Recommended changes to the
Canadian Transportation Act
Second Submission
of the
National Farmers Union
to the
Canada Transportation Act Review Panel
December 8, 2000
Preface
The National Farmers Union (NFU) welcomes this opportunity to expand on its October 6, 2000 submission to the CTA Review Panel. Because it is a national, voluntary organization of farm families, the NFU is well-positioned to place before the Panel farmers' interests within the grain handling and transportation system.
The current farm income crisis--coming as it does alongside healthy profits for input manufacturers, food processors, retailers, and railways--indicates that Canadian agricultural and transportation policies are failing to maintain a proper balance of interests in the agri-food sector. Government policies and inaction, on the one hand, and increasing agri-business market power, on the other, have created a farm income crisis within an agri-food chain where the firms that dominate every other link enjoy large profits. Ironically, the farm income crisis occurs within an agri-food production chain awash in money.
In failing to address this imbalance in power and profit, grain handling and transportation policy, including the Canada Transportation Act (CTA), have become significant contributing causes to the farm crisis, the decimation of rural communities, and the destruction of rural economies.
This CTA Review comes at a time of unprecedented railway and grain company efforts to take control of Canada's grain handling and transportation system. Over the past five years, and seeming to intensify every year, grain and rail companies have pressured for a "commercial" system which would expel farmers and their marketing agency, the Canadian Wheat Board, from the grain handling and transportation system.
While grain and rail corporations claim that a commercial system would be to the benefit of all, farmers have good reason to doubt this. That grain and rail companies are pursuing their own interests, not farmers', is clearly demonstrated if one looks at accelerating branchline abandonment, elevator closure, their opposition to farmer ownership of government hopper cars, and the failure of the grain companies to pass on to farmers more than a fraction of the $178 million cost reduction contained in this past summer's reform package.
We hope that the Review Panelists will have the courage, wisdom, and independence to propose recommendations which lower system costs and increase system efficiency and capacity, but, most important, that lower farmers' costs, protect our equitable access to the system, and that restore and protect the critical balance of power within the system so that farmers can protect their interests in the future.
Recommended changes to the Canadian Transportation Act
Second Submission of the National Farmers Union
to the Canada Transportation Act Review Panel
December 8, 2000
Introduction
The key fact that the CTA Review Panel must keep in mind is:
Even if government does implement complete or limited open access, "managed access", or other competitive access measures, it is almost certain that the vast majority of grain delivery points will remain captive to one railway.
Further, meaningful competitive access, if it comes, will take years to legislate and implement and it will be several more years before real competition develops at a significant number of grain delivery points. It is highly unlikely that farmers will see effective railway competition at a significant number of points within the decade.
Because of this, while the CTA must enable and foster competitive access, it is even more important that the Act expand protections for captive shippers and continue to regulate railways which, for most farmers and shippers, will retain monopoly or duopoly power. Competitive access is no panacea: It must be pursued in tandem with measures which increase protection for captive shippers.
To improve competition, protect shippers, provide fair and affordable rates to farmers, and ensure access and service, the NFU recommends that the government amend the Canada Transportation Act to include the following:
As noted in our October submission, none of the measures recommended above are inconsistent with open access, managed access, or other competitive access regimes. To the contrary, such measures expand, complement, and enhance competitive access. Most important, these measures provide protections to many farmers that will remain captive to one railway. The following section details each of the NFU's recommended amendments to the CTA.
Farmers need the right to purchase railway sidings for salvage value.
Railways are closing and tearing up railway sidings at an alarming rate. On August 1, 2000, CN removed 82 sidings from its rates scale. It has since removed 20 more. CN is quickly dismantling many of these sidings. CP is acting likewise. By de-listing, destroying, or raising minimum train run requirements, CN and CP are moving quickly to reduce the number of sidings where farmers can load producer cars.
The Canada Grain Act guarantees farmers' right to load producer cars. This right can be an effective check on the power of grain companies. If grain companies raise handling and elevation tariffs too high, farmers need only exercise their right to load producer cars and, thus, bypass the grain companies and exert significant downward pressure on tariffs.
While farmers still retain their right to load producer cars, they are losing their effective right to do so. It becomes impossible to exercise such a right if the nearest siding is 50 or 100 kilometers distant. While it is feasible to drive farm grain trucks and augers and tractors to power augers 10 or 20 kms to load a producer car, it is not feasible if the car is spotted 50 kms away. Farmers' trucks simply cannot make enough trips quickly enough. Because of the uncertainty over when producer cars will be spotted, it is also nearly impossible to schedule large commercial trucks to haul the grain.
