Regulation and the Supply Chain

Since 2020, CP persevered through the COVID-19 pandemic, devastating wildfires and catastrophic washouts in the B.C. interior, extreme winter weather conditions on the Prairies, and extensive flooding in Southern Manitoba. CP’s commitment and drive remained constant. 

CP overcame significant obstacles to continue delivering service to its customers. CP also supported many communities along the network that were affected by the extreme weather events.

CP transitioned to precision scheduled railroading (PSR) in 2013. PSR is an operating philosophy that has driven impressive performance improvements across every metric. A tried and tested operating model that delivers results for customers, employees, shareholders and supply chains, PSR is an unrelenting commitment to moving a customer’s freight from origin to destination in as safe, reliable and efficient a manner as possible. 

At CP, PSR has evolved into an overarching philosophy that fundamentally values performance.

The implementation of PSR a decade ago has allowed CP to significantly increase its capital investment, which has in turn unlocked substantial benefits for our customers, including improved service and higher productivity. 

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CP is growing its network to offer improved service and more destinations and routing options to rail customers. As we grow, CP continues to provide even more efficient and environmentally sustainable freight transportation across North America. In 2020, CP completed its acquisition of the Central Maine & Quebec restoring and expanding CP’s service to Quebec, Maine and Atlantic Canada. 

In 2021, CP closed the transaction for the acquisition of Kansas City Southern, the smallest class I railroad in North America. The combination of CP and KCS, which remains subject to regulatory approval in the United States, would create the first single-line railway network connecting Canada, the U.S. and Mexico.

With the Transportation Modernization Act (Bill C-49), which became law in the spring of 2018, the Parliament of Canada wisely replaced the previous extended regulated interswitching limit with the long-haul interswitching (LHI) regime. Significant policy work by Transport Canada officials and extensive consultations with industry occurred at that time to design the LHI regime.

A return to any version of the previous extended regulated interswitching regime will unavoidably harm the performance, capacity and competitiveness of Canada’s rail-based supply chains. It would be prudent to leave in place the LHI regime that was created for the express purpose of avoiding these harms.

Canada has among the lowest freight rates in the entire world.

Canada’s National Transportation Policy, as articulated in Section 5 of the Canada Transportation Act, recognizes that competition and market forces are the best means of providing a viable, effective, sustainable and cost-competitive transportation system. CP's customers, and by extension, the Canadian economy, benefit from a competitive rail system, which features high levels of private sector capital investment, industry-leading safety performance, innovation, and a cost-competitive service.
 
Despite a healthy market with competitive transportation options, Canadian rail shippers have access to many regulatory remedies under the Canada Transportation Act, such as final offer arbitration on rates, the statutory right to a service level agreement with the railway, service arbitration, regulated interswitching and running rights.