The relationship between Canadian grain farmers and the rail transportation industry is one of historical dependence on a system that is accountable only to the shareholders of the two largest rail companies. As the majority of Canadian grain is shipped to market by rail, the reliability of the Canadian grain handling system is directly related to farmers’ competitiveness in domestic and global markets.
This dependency was highlighted in the record-breaking 2013 – 2014 crop year when severe weather, higher-than-anticipated crop yields and competition for access to rail transportation led to severe backlogs at the farm gate, elevators and finally at port. Farmers were unable to ship their product for months on end, resulting in large financial losses for many western Canadian farmers. This situation exacerbated the unbalanced relationship between agriculture shippers and the rail industry and led the federal government to introduce temporary measures including extended interswitching distances up to 160km in the prairie provinces and mandated grain volumes in the Fair Rail for Grain Farmers Act of 2014 (Bill C-30). The government also responded to the crisis by accelerating a full Review of the Canada Transportation Act.
It is our belief that farmers should be competitive in their own right, and that the grain handling industry should be balanced and fair for all parties, be they grain farmers, handlers or shipping companies. As part of the recent review of the Canada Transportation Act (commonly referred to as the “Emerson Report”), GGC provided the following recommendations to the federal government:
Recommendation 1: that adequate and suitable accommodation be properly defined under the common carrier obligations of the Act as follows: “For the purposes of sections 113 and 114, a railway company shall fulfill its service obligations in a manner that meets the rail transportation needs of the shipper.”
Recommendation 2: That reciprocal penalties be included in arbitrated Service Level Agreements at the shipper’s request.
Recommendation 3: That the interswitching measures included in Bill C-30 be made a permanent feature of the Act and that consideration be given to further extension of the limit to include more shippers.
Recommendation 4: That the Maximum Revenue Entitlement (MRE) be maintained, with a review considered only once level of service deficiencies are addressed.
Recommendation 5: That the Canadian Transportation Agency be granted independent authority to investigate railway issues of its own accord as exists in the US with the Surface Transportation Board.
The announcement of the Transportation 2030 plan by Minister Marc Garneau on November 3, 2016 included many of these key recommendations and, if implemented before the 2017/2018 crop year, could help pave the way towards a more equitable and reliable grain handling system.