CANADIAN RAIL SUBSIDIES AND CONTINENTAL BARLEY FLOWS: A SPATIAL ANALYSIS

Abstract

Rail subsidies provided under the Western Grain Transportation Act (WGTA) have been controversial within Canada and an issue in recent trade disputes with the U.S. A detailed spatial equilibrium model of the North American barley market is used to assess the effects of WGTA subsidies. Simulation results indicate that elimination of these subsidies would induce a larger flow of barley from Canada to the United States.