Canada moves to improve railway service

Fri Mar 18, 2011 4:28pm EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Ottawa will move to quell complaints by western Canadian farmers about poor rail freight service by giving all shippers more clout in ensuring consistent operations, but it is taking no immediate steps to penalize railways for bad performance.

The Conservative government said on Friday it will help shippers and railways negotiate terms for service agreements -- something they don't have now -- and improve ways to resolve disputes.

Those steps, which will require the government to pass legislation giving shippers the right to the service agreements, drew support from some farm and forestry groups and opposition from Canada's biggest railway.

Ottawa's moves, which come amid rising expectations of a spring general election, are aimed at making railway transportation more efficient and reliable, said Transport Minister Rob Merrifield at a grain terminal near Winnipeg.

The country's two main railways, Canadian National and Canadian Pacific, handle most of Canada's rail freight, and have faced criticism from farmers that unpredictable service is keeping growers from fully cashing in on high grain prices.

Canadian farmers lean heavily on railways to move grain to port because distances are too vast to rely on trucks, and the western grain belt lacks a river freight system.

Canadian National Chief Executive Claude Mongeau said Canada's rail service is quite good overall and said the railway has serious concerns about the government's moves.

"We are concerned that the ... recommendations are drifting backward toward more regulation instead of encouraging the current momentum for positive change," Mongeau said.   Continued...