Fair Rail Services Act Helps Ensure Jobs, Growth, and Prosperity

By: David Lindsay, president and CEO, Forest Products Association of Canada (FPAC)

The sound of the train whistle and the rumble of the railway tracks is the sound of money. Money on the move. Millions of dollars of product travels across this country by rail every day. The railway is important but the real value is in the products they are delivering.

In many small mining and forestry communities in Canada, the train is the only way to get natural resource products to market. As we increasingly sell our products to the international marketplace, we can and will create good jobs for Canadians in the forestry, mining and agricultural sector.

With new international customers demanding more products from Canada, the reliability of our railway system becomes even more critical. The forest industry is very dependent on rail. Delays in service, poor quality rail cars or missed shipments add cost. Inferior services and extra costs make our resource industries, and the small rural communities that depend on them, less globally competitive.

Many of the communities where our employees work are totally dependent on the railway to get their product to market. If the lumber or newsprint or pulp is late getting off the loading dock at the mill it will probably be late making it to port and might not get loaded onto the ship leaving for China or India.

The government recently introduced the Fair Rail Freight Services Act in Parliament. We believe this legislation, if passed, will help ensure jobs, growth and prosperity in our remote communities for years to come.

This legislation will help ensure a fair and balanced relationship between shippers and the railways by giving our forestry companies and other rail customers the right to service agreements and dispute settlement mechanisms along with significant penalties for non-compliance.

Why is this important? Well, right now many of our forest mills and many of the mines and other large commodity producers in Canada depend on one major rail supplier to move their product. This means all the power for the amount of service available and when and how it is provided is in the hands of the railway company. That is called a monopoly.

Think of a see saw in the children’s playground. The rail monopoly’s rights and privileges as the sole supplier of bulk transportation heavy weights one side of the see saw. This imbalance in the business relationship leaves the customers on the other side of the see saw up in the air.

Sometimes not enough cars arrive to move the product, sometimes the train is late or the rail cars are damaged or broken. Any of these problems can cause the railway customer or shipper extra costs or problems in serving their markets and their customers. This can mean lost business and lost jobs.

That is why we argue that the Fair Rail Freight Services Act will help the economies of our rural and remote communities. Shippers, such as forest product companies, have waited a long time for the government to take such action to help level the playing field between the railway companies and the shippers. That is why the legislation introduced just before Christmas needs to be passed as quickly as possible.

Fast-tracking the bill in the New Year will be a good way to help forestry companies and other shippers move towards a balance between themselves and the railway monopolies. This legislation by itself does not provide quality rail service. However, the power to hold the railway companies to a basic level of service will balance the business relationship and allow for fair business negotiation.

Rural communities should encourage their Members of Parliament to pass this bill as soon as possible to help the forest products industry and other shippers retain and create jobs for the benefits of workers and the entire Canadian economy.