Another way that railways are depriving farmers of their effective right to load producer cars is by raising rates significantly for single-car spots and reducing rates for 50 and 100 car spots. By doing this, the railways can capture most or all of the savings that farmers might see from bypassing grain companies. This neutralizes the producer car as a check on grain company tariffs and power. Please see the section of limits on rate differentials, below, for more detail on what is needed here.
By withdrawing the rail network farther and farther from many farms, branchline abandonment is already having a corrosive effect on farmers' effective right to load producer cars. That effect is compounded, completely unnecessarily, when railways close or destroy sidings on lines not slated for abandonment.
Farmers are losing their effective right to load producer cars and, thus, they are losing their check on grain company power. This is happening at exactly the same time that elevator closure is reducing competition at many points and, in effect, increasing grain company power. This combination of factors will increase farmers' costs and nullify a right that producers have enjoyed since 1902. If the CTA was created for any purpose, it was surely for the purpose of protecting such vital and long-standing rights.
Farmers must enjoy continued access to the nearest possible railway sidings. To facilitate this, the CTA must curb a railway's ability to de-list or destroy sidings. The best way to do this is to amend the CTA to require railways to sell sidings at salvage value (approximately $20,000 per siding).
Requiring railways to sell sidings is not sufficient if the buyer is a grain company or another user which may deny farmers use of the siding. Even selling to one farmer or a group does not ensure that all farmers will enjoy continued use of a siding. Further, having hundreds of owners of hundreds of sidings across Canada could pose safety concerns. Sidings should be offered for sale to interested municipal, provincial, or federal governments in much the same way that branchlines are offered currently.
Finally, some sidings have already been torn up. The CTA must give farmers or other parties the right to build sidings where they are needed.
The NFU recommends that the CTA be amended to include provisions that require railways to sell sidings to interested governments for salvage value.
Further, the NFU recommends that producer cars continue to receive priority in the car allocation process and that all other necessary safeguards be introduced to ensure that farmers continue to enjoy the effective right to load producer cars.
Finally, the CTA must establish a process whereby farmers and others can obtain permits to build sidings along railway lines.
Farmers need a productivity-gain sharing adjustment mechanism
Bill C-34 and the federal government's May 10 transportation reform package terminated the Rate Cap and replaced it with a railway Revenue Cap. In so doing, they also reduced annual railway revenues $178 million below what they would have been in the 2000/20001 crop year. That $178 million dollars was not a railway gift to farmers.
Because of a lack of costing reviews or productivity-gain sharing mechanisms since 1992, and because there has continued to be an inflation-adjustment mechanism, farmers have watched their freight rates rise farther and farther above fair and reasonable cost-based levels. While rates have adjusted upward to account for inflation, they have not been adjusted downward to reflect increases in railway productivity resulting from more fuel-efficient locomotives, branchline abandonment, the elimination of cabooses, or sweeping staff reductions. By 2000, railway revenues were approximately $200 million annually above where they would have been had costing reviews continued or had productivity gains been shared with farmers through some other mechanism.
The recent $178 million reduction in annual railway revenues was needed because of a flaw in the CTA--the omission of a productivity-gain sharing mechanism. Between 1992 and 2000, that flaw transferred approximately $700 million from farmers to railways through inappropriately-high freight rates. Bill C-34 did nothing to correct this flaw. Hence, freight rates have once again begun to rise above railways' actual costs and, over the next decade, the CTA will wrongfully transfer over a billion dollars from cash-strapped farmers to highly-profitable railways. (1)
The National Farmers Union recommends that the CTA be amended to include productivity-gain-sharing mechanisms. Like the inflation-adjustment mechanism currently operating within the CTA, productivity adjustments could be based on Agency estimates and need not require a full Costing Review.
While the recent $178 million annual railway revenue reduction seemed to return to farmers a share of annual railway productivity gains, the reality seems to be that farmers will only see a small portion of that $178 million. This is contrary to the clearly-stated intentions of the government.
In a June 16 letter to the NFU, Minister responsible for the Canadian Wheat Board, Ralph Goodale, commenting on the transportation reform package, stated:
The promise was clear: farmers would see their freight rates decline an average of $5.92 per tonne below proposed 2000/01 levels and $4.47 per tonne below actual 1999/00 levels ($4.47 is $5.92 minus the scheduled $1.45 CTA increase for 2000/01).
