Liberal MPs are throwing their support behind rail shippers in calling for immediate legislation to remove the imbalance in market power in the area of rail shipping.

Farm groups, including those with otherwise opposing ideologies, such as the Western Canadian Wheat Growers and Canadian Wheat Board, are virtually unanimous in demanding action to fix the service deficiencies.

The Liberals say the interim report from the Rail Freight Service Review panel was contradictory.

"One the one hand, they said the rail service was inadequate and that the source of the problem was excessive railway market power, and on the other hand, they said they'd give the railways three years to fix things up before introducing legislation," explains John McCallum, Transport, Infrastructure and Communities Critic.

McCallum explains they're calling for immediate legislation and regulation that address the need for better notice of service changes, enforceable service agreements, practical dispute resolution procedures and stronger performance reporting.

"When a farmer fails to fill a railway car on time, he or she has to pay penalties. However, when the railways don't deliver a car in time for a producer to fill...there's no penalties for them," explains Wayne Easter, Agriculture Critic, emphasizing the need for enforceable service agreements with all shippers.

Railways have argued that regulation would lead to decreased investment and innovation, and therefore, poorer service for shippers.

"One of the arguments made is about the lack of competition. You can carry the railways' argument down that line as well," explains Easter. "The lack of competition discourages innovation. So what the whole attempt here is to put in place, where there is no competition, a regulatory regime or service contracts that ensure that innovation does take place and that proper service is provided."

Deputy Leader Ralph Goodale says there is nothing to gain by giving railways until 2013 to address the service deficiencies.

"Even though we've identified the issues, and even though we know what causes these issues - this imbalance in market power, all the cards being in the hands of the railways - we're going to leave it alone for another three years, cross our fingers and hope for the best," says Goodale. "We're saying the recommendations are there, the analysis is solid, the problem is obvious. You gain nothing by waiting so get the process started now for the legislation and the regulations that will be required to fix it."

The Review panel received comments from dozens of farm groups and shippers in response to the recommendations in the interim report. It's expected the final Rail Freight Service Review report could be released by the end of the month.

~ Wednesday, December 15, 2010 ~