Canadian railways say federal budget measures will increase costs

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by Emily Atkins

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.”

The association said previous attempts at interswitching resulted in slowing down the movement of goods by one to two days, or almost 25 percent, and adds costs and s well as increasing greenhouse gas (GHG) emissions.

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.

“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 association said a ban on the use of temporary replacement workers will make strikes more frequent, resulting in more disruptions of critical transport links.