The Canadian forest industry has welcomed the federal government's decision to implement recommendations to improve rail freight services for shippers.
The three-year-old Rail Freight Service Review Panel's recommendations were targetted at Canada's two largest railways, CN and CP.
The federal recommendations include legislation that establishes shippers' rights to service agreements with railways, a streamlined dispute resolution and a commitment to develop public reporting from CN and CP on service areas such as rail car deliveries.
"The government has correctly recognized that there are imbalances in Canada's rail system that negatively impact the livelihoods of rural resource communities," said Forest Products Association president and CEO Avrim Lazar.
"From our perspective, the government has gotten it right by taking these steps and the result will be more reliable and efficient rail service. The measures will help to ensure our rural industries can compete, create jobs, and sustain hundreds of communities from coast to coast," added Lazar.
CN has a virtual monopoly on rail services in Northern B.C., a resource-rich area home to forest, mining, energy and agriculture sectors that often rely on rail service to get their goods to market.
The forest association has cited service concerns over rail cars showing up when they are not needed, not as many cars as needed being delivered and fuel surcharges being charged that are higher than a fuel price increase.
While a survey of shippers outlined in the panel's report showed a similar set of concerns as those outlined by the forest association, forest companies rarely cite concerns publicly about rail service in Northern B.C.
The forest association has said individual forest companies are reluctant to speak out because of their captive relationship with a railway.
The Forest Products Association of Canada represents companies such as Canfor, West Fraser, Tolko and Tembec, all of which have operations in Northern B.C.
The three-person panel, which included a former CN executive, found that although the railways have taken steps to address service issues, problems still remain. The panel found the major cause of rail service problems was railway market power.
While CN said it is pleased the government recognized the importance of a supply chain approach and noted its preference for commercial solutions, CN is concerned the government's decision to consider tabling legislation could stifle supply chain innovation and Canada's competitiveness in the global marketplace.
"CN disagrees with the focus and tenor of the panel's recommendations. Like the dissenting panel member, we are concerned the panel's recommendations are drifting backward toward more regulation instead of encouraging the current momentum for positive change," said Claude Mongeau, president and CEO of CN.
Mongeau said the panel failed to act on the hard facts that were before it, which show that rail service in Canada is actually quite good overall.
