Prepared By: John Coleman, Senior Fellow
Regulatory Governance Initiative, School of Public Policy and Administration
August 3, 2015
As the title suggests, this report describes the interrelationships among capacity, congestion, system optimization, and levels of service in the rail freight transportation system in Canada in the context of the Canada Transportation Act. It raises two very important points: first of all, that Canadian transportation policy has not articulated what is the primary goal of freight rail transportation in Canada; and secondly, largely as a result of the first point, legislation and regulation within the current framework are increasingly creating a system of “local optimization” (i.e. optimizing service and performance on a shipper-by-shipper basis) inconsistent with, and to the detriment of, the concept of entire “system optimization” (under what the author calls “Model 21” – the new railway business and operating model for the 21st century). The research report addresses the following issues: how demands are placed on the railway system and what impact this has on railway operations, service, and planning; limitations in railways’ ability to plan and optimize traffic, and the possible benefits that may accrue from improved planning; the options that exist for improving rail service to shippers, based on the current North American regulatory structure; and finally, how the economic regulation of railways (and the availability of more timely and relevant data) can be improved to better support Canada’s international competitiveness, trade interests, and economic growth and prosperity.