Federal Court Rejects CP Rail Appeal, Rules in Favour of P&H on Interswitching

The Federal Court of Appeals has upheld an earlier ruling by the Canadian Transportation Agency giving Parrish & Heimbecker access to lower priced rail service from BNSF Railway in southern Alberta.

CP Rail had argued it was not required to provide service at statutory interswitching rates for the P&H elevator at Milk River because one of the conditions for interswitching — the presence of an interchange — did not exist. The court rejected that argument, determining that an interchange between CP and BNSF does exist at the Coutts, Alberta border crossing, about 20 kilometres from the P&H facility at Milk River. (At the time of the initial CTA ruling in 2013, the interswitching distance was set at 30 kilometres — it was extended to 160 kilometres with the passage of the Fair Rail for Grain Farmers Act in 2014.)

The decision means P&H can require CP to haul cars from Milk River to Coutts for a statutory rate of $315  per car (around $3.50 per tonne) instead of CP’s commercial rate of $1,373 per car (over $15 per tonne.) (Read the judges’ decision here.)

Related: CP Rail Files Lawsuit Regarding Bill C-30; Says Interswitching Changes Made With “Errors of Law”

“The difference in rates of almost $12 per tonne improves the return on shipments to the U.S. market and gives P&H the ability to offer better prices to Canadian farmers,” said Levi Wood, president of the Western Canadian Wheat Growers Association, welcoming the court decision in a press release on Monday. “Other shippers within the 160 km interswitching distance will also benefit from this ruling. Having the interswitching provision improves our industry’s competitiveness, while providing adequate compensation to the Canadian railway for its portion of the haul.”

The Wheat Growers say they hope the ruling will establish a precedent, noting CN Rail has also appealed a CTA ruling on interswitching involving a Richardson elevator at Letellier, Manitoba.

CP is also taking the federal government to court over the changes to interswitching distances introduced in the Fair Rail for Grain Farmers Act last year.

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Categories: Logistics / News / Western Canada