INTRODUCTION

The Railway Association of Canada (RAC), situated in the nation’s capital, represents some 50 core freight, tourist, commuter, and intercity Canadian railways, playing a major role in promoting the safety, viability, and growth of the railway industry within Canada. In addition to this core membership, the RAC has recently created an Associate Membership open to all railway suppliers and industrial railway operators. The RAC’s dedicated team of professionals coordinates the development of rules and recommended practices pertaining to operations and safety, which have made rail the safest mode of surface transportation. RAC staff conducts the research, policy development and advocacy necessary to lobby all levels of government and transportation-related businesses to promote rail’s advantages and ensure fair treatment among other modes.

PAST

The Canadian Railway War Board was formed at a meeting of railway executives on October 23, 1917, at the suggestion of the Canadian Government, for the purpose of coordinating railway activities during World War I, to ensure efficient movement of troops, war supplies and services. Having proved itself to be an effective organization, the Railway Association of Canada (RAC) was officially established in 1919 and incorporated in 1953. From 1917 to 2000, RAC’s headquarters in Montreal dealt primarily with member services and safety and operations activities at the national level and coordination of standards with the Association of American Railroads on a continental basis. The deregulation of railways, since 1987, has led to the establishment of approximately 40 short line and regional railways.

PRESENT

During 2000, in addition to on-going safety and operations management, RAC received a new mandate from its Board of Directors to include an expanded role in the fields of policy and advocacy, on behalf of its member railways. This enhanced mandate led to the relocation of headquarters from Montreal to Ottawa in the fall of 2000, to be closer to federal decision makers. RAC is proud to have tourist, passenger, commuter, short line and regional railways, and Class 1 freight railways among its members. In total members operate approximately 64,000 km of main line track (RAC: Rail Trends 2006), including operating rights.

FUTURE

Rail in Canada has a challenging future. The 22 policies outlined in the RAC document Policy Directions 2005-2006 are intended to inform and influence members of federal and provincial governments, appropriate transportation-related officials, associated industries and targeted members of community associations/organizations, etc. It is our hope that they will generate increased awareness and worthwhile discussion on important issues to rail and the public at large.

THE RESURGENCE OF RAIL

It is an exciting time for the rail sector. This mode, perhaps the one most taken for granted in Canada, has undergone a remarkable metamorphosis. Historically, rail received considerable public subsidy and was highly regulated. Beginning in the late 1980s and early 1990s, there was a progressive increase in government and public awareness of the over-regulation of the industry and of the need to introduce more market forces to promote self-sufficiency, competitiveness, and efficiency in the sector. This awareness has been reflected in public policy changes to create the market mechanisms conducive to private sector investment and to free management to develop a highly efficient, privately funded network stretching throughout this vast continent.

A combination of changes in regulations, i.e., National Transportation Act (1987), Canada Transportation Act (1996), resulted in the cancellation of explicit transportation subsidies, the privatization of CN Railway (1995), devolution of airports, marine ports and air navigation systems. These changes, coupled with NAFTA (1994), have opened the way for rail to take its rightful place in Canada’s transportation sector. There is a new strategic approach. The trunk line component, formerly concentrated on an east-west axis, has now become continental, with a strong and vibrant north/south focus. This framework is successfully fed by a dynamic new short line and regional railway component, - an entrepreneurial, flexible, well-managed, and customer-focused sector. This symbiosis has created the best railway system in both North America and the world.

Railways in this country have responded to competitive challenges with vigour... the achievements speak for themselves. Canada has some of the most successful railways in the world - critical to the competitiveness of Canadian industry and ultimately the standard of living of all Canadians. As can be seen throughout this website, there are numerous and significant concrete examples of our world class successes.

SHORT LINES

The Canada Transportation Act (1996) recognizes transportation 'as a key to regional economic development'. Short line and regional railways represent those which “feed into and take away from” high volume, trunk-line railways.

Between 1996 and 1999, CN and CPR transferred more than 8,500 km of rail line to short line operators, over 80 percent of the total identified for discontinuance over that period. Consequently, the relative importance of short lines in the national transportation network has increased dramatically.

Short lines play a fundamental role in the industry as it provides a direct link to the Class 1 networks for shippers on branch lines. The traffic is collected by the short lines and generally interchanged with its main line partners which, on average, move the long-haul, high volume traffic five times further to destination. They are highly customer focused and strive, in conjunction with their Class 1 partners, to provide seamless transportation service from points of origin to destination. Short lines have managed to keep pace with the Class 1s by originating 23.9 per cent of the carloads in 2005.

The success story is the excellent 'fit' between the long haul, high efficiency of Class 1s and the local customer service and logistics capabilities of the short lines.

ON TRACK

Effective, forward-looking transportation policy should facilitate rather than inhibit Canadian competitiveness in the North American arena. Today, this demands a comprehensive national policy that will level the playing field among modes, both for freight and passenger services, and between Canada and the U.S. The current imbalance in the treatment of modes seriously jeopardizes the success of the Canadian rail industry. The benefits of deregulation beginning in 1987 speak for themselves and have helped to:

• Create the safest surface mode of transportation in the world for people and goods;
• Reduce shipper rates by 35 percent, to the lowest in the western world and 60 percent below the international average;
• Reduce intercity passenger rail subsidies by 62 percent;
• Increase ridership to 63 million passenger/commuter/tourist trips per year;
• Trigger a massive capital investment in Canada's rail network, over the past ten years, amounting to more than $17 billion;
• Spur the creation of a vibrant short line industry;
  Strengthen the ability of the railways to fully sustain their infrastructure; and
• Eliminate government subsidies for rail freight.

This story is impressive, but more is possible. The Canadian rail sector is on track to build on its recent gains to make an important contribution to Canada’s future prosperity. Certain policy initiatives are required to strengthen the role of railways as a sustainable transportation resource, which is key for enhancing Canada’s competitive position. These policies are highlighted in the RAC's policy brochure: On Track for the Future. The RAC publication Policy Directions 2005-2006 outlines 22 policy directions capable of growing the rail industry’s service into the next century.