OTTAWA, March 28, 2023 — The Railway Association of Canada (RAC) calls the federal government’s move to resurrect the failed policy of extended regulated interswitching misguided and harmful to Canada’s supply chains.

“This policy will cause Canadians to pay more for virtually everything that moves by rail,” says Marc Brazeau, the RAC’s President and CEO. “With Budget 2023, at a time when inflation remains at 40-year highs, extending regulated interswitching – even on a temporary basis – will incentivize congestion in our supply chains while disincentivizing private investment.”

This pilot has been done before. Here are the impacts of switching cargo multiple times:

  • It slows the movement of goods by 1-2 days, or almost 25%
  • It adds to GHG emissions, which will hurt our environment
  • It also adds costs, which will worsen inflation

Brazeau adds: “The measures announced today will not improve the efficiency, capacity or reliability of Canada’s supply chains. They will do the exact opposite, as we saw under extended regulated interswitching that was in place from 2014 to 2016.”

The current government cancelled this very policy in 2016 based on results from a previous pilot and recommendations contained in an independent study.

Brazeau notes that Canadian Class 1 railways already:

  • Are the safest in North America and 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.
  • Hold up their end of the supply chains bargain, demonstrating remarkable resilience over the past few years in the face of extraordinary disruptions through the global pandemic and government policies responding to it, and in the face of extreme weather events.

“We have proposed workable and pragmatic policies to the government to improve supply chain efficiency and capacity. We also asked for fiscal measures that would support investments in the supply chain by all participants. Those proposals continue to be our priorities,” says Brazeau. “We need all supply chain players to do more on data-sharing, accountability, innovation and investment.”

The RAC also opposes the government’s move to ban the use of replacement workers in federal workplaces affected by work stoppages. The evidence shows that a ban on the use of temporary replacement workers will mean:

  • Critical services, including commuter transit, will be disrupted more frequently
  • Strikes will be more common and will last longer
  • The labour relations climate will deteriorate
  • Back-to-work legislation will be required more often

Canada’s railways are committed to remaining strong and healthy links in complex, integrated global supply chains. The RAC will work with the government, associations, and other stakeholders so that its members and associate members can continue to keep Canada moving forward safely and efficiently.