Editor’s Note: The following editorial was written by Rob Ritchie, President & CEO of the Canadian Pacific Railway.
CALGARY — Re All Aboard The E & N (editorial — April 13): The plight of the Esquimalt and Nanaimo Railway is a clear example of decades of ill-thought-out public policy regarding railways. It is a microcosm of what has occurred across the country since the 1950s, according to an editorial in the Globe and Mail, written by Rob Ritchie.
The capital for modernization of roads is provided by taxpayers. For rail, modernization comes from the revenues charged to customers. All the costs must be recovered or the business fails. There are no subsidies from government except for most passenger operations, which are a small fraction of the rail business in Canada.
For the effect of this constant subsidization of road systems by governments, look no further than the highways on Vancouver Island. It is not a coincidence that the E & N faces a truly bleak future since the completion of a major new four-lane highway on Vancouver Island.
In addition, taxation policy favours road over rail: Rail rights-of-way are taxed, highways are not. In 2000, Canadian railway property tax was $134-million.
Railways and highway users also pay fuel tax. Sounds the same, but it is not.
Governments sometimes say they reinvest the fuel tax back into the roads. If that’s true, then railway taxes should be reinvested into railways or, in practical terms, not collected at all, since railways have to constantly reinvest in their infrastructure. Railway fuel taxes are, in effect, used to upgrade roads that attract more truck traffic and take business away from railways. Fuel taxes extracted $178-million from the rail industry in 2000.
Think about what $134-million plus $178-million could do for what you suggest is “shameful neglect” of our rail system. Imagine the mix of transportation modes there might be on Vancouver Island, and elsewhere, if the right policy balance were in place.