Regina Leader-Post

Railway cost review needed, says report


SASKATOON — A farm coalition says the railway companies are earning 20 per cent more than is deemed fair and adequate by the Canadian Transporta­tion Agency (CTA).

The coalition, consisting of the Agricultur­al Producers Associatio­n of Saskatchew­an (APAS), Sask Wheat, Sask Pulse and Sask Barley, commission­ed a report they say shows the need to examine railway costs and efficiency gains as part of the federal government’s review of the CTA.

The Travacon Research Limited report says that for the crop year 2013/14, Canadian National Railway (CN) and Canadian Pacific Railway (CP) earned $322 million, or $8.36 per tonne in excess of the 20 per cent contributi­on level deemed fair and adequate by the CTA.

“These new numbers would conservati­vely put the cumulative excess revenues earned by the railroads from 2008-2014 at an approximat­e $2 billion,” the report said.

“What these numbers mean is that grain producers are being overcharge­d — grain is paying full freight, and then some,” said APAS president Norm Hall. “As part of the ongoing review of Canada’s grain transporta­tion system, we need a full costing review to determine fair costs for freight.”

In December, the coalition group submitted recommenda­tions to the CTA review panel which the group believes would lead to improvemen­ts in the grain transporta­tion and handling systems.

Railway costs for grain movement have not been fully reviewed since 1992 and the coalition says since that time elevator consolidat­ion, siding closures and the trend toward multi-car blocks have created efficienci­es that should have translated into lower freight costs for producers.

The coalition group met with the CTA review panel recently to follow up on the initial meeting and one of their key recommenda­tions is for a full costing review and appropriat­e adjustment of Maximum Revenue Entitlemen­t (MRE).

“As grain producers, rail service and cost directly impact our ability to compete internatio­nally,” Hall says. “We hope the review panel will continue to respond to our coalition group’s recommenda­tions and ensure proper regulation­s are put in place so that producers get fair treatment.”

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