CTA Decision on CN feed grain freight rates to Atlantic Canada

Ottawa, August 21, 1996 -- The Canadian Transportation Agency (CTA) rendered a decision today in response to a public interest application by Halifax Grain Elevator Limited (HGEL) to investigate certain freight rates established by Canadian National Railway Company (CN). The rates in question applied to movements of feed grains from western Canada and southwestern Ontario origins to destinations in the Annapolis Valley region of Nova Scotia.


This decision was not rendered under the Canada Transportation Act, which came into effect July 1, 1996. The Agency's mandate in this matter was to make a decision based on evidence further to legislation in effect at the time the application was filed, namely, the National Transportation Act, 1987. This legislation provided for public interest applications and findings as to whether actions of carriers were prejudicial to the public interest.


The CTA finds that CN's freight rates have had a direct and damaging effect on HGEL and the marine/truck transportation industry that serves it.


The CTA has not found evidence of effective alternative sources or transportation routings for feed grains should HGEL's operations be forced to close. It is therefore of the view that there would be no protection from monopoly abuse. The subsequent economic harm that would befall HGEL's customers, including the area livestock/dairy industry, Dover Mills, the Port of Halifax, and St. Lawrence/Great Lakes marine interests, is demonstration of prejudice to the public interest.


The CTA has concluded that the subject rates contained in CN tariffs _ CN 4436 and 4484 and Grand Trunk Western 4501 _ are indeed prejudicial to the public interest. A CTA Order requires CN to remove the prejudicial features by adjusting the applicable rates in the above mentioned tariffs. Pursuant to subsection 61(1) of the National Transportation Act, 1987, CN is directed to forthwith increase and maintain the subject rates at a more competitive level.


While in the short term, some users of feed grains will face higher rail charges, the CTA finds that in the long term, the existence of continued competition will prevent monopoly abuse and better serve the economic interests of these customers.



INFORMATION:    Carol Thurston (819) 994-0775

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