OTTAWA — The Canadian Transportation Agency is expected to rule soon on two cases that could have significant implications for the country’s major railways, the National Post reports.
Both cases involve questions of so-called “competitive access,” and whether third parties should be granted running rights to use lines owned by Canadian National Railway Co. or Canadian Pacific Railway Co.
“I honestly think these two are going to set precedents for the future of rail policy in Canada,” said James Nolan, a specialist in agricultural economics at the University of Saskatchewan.
The first case, for which a ruling could come within days, involves a Saskatchewan specialty grain shipper, Naber Seed & Grain Co. Ltd. It first complained to the CTA several years ago that CN was not providing enough cars. At hearings held in January and February, it proposed that short-line railway OmniTrax Canada Inc. be allowed to use CN’s lines to bring in additional cars.
In the second case, Ferroequus Railway Co. Ltd. of Edmonton is looking for permission to use CN’s lines to carry grain from Camrose, Alta., to Prince Rupert, B.C. A hearing began in April and the CTA is currently deciding the case.
Although railways have reached voluntary agreements in the past to share track, there has never been an instance in Canada where the regulator has granted running rights.
Both CN and CPR vigorously oppose the concept and refer to “competitive access” as “forced access.”
Mark Hallman, a spokesman for CN, said yesterday he could not comment with a ruling pending. But he repeated CN’s position that opening the company’s lines would cause inefficiency, drive up costs for shippers, create potential safety hazards and make it harder for CN to find capital.
“We see it as the wrong way to go. It would inject all kinds of inefficiencies into the system,” he said, noting the railway has proposed alternate remedies in the Naber case.
CPR has expressed similar concerns about access questions.
Mr. Nolan, who testified on behalf of Naber Seed, said the railways also fear smaller railways and possibly even large U.S. railways will attempt to use running rights to steal high-value traffic on CN’s and CPR’s lines.
After a year of review, a special panel studying the Canada Transportation Act endorsed the idea of running rights and even suggested they be broadened. At the same time, though, it cautioned that such rights should be granted only in extraordinary instances where the incumbent railway’s service is inadequate.
Mr. Nolan said he expects the agency’s decisions will be incorporated into a new transport act the federal government is expected to introduce later this year. Its rulings may also be adopted by U.S. legislators who are grappling with similar issues.