries.”
The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. It is Canada’s trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review. It is considered by many to be Canada’s most influential think tank.
Click here for the full report.
For more information contact: Benjamin Dachis, Senior Policy Analyst, C.D. Howe Institute. Phone: 416-865-1904 Ext. 9997; E-Mail: kmurphy@cdhowe.org.