Canada's Bill C-52 makes it more expensive for industry: miners

Canada's Bill C-52 does not address the imbalance of railway market power and makes it more expensive for miners, industry representatives told the federal government Thursday in Ottawa.

The Mining Association of Canada said the Fair Rail Freight Service Act does not improve the efficiency and reliability of the rail system that is needed in the country.

"The current imbalance and associated service failures have resulted in unreliable service and higher costs for the mining industry, its partners and customers," said the association's president Pierre Gratton, in a written statement, adding insufficient service adversely affects the entire supply chain and, subsequently, the economy.

Gratton also said it's crucial for the industry to be able to deliver products effectively to and from ports and smelters across the country's expansive geography. Rail freight service is a key component to compete internationally, particularly against countries with shorter supply chains.

The bill is designed to give companies the right to a service level agreement with railways. Additionally, it creates an arbitration process to establish an agreement when commercial negotiations fail.

Although the bill gives shippers a statutory right to the agreement, it does not define that service level. As a result, the association claims the railway is favoured over shippers in arbitration because those elements are not defined.

The association, along with the Coalition of Rail Shippers, has proposed a number of amendments to the bill.

Parliament has already heard the bill twice and it is now in its standing committee on transport for review prior to its third and final hearing.

Canadian miners are the largest customers of the national railways. In 2011, they accounted for 54% of total Canadian rail freight revenue plus almost half of the total commodity freight volume carried by trains.