Collaboration Moves Supply Chains. Regulation Slows Them Down.
Canadians expect that when they buy something, they’ll get it. When they produce something, they trust it will get to market. Each and every day, 24/7/365, Canada’s railways are moving vital products like fuel, food, and consumer goods.
Railways are a backbone of Canada’s economy.
Rail’s dependability and reliability form strong links in global and domestic supply chains. But moving a trading nation like Canada forward doesn’t happen by rail alone.
Canada’s railways have held up their end of the supply chain bargain, demonstrating remarkable resilience despite extraordinary disruptions through the global pandemic and government policies responding to it, and in the face of extreme weather events.
Facts
Canadian railways are the safest in North America.
Among the safest in the world, in no small measure because our railways reinvest 20-25 cents on every dollar they earn back into their networks.
Offer the lowest rail freight rates among leading trading nations, rates 11% lower than the U.S
Showing the robust competition that exists between Canadian railways.
Canadian railways move half of Canada’s exports – $380 billion worth of goods each year.
Rail dwell times remain consistently low while delays in other modes have ballooned.
Despite these facts, there are some who think even more economic regulation will “fix” problems in other parts of Canada’s supply chains. Extended interswitching is particularly ill-advised. When implemented, it will increase supply chain congestion (slowing movement of interchanged goods by almost 25%), undercut past and future investments, add to GHG emissions, and further increase costs in an era of 40-year-high inflation.
#railmatters #factsmatter
Our Recommendations for Supporting Strong Supply Chains
Recommendation 1
Abandon extended interswitching and focus on tangible supply chain solutions.
Extending the regulated interswitching distance will add 1-2 days or ~25% to the average movement of interchanged goods. An extension of the regulated interswitching distance for grain was tried in 2014. It was reversed in 2017 based on independent facts and evidence. Reviving this failed policy would damage Canadian competitiveness, disrupt supply chains, and add to inflation and GHG emissions.
Recommendation 2
Abandon plans to ban replacement workers; ensure supply chains continue to operate during work stoppages
Safety is job number one for every railway and every railroader. The federal government is planning to ban the use of temporary replacement workers during a work stoppage. This policy would have major safety and supply chain ramifications. Railways do not use “scabs” but they do use qualified managers to ensure trains can continue safety operating during a work stoppage. Trains operate 24/7/365 and can’t simply be left on the track. There are regulated safety precautions that must happen regardless of a work stoppage. The replacement worker ban is a false solution in search of a real problem and should be reconsidered.
Recommendation 3
Collaborate with the Port of Vancouver and other stakeholders on a solution allowing grain to be handled in the rain.
Workers are prevented from loading grain onto vessels in the rain in Vancouver where it rains 165 days per year. While railways set records for grain movement, upholding their end of the transportation bargain, trains are getting stuck at port because their grain cannot be loaded onto vessels in the rain – creating backlogs. Structures could be created where grain can be safely loaded out of the rain at port.
Recommendation 4
Facilitate the express entry of skilled rail professionals to Canada.
Canada’s railways need more assured access to human capital and in-demand skills. Key professions could be added to the National Occupation Classification (NOC) codes for Express Entry eligibility.
Recommendation 5
Increase support for shortline railways to enhance fluidity, improve safety, lower emissions, and reduce public infrastructure strain.
Shortline railways are essential to improving the fluidity of supply chains. They remove traffic from publicly funded highways and, in many cases, provide vital services to rural and remote communities across Canada. The federal government should create a dedicated, multi-year capital funding program to support shortline infrastructure investments similar to other jurisdictions (U.S., Québec) to make funding programs available to shortline railways.
Recommendation 6
Extend, by three years, the phase out of the Accelerated Investment Incentive.
Ongoing investments in rail are necessary to support a robust, fluid supply chain and facilitate future growth of the Canadian economy.
Reports
Rail Trends 2023
CPCS Study
