Published on Wed, 07/06/2011 by Farmers of North America

Communities Call For Action on Rail

In a joint release the leaders of seven municipalities are publicly calling for action to maintain rail service to their region. As part of their call to action, they are announcing that they have joined together to seek a Net Salvage Value Determination from the Canadian Transportation Agency in anticipation of arriving at a value for which the line can be purchased and retained as a short line railway.

The region is large spanning five rural municipalities in south west Saskatchewan. CP Rail is in the process of formally abandoning the only line that connects communities to the primary rail network. The line runs from Hodgeville to the CP Expanse subdivision near Mossbank.

The line currently serves thousands of farmers and local businesses.

If the line is abandoned, farmers and other rail users will be forced to use facilities at long distance. The increased use of large trucks has proven to dramatically increase costs to municipalities in road maintenance, beyond the costs imposed on farmers. Greatly increased use of diesel will definitely increase the region's contribution to green house gas emissions and lay more misplaced blame at the feet of farmers for environmental impacts.

The communities have been advised that CP is seeking to have a commercial value placed on the line that exceeds the normal standard of scrap steel. Reliable information indicates that once rail that has been removed by both CP and CN it enters the "re-lay" market and from there has been exported to South America where it has been relaid in rail networks serving South American farmers. Essentially, the railways are making extraordinary profit by lifting rail lines that have been paid for by Canadian farmers and taxpayers and allowing them to be relaid as lines that directly compete with Canadian farmers.

George Dyck, Councilor for Hodgeville, said the situation is morally wrong because the abandonment process is making the communities pay for a line that CP has already been paid for once through the Rail Rehabilitation Program.

"They took all this money from taxpayers to rehabilitate the line, so we already paid for it. Now they want us to pay them for it again and they want us to pay at a rate foreign governments will pay to create unfair competition against our farmers. That's just wrong."

The Mayor of Gravelbourg, Real Forest, said there is some hope that a commercial operator could have success negotiating with CP. Farmers of North America has been working with both the communities and a commercial venture trying to obtain the line.

"But if CP is trying to leverage millions of extra dollars out of our small communities, I can't see them dealing very well with a commercial offer."

The communities acknowledged the effort of the provincial government in being willing to cost share their part of the expense for the Net Salvage Value process. However, the communities believe the federal government should be taking a stronger role in pressing CP to be more reasonable.

The municipalities are calling on the federal government to prevent the CTA from considering the potential export price of the rail or its "re-lay value" but to stick to the salvage value as historically determined as scrap metal; to consider acting to recover the taxpayer's money CP wasted in rehabilitating a line it now claims is worthless as a line but only has value if ripped out; and finally to direct CTA to calculate the final value by subtracting the fees that would be paid to the municipalities if CP were allowed to tear out the track.

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For more information contact:

Town of Gravelbourg. Mayor: Real Forest, 1-306-648-3301
Village of Hodgeville. Councillor: George Dyck, 1-306-677-2223

Additional comment or perspectives available from:
RM of Sutton. Reeve: Richard Nagel, 1-306-354-2414
RM of Gravelbourg. Reeve: Roland Levac, 1-306-648-2412
RM of Glen Bain. Reeve: Ivan Braun, 1-306-264-3607
RM of Lawtonia. Reeve: Barry Leisle, 1-306-677-2266
RM of Shamrock. Reeve: Dwayne James, 1-306-648-3594

Glenn Caleval, Communications Advisor, 1-306-683-9877
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