If the reform package delivered promised savings, farmers hauling grain today would see freight rates which are an average of $4.47 per tonne below those they paid last year. Anecdotally, this is not the case. Many farmers have reported rate decreases at high-throughput, mainline elevators of less than $2.00 per tonne compared to last year. Since we can assume that rate reductions at wooden elevators that load only a few cars at once will be below the $4.47 average, we would expect rate reductions at large concrete elevators that load 50 or more cars will be significantly more than the $4.47 per tonne average. CN has announced multi-car loading incentives of $4 per tonne on 50-car blocks and $6 per tonne on 100-car blocks.
It is almost certain that CN and CP will meet their legislated revenue caps. It is also certain that a large portion of the required revenue decreases will take the form of multi-car loading incentives paid by railways directly to grain companies. And it is very likely that grain companies will pass on only a portion of these loading incentives to farmers, pocketing a significant portion for themselves.
Thus, when examining the question of productivity gain-sharing with farmers, CTA Review Panel members should not be reassured by the $178 million annual reduction in railway revenues: only a portion of this reduction is being passed back to farmers. Thus, from a farmer's perspective, freight costs remain far above reasonable, cost-based levels and inflation-adjustment mechanisms will drive those costs higher still. Real, effective productivity-gain sharing mechanisms are urgently needed that put savings in farmers' pockets.
Farmers need limits on rate differentials within the Revenue Cap
As amended by Bill C-34, the CTA and its new Revenue Cap limits only the rate differentials between single-car rates on branchlines and single-car rates on mainlines. The CTA and Revenue Cap do not limit differentials between single-car (and small-block) rates and multi-car rates. Thus, a farmer near a wooden elevator (which loads only five or ten cars) on a branchline may face rates ten or twenty percent higher than rates at a large mainline elevator.
By using such rate differentials, railways can drive grain from wooden, branchline elevators to the mainlines. This unrestricted power will allow railways to restructure the branchline and grain collection network to serve their interests. It will accelerate branchline abandonment, threaten the future of communities, increase farmers' costs, and increase road repair costs for all Canadian taxpayers.
In addition, the absence of rate differential limits gives railways the power to charge more for high-value crops such as canola or lentils. And it gives them the power to charge more during peak sales and shipping periods. Railways could use these two "flexibilities" to capture a significant portion of the price premiums that currently go to farmers.
Unrestricted variability in rates from point to point, from crop to crop, and from month to month means that the rate reductions for individual farmers will be extremely uneven: some currently face increases. Further, those who have seen decreases are seeing those savings eaten up by increases in trucking and other costs.
Freight rates must be generally distance-based. The NFU recommends that the CTA be amended so that rate differentials--on single-car versus multi-car loading and on mainlines versus branchlines--are restricted to actual differences in railways' costs.
The preceding amendment would give railways some latitude to charge more on branchlines and for single-car (and small-block) loading points, but it would avoid the destructive effects of uncontrolled differentials, and it would still provide the railways and grain companies with sufficient flexibility to pursue profits and efficiency. The Agency could monitor and enforce rate differentials, and shippers could also challenge differentials through the Final Offer Arbitration mechanism.
Further (because actual differences in railways costs are nearly zero) the NFU recommends that the CTA be amended to prohibit railways from charging different rates for different commodities or for different times of the year.
From a given point to a given destination, the cost of moving a carload of oats is much the same as moving a carload of canola. And it is much the same in October as it is in March. There is no legitimate reason for the CTA to give railways the power to price-discriminate based on commodity or shipping period.
Finally, the NFU recommends that the CTA be amended to set a ceiling on freight charges for producer cars equal to the lower of: the railways' single car rates at nearby points; or a rate that reflects the full $5.92 per tonne average cost decrease promised by the federal government.
Prior to August 1, 2000, farmers who loaded producer cars paid the same freight rate as any local elevator. This meant that if elevator handling charges rose above a level that reflected the farmers' benefit for the service, the farmer could bypass the elevator and load a producer car instead. With the new changes, especially the incentives of up to $6 for loading 100-car blocks, farmers who load producer cars will pay much higher freight rates than the local elevator. This means that elevator handling charges can rise far above reasonable levels (up to $6 per tonne above) before farmers would be able, by using producer cars, to realize any effective disciplines on elevator companies. Without rules setting producer car rates at reasonable levels, the discipline on elevator tariffs imposed by the producer car option is all but lost.
