CALGARY — The Alberta government — a champion of free enterprise — is on the wrong track in pushing for increased federal regulation of Canada’s railways, says Paul M. Tellier, president and chief executive officer of Canadian National.
According to a CN press release, Tellier said the adoption of the Alberta Department of Transportation’s call for broader regulated running rights would open the door to open access — a system where Ottawa regulators could force CN to open its track and customer base to rail competitors at regulated rates.
“Westerners would not put up with this kind of regulated poaching in the oil industry,” Tellier told the Calgary Chamber of Commercein a speech here. “But some in the agricultural community are willing to entertain the idea for transportation. Why? Because they have a long-standing grudge against railways.
“In some circles across the Prairies, there is a tradition of railway bashing … But the legacy of past conflicts must not blind us to 21st century realities. And the reality is this: the West has become competitive in a global marketplace, in large part, because it has one of the best rail systems in the world,” as a result of 15 years of rail deregulation.
“In the 21st century, competition is not just a matter of whether a community is served by two railways, or a railway and a highway.Competition is global. And when shippers and their railways compete globally, there is no need to change the regulatory systemto ensure competition locally. The demands of global competitiveness make the whole system competitive.”
Tellier said rail access agreements must – as they are today underthe current regulatory regime – be driven by commercial pacts “with rates that reflect the fixed costs, the variable costs and the lost opportunities” of the host railway. “Rates must be negotiated – not imposed by bureaucrats in Ottawa.”
Tellier said rail deregulation in Canada has revived the rail industry, generated the lowest rail rates in the world and ended hundreds of millions of dollars in government rail subsidies. The current deregulated environment also offers shippers effective remedies – remedies not available to shippers in the United States- in isolated incidents where market mechanisms are not as effective as they should be.
Tellier said deregulation has been key to CN’s ability to offer competitive rates and services to a range of Alberta industries, from producers of oil sands sulphur and petroleum coke by-products, coal and urea, to petrochemical producers in Fort Saskatchewan, Alta., which enjoy direct, single-line rail access to petrochemical centres in Sarnia, Ont., and Geismar, La., via CN’s North American network.
In addition, CN’s expedited transcontinental intermodal trains give Calgary and Edmonton shippers and receivers effective alternatives to long-distance trucking for high-value goods movingbetween the West and Central Canada.
Tellier said a deregulated rail environment is essential to CN’s plans for growth. One potential growth area for CN is the planned development of oil sands south of Fort McMurray, Alta., which are located much closer to the existing railhead in Northern Alberta.
“This opens new possibilities for rail to contribute to the development of the oil sands … CN would be interested in helpingimprove rail service to Fort McMurray” in cooperation with short line partners Lakeland and Waterways Railway, and the Athabasca Northern Railway. “I’m very open to any business case that makes rail service to the oil sands work for everyone involved.”
Canadian National Railway Company spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key cities of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.