Re: *Too
Author: Crow's Nest Observer
Date: 01-03-2019 - 18:13
The action to limit the profits may not be as nefarious as it first seems, or at least not a liberal conspiracy. Consider a little historical backdrop:
Canadian freight rates for hauling grain are steeped in history. Once upon a time, the CPR received land grants & subsidies to build a southern mainline through Crow's Nest Pass. In return, they agreed to perpetual rates for hauling grain commonly called "the Crow." It took effect in 1897 and for a time everyone was mostly happy - or at least as happy as a Western Canadian farmer or a CPR shareholder could ever be. That would not last for long.
Unfortunately, none of the agreement authors or signors realized the "toll" that the new-fangled phenomenon called inflation would take on the profitability of hauling grain. In 1927, the rate was increased slightly by an Act of Parliament, and it was extended to all grain moving on any railroad in Canada. By the 1970s, all railroads were losing money hauling grain.
Fast forward to 1983. After extensive lobby efforts, the Crow was retired, and for a period of time railroads - including the CPR - received grain transportation subsidies. Later, the subsidies were phased out with a final one-time payment to farmers to help them adjust to the burden of higher "real world" freight rates, and the rates were allowed to increase gradually to an amount not to exceed 10% of the world price of grain. Yet western Canadian farmers have remained suspicious that the railroads would take advantage of them because of their quasi monopoly, and perhaps this is justified. I believe - but have not been able to verify - that the rebate is related to the 10% cap because of lower than anticipated grain prices.
So this has little to do with "liberal" or "conservative" values. It is more likely about ensuring the terms of an agreement are followed.