Farmers need a Prairie Rail Authority
Branchline abandonment and elevator closure is proceeding swiftly and in an unco-ordinated fashion. This destruction of our grain handling and transportation infrastructure will almost certainly decrease system capacity and increase total costs. To avoid these negative outcomes, we need a regulatory structure to ensure that system assets are managed in a coordinated fashion and for the long-term benefits of all participants.
In talking to farmers across the prairies, NFU officials have learned that the situation in each community and on each branchline is unique. Some farmers believed that they could create a viable shortline if legislation existed which would compel the railways to fairly share revenues with shortline carriers. Other farmers convincingly demonstrate that there is substantial traffic on their line and a need for a major railway to operate that line. Still others admit that their line is no longer viable and must be abandoned; these farmers need funds to pay for road upgrading and maintenance. Rather than imposing a single solution on farmers, grain companies, railways, and taxpayers, we need to create an innovative, flexible, holistic, and cooperative framework in which all participants can work toward solutions which best suit each community and branchline.
The Hall Commission report of 1976 recommended just such a framework: the Prairie Rail Authority (PRA). In Hall's proposal, the PRA would:
• own, manage, and maintain prairie branchlines;
• oversee and coordinate branchline use or abandonment;
• evaluate the costs and benefits to all parties of continued use, abandonment, or transfer; and
• create a long-term, coherent plan for grain-dependent branchlines.
A contemporary version of the PRA would provide the authority, resources, and flexibility to pursue the solutions best suited to each branchline and community. While the details of a PRA would have to be worked out cooperatively among all participants, the following proposed structure could form the basis for discussion.
A proposal for a modern PRA:
• The railways would initially retain ownership of the branchline network;
• Railways would lose their current CTA-mandated ability to abandon branchlines;
• The PRA would independently evaluate the costs and benefits of retaining, abandoning, or transferring each grain-dependent branchline;
• The PRA would develop a long-term plan for western branchlines with the objective of minimizing total costs and maximizing system efficiency and capacity;
• On the basis of the long-term plan and the cost-benefit analysis, the PRA would have the legislative power to:
- recommend abandonment and negotiate or arbitrate a fair allocation of cost savings to all parties. Railways would have the option to continue operating the lines rather than forgo the revenue.
- transfer lines to shortline operators where such operations could be viable and after the payment of salvage value (or a comparable lease payment) to the railways. (All payments net of branchline rehabilitation dollars.) The PRA would have the power to arbitrate rate-sharing between railways and shortline operators. The railways would have the option to continue operating the line rather than allowing it to be transferred.
- require the railways to operate lines where no superior or more cost-effective alternative exists.
A modern, effective, and flexible PRA would allow farmers and other system participants to pursue solutions best suited to their individual lines. It would help ensure that the overall grain transportation system moved, in a concerted way, toward higher efficiency and lower cost, and it would ensure that farmers' needs and interests were taken into account when making abandonment decisions.
The National Farmers Union recommends that the government of Canada create a Prairie Rail Authority to oversee western Canada's valuable grain transportation infrastructure.
Farmers need a mechanism to take full account of greenhouse gas
emissions and climate change implications
The Canadian government's grain transportation policy runs counter to its commitments under the Kyoto Agreement, a growing worldwide consensus that climate change is a looming danger, and the recognition that swift action is necessary to reduce greenhouse-gas emissions.
The current railway and grain company-driven transportation policies will destroy our vital rail infrastructure and increase grain trucking distances. Trains are three times more fuel efficient than trucks, and trains produce only 1/3 as much CO2 per tonne-mile as trucks (Roberts, Sloane, & Associates, 1992). If Canada is to reduce (or even stabilize) emissions of CO2 and other greenhouse gases, we must act immediately to ensure that grain trucking distances are minimized and rail use maximized.
Pressure to curb greenhouse-gas emissions is mounting. For farmers, there will be a large cost if we fail to take advantage of least-cost emission-reduction strategies. The production, processing, transportation, and distribution of food--from seed to shelf--produces greenhouse gases. If we increase greenhouse gas emissions in one stage, transportation, the burden of future emission reductions will fall increasingly on other stages, such as production. Terminating branchline abandonment and increasing railway utilization allows farmers and food sector participants to cut food-related emissions in a relatively painless and low-cost manner. If we do not take advantage of this option, we will be forced to make deeper and more costly cuts in emissions at other stages along the seed-to-shelf chain. If CN and CP, by irrevocably destroying branchlines, force an increase in greenhouse gas emissions, then the need for cuts elsewhere increases; those cuts may prove very expensive; and those cuts will likely fall on the production and processing sectors. This will further increase costs to farmers riding razor-thin margins.
