Your Reading List

Editorial: Cell companies bad, railways good

Editorial: Cell companies bad, railways good

Just as there’s good stress and bad stress, there’s good excitement and bad excitement. There’s the good excitement you get when watching the Grey Cup, especially if you’re a Riders fan. Then there’s the other kind of excitement (as in riled up) you got watching this year’s Grey Cup commercials about how the Harper government is stomping on those big bad cellphone companies.

This follows the speech from the throne, in which we were told the government would defend citizens against those evil cable providers. Isn’t it nice to know that a “conservative” government that preaches the virtues of free markets and staying out of citizens’ business will pass an act of Parliament to let you subscribe to the Space channel without having to pay the full three bucks a month to get Spike, History and Bravo as well? And then use your tax money to tell you about it?

If you were a grain farmer watching the Grey Cup, it might have occurred to you that it seems odd that the Harper government has one attitude toward competition in the cellphone business, but another toward the railways.

Speaking to the Grain Industry Symposium in Ottawa last month, Agriculture Minister Gerry Ritz said he hasn’t seen any evidence that the railways aren’t performing. Apparently the grain companies reporting a weekly shortfall of between 1,000 to 2,000 cars isn’t evidence.

However, “I’ve asked (the grain companies) to keep me up to speed on what’s working, what’s not working, so I can flow it through to Transport Canada and directly to the railways to make sure they understand that we are watching.”

The reference to flowing through Transport Canada directly to the railways is particularly telling. Mr. Ritz may not be aware that in certain quarters, the joke is that Transport Canada is otherwise known as the railways’ unofficial lobbying office in Ottawa.

The minister is also a fan of removing the revenue cap on grain shipments, which would be the railways’ final victory in a long-running campaign to get absolutely everything their way. Perhaps it’s ancient history now, but some of us remember when the railways hinted if not outright promised that if the government got rid of the Crow rate, they might be able to afford to improve service. The railways also said they could improve efficiency by getting rid of all those old wooden elevators and all those branch lines.

So let’s go back to 1983-84, when there were 3,000 elevators, not 300, and most of the cars were boxes, not hoppers. In the final week of that year, Thunder Bay took off 9,672 cars, and Vancouver unloaded 3,000-plus. Back then, 5,000 unloads would have been a disaster. Today it’s considered a good week.

So the railways got what they wanted. The Crow is gone. The boxcars are gone. The branch lines are gone. The wooden elevators are gone. The wheat board is gone. But the railways are shipping half as many cars as they did 30 years ago. Their solution to improve things — and one apparently shared by Minister Ritz — is to get rid of the revenue cap so they can charge even more.

Did we mention that the revenue cap is set at a level to guarantee a profit, and is adjusted for inflation?

The theory behind this, by the way, is that by allowing the railways to charge more in total, they could raise rates at some points to encourage more efficiency in the system. When there are four elevators in Western Canada — one per railway at the foothills of the Rockies and at the Manitoba-Ontario border — perhaps the system will be sufficiently efficient from the railways’ point of view.

The wholesale deregulation of the system over the past 30 years was marked by a number of reports, many prepared with helpful support from the railways’ lobby office in Ottawa… er, Transport Canada. One of the last, by retired Supreme Court Justice Willard Estey, supported continued deregulation. However, it’s somehow been forgotten that he also made another recommendation to encourage competition, which was that the rail system be deregulated in the same way as telecommunications, and that there be joint running rights. In other words, anyone could start a railway and run it on CN and CP tracks.

Well, that didn’t happen, but the current government ad campaign tells us that it wants at least four cellphone companies competing in every region of the country — and sharing cell towers.

In kowtowing to the railways, the Harper government is only carrying a tradition followed by previous Liberal and Progressive Conservative governments. But never have we seen such a stark ideological contrast. You must have the choice of four cell companies, but two railways are enough.

About the author



Stories from our other publications