Forest industry to Government: fix rail service now

Oct. 14,
2010, Ottawa – The Forest Products Association of Canada (FPAC) is calling on
the Canadian federal government to act quickly and decisively on the problems
identified by the Rail Freight Service Review panel. Early in 2008, the federal
government committed to addressing the deficiencies in rail service to rural
industries. After two and a half years of process and deliberation, the
industry suggests that the time for action has come.

The interim report
from the Rail Freight Service Review panel correctly recognizes “there is a
need for change” and that “improvement in rail service is required”. It makes
several positive recommendations that would help address some of the service
inadequacies faced by Canadian shippers. However, the panel is relying on
Canadian National Railway and Canadian Pacific Railway to voluntarily bring in
the changes and says that the government should only consider regulatory
measures after 2013.

“Service is poor
because there is no effective competition,” says Avrim Lazar, president and CEO
of FPAC. “A delay is simply unacceptable and a deep blow to resource
communities in rural Canada that depend on rail shipping.”

He points
to the panel report that notes, “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.”

Most
resource shippers are located in remote regions of the country where only a
single rail company can transport their products. For the forest products
industry, most mills served by rail are captive to such a rail monopoly. The
government launched the review of rail freight service two years ago in
recognition of the need to create conditions to help Canada’s rural economy get
the necessary rail service to prosper. At the outset of the review process, the
forest products industry was assured that the government would act to improve
rail service at the earliest opportunity.

“From our
perspective, the government did the right thing in setting up the panel. The
panel did the right thing in making concrete recommendations for change. The
one thing that is terribly wrong here is the notion of deferring action for
another three years,” says Lazar.

View the Interim Report: www.tc.gc.ca/eng/policy/acg-rfs-review-examen-sfm-rvw-eng-442.htm.