VANCOUVER (miningweekly.com) – Canadian miners are voicing frustration and concern over the federal government’s removal of a Senate amendment relating to final offer arbitration (FOA), and with its modification of an amendment giving the Canada Transportation Agency own-motion power, in Bill C-49 – legislation that amends the Canada Transportation Act.
According to the Mining Association of Canada (MAC), which represents most of Canada's production of base and precious metals, uranium, diamonds, metallurgical coal and mined oil sands, mining accounts for the single largest customer group of Canada’s railways at about 19% or one-fifth of the total value of Canadian exports, and over half of total rail freight revenue generated each year, yet an unlevel playing field renders many shippers, including many mining companies, captive to one railway and therefore beholden to railway market power.
"The effectiveness and reliability of rail freight service is critical to Canada's mineral investment competitiveness, and this move by the government will diminish that competitiveness. How many mill closures and job losses, lost customers and abandoned investments will it take before a Minister of Transport and his or her department recognise that their oversight of Canada's railway system is failing,” association president and CEO Pierre Gratton asked in a statement.
“Despite a commitment to ensure that our industry remains competitive, the government has failed to modernise the Canada Transportation Act in a way that balances the interests of shippers and railways and ensures that our wealth and job creating industries are protected from the railway's unbridled market power."
The amendment on FOA, introduced by Senator Rosa Galvez – a member of the Independent Senator's Group – and supported by all but one member of the Senate Transport and Communications Committee, was also supported by a coalition of eight captive shipper industry associations.
The amendment would have increased data transparency in the FOA process, which is the only remedy available to captive shippers to seek rates more like those that might prevail under conditions of effective competition, to address its erosion by Canadian National and Canadian Pacific railway companies.
Gratton argued that Transport Minister Marc Garneau's response in a motion sent to the House of Commons erodes FOA even further, strengthens CN and CP, and leaves captive shippers at their mercy.
The MAC pointed out that in his motion, Garneau does not provide a rationale for rejecting the amendment. Instead, he repeats arguments regularly made by CN and CP and “ignores or defies the state of the law regarding the purpose of FOA, undermining the ability of the most captive shippers to obtain competitive rates and levels of service”.
The amendment on own-motion power, also introduced by Galvez and supported by the Senate Committee, was modified by Garneau in a manner that will reduce the agency's independence and further strengthen the hand of Transport Canada and the politicisation of rail service, the MAC claimed.
"This is a damaging signal to our members' international customers who have been closely monitoring C-49 and its potential impacts as a measure of Canada's reliability as a source for raw materials. There are significant costs associated with transporting goods to and from the mine site, and companies need to get their goods to their international customers on time," stated Gratton.