Ring of Fire is Test Case on Government Rail Policy

July 29, 2014 - Trains or trucks? That is the burning question that must be answered in the debate over the Ring of Fire’s transportation options.

In a bygone era, the overwhelming choice would have been rail. As generations of Canadian school children once learned, it was the railways that opened up Northern Ontario and most of the country, economically and socially. Even in the subsequent era when rail lost its monopoly, trains remained the winners when it came to providing access to large, long-term resource developments. The construction of the CP and CN branch lines to Manitouwadge’s copper mines in the 1950s is a prime example.

But trains haven’t fared well in these competitions in Canada in recent years, even as they are growing in importance in other developed and developing nations. Consequently, many rail proponents regard the Ring of Fire’s modal choice a litmus test for the direction of transportation policy, federally and provincially. Will rail solutions once again be part of the Canadian planning and decision-making processes?

With many cracks in our national and provincial transportation systems appearing recently, fundamental questions about our transportation destiny need to be asked – and soon. One of the biggest problems is we really don’t have a national policy, let alone a rail policy. The same applies provincially.

What we do have is lots of rhetoric at the top of various pieces of legislation, usually calling for the best use of each mode and competition as the guiding principle; Canadian transport policy has been laissez-faire for decades.

That competitiveness test is flawed because it’s not being conducted on a level playing field. With deregulation and an almost total lack of public investment in rail infrastructure and service, we have been asking the railways to operate efficiently against competitors that are still receiving a trainload of direct and indirect subsidies. How can one mode – even with its superiority in moving many types of freight and passenger traffic – compete against others that have a substantial portion of their costs covered by the public?

Furthermore, determining transport policy by traditional balance sheet accounting is short sighted. A host of issues beyond carrier profitability must be considered, including economic development impact, social connectivity, environmental effects and the long-term availability and cost of the oil that fuels all forms of Canadian intercity freight and passenger transport today.

Analyzing rail’s applicability to the Ring of Fire highlights its attributes. Initial estimates for the construction of a 330-km rail link from the CN main line near Nakina to the proposed KWG development will cost $1.561 billion versus $$1.052 billion for a highway. On a capital basis, it would seem rail loses. But once that hurdle is cleared, rail becomes the clear winner with its ability to move one tonne of mine output for as little as $6.33 compared to $59.28 by truck.

There are many other currently intangible factors that need to be weighed. One is the ease with which railways can be converted from oil-powered diesel operation to non-fossil-fuelled electric, not to mention the greater energy efficiency of trains versus trucks.

Time is growing short for the resolution of our national and provincial transportation problems. Other nations have come to grips with similar challenges and have made rail a cornerstone of their transportation policies, integrating it with their plans for the highway, air and marine modes. In an era of increasing globalization, we can’t ignore the fact that most of our competitors are years – if not decades – ahead of us.

If Canada fails to resolve this issue, we’ll pay a steep price. No major nation can compete globally without an efficient and effective rail system. Building and sustaining one won’t come without costs and, as in other countries, some of those costs will have to be borne by the public.

What we require most if we are going to wring the maximum benefits from trains is a blueprint balancing public and private interests. The first step must be the long-overdue public debate leading to the production of national and provincial rail policies. Opening that debate with a public discussion of the transportation choice for the Ring of Fire is an ideal place to begin – for Northern Ontario and the nation.

Authored by Greg Gormick

Greg Gormick is a Toronto transportation writer and policy adviser. His clients have included CN, CP, VIA and numerous elected officials and government transportation agencies.