MONTREAL — The federal government wants to pull more trade goods off trucks and put it onto trains and boats to meet Canada’s commitments to the Kyoto Treaty on Climate Change, the Montreal Gazette reported.
But some of Canada’s biggest industrial shippers are warning that won’t happen unless Ottawa puts more checks on the “monopolistic practices” of railways and reforms government- mandated marine services.
The Canadian Industrial Transportation Association, which represents 200 shippers, including major manufacturing, forestry and chemical companies, says federal transport officials have indicated that as trade volumes balloon in the future, they want much of that new goods traffic to shift to rail and marine transport.
Federal Transport Minister David Collenette confirmed the thinking on Tuesday.
“We have to do this,” he said. “It’s being done in Europe and more and more, it is being done in the U.S.”
However, Canada’s major shippers say they’ll continue to favour trucks unless rail providers in particular become more responsive.
“The fact is, the railways are difficult to work with because the current ‘checks’ to their duopolistic behaviour are ineffective,” the industrial transportation association said in a statement.
The association has a specific problem with the country’s two main railways: Montreal-based Canadian National Railway Co. and Calgary-based Canadian Pacific Railway Co.
Lisa MacGillivray, president of the association, said the railways continue to falsely bill their clients through what are called “accessorial tariffs,” costing some companies more than $1 million a year.
“When you start having aggregate bills over a year of $1 million in erroneous billings, that’s a huge problem.”
MacGillivray said the rail companies are slow to respond to customers.
“They’re great at putting out press releases when they do things well. But day-to-day, my members are saying that the problems continue. There’s just nobody watching over these guys.”
CN and CP charge the tariffs when shippers return the railways’ cars late, for example.
Canada’s federal regulator recently ruled the railways are not billing illegally. And the Canada Transportation Act Review Panel, an impartial body, said last year that the rail system is reasonably competitive and noted that rail rates have decreased by 40 per cent since deregulation began 15 years ago.
CN spokesman Mark Hallman noted that the trucking industry is subsidized because it doesn’t have to pay for its own infrastructure or pay taxes on it. CN wants a more equitable tax regime.
Since 1990, rail traffic in Canada has increased 30 per cent. Meanwhile, intermodal traffic – when rail companies move truck containers over rail lines – is the fastest-growing part of railroads’ business in Canada.
“CN tries to work with its customers the best it can,” Hallman said.
MacGillivray maintained the railroads are still abusing clients.
The shippers even suggest allowing trucking companies to use railway lines owned by CN and CP to move goods in order to boost competition. Federal regulators have rejected all attempts at granting such running-rights in the past.
Railways have lost significant market share to trucking companies in recent years.
Said MacGillivray: “The minister standing out there and saying, ‘OK, now everybody use rail again,’ that’s not really a solution.”