Ottawa has renewed a federal order that dictates how much grain must be moved each week by Canada’s largest railway companies.
Federal agriculture minister Gerry Ritz and transport minister Lisa Raitt announced late Nov. 29 that weekly grain volume requirements will remain in place until March 28, 2015.
However, the volume requirements have been reduced from the levels that were previously in place.
Beginning Nov. 30, Canadian National Railway and Canadian Pacific Railway will be required to haul 200,000 to 465,000 tonnes of grain per week or face fines as high as $100,000 per week for non-compliance.
The exact amount that the railways must haul each week will vary depending on the time of year.
According to Ottawa’s plan, both CN and CP must haul:
- 345,000 tonnes per week between Nov. 30 and Dec. 20.
- 200,000 tonnes per week between Dec. 21 and Jan. 3, 2015.
- 325,000 tonnes per week between Jan. 4, 2015 and Feb. 21.
- 345,000 tonnes per week between Feb. 22 and March 21.
- 465,000 tonnes per week between March 22 and March 28.
In addition, the railways will be required to “submit formal winter contingency plans,” which include service plans for producer car loaders and short-line railways for the remainder of the 2014-15 crop year, which ends July 31, 2015.
In an effort to improve transparency in the logistics system, the railways will also be expected to provide information on the number of cars that are spotted on each railway corridor.
That information will include rail car placements at producer car loading sites and short-line railway companies that operate in Western Canada.
The information will be supplied to the Western Canadian Grain Monitoring Program, which Quorum Corp. manages for the federal government. CN’s response to Ottawa’s new regulations was consistent with the company’s previous statements.
CN has argued since the weekly volume requirements were first introduced in March 2014 that Ottawa should allow normal commercial relations to dictate the amount of grain that is moved.
“CN believes that normal commercial relationships and a stable regulatory environment are essential for an effective, well-functioning rail transportation marketplace, including that for grain.”
Canadian Pacific said it would continue to move Canadian grain consistent with demand and in compliance with the mandatory minimums.
“It is also important to remember that CP is one link in the global supply chain,” CP officials said. “More than anything, it is market forces that have driven the record volumes of grain that CP has delivered this year and last.”
With a few exceptions, farm groups across Western Canada have favoured the retention of the federal volumes requirements.