Transportation is the single largest source of greenhouse gas emissions in Canada. Current federal forecasts are for transportation-related emissions to rise to 26% above 1990 levels by 2010 and 42% above 1990 levels by 2020. Clearly, government is moving in the wrong direction in terms of meeting its commitments. One need look no further than grain transportation policy to understand why.
The NFU recommends that Canadian grain transportation policy be harmonized with, and integrated into, Canadian policy on greenhouse gas emission reduction.
The NFU further recommends that until this is completed, branchline abandonment be halted.
Farmers need expanded Interswitching
Various competitive access proposals currently before the Review Panel, because they give shippers access to alternative carriers, deliver what amounts to greatly-expanded Interswitching. However, many branchline and some mainline shippers will remain captive to one carrier regardless of the development of competitive access at some points. Expanded Interswitching provisions within the CTA could help lower costs for these shippers.
The current Interswitching distance limit is 30km. With this limitation, Interswitching is of use only to shippers in major urban areas. To benefit grain shippers, the distance limit would have to be increased.
The National Farmers Union recommends that Interswitching be expanded so that all rail shippers have Interswitching access to the closest competing carrier.
Farmers need improved Competitive Line Rate provisions
Like interswitching, Competitive Line Rates could give captive shippers protections. As currently formulated, CLR provisions are rarely used by grain shippers.
The National Farmers Union recommends that Competitive Line Rate provisions should be improved by increasing their duration; allowing CLRs at both ends of a movement; removing the "substantial commercial harm" requirement in section 27, and significantly increasing the current 1200 kilometer limit.
Farmers need effective Final Offer Arbitration
While Final Offer Arbitration (FOA) needs to be further improved to ensure that farmers and small (specialty crop) shippers can access this mechanism, the National Farmers Union recognizes that Bill C-34 did contain some improvements. The NFU believes that it is reasonable to wait and see what effect those recent changes have on the FOA process before proceeding further. However, if it becomes clear in the next year that small shippers still cannot effectively access the FOA process, the government must move quickly to remedy that situation.
The NFU recommends that FOA not be modified further at this time.
Mergers and acquisitions
The recently-proposed takeover of CN by Burlington Northern Sante Fe was stopped only after the U.S. Surface Transportation Board postponed hearings on the deal for 15 months and undertook a revision of its rules for evaluating mergers and acquisitions.
The Canadian government and the CTA both seem to lack a structure to control the takeover of Canadian railways by American railways. Such a takeover, and the move toward two North American continental carriers, would have significant effects.
First, the move to two North American rail carriers would effectively end Canada's ability to regulate railways operating here or to pursue any regulatory policy that was significantly different than that in place in the U.S. Continental railways would allocate resources to those North American areas and sectors which provided the highest revenues and profits. While CN and CP must utilize their assets--locomotives, cars, workers, and logistical networks--within Canada, North American carriers would not be so limited. If, for regulatory or commercial reasons, certain Canadian regions or sectors failed to deliver sufficient revenues or profits to continental carriers, continental carriers may simply choose to withdraw their locomotives and cars and abandon large geographic regions or economic sectors of Canada.
An alternative scenario is more likely: Canadian regulations, rates, and service would, by necessity, be harmonized to those in the rest of the continent so as to assure railway service for Canadians.
We must be clear what continental mergers would mean: at the very moment that the market power of railways would leap upward, Canada would lose its power to regulate those railways. Pursuing or allowing such mergers would be unparalleled folly.
The NFU recommends that the Canadian government bring forward clear legislation that will ensure that Canada retain its major railways, CN and CP. Farmers want Canadian railways regulated within a Canadian context.
The myth that farmers will benefit in a commercial system
Railways and grain companies claim that if they are allowed to move to a "commercial" system that this will drive down costs and provide benefits for all. This is partly true. If you allow railways to tear up branchlines and sidings and force grain collection to a small number of points, railways' costs will decrease. And if you allow grain companies to slash the number of elevators, these companies' costs will decrease. The myth that all these companies propagate, however, is that they will pass these cost savings back to farmers.
Grain handling is, in theory, competitive. Nine major companies compete for grain handling business in western Canada on the basis of price and service. The sort of economic theory currently propounded by grain and rail companies implies that in such competitive markets, cost decreases will be passed onto farmers. It is instructive, therefore, to examine the grain collection system over the past 30 years.
