Crow Rate

The "Crow Rate" or "Crow's Nest Freight Rate" was a rail transportation subsidy imposed on the Canadian Pacific Railway ("CPR") by the Canadian government, benefiting farmers on the Canadian Prairies and manufacturers in central Canada.

Origin

In the late 19th century, mineral strikes in southeastern BC near Nelson, Ainsworth, Rossland, Kaslo, Kimberley and Moyie inspired American rail interests to push lines northward, to rail out ore and to provide machinery and supplies needed for the development of local smelters. Both the Canadian government and the CPR wanted an all-Canadian rail line to forestall this American access and to reassert Canadian sovereignty in the area. A rail line was planned from Lethbridge, Alberta to Kootenay Landing near Nelson, British Columbia through the Crow’s Nest Pass, which would also enable the development of coal deposits in the Pass and the Elk River valley, important both for mineral smelting operations and for the CPR's conversion of locomotives from wood to coal.^[1]

The CPR needed government funding and concessions for the construction of this rail line, and the negotiated agreement between the CPR and the Canadian government was contained in the "Crow's Nest Pass Agreement" dated September 6, 1897. Amongst other things, the CPR agreed to provide reduced rail rates for farmers' grain shipped east to the Great Lakes and for farm machinery shipped west from central Canada "forever".

Unfortunately, this may partially be the cause of the abandonment (and in few cases, sale) of thousands of miles of CP branch lines and even secondary main lines due to the grain traffic on many of them being no longer profitable. CP was unable to cover the cost of keeping lines open that primarily served grain elevators, in many cases, due to the low rates that the farmers got, and it ultimately led to the closure of many grain elevators which were abandoned from rail service, thus causing the Crow Rate to arguably have negative long-term impact on CP.

End of "forever"

Although popular with farmers, these reduced rates were not cost-effective for the railway and provided central Canadian manufacturers and grain ports with an unfair advantage. The Crow Rate was suspended by the CPR during World War One and only reinstated in 1925. By the early 1980s, the government attempted to resolve the problems between the competing interests by altering the agreement. The Western Grain Transportation Act of 1983 allowed shipping rates to increase, but never more than 10% of the world price for grain. In addition, further cash payments were made by the government to the CPR.

With the 1993 election of the new Liberal government of Jean Chrétien, the government took steps to eliminate the subsidies altogether. This was implemented in 1995 through the Western Grain Transition Payment Program, which provided one-time payments to farmers to assist them in making the transition away from subsidized shipping.

Reference

1. ^ R.G. Harvey Carving the Western Path, Routes to Remember Heritage House Publishing, 2006

External links

• Video on CBC archives.
• Canadian Encyclopedia entry.
• Ken Cruikshank, Close Ties: Railways, Government and the Board of Railway Commissioners.
• "The New Pioneers" Saskatchewan: The History of Agriculture.