Winnipeg Free Press - PRINT EDITION

Bill aims to protect shippers

Federal legislation intends to ensure fair treatment from railways

  • Print

The federal government tabled long-awaited legislation on Tuesday designed to ensure all shippers are treated fairly by Canada's largest railways.

The Fair Rail Freight Service Act, which was announced in Winnipeg by Transport Minister Denis Lebel and Agriculture Minister Gerry Ritz, was hailed by spokesmen for farmers, grain handlers, oil and gas companies, and pulse-crop growers as an important step forward in levelling the playing field for shippers who have long complained of poor service from the country's major railways -- Canadian National Railway and Canadian Pacific Railway.

"It is definitely a step in the right direction," said Jean-Marc Ruest, vice-president of corporate affairs and general counsel for Canada's largest privately owned grain company -- Winnipeg-based Richardson International.

"It's nice to know there are tools available now to bring railroads to the table and to ensured everyone's interests are respected and that it's a balanced approach," added Keystone Agricultural Producers president Doug Chorney.

The government launched a review in 2008 to address complaints by shippers about Canada's rail freight service. A preliminary report found overall rail freight service was inadequate, in part because of a power imbalance between the country's two large railways and hundreds of shippers. If a railway didn't want to deal with a shipper, there was nothing forcing it to do so.

The new legislation attempts to address that imbalance by guaranteeing shippers the right to negotiate a service agreement with a railway. If an agreement can't be reached within 30 days, they can ask the Canadian Transport Agency to appoint an arbitrator who will impose a binding, non-appealable agreement on the two parties.

The arbitration process will have a 45-day timeline but can be extended for up to 20 days. Railways can face penalties of up to $100,000 for each violation of an arbitrated agreement, as well as other existing remedies provided for in the act.

The proposed legislation is now be reviewed by a parliamentary committee and must be approved by the House of Commons and Senate before becoming law. It's not known how long that process might take.

Lebel told reporters the legislation will enhance the effectiveness, efficiency and reliability of Canada's rail system.

"The railway-shipper relationship is vital to Canada's economy as a whole because when shippers can move more volume this means more exports, more revenue and, for sure, more Canadian jobs," he added.

While shipper groups welcomed the government's intervention, Canadian National was quick to condemn it as an unnecessary intrusion that puts the country's economic growth at risk.

"Such an approach would stifle innovation, chill the positive service momentum that's taken hold and result in potentially unintended consequences for the rail industry and the customers we serve," said CN president and chief executive Claude Mongeau.

Mongeau said there is no evidence of systematic rail service performance problems in Canada that warrants Ottawa's intervention.

"The objective fact is that Canada has a world-class rail system, one known internationally for efficiency and reliability -- a key asset for a trading nation like Canada -- and that reflects a well-functioning market for rail services," he said.

Canadian Pacific said the best way to improve the country's "world-class rail supply chain" is through commercial undertakings, better traffic forecasting and more certainty on traffic volumes.

CP Rail CEO Hunter Harrison said the railway has been implementing earlier recommendations, including a service agreement template and a commercial dispute resolution process.

"As such, we are confident strong commercial relationships will continue to emerge with little need for the processes described in the legislation," he stated.

Lebel agreed rail service has improved since the government review began.

He said the new provisions are designed to build upon that success and help solidify the gains that already have been made.


-- with files by Canadian Press

Republished from the Winnipeg Free Press print edition December 12, 2012 B4

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


Selinger addresses stadium lawsuit

View more like this

Photo Store Gallery

  • A  young goose stuffed with bread from  St Vital park passers-by takes a nap in the shade Thursday near lunch  –see Bryksa’s 30 day goose challenge Day 29-June 28, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Young goslings jostle for position to take a drink from a puddle in Brookside Cemetery Thursday morning- Day 23– June 14, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos


Are you concerned about the number of homicides so far this year?

View Results

Ads by Google