In 1970, western Canada had 4,984 elevators. (2) Today, that number is approximately 793. Over the past 30 years, grain companies closed and destroyed all but 16% of the elevators that existed in 1970. Over the same period, grain production rose one-and-one-half-fold. Grain companies are now collecting 150% of the grain they collected in 1970 and doing so through 1/6 the number of elevators. This is a sweeping restructuring and must have yielded dramatic efficiencies. It is therefore educational to examine what happened to the tariffs that elevator companies charged farmers during this time of rapidly rising efficiency. (3) Please see Figure 1, below.
Figure 1: Elevator numbers and handling tariffs, 1970 to present.
Figure 1 demonstrates that farmers now pay over eight times as much as they did 30 years ago, despite the "consolidation" of over 80% of the elevator network. Grain companies handling tariffs rose at twice the rate of inflation despite increases in volume and gains in efficiency that increased the per-elevator grain throughput nine-fold.
Cost increases continue. Less than three months ago, many grain companies announced double-digit increases in handling tariffs. This comes near the end of the most rapid and dramatic consolidation of the elevator network in history--the network has been cut nearly in half in just 6 years.
As noted above, grain companies are failing to pass on more than a portion of the multi-car loading incentives that railways are paying to grain companies as part of the $178 million annual revenue reduction mandated by the federal government. Not only are grain companies pocketing money clearly intended for farmers, but such action on the part of grain companies demonstrates a significantly lower level of competition in the system than predicted by deregulation advocates and it exposes the hypocrisy of grain company executives who have so often and so publicly committed themselves to the project of securing savings for farmers.
The situation is much the same on the rail side. Despite the elimination of the caboose, much of the branchline network, and over half of the railway workforce, farmers' freight rates continue to increase. Any relief from this trend, such as the recent $178 million reduction, has come as a result of government intervention. Railways also, over the past eight years, pocketed $700 million dollars in undistributed productivity gains. These are the same railways that claim that they are ready to pass cost savings back to farmers.
Finally, note that under the CTA, if railways tore up every branchline in western Canada, over the next ten years the net effect on farmers' freight rates would be a 20% increase. (4) The current CTA contains no mechanism to allocate to farmers a fair proportion of the "efficiencies" gained through branchline abandonment or as a result of any other changes. Nor is it likely, based on past performance, that rail and grain companies would pass these efficiencies back to farmers voluntarily in a deregulated, commercial system.
The evidence is clear: so-called "efficiencies", "rationalization", and "consolidation" do not lead to savings for farmers. We stand today at the end of decades of increasing efficiency and dramatic consolidation and we stand today burdened with higher costs and mired in a farm income crisis. The NFU urges the CTA Review Panelists to look at the evidence, the numbers, and the real effects of "efficiency" on farmers and to not be taken in by grain company and railway rhetoric, ideology, or hypothetical economic arguments.
Conclusion
Real, effective railway competition does not currently exist. If the government and the CTA Review Panel have the will to act against the objections and threats of the railways, competition may exist, many years from now, at a limited number of points. But in the interim, and for the vast majority of points that will never see competition, it is vital that the CTA expand effective limits on railway power.Moving ahead with measures that might deliver competition to some points does not preclude expanding in scope, number, and effectiveness the shipper protection measures contained in the CTA.
We hope that the Review Panelists will have the will and wisdom to propose regulations and legislative changes which will truly protect farmers' interests and lower farmers' costs. As well, farmers need measures which protect our equitable access to the system and that restore and protect the critical balance of power within the system so that farmers can protect their interests in the future.
The recommendations of the Canadian Transportation Act Review Panel, and the subsequent actions by the federal government, will be significant determinants of whether the farm income crisis eases or intensifies. As such, they will help determine the futures of thousands of farm families and the makeup of the prairie landscape.
Respectfully Submitted
by the
National Farmers Union 1. 1 CN and CP's 1999 profits totalled $867 million: more than the realized net farm income of all the
140,000 farm families in Man., Sask., and Alta. combined. 2 Canadian Grain Commission, Grain Elevators in Canada, Appendix, "Historical Record".
3 Tariff information available upon request from the Canadian Grain Commission.
4 Over the next ten years, freight rates will rise with inflation even as railways' costs of moving a given
tonne of grain decrease. Between 1995/96 and 1999/00, annual rate increases averaged over 2% per year.