Government considers all options | Railways, grain firms ordered to clean up backlog by end of March or face penalties
OTTAWA — Federal agriculture minister Gerry Ritz said last week that he doubts the railways will be able to move the grain they need to clear the backlog.
His statements followed a meeting with the railways that he described as containing more sticks than carrots.
“They did it for two weeks in the fall coming off the combine, but to do it in a long term, strategic, week after week, I am skeptical,” he said.
Ritz said Canadian National Railway and Canadian Pacific Railway would need to put far more cars on the rails to clear up the problem.
He said the federal government is still considering all options, including regulations that would fine the railways for poor service. Some reports indicated there could be an announcement earlier this week, after Western Producer deadlines.
Ritz has also ordered the railways and grain companies to clean up all grain contracts from last fall by the end of March or producers will be able to start charging interest.
“The first and best option is continued dialogue, but we’re not going to talk forever,” he told reporters after addressing farmers at the Canadian Federation of Agriculture annual meeting.
He said the railways continue to spot cars in locations that don’t meet grain companies’ needs, which has to change.
Ritz and federal transport minister Lisa Raitt could also sign regulations allowing for penalties, as well as consider options that include orders-in-council and legislative change.
Farmers at the meeting said Raitt’s continuing silence on the backlog was a concern.
“We need to have some assurance out of the transport department because my experience has been that transport has always been very railroad friendly,” said Alberta Federation of Agriculture president Lynn Jacobson.
Raitt was supposed to attend a CFA event but did not appear.
Liberal leader Justin Trudeau told the meeting that Raitt should tell the railways to “get this done.” He said it’s absurd that Canadian railways are leasing or selling locomotives to the United States while Canadian grain sits.
“It’s something that should be dealt with fairly straightforwardly by a transport minister that’s willing to actually step up and say, ‘get your act together, railroads.’ ”
Trudeau said the solution is simple.
“We need mandatory enforceable service agreements with the railways. We need clear penalties that are enforced.”
Federal NDP agriculture critic Malcolm Allen said the bottleneck is strangling the economy, and he urged the government to take more immediate, decisive action.
“The time for talking is over,” he said.
“The time for bringing out the big stick is now.”
Ritz said meetings over the last week included discussion about both carrots and sticks, but mostly sticks. He said he was so “mean” during meetings that the railways called Raitt and asked for him to be removed from the file.
He said the railways must enhance both surge and long-term capacity. Crops are getting bigger generally, the record crop of 2013 notwithstanding.
Agricultural Producers Association of Saskatchewan president Norm Hall said the railways aren’t even moving as much as they did last year.
“We don’t expect them to move 140 percent of normal of our grain crops, but we do expect them to at least move normal crops,” he said.
Outstanding orders for grain cars were estimated at 55,000 last week, with 50 ships waiting in port. One ship from Japan had been turned away.
Hall said the University of Saskatchewan estimated agricultural losses at $2 to $4 billion.
“That takes out all of the trade deals that you’ve worked so hard to create for us,” he told Ritz.
“That takes out all of the increased yields that we’ve got over the last 20 years. We might as well be growing Marquis and have 25 bushel yields with what they’re doing to us right now.”
Ritz agreed, saying Canada worked hard on the trade deals.
“To see them negated within a year just breaks my heart,” he said.