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CP challenging extended rail interswitching rules

(Dave Bedard photo)

Canadian Pacific Railway (CP) wants the courts to shoot down new federal rules that allow more Prairie elevators to move loaded grain cars on more than one railway, the Manitoba Co-operator reports.

The Canadian Transportation Agency rules, launched in tandem with the Fair Rail for Grain Farmers Act passed in May, are the target of an action filed recently with the Federal Court of Appeal by CP through Saskatoon lawyer Doug Hodson.

The rules, meant to improve grain traffic from Prairie elevators to West Coast and Great Lakes/St. Lawrence ports, extend the interswitching rights up to 160 km for grain and all other commodities moved by shippers in the three Prairie provinces.

Interswitching rules commit one rail carrier to pick up cars from a shipper, then deliver them to another railway for the line haul. The Canada Transportation Act had allowed shippers to use interswitching for only up to a 30-km radius.

Ninety-four per cent of grain elevators are served by just one railway and the 30-km limit allowed only 14 elevators in that service radius to make a deal with a competing rail line, be it in Canada or the U.S.

Extending the interswitching limit to 160 km, the government said this spring, brings the number of eligible elevators up to 150. The government emphasized at the time that the rules do not confer “joint running rights” to railways.

CP, however, contends in its recent court filing that extending interswitching violates the Canada Transportation Act and may impose up to $13.3 million per year in extra, unrecoverable costs on the railway.

The new CTA rules, CP said in documents quoted by Co-operator contributor Alex Binkley in the newspaper’s Sept. 18 issue, require the railway to “incur expenses in excess of the rates it receives.”

Asking the appeal court to impose a stay on the new rules, CP further claimed it doesn’t have capacity to safely handle the extended interswitching, “which may lead to congestion on the rail lines and thus negatively impact the efficiency of the rail network as a whole.”

The court documents allege the extended interswitching rules are politically motivated, arbitrary and beyond CTA jurisdiction.

CP also said that despite the government’s claims, the Fair Rail for Grain Farmers Act as passed included no clauses amending the Canada Transportation Act that would allow the CTA to extend interswitching.

The CTA, CP said, has found “no demonstrated need” in the past 27 years to extend the interswitching limit beyond a 30-km radius. “There is therefore no pressing policy concern that would weigh against granting a stay.”

CP also criticized the CTA for rushing the drafting of the new rules to meet the government’s wish of having changes ready for the start of the 2014-15 crop year on Aug. 1. — Network



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