Canada’s two biggest railways are fighting against a new rail shipping rule in Ottawa’s federal budget bill over concerns that it will increase expenses and congestion. The legislation proposes to expand what is known as “extended interswitching” to 160 kilometers from 30 kilometers in three Prairie provinces for an 18-month period to promote competition and tamp down prices. Interswitching refers to the transfer of cargo between two rail companies where their tracks meet. The practice seeks to give shippers bargaining power, but it has awoken Canada’s two railway giants, who warn of snarled traffic, delays, increased costs, and job cuts. However, farmers and industry groups disagree and see the change leading to lower costs, efficiency, better access to markets, and increased competition. The railway debate is a heated one, with Canadian railways trying to influence politicians through lobbyists. The budget bill passed in the House of Commons on Thursday and now awaits Senate approval.
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