TORONTO (miningweekly.com) – The Canadian Coalition of Rail Shippers (CRS) and the Mining Association of Canada (MAC) on Thursday in the House of Commons Standing Committee on Transport, Infrastructure and Communities proposed six amendments to the Fair Rail Freight Service Act to achieve the government's intended outcomes.
MAC said the proposed Act, referred to as Bill C-52, would not “go the distance” in overcoming the rail service failures that gave rise to the Bill in the first place.
"The current imbalance and associated service failures have resulted in unreliable service and higher costs for the mining industry, its partners and customers. We urge the government to consider our amendments given that insufficient rail freight service adversely affects the entire logistics supply chain and, in turn, the Canadian economy as a whole," MAC president and CEO Pierre Gratton said.
Overcoming Canada's vast geography to deliver products effectively to and from ports and smelters is critical, especially when competing against countries with significantly shorter logistical supply chains. Rail freight service is a critical component of the Canadian mining industry's ability to compete internationally.
MAC said the mining industry is the single largest customer of Canadian railways. In 2011, Canadian miners accounted for 54% of total Canadian rail freight revenue, and just under half of the total commodity freight volume carried.
"While our industry appreciates the government's initiative in attempting to partially correct the imbalance of railway market power through its initial review and the tabling of this Bill, we believe it does not deliver on the government's promise to enhance the efficiency and reliability of the entire rail freight supply chain," Gratton said.
MAC urged the federal government to make amendments to the Bill to correct the issues that were identified in Transport Canada's Rail Freight Service Review, and to improve the bargaining relationship between railway companies and shippers.
Although the Bill features some positive changes that MAC and the Coalition of Rail Shippers (CRS) advocated for during the government review and consultation process, MAC said the recommendations that are currently absent from the bill pose the greatest challenges to the shipping community.
For example, although Bill C-52 gives shippers a statutory right to a service level agreement, it does so without defining that service. Without specifying the elements of service that a shipper needs, an arbitrator would have no direction in a process that, unless amended, weighs heavily in the railway's favour.