CALGARY — Alberta’s attempts to force Canada’s main railways to open up their tracks and customer base to competitors is misguided, Canadian National president and CEO Paul Tellier said Thursday in a speech.
The Canadian Press reported that Tellier used his speech at the Calgary Chamber of Commerce to take a swing at the provincial department of transportation which, he said, is asking Ottawa to intervene and re-regulate the rail industry.
“Westerners would not put up with this kind of regulated poaching in the oil industry,” Tellier said.
“But some in the agricultur al community are willing to entertain the idea for transportation. Why? Because they have a long-standing grudge against railroads.”
Tellier said Alberta Transportation, in a submission to the Canada Transportation Act review panel, wants the access to tracks opened up to encourage competition among railway companies.
Rod Thompson, an executive director with Alberta Transportation in Edmonton, said the submission asked only that the federal government evaluate the concept of opening up rails to other companies.
Thompson said shippers consulted by his department have also given their own submissions to Ottawa “and they’re much stronger — the position that we put forward is a compromise.”
Alberta Transportation shares the concern about long-term viability of rail transportation, he said.
“We need the railways here, because we’ve got grain, coal, sulfur, and forest products to move — all the things that they’re the best at and we need them to be here,” Thompson said.
But Tellier said competition is not just a matter of whether a particular community is served by two railroads. He said competition must be viewed on a North American and global scale.
“When shippers and their railroads compete globally, there is no need to change the regulatory system to ensure competition locally,” said Tellier. “The demands of global competitiveness make the whole system competitive.”
Canadian Pacific spokesman Len Cocolicchio said Tellier’s comments were “exactly what we’ve been saying for at least a year.”
And he said opening up rail lines to independent companies would trigger “cherry picking” of the more lucrative routes by Canadian and American companies.
That would not be healthy for the long-term health of the Canadian rail industry, he said.
Though Montreal-based CN and Calgary-based CP are regularly rated the most efficient among North America’s seven remaining large railroads, they are much smaller that U.S. giants Union Pacific and Burlington Northern.
“Therefore the policy framework in which we have to work is very, very critical,” said Tellier.
Despite being based in Montreal, Canadian National has a large presence in Alberta with more than 2,000 employees, nearly 2,600 kilometres of track and five shortline railway partners.
And Tellier said he was very interested in getting involved in a rail line up to the booming northern Alberta oilsands, past Fort McMurray, potentially with an independent short-line railroad.
“But in order to do this, we need to remove the climate of uncertainty that exists,” he said.
Tellier’s strong words against so-called open access of rail lines comes just one day after CN issued a profit warning due to this year’s drought in western Canada and the expected disastrous crop.
CN said Wednesday it expects revenues from grain to fall an estimated $170 million this year amid reports that the crop will be 50 per cent below its five-year average.
CN’s shares (TSX:CNR) had a rough ride on the Toronto stock market, dropping $4.08 to $61.20. CP Rail’s shares (TSX:CP) fell $2.30 to $29.70.