Rail industry lobbying Feds on border, tax issues

Representatives from the rail industry are lobbying Parliamentarians and federal officials in Ottawa to let Canadian rail make a greater contribution to help governments reduce road and border congestion and by addressing its current tax burden.

“In the wake of the human tragedy that occurred on Sept. 11, governments must find ways to control our countries’ borders which both increase security and ensure the free flow of goods between Canada and the U.S.. Canada and the United States are the two largest trading partners in the world, and that trade is vital to the economic health of both countries,” said Bill Rowat, President and Chief Executive Officer of the Railway Association of
Canada.

According to John Marinucci, President of the Canadian Association of Railway
Suppliers, Canadian railways have been constrained in making all the capital investments needed to stay competitive with their big U.S. rivals.

“The problem lies in the degree of Canadian rail’s taxation. The tax burden of Canadian railways is more than twice that of U.S. railroads, and 29 per cent higher than the tax burden of Canadian trucking. The irony is that Canadian railways are working to take trucks off already congested highways through expedited service packages, and innovative new ways of carrying truck trailers on rails. Every hundred-car train takes 275 big trucks off the highways, for example, including those roads leading to and from border gateways,” he says

Eighty-five per cent of Canada’s exports go to the United States; 50 per
cent of U.S. exports come to Canada.

Some 80 per cent of all rail traffic between Canada and the United States crosses the border through gateways in Ontario, Manitoba and Saskatchewan and four states-New York, Michigan, Minnesota and North Dakota. The balance moves between New Brunswick, Quebec, Alberta, British Columbia and the facing American states of Maine, Vermont, Idaho and Washington.

“Almost two million freight shipments a year cross the Canada-U.S. border by rail. That’s the equivalent of some six million trucks that aren’t on the highways,” said Rowat.

Rowat and Marinucci are leading the information blitz, “On Track for the Future,” in meetings this week with Members of Parliament, Senators, the Finance Committee, the Transport and Government Operations Committee, and the Industry Committee.

They will discuss action taken by the railway industry to enhance border security since terrorist attacks in the United States on September 11.

“There should be pre-qualification for all low-risk trade and law-abiding travellers. Customs computer systems should be harmonized, and customs inspections should be at the traffic’s origin or destination terminals, not at the border,” said Rowat.

Some 40 per cent of Canada’s exports depend on rail transportation to get to market, he says.

“Canadian railways’ competitive strength affects the competitive strength of the entire economy.”

Meanwhile, Marinucci says that huge investments have been made in the past few years to improve the productivity of Canadian rail operations in ways that are not necessarily visible to the public, including the introduction of new locomotives which are not only far more powerful, but also 50 per cent more fuel-efficient than the ones they replaced. Computers, used in such applications as train control and customs clearance, facilitate the ever-growing volume of Canada-U.S. trade and relieve congestion at the border. New materials and designs have raised the capacity of freight cars, while new track has been laid to permit heavier loads.