Annual Review & Outlook 2013: Canadian National Railway

Claude MongeauNew rail regulation may be on the horizon in Canada, which CN believes would be a mistake. Canada has a world-class rail service and a regulatory regime providing shippers with ample protection. CN strongly encourages the Canadian government to stay the course with a commercial approach to rail service. Additional regulation would stifle innovation and chill the positive momentum we’ve developed.

If the Canadian government were to legislate in the area of railway-customer service agreements, however, any new rules should be balanced and targeted. CN believes such legislation should require mediation as a first step to give commercial solutions a better chance to prevail. The rules also should require the rail regulator, the Canadian Transportation Agency, to arbitrate any service dispute rather than a roster of arbitrators, so as to limit the possibility of unintended consequences for Canada’s rail network. And regulatory intervention should only be available to rail customers who depend on a single railroad.

Commercial principles and a stable regulatory environment are critical to an effective North American rail transportation market. Innovation can only thrive in an environment that allows railways to work creatively with their customers and to earn revenues sufficient to make the sizable investments necessary in networks and infrastructure. The dismantling of heavy rail regulation in the U.S. and Canada during the 1980s and 1990s helped to revive a once-struggling industry and enabled it to provide better service to rail customers.

Railways are crucial to the prosperity of the U.S. and Canadian economies. The industries and customers we serve can’t afford the risk of seeing the clock turned back with additional, burdensome and unwarranted rail regulation.

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