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Ritz Offers Railway Costing Review Compromise

Agriculture Minister Gerry Ritz says he would support a costing reviewing if it focused on all elements of the grain-handling and transportation system not just the railways.

But the first order of business for the Harper government remains dealing with the recommendations of the final report of the Railway Freight Service Review, he told the annual meeting of the Canadian Federation of Agriculture. It was presented to the government before Christmas and was expected to be released by the end of January.

Ritz said it will be made public soon. The challenge facing grain farmers and other western shippers is both the cost of transportation and the quality of service, he added. “A costing review has to be holistic, all the players have to be involved.”


He was answering a question from Lynn Jacobson of Wild Rose Agriculture Producers who said that service review won’t solve the current problems of western farmers. “Transportation is our biggest cost. We’ve paid out $1 billion in excess revenue during the last five years and we’ll pay another billion in the next four years unless changes are made.” He said the overpayment figures come from a study done for the Canadian Wheat Board.

He got a more positive answer from Liberal Leader Michael Ignatieff and a surprise boost from Avrim Lazaar, the head of Forest Products Association of Canada. He began a presentation on dealing with environment groups by tearing a strip off CN and CP.

Ignatieff said that last costing review was done in 1990 and it’s time for the government to deal with “a festering problem. It would be appropriate to have a costing review. The review could look at all the numbers and listen carefully to all the parties and figure out what’s going on.”


Lazaar, a leader in the shipper movement that coaxed the government into the service review, said, “Canada needs a rail system that works for rural Canada rather than just for the shareholders. The federal government doesn’t regulate the railways closely enough to foster competition.”

Canadian exporters face stiff international competition, he added. “We don’t have a monopoly like the railways have.” Eighty per cent of the forest products mills are captive to one of the carriers.

He urged the CFA to join shipper groups in sending a strong message to the Harper government to get tough with the railways. “We cannot afford railways not under the discipline of competition or regulations.”


Jacobson said data from Quorum Corp., the grain transportation monitor, says CP has fallen way behind in moving grain from the southern Prairies this winter.

“We need federal help in getting to the bottom of this,” the southern Alberta farmers said in an interview later. “CP is 4,400 cars behind on its delivery commitments this year. The high prices for grain aren’t doing anything for us because the grain is sitting in terminals waiting to be moved by the railways.

Mark Hemmes of Quorum Corp. said in an interview that Jacobson’s figures were not correct. “We do not and have not published numbers like that.” Earlier in the winter, CP had fallen behind in moving grain cars. “At one point it was getting up there but they caught up and right now they are on track to clear it up totally.”

Jacobson wasn’t opposed to the idea of a broad costing review but he was worried that without the spotlight on them, the railways would twist the review to their benefit. “We could get lost in a big-picture view.”

His goal for now is to get every farmer to contact their MPs to lobby for a costing review.

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