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
Immediately Repeal Extended Regulated Interswitching
Extending the regulated interswitching distance will add 1-2 days or ~25% to the average movement of interchanged goods. In an environment where a) it remains critical for Canada to stay competitive with its largest trading partner, b) tax and other policies already favour rail investments in the U.S. over Canada, and c) the current government replaced extended interswitching with Long-Haul Interswitching (LHI) in 2017, the RAC urges the federal government to support Canadian workers and supply chains by immediately repealing extended regulated interswitching.
Recommendation 2
Incentivize Capacity-Enhancing Supply Chain Investments
Safety is job one for every railway and every railroader. Whether it is infrastructure upgrades, track maintenance, technology deployment, training, awareness programs, or otherwise, investments in safety and a strong safety culture are non-negotiable for railways big and small.
Recommendation 3
Create Predictable Support
Mechanism To Revitalize Shortline Railways
Bolstered shortline infrastructure would contribute to regional economic development, improve supply chain fluidity, lower costs for businesses, and enhance safety while lowering emissions and reducing the strain on public infrastructure. Create a Railway Track Maintenance Tax Credit (comparable to U.S. Section 45G) and permanent support for shortline railways.
Recommendation 4
Augment Operational And Capital Support For Passenger Railways
Passenger railways connect communities and provide unique tourism experiences, showcasing Canada. They move millions of passengers safely and sustainably every
year, and employ over 5,000 Canadians, supporting thousands more jobs in regional economies. Separate, dedicated rail lines for passenger and freight are necessary in areas where there is significant freight and passenger rail activity.
Recommendation 5
Address The Economic Impact Of Labour Disruptions And Incremental Labour Regulations
1. Amend the Interpretive Guideline to clearly state that 10 medical leave days cannot be stacked on existing employee medical leave programs.
2. Implement a statutory authority in the Canada Labour Code for the federal cabinet to impose binding arbitration and prevent or terminate a work stoppage if a negotiated agreement cannot be reached in sectors that are essential to Canada’s supply chains.
Recommendation 6
Support Rail Industry Decarbonization And Climate Resiliency
Half of Canada’s exports move by rail, yet the rail industry accounts for less than 4% of Canada’s transportation emissions. This is a testament to rail’s fuel efficiency. Prioritize investments and incentives to develop the domestic low carbon fuel sector, support modal shift to rail, and reduce investment risks.
Reports
Rail Trends 2023
CPCS Study
