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Letter to MP's and MLA's
Dear Sir,
The Producer Car Shippers of Canada is a broad based producer organization whose mission is “to ensure the rights of farmers to load producer cars is maintained, protected and enhanced”. The organization is funded and directed by grain producers from Alberta, Saskatchewan and Manitoba.
The Producer Car Shippers of Canada objects to Canadian National Railway’s recent initiative to delist fifty Public Producer Car Loading Sites. We also wish to point out the importance of producer cars as they relate to Short Line Railways and how CN and CP are able to use flaws in the Rail Transportation Legislation to discourage Short Line development and encourage abandonment.
The producers’ right to bypass the primary elevators by ordering their own railcar for shipping grain to port was enshrined in legislation over one hundred years ago as a competitive alternative for producers. Producer cars have always acted as a safety valve to counter the powerful railway/grain company alliances. This right is especially relevant today because it is only through the recent increased use of producer car loading that Short Line Railways have been created on the Canadian prairies. It is worth noting that unlike CN and CP, Short Line Railways welcome and promote the use of producer cars.
The present legislation regarding designated public producer car sites and rail siding removal enables CN and CP to unilaterally create the conditions for an unviable Short Line prior to initiating the legislated discontinuance process. They can trump the intention of the existing rail abandonment process which is to enable the creation of Short Lines Railways where commercial potential exists. It is true there are some branch lines on the prairies that do not have Short Line potential, however there are many that do have potential. Unfortunately for producers and municipalities who are seeking a Short Line alternative to expensive trucking and high road impact costs, the present legislation permits CN and CP to demarket a branch prior to initiating the discontinuance process thus doing an end run around the intention of the legislation. One glaring method that CN and CP use to force grain to the main lines thus demarketing the branch lines is by offering rebates to the large mainline terminals that far exceed the efficiencies gained at these terminals. Properly drafted railway legislation should attempt to cause normal competitive behavior and not allow CN or CP to unilaterally pick winners and losers through predatory pricing.
In order to remedy these problems the Producer Car Shippers of Canada requests that the Federal Government take the following measures:
1 - The government, not the railways must designate sufficient public producer car sites on the prairies so that producers have access to this competitive alternative within a reasonable hauling distance. This will ensure that the producer car legislation continues to act as an effective safety valve by injecting a level of competition.
2 - The Government must not permit the railways to remove or disable rail sidings prior to or during a discontinuance initiative because these actions can predetermine the commercial viability of a potential Short Line Railway.
3 - The Government must instruct the Canadian Transportation Agency to initiate a Railway Costing Review. A costing review will confirm that the railways are paying multi-car incentives to the large terminals on the main lines that far exceed the actual efficiency gains.
4 - The Government must not allow the railways to claw back from producers the multi-car incentives paid to grain companies. The railways are wrongly allowed to claim the multi-car incentives as a revenue cap deductible expense which effectively enables them to increase freight rates without exceeding the revenue cap.
Respectfully yours
Brent Running, President
Producer Car Shippers of Canada
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