Transport committee  If I could just add to clarify, I want to make—

Transport committee  My concern with the rural shippers in those remote locations in particular is that it may actually be harmful to them, because to the extent it encourages that movement—those cars to be off the CN network, let's say—it will be very difficult for us to justify the investments required to keep remote lines operational.

Transport committee  Rail is most competitive when we're talking about long-haul shipments. The number that we use often in the industry is about 500 miles. So if it's shorter than 500 miles, it will be very difficult for rail to compete with truck. In the instance I referred to, the shipper was actually using truck to get onto the rail network, but at a point much further down than their actual physical location.

Transport committee  In CN's context, in the context of business law specifically related to the extended interswitching under Bill C-30, it's probably in the order of a couple of thousand carloads.

Transport committee  Percentage-wise it would be very small. Our concern is the potential going forward particularly with the long-haul interswitching.

Transport committee  Maybe I can take that with an example. We have an existing customer today located in a remote region that ships lumber, and they ship all of that lumber today by truck. In coming together on a commercial basis, we made a decision to make some investment in order to bring rail to that customer, which supports our climate change agenda and supports the low-cost enabling of the infrastructure and the shipping of freight.

Transport committee  We certainly have lost business to BN, as an example. In the context of negotiation, you have to remember that the vast majority of our customers are very large shippers. The top 150 customers of CN represent about 80% of our revenue. These are large multinational companies that have many means of exerting influence and pressure in the negotiation.

Transport committee  I would echo Mr. Clements' comments. Certainly as it exists today, there are six major railroads in North America. Two operate in Canada, two operate in the western United States, and two operate in the eastern United States. It appears unlikely in the context of recent actions that the U.S. regulatory environment would proceed with any type of consolidation scenario.

Transport committee  In any competitive industry, we want to be on an even playing field with our competitors, and we aren't today. When we look at the U.S. regulatory framework, there's no common carrier obligation. They're not obliged to carry traffic. There's no final offer arbitration, no group final offer arbitration.

Transport committee  It's imperative that we have a level playing field with our competitors if we want to remain competitive in an industry that might eventually consolidate.

Transport committee  Yes, it does.

Transport committee  The difference is in the way the rates are negotiated. In the U.S. it's done on a commercial basis. What's being proposed here in Canada is to have those rates all fall under a regulated regime. That's the key difference.

Transport committee  We do indeed. In fact about 30% of our business is interchange business with other railroads.

Transport committee  I think our experience with short lines has shown us that if it's not economically viable for us to operate, the likelihood that it's economically viable for a short line is very unlikely. It's not a matter of having a short-line operator come in to operate in those remote regions.

Transport committee  I think LHI is significantly broader than what was in place in the context of extended interswitching. The fact that extended interswitching was somewhat a temporary measure may have also played into the fact that shippers perhaps limited their use. Our point with respect to both of those remedies is that if the shipper has rate and/or service issues, there are significant existing remedies the shipper can use, and we see them used.