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Rail News: Rail Industry Trends

Canada needs regulatory reform to provide railroads taxation relief, CPR's Ritchie says


Rob Ritchie believes it's absurd that property taxes on Canadian Pacific Railway's right of way range from $913 per mile of track in one province to $8,802 in another.

The Class I also pays provincial fuel taxes ranging from 1.5 cents to 15 cents, said CPR's president and chief executive officer in a speech before the Western Transportation Advisory Council Nov. 19 in Vancouver, British Columbia, according to a prepared statement.

Meanwhile, truckers don't pay any property taxes to use roads, and the fuel tax they do pay helps improve and expand Canada's highways. None of the fuel tax paid by railroads filters back into the rail network — some of it actually is poured back into the highways, said Ritchie.

"Do you see yourselves as ministers of transportation or as ministers of highways?" he asked attendees.

Ritchie believes Canada should eliminate rail taxes and allow railroads to invest that money in their infrastructure.

In the absence of taxation and regulatory reform, public-private partnerships could help create a more level playing field with trucks, he said.

"Through such partnerships, we would be able to do more to expand and improve urban and inter-city passenger rail … decongest the major arteries of truck traffic and, at the same time, make trucking more efficient by transporting trailers between terminals in major hubs," said Ritchie.

For example, CPR has proposed a $600 million Detroit River Tunnel Project with partner Borealis Transportation Infrastructure Trust. The partners would build a rail tunnel under the Detroit River and convert CPR's existing rail tunnel into a two-way roadway for international truck traffic.

CPR and Borealis are seeking $150 million from a $300 million border infrastructure upgrade fund created by the federal and Ontario governments to help fund the project.

Contact Progressive Railroading editorial staff.

More News from 11/20/2002