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HISTORICAL PERSPECTIVE AND PROPOSITIONS ON THE CROWSNEST PASS FREIGHT RATE AGREEMENT
Author(s) -
Kulshreshtha S.N.,
Devine D.G.
Publication year - 1978
Publication title -
canadian journal of agricultural economics/revue canadienne d'agroeconomie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 37
eISSN - 1744-7976
pISSN - 0008-3976
DOI - 10.1111/j.1744-7976.1978.tb02909.x
Subject(s) - subsidy , public interest , interest rate , cash flow , economics , payment , competition (biology) , public economics , rate of return , parliament , cash , discounted cash flow , business , politics , finance , political science , law , market economy , ecology , biology
Summary In summary, the Crowsnest rates were agreed upon by the CPR in return for access to the Kootenay district of British Columbia. The cash subsidy involved was in the neighborhood of $3.4 million. The rates were fixed in perpetuity; thus could only be changed by Parliament if deemed in the public interest. The original agreement has been modified once to date in the name of public interest. Despite the polarization of public opinion on the Crowsnest rates, the effect of freight rate changes is not well documented 16 and, owing to a lack of objective evidence, the debate remains inconclusive. Obviously there is a need for more empirical work in this area. The principle of the Crowsnest Rate is with little doubt extremely important to Western Canada; however, the application of the subsidy and the method of payment may not be in the West's best interest. Thus, given the premise that the rates may be changed if they are not in the public interest, we propose, at a minimum, the examination of three research questions:i. the economic consequences of adjustment, readministration or removal of the rates on regional development ii. the political consequences of tampering with a regional subsidy including income redistribution and just compensation, and iii. The effective control of all rail rates at competitive levels in the future particularly in regions where effective competition is questionable and the performance possibilities of public versus the private provision of transport services under selected circumstances. These issues we suggest need to be addressed individually and in depth, so that society can begin to weigh their impact on the future economic development of Western Canada.