ATB's Todd Hirsch Article on rail issue in Globe and Mail!!

[northfarmer]

Todd Hirsch’s opinion in the March 14 Globe and
Mail on the ‘grain revenue entitlement’ that
railways have when hauling grain contains many
factual errors. Hirsch refers to a maximum
revenue cap, this is misleading and inaccurate. In
reality, there is no cap on the revenue that
railways can generate hauling grain. The policy
that is in place uses a formula to determine the
maximum rate per tonne that can be charged in a
crop year. Haul more grain and make more
money. The annual methodology to determine
the changes to the volume related composite
price index, includes a calculation of changes in
cost of capital as well as changes in prices for
labour, fuel and materials. Perhaps Mr. Hirsch
should provide his estimate on the rate of return
that the railways are already earning under this
formula before he judges it to be inadequate to
meet the needs of railway investors.

When we finally have a chance for meaningful
regulatory change coming out of the crisis of grain
movement this winter we do not need our
provincial bankers economist being a mouthpiece
for the railways.

[sawfly]

if there ever was a miss named program .
this is it.
just shows the ignorance of folks that should
know better
this illousion that other industries will not victim
to this nightmare. their next
what is to stop it

[ProFarmer]

Read tues globe and mail and there is an article saying we farmers are a bunch of winers on page fp9. GRRRR

[northfarmer]

Make no mistake the railway attack dogs are out
and in full force. There will be huge fight back on
the legislative amendments that will be tabled
when the house returns to sit. Service level
agreements with penalties for non performance
are critical to making the railway duopoly work
better.

The revenue cap is a red herring argument to
deflect and distract.

ATB customers need to raise hell and have Todd
called out.

This is rich coming from the bank in Alberta who
brags about its strong support for producers.
Looks like they got fed a bone from railways!

[mcfarms]

And he worked for the CPR pretty obvious where he got his "information" from.





Todd Hirsch is ATB Financial's Chief Economist. He holds a BA Honours in Economics from the University of Alberta and an MA in Economics from the University of Calgary. For over 20 years he’s worked as an economist at several different companies including Canadian Pacific Railway, the Canada West Foundation and the Bank of Canada. For almost a decade, Todd taught economics at the University of Calgary.

[sumdumguy]

Does he have vested interest or has he had to
deal with railways once, ever in order to generate
economic benefit? Easy to shoot your mouth off
about economic theory when the reality is
something quite different.

[ColevilleH2S]

I assume <a href="http://www.toddhirsch.com/1/post/2014/03/the-sacredness-of-canadian-agriculture.html">THIS</a> is what he wrote in the Globe.

My favourite quote,"Canadian agriculture manages to command a degree of sacredness that even the Pope would envy."

[Hopalong]

After reading 'this',have a completely different
view than presented in earlier comments.

[farming101]

Another similar inaccuracy in the latest AgAdvance magazine.

"The Canadian Transportation Agency reported that the railways earned $1.1 billion moving Western Canadian grain in 2012/2013, a level very close to the allowable limits under the rail cap."

This implies that the total amount the railways can earn is a little more than 1.1 billion moving grain.
WRONG! It is a per tonne rate. Move more tonnes, earn more revenue.

I wish these articles were accurate. This isn't helpful.

[Hopalong]

Just reread the Agadvance story. Agree with
farming 101 that rail revenue entitlement is not a
total revenue cap but is based on amount and
distance moved.
Problems come when railways can make more
moving other traffic. There does not seem to be a
way for grain shippers to pay more to get railways
to haul sooner to meet shipper commitments even
though both parties might profit from that.
Changes to so called revenue cap are necessary.