Rail shippers willing to try, try again to get rail service bill fixed

A coalition of Canadian rail shippers sent a letter to the federal transport committee in February 2013, demanding immediate changes to the then pending Fair Rail Freight Services Act (Bill C-52).

If left unchanged, they said, the railroads could render the bill’s provisions ineffective in court.

The group put forward six amendments, nicknamed in Ottawa circles as the “big six.” Among the suggestions, the shippers wanted a clearer definition of service, mandatory service level agreements and reciprocal penalties.

These changes, the group insisted, would “minimize uncertainty, give more explicit guidance to arbitrators and limit the opportunity for railways to mount legal challenges designed to frustrate the intent of Parliament, delay decisions and lead shippers, both large and small, into expensive legal battles.”

The majority Conservative government eventually rejected all six amendments.

A year and two months later, in light of a massive grain backlog across the Prairies, not much has changed.

Shippers and the railways are still griping, blaming everyone but themselves for the unprecedented backlog well into its seventh month.

No service level agreements have been negotiated or signed.

The “big six” are all back on the table.

And, while the bill number (Bill C-30) and the committee studying it (agriculture) may have changed, MPs are still struggling to find a solution to longstanding service problems.

Some stakeholders have hailed their latest attempt, the Fair Rail for Grain Farmers act, as a step in the right direction.

Most though, including industry, farmers and academia, still say the bill doesn’t go far enough.

Critics of Bill C-30 argue that it lacks teeth. Missing again, they said during eight hours of emergency agriculture committee meetings last month, is a precise definition of service.

Nor does the bill make service level agreements mandatory, complete with reciprocal penalties, something industry has been demanding for years.

MPs were told again the legislation must be amended.

In what’s become standard practice in Ottawa, the Conservatives voted down every opposition amendment.

A Conservative change would alter the bill slightly. The new section orders the railways to pay “any ex-penses” incurred by any person be-cause of poor service.

Critics have been quick to point out a flaw. The bill still lacks a clear definition of “service” or “expenses.”

The Conservatives have said that those definitions, along with better guidelines for federal arbitrators negotiating service level agreements, will come via regulations.

However, the regulations are still being drafted. When and what those regulations will look like remains to be seen.

Whether they will prevent the railways from playing games is also to be determined.

The pending Fair Rail for Grain Farmers Act sunsets after two years. With tensions between the railways and shippers at an all time high, there’s plenty of time for the railways to stall, particularly because any penalty levied by the Canadian Transportation Agency (CTA) is eligible to be challenged in court under the Canada Transportation Act.

With the railways being framed as “failing the country,” Canadian National Railway president Claude Mongeau recently told the Winnipeg Chamber of Commerce the railway is considering its options.

He said one shipper is seeking federal arbitration for a service level agreement, and CN is planning its presentation to the CTA.

Mongeau said the railway will also seek federal regulations for grain companies, which have managed to avoid blame even though they’re making promises to farmers and customers the railways simply can’t keep.

One thing is for sure. Rail service for bulk goods, like grain, is an issue that is not going away any time soon.

Federal transport minister Lisa Raitt has said the promised rail service review, originally set for June 2015, will start this summer.

If the “big six” fail to be included in the Fair Rail for Grain Farmers Act this spring, shippers are guaranteed to trot out the changes for the third time this summer during the government’s rail review.

One can only wonder what the Conservatives will say then.

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