TRANSPORTATION POLICY, COMPETITION AND ECONOMIC GROWTH *

Canadian transportation policy states that the best way to meet the needs of the Canadian economy and Canadians is to have a transportation system that is competitive, economic and efficient. The competitiveness of Canadian firms in Canadian, North American and world markets depends on the efficiency of the transportation system. The Canada Transportation Act (CTA) maintains the needs of users and the well being of Canadians in rural and urban Canada are met when transportation is provided in the most efficient way possible, namely, at the lowest total cost. The CTA is also clear in stating that the objectives of Canadian transportation policy in serving the needs of users and advancing the well-being of Canadians are achieved, among other things, when rates and conditions do not constitute an undue obstacle to the movement of traffic within Canada or for export and that competition and market forces, both within and among the various modes of transportation, are the prime agents in providing viable and effective transportation services. In essence, the CTA provides that transportation services should be supplied at rates that cover the cost of providing transportation services. Therefore, both the users of transportation services and the providers of transportation services will have their respective needs met by a “competitive, economic and efficient national transportation system”.1 While section 5 of the CTA is a clear statement of policy that competitive market forces should be the means of achieving the objectives of policy, the federal government has adopted differing strategies across modes for achieving those objectives. In rail an