High times ahead for Canadian rails

Canada’s three major railways should benefit from the Oct. 19, 2015 sea-to-sea election sweep by Justin Trudeau’s Liberal Party of Canada. Trudeau’s party even managed to get four members of parliament elected in Alberta's two metropolises, Calgary and Edmonton—the ideological and financial anchors of the defeated Stephen Harper’s pro-pipeline and anti-rail Conservative government.

Canadian voters issued the final death warrant for the ailing Keystone XL trans-border pipeline project, for which Harper was the last surviving cheerleader, having spent millions of taxpayer dollars promoting the private-sector scheme. The election of a greener government determined to redeem Canada from its reputation as an environmental pariah means a screeching halt to expansion of Alberta’s northern tar sands.

New pipeline capacity is decades away because the Liberal government has promised to restore credible social and environmental assessment processes before new energy projects will be considered.

That means CN and Canadian Pacific will continue to haul their existing shares of tar sands output to U.S. markets (assuming shippers find a way to avoid diluting the bitumen with extremely explosive naphtha). Any additional tar sands production from capacity expansions too far along to stop will also be shipped by rail.

Harper publicly damned rail as a dangerous alternative to pipelines, directing every bit of blame for Lac-Mégantic and subsequent oil train calamities against the carriers, while deflecting any attempts to hold oil shippers responsible for the condition of their consignments. Only a handful of operating employees of the hapless, defunct Montreal, Maine & Atlantic face criminal charges. This, despite a public revelation by the consignee, Irving Oil of New Brunswick, that it knew for months before Lac-Mégantic that the volatility of its Bakken crude deliveries was being routinely misrepresented in shipping documents.

The demise of the Western-based Conservatives should also mean an end to government harangues and penalties aimed at freight haulers on behalf of prairie grain growers.

For Canada’s national passenger carrier, Via Rail, the election of the Liberals should mean unlocking funds to proceed with significant infrastructure projects and fleet improvements. Contrary to the Conservatives and their starve-the-state dogma, Trudeau has promised many billions in public infrastructure investment, to be funded by higher taxes for individuals earning more than $200,000 and good old-fashioned Keynesian deficits to fill the economic void left by Harper’s delusions of Canada as an energy superpower.

Via will also find a more sympathetic ear in Ottawa for its scheme to blend private and public investment in a new, dedicated passenger line linking Montreal, Ottawa and Toronto.

Along with the promised legalization of marijuana (Trudeau is an admitted recreational taker), the country’s return to centrist politics and Keynesian economics should mellow relations between Canada’s government and the country‘s vital railways.