Rail Shippers Approve Government's Commitment to Legislation

Ottawa, Ontario, Canada: The Coalition of Rail Shippers (CRS) is grateful that the Minister of Transport, Denis Lebel, has reconfirmed the government's intention to bring in legislation on rail service following the release of the Dinning report.

The Minister reiterated his commitment to introduce a bill which would give shippers the right to service agreements with the railways and provide a process to establish such an agreement should commercial negotiations fail. Jim Dinning had been asked by the government to try to facilitate discussions between rail customers and the major railways to develop service level agreements and dispute resolution templates that could be used in direct negotiations between individual shippers and their rail carriers.

"The CRS appreciates the efforts of Mr. Dinning in leading the face-to-face meetings between the railways and a diverse range of railway customers over a five month period," said Bob Ballantyne, chair of the CRS. "From our perspective, the government did the right thing in establishing the facilitation process. Unfortunately, despite the best efforts of Mr. Dinning and his team, this process failed to deliver."

Railway customers, big and small, spend several billion dollars on rail freight services each year. Many resource-based rail customers are captive to the virtual monopoly power enjoyed by the railways. This unacceptable imbalance of power has led to inadequate service which impacts the competitiveness of Canadian businesses and their ability to serve export markets.

The Federal Government's own Rail Freight Service Review report, tabled in March 2011, stated that: "the major cause of rail service problems is railway market power, which leads to an imbalance in the commercial relationships between the railways and other stakeholders."

"Now that the Dinning facilitation process has been completed, we are pleased that the government is preparing to table legislation to ensure balanced negotiations with the railways, supported by timely and effective dispute settlement in case of a dispute between railways and their customers," continued Ballantyne. "Rebalancing the commercial framework will encourage real commercial negotiations between the railways and their customers."

The Coalition of Rail Shippers is comprised of 18 industry associations, representing broad segments of Canadian industry. The companies represented by the CRS account for over 80 percent of the revenues of Canadian National and Canadian Pacific.