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In a March 20 address to the Canadian Club of Ottawa, Canadian National Railway Co. President and Chief Executive Officer Paul Tellier urged Canada’s government to adopt his railroad’s proposed road relief and shipper tax credit designed to lower shipper rates and divert 100 million tons of freight annually from trucks to rail.
The tax credit, which would target $160 million in annual fuel taxes already levied on Canadian railroads, also aims to reduce greenhouse gas emissions while saving Canada’s provincial governments $500 million annually in highway construction and maintenance costs.
CN wants shippers to receive government tax diversion credits as an incentive to move freight by rail rather than by truck. With more traffic moving on its rails, CN then would have the leverage to cut its rates — offering shippers an additional rail benefit.
Tellier also suggested that the Canada Transportation Act (CTA) review panel resist pressures to use the review process to fix Canada’s farm income crises brought on by a grain subsidy war between the United States and Europe.
"It’s a policy problem Canada has to address within the context of World Trade Organization and North American Free Trade Agreement rules," he said, according to a prepared statement.
The CTA review process also should not be used to reward "poachers" seeking forced access to CN’s and Canadian Pacific Railway’s mainlines, said Tellier, referring to OmniTRAX Inc.’s open access efforts in Saskatchewan and Manitoba.
"It would put the network at the disposal of those who did not build it, do not maintain it and who are not responsible for the service it provides," he said. "Forced access would divide between two carriers the revenues that already are marginal with just one carrier."
CN is working closely with Prairie Alliance for the Future (PAFF), a non-profit organization spearheaded by Brotherhood of Maintenance of Way Employes that’s planning to create a cooperative to operate 1,000 miles of CN grain lines in Manitoba and Saskatchewan.
"The PAFF example shows that there are many possible solutions to encourage short lines," said Tellier.