Canadian Mining Journal

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TRANSPORTATION: MAC says feds fail at railway oversight



OTTAWA – The Mining Association of Canada is disappointed and frustrated by the federal government’s failure to protect captive users from price gouging by Canada’s railways.

The mineral industry is the single largest customer group of this country’s railways. Mining accounts for 19% of the total value of Canadian exports and over half of the total rail freight revenue generated each year. The problem is that many shippers, including mining companies, are captive to one railway and its rates.

The problem came to a head when the Minister of Transport refused to accept a Senate amendment to Bill C-49, which makes changes to the Canada Transportation Act. The amendment was introduced by Senator Rosa Galvez, and it related to Final Offer Arbitration (FOA). FOA is the only remedy available to captive shippers seeking to pay rates more like those that would prevail in a competitive transportation market. The amendment would have increased data transparency in the FOA process.

The amendment was supported by all but one  member of the Senate Transport and Communications Committee as well as a coalition of eight captive shipper industry associations.

Said MAC president and CEO Pierre Gratton: “The effectiveness and reliability of rail freight service is critical to Canada’s mineral investment competitiveness, and this move by the government will diminish that competitiveness. How many mill closures and job losses, lost customers and abandoned investments will it take before a Minister of Transport and his or her department recognize that their oversight of Canada’s railway system is failing.  Despite a commitment to ensure that our industry remains competitive, the government has failed to modernize the Canada Transportation Act in a way that balances the interests of shippers and railways and ensures that our wealth and job creating industries are protected from the railway’s unbridled market power.”

He may be contacted via the MAC staff area at www.Mining.ca or by calling 613-233-9392.