Have you been trying to follow the current Crow debate? Or has it become too complicated to keep up with, even in a casual way? This two part question-and-answer article outlines some of the details of the issue, its historical background and problems associated with it. The second part will appear in the next issue.

Q. What is the origin of the Crow rate?

A. It began with passage of the Crow's Nest Pass Act in June, 1897, by the federal Parliament. Canadian Pacific and the government signed the Crow's Nest Pass Agreement on 6 Sep 1897.

As part of the agreement, the company undertook to construct the Crow's Nest Pass line, which extended its rail system from southern Alberta to British Columbia. The company also agreed to reduce eastbound rates for grain and flour moving to the Lakehead. (The railway also agreed to reduce rates on certain westbound goods.) In return, the company earned (for building the line) $3.4 million in cash from the federal government. Through another agreement, related to the construction of the British Columbia section of the line, it received 3.7 million acres of land from the B.C. government.

Q. Canadian Pacific received a payment of $25 million and 25 million acres of land as part of an 1881 agreement. How does this relate to the Crow's Nest Pass Agreement?

A. It doesn't. The 1881 agreement was to build the transcontinental railway, which was completed in 1885, 12 years before the signing of the Crow's Nest Pass Agreement.

Q. Is the Crow agreement of 1897 the same one that exists today?

A. No. It was revoked in 1925 by Parliament and replaced by a statute that prescribed rates for grain and flour which were applied to all grain and flour going to the Lakehead from all western points existing then or later on all railways. This came about because the Supreme Court had decided that the original deal covered only the 289 points on Canadian Pacific Railway in 1897, which would have led to disparities affecting newer loading points.

It now applies to some 1,225 points on both railways. (The 1925 law also eliminated those reduced rates on certain goods moving west).

In 1927 the Crow rate was extended to apply to export grain going to the west coast as well. In 1931, export grain moving to Churchill was covered by the rate. In 1961, Parliament extended the law to make the rate to apply to rape seed (canola).

Q. Which change was the most significant?

A. The 1925 change. It altered the situation from one governed by a two-party agreement (between the federal government and Canadian Pacific Railway) to one of national policy imposed by statute. This action greatly extended the scope of the original agreement.

Q. What is the Crow rate now?

A. It is about half a cent per ton per mile. The full cost to move the grain is about three cents per ton mile, or about six times the amount paid under the Crow rate.

Q. What happened to the land Canadian Pacific received from the B.C. government?

A. Canadian Pacific disposed of it over a period of some 50 years with a net return to the company of $1.8 million. In all, the company received a total of $5.2 million in federal cash and B.C. land for building the line. Construction costs totalled $9.8 million.

Q. What did the Crow do for the nation?

A. There was a time when the Crow was considered to be of value. J. Lorne McDougall, a Queen's University transportation economist, has observed that "up to 1914 the Crow rates were good developmental rates, good for the railways, good for the shippers, thereafter, they were an anachronism."

Q. What is the effect of the Crow today?

A. Grain losses, which now amount to a railway subsidy to the grain transportation system, have reached unmanageable levels. In spite of growing federal involvement in hopper car purchases, branch line subsidies, and rehabilitation, losses now threaten the financial integrity of the railway system.

There was never any suggestion either in the 1897 Crow's Nest Pass Agreement or in 1925 when the rate was made extended and made statutory, that Parliament intended or expected Canadian railways to lose money carrying grain at the rate levels prescribed.

This CP Rail News article is copyright 1983 by the Canadian Pacific Railway and is reprinted here with their permission. All photographs, logos, and trademarks are the property of the Canadian Pacific Railway Company.