The National Post is Canada’s second largest national paper.
Pierre Gratton is President and CEO, Mining Association of Canada.
The rail and mining industries have a dependeant relationship. Without rail freight service, mining companies would be challenged to operate since Canada’s vast geography doesn’t exactly make delivering products to ports and smelters easy. And without the mining industry, the railways would lose their biggest client.
Our industries are a natural fit, but issues over market power have complicated our relationship. As a general rule, the more competition, the more likely customers will receive better service at lower prices. No competition breeds market power, which results in high prices and leaves customers with no alternate provider to turn to – repercussions of what’s known as a natural monopoly.
The Canadian railways are often considered a typical example of a natural monopoly. The high costs of laying track and servicing Canada’s vast geography have resulted in a lack of competition among the railways – Canadian Pacific (CP) and Canadian National (CN). To further aggravate the issue, the remote locations of mining operations often mean shippers are limited to just one of the two railways, and frequently stranded without alternative shipping methods. Continue Reading →