The influence of grain freight rates on the farm land market in the Prairie Provinces

Abstract

Research in Canadian transportation and agricultural policy has seen extensive amount of time and effort expended upon examining the inefficiencies in the movement of Prairie grain. The statutory freight rates, more commonly known as the Crowsnest pass rates, have been singled out as one of the major contributors to the existing inefficiency in grain movement. The rates are fixed by Federal statute. They apply to rail transportation of all export movements of grains, certain feed products and grain by-products, from all Prairie points to Vancouver, Prince Rupert or Churchill and; to both export and domestic movements from any point west of Thunder Bay to Thunder Bay or Armstrong. The statutory freight rates developed as an extension of the Crowsnest Pass Agreement of 1897. In the agreement, a substantial subsidy was made available to the Canadian Pacific Railway company by the Federal Government to build a rail line from Lethbridge, Alberta, through the Crowsnest Pass, to Nelson, British Columbia. In return for this subsidy, the Canadian Pacific Railway company agreed to make several concessions to the government. One of those concessions was the Crowsnest Pass grain freight rates for grain and flour moving from the West to the Lakehead. Among the reasons why the Federal Government undertook the agreement with the Canadian Pacific Railway company were expansion of the economy, further development of export markets, and the assertion of national sovereignty. In 1925, the Crowsnest Pass Agreement was dissolved and amendments were made to the Railway Act. Those amendments made the Crowsnest freight rates statutory for movements of Prairie grain and flour to the Lakehead. Subsequent changes to the Railway Act extended the rates to export movements from the Prairies to the Pacific ports and Churchill. In addition, alterations were made to the grain categories covered...