Transport committee  Most grain needs to move in significant bulk volume, and it's just the inherent nature. You're going to ship a 150-unit car train of bulk grain, and the efficiency of doing the equivalent amount of grain in an intermodal container just doesn't compare.

Transport committee  I think that's an issue that is in front of all of us that we need to try to figure out. We do have an issue with the hopper cars. It was government that had invested in them in a significant way in the last round. The cars are coming to the end of their useful lifespans. There is a significant problem with the maximum revenue entitlement and how it treats investments, which is what we refer to as the free rider problem, meaning that if CN goes and buys 1,000 new hopper cars, the formula by definition gives 50% of the benefit of that investment to my competitor.

Transport committee  The regulated rates are essentially a variable cost, accounting for fuel and labour and not much more. Inherently, therein lies the problem. There is nothing accounted for in terms of the required investment to keep the railway operational on a go-forward basis. Our view would be that the ability to negotiate those rates on a commercial basis would be the best practice.

Transport committee  Short-line rail is a very important partner for us in the supply chain. They typically have smaller branch lines that feed into the larger CN and CP networks. Certainly coordination, good information sharing, is an important part of how we deal with the short-line network. However, with respect to Bill C-30, CN doesn't have a particular view with respect to the short-line perspective in that regard.

Transport committee  There are five class I railroads. Essentially, there are four major railroads. Two of them operate exclusively east of the Mississippi River, two operate exclusively west of the Mississippi River. The fifth is more of a regional railroad comparable to a large short-line. In terms of the relative competitive landscape, U.S. versus Canada, it's virtually identical, given that in Canada most of the geography is covered by two major railroads.

Transport committee  I would just add another comment to that. The regulation of the 160 kilometres was not based on a thorough fact-based, data-rich analysis. In the context of developing good transportation policy, I think we're trying to do that analysis before we make the policy. There's good justification to allow it to sunset and perhaps continue the research, if that's required.

Transport committee  Shippers would still have the option to use BNSF should they want to get their grain to U.S.-destined locations—

Transport committee  But the rates to do so would be at a commercial rate as opposed to a regulated rate.

Transport committee  Good morning. My name is Janet Drysdale. I'm vice-president of corporate development for CN Rail.

Transport committee  While quotas are an ineffective means to increase capacity, extended interswitching is far more problematic, undermining Canada's export agenda and exacerbating the looming issue with respect to railcar capacity for grain. For those of you who travel by air to Ottawa, I imagine that given the option, you prefer a direct flight.