national farmers union

The major (and most damaging) recommendations of the Estey Report are:

• 5. - The government-owned hopper cars should be sold "to anyone inside or outside the grain transportation business, for their fair market value."
  
• 6. - "The CAPG system should be discontinued."
  
• 7. - "It is recommended that the rate cap be repealed..."
  
• 14. - "Apart from sales and marketing, it is recommended that the [Canadian Wheat] Board have no operational or commercial role in the handling and transportation of grain...."

All four of these recommendations and several others are directly traceable to submissions from Canadian Pacific Railway. On page 9 of its Phase II submission, CP succinctly reveals a vision of a deregulated, railway-friendly transportation system which is provocatively similar to the recommendations summarized above:

Prerequisites for a commercial Grain Handling and Transportation System:

• Remove Institutional Barriers: CWB withdraws from inland transportation, and Car location Policy Group's role is eliminated.
• Remove Regulatory Barriers: Division VI of the Canada Transportation Act (maximum rate scale, annual adjustments) and legislation involving the sale of government hopper cars and mandatory productivity sharing.

In many cases, Estey's recommendations bear a striking similarity to the text of the CP submission. See attached backgrounder for a recommendation-by-recommendation correlation.

"Upon comparing the CP and Estey documents, one is struck by Estey's total acceptance of CP arguments and proposals. It is clear that Estey completely bought into the position put forward by CP and other industry participants. Farmers should know that Estey's recommendations give the railways almost everything that they asked for and farmers should understand what that means to them," said NFU Transportation Committee Chair Terry Boehm.

"In giving the railways most everything they wanted, Estey left little, if anything, for farmers. Estey recommended terminating CAPG and expelling the CWB from transportation: these are the two primary places where farmers currently have input in the system. The loss of the rate cap will sharply increase farmers' costs and railway profitability. His recommendation on hopper-car ownership would effectively deny those cars to producers: forcing them to bid against CN, Cargill, and Burlington Northern. And his recommendations on branchline abandonment put few obstacles in the way of the abandonment of most of the prairie branchline network. Champagne corks must be popping at CP." concluded Boehm.

For More Information:

• Terry Boehm, Chair, NFU Trans. Comm.: (306) 257-3689
  
• Darrin Qualman, Executive Secretary: (306) 652-9465