| WINNIPEG, Manitoba
WINNIPEG, Manitoba Oct 14 Canada's big railways
are pressing Ottawa to loosen rules around hauling the country's
crops, changes they say would improve efficiency but that
farmers fear would weaken their bargaining power.
A February report recommended that Ottawa institutes
transportation system changes, including phasing out a
16-year-old cap on revenue that Canadian National Railway Co
and Canadian Pacific Railway Limited earn
hauling western grain.
Transport Minister Marc Garneau has spent months meeting
shippers and railways, and has a last meeting Oct. 20 with
farmers. He will announce decisions this autumn, spokesman Marc
Railways struggled to move the huge 2013 harvest during a
harsh winter, angering farmers. The former Conservative
government imposed grain volume minimums and expanded
interswitching, the transfer of cars from one railway's line to
Expanded interswitching remains, while Ottawa removed
monthly grain minimums but kept the authority to impose them
Railways say the measures, including the revenue cap,
distort markets and offer less reason to invest.
"We can buy more modern cars, larger capacity cars if we let
the commercial process work," Canadian Pacific Chief Operating
Officer Keith Creel said in an interview. "Mistrust between the
railway and the farmer is going to have to be healed for that to
CP asked Ottawa to scrap the cap and eliminate expanded
interswitching, which allows U.S.-based BNSF Railway Co
to take certain Canadian shipments without adequately
compensating railways for using their railroad, Creel said.
BNSF declined to comment on compensation. The railway has
not made requests to Ottawa regarding interswitching, said
spokesman Mike Trevino.
CN wants Ottawa to move away from regulated grain volumes,
expanded interswitching and the cap, said spokeswoman Kate
Farmers fear they won't get fair treatment without the cap,
since nearly all 400 Western Canada crop facilities are served
by a single railway.
"There isn't competition in the system," said Ron Bonnett,
president of farmer organization Canadian Federation of
Grain companies want Ottawa to preserve interswitching,
which introduced needed competition, said Wade Sobkowich,
executive director of Western Grain Elevator Association, whose
members include Richardson International and Viterra
Canpotex, the offshore potash exporter for Potash Corp of
Saskatchewan, Mosaic Co and Agrium Inc
, wants equal treatment of commodities, and no
reinstatement of grain minimums, said Chief Executive Ken Seitz.
"We don't want the government to pick winners and losers,"
said Brendan Marshall, vice-president of economic affairs at
Mining Association of Canada, which includes Teck Resources Ltd
(Editing by Bernadette Baum)