Railways have great lobbyists
The Canada Grains Council meeting that wrapped up yesterday in Ottawa provided a great example of the persuasive powers of Canada’s two major railways. One of the sessions at the meeting was to garner reaction to the draft recommendations of the Rail Freight Services Review. The review recognizes that the railways have inordinate market power because there isn’t true competition. Rail shippers agree with that assessment, but they’re disappointed that the review says shippers and the railways should try to work it out themselves. If the two sides can’t work it out, the need for regulations to balance the playing field wouldn’t be assessed until after 2013. Shippers want the regulatory backstop now, saying there’s no reason for further delay. The railways were represented at the meeting by Cliff Mackay, president of the Railway Association of Canada. To hear him talk, the railways are practically saints. He says Canada has cheap rail rates compared to competitors and he says rail moved record volumes last year and this year. According to Mackay, commercial incentives and mutual respect are what is needed. He says interventionist regulatory measures would turn the clock back 20 years. He even disputes the contention that the railways have inordinate market power. After listening to Mackay, it’s easier to understand the legendary lobbying power of Canada’s railways. I’m Kevin Hursh.