17 December 2004
CPR Chief Executive
Calls for Major Investments in Continental Transportation
The chief executive of
Canadian Pacific Railway said Thursday the entire North American surface transportation infrastructure
is in desperate need of more capacity to keep pace with the growth in global trade.
Robert Ritchie said Thursday traffic bottlenecks currently showing up in ports, border crossings,
around cities and on some highway corridors, are just the beginning. Railways are doing their part by
investing in tracks and equipment, and are doing more co-operation with other railways,
to ease the crunch, Ritchie said.
But he added they are being constrained in their investments by what he calls unfair taxes on their
rights-of-way and for fuel.
Ritchie told the Canadian Railway Club that North American railways pay $1.5 billion yearly in
property and fuel taxes. This would be enough to build 800 kilometres of new track a year, he said.
While railways pay corporate and other taxes, they believe property taxes on their
rights-of-way are unfair, since motorists do not pay property taxes for highways. And
since truckers pay fuel taxes to pay for highways, railways say it is unfair for railways to pay fuel
taxes since they own their tracks.
Ritchie said CPR pays close to $200 million a year in property and fuel taxes.
"We would not have a capacity issue to deal with if that money was available for
re-investments," Ritchie said.
Ritchie said his own railway's business is booming, particularly for bulk goods and containers. He
also said automotive freight is healthy since it serves plants owned by Toyota and Honda that are
both doing well.
But he said the railway has capacity restraints, for example on its main western line between Moose
Jaw, Sask., and Vancouver.
"We need to put in between $500 million to $600 million to resolve the capacity crunch we have
right now," Ritchie said, referring to his Calgary-based railway.
"There's a disconnect here," the CEO said. "Governments know they have serious
transportation issues, yet they're not reforming the policies that are part of the problem."
The railway, formerly based in Montreal, announced this week an agreement to sell a large railyard
in the city to the University of Montreal for the site of a university expansion and a new
superhospital.
Ritchie said CPR is looking to new sites in the greater Montreal area in Ste-Therese and
Lachine.
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