Railways lost

Written - 20 July, 2008

All over Canada, a quiet tragedy is occurring. Over the past few months, CN has been tearing up railway tracks (or the lifeline of the nation, depending upon your vantage). CN can hardly be blamed, as a company, profits have been in decline for decades and the price of steel is skyrocketing. However, a look at gasoline prices shows that tearing out the lines for quick cash might be the most shortsighted decisions made by the crown in our times.

The decline in use of the rails has been due to the automobile, but railways in Canada remained a viable part of the economy until the 1990’s through government support of the Crow rate (ended 1983) and later Western Grain Transportation Act. Both were a subsidy for western farmers to transport their grain to ports in the Pacific. However, following the implementation of the NAFTA agreement, transportation subsidies were deemed an unfair practice by the US and thus cancelled.

The loss of the Crow rate and later subsidies altered grain production on the prairies as agricultural companies favored the use of trucking, which in turn forced CN to raise its rates to meet the bottom line. An economic loser, CN has had to justify funding to the crown, but with smaller cargo loads this has been difficult. During the past decade, CN has seen ‘slimming and trimming,’ which has resulted in the loss of over 50% of its jobs.

Selling the tracks is not ‘slimming and trimming,’ it is more like an eating disorder. GM workers can attest that the automotive industry is in a nosedive and gas prices are increasingly making driving a luxury for the rich. Environmental groups have been lobbying the government for decades to increase rail transport by providing incentives to users. However, government has left CN to the ravages of market capitalism (though massively subsidizing oil development… funny, the US doesn’t mind that one) and one of the most reliable alternatives to an oil economy is being destroyed.

The nation-state of Canada was built by rails and may poetically dissolve because them. If transportation networks collapses with oil price increases, there will be little glue to hold a nation built on economics rather than shared history. Perhaps a government as fiercely patriotic as our own should look into this…