It might be time to put away the stick and pull out the carrot in an effort to get better rail service, says Saskatchewan’s agriculture minister.
“There needs to be motivation for the railways to operate without government having to tell them how many cars they have to deliver every week,” said Lyle Stewart.
That was one theme in the province’s submission to the Canada Transportation Act review.
“Certainly the way the railways are paid has to be addressed,” Stewart said during an interview at the Saskatchewan Association of Rural Municipalities’ annual convention.
“Not necessarily (paying) more, but they don’t seem to be motivated to haul grain, that’s for sure.”
He said everything needs to be explored, including a possible restructuring of the railway revenue cap for hauling grain.
Grain handling was a hot topic at SARM and was raised during a question and answer session with prime minister Stephen Harper.
Harper said Canada is in the unusual situation where two railways have “extraordinary market power,” which is why they need to be closely monitored.
“We simply cannot accept outcomes where those two big companies dictate to the market just what they think is satisfactory in their interests,” Harper said.
He said the federal order in council requiring compulsory minimum grain shipments have helped unclog the system.
“Let me assure everybody in the room here, we are tracking this very closely,” said Harper.
“The system is clearly not under anywhere near the strain it was a year ago.”
Harper’s comments prompted a response from Liberal MP Ralph Goodale.
“The deficient rail system that we are burdened with today is the one designed and imposed by the Harper government,” he said in a news release.
“They’ve been talking and tinkering for nearly a decade, and they’ve accomplished the square root of nothing.”
Goodale said there have been rail freight service reviews, rail legislation and two orders in council, and the result has been $5 billion in costs and losses to farmers.
Goodale said there is no equity in how shipping corridor, producer cars and short lines are treated.
The inequity issue was also raised during SARM’s bear pit session with Saskatchewan’s cabinet ministers.
Armand Roy, councillor for the RM of St. Louis and president of the Wheatland Rail short line, said companies have built new markets in the post-single desk marketing environment, but are now losing some of them because of poor transportation performance,” he said.
Saskatchewan oat producers have a geographic and quality advantage over competitors in servicing the U.S. market, he said.
“But we are going to lose it if we do not get these transportation issues fixed,” he told cabinet ministers.
Stewart said the province has been lobbying the federal government and the railways to provide better service for small shippers, including short lines and producer cars.
“I have all kinds of sympathy with your situation in the oat business and all of these other shippers,” he said.
Stewart praised federal agriculture minister Gerry Ritz for standing up to the railways and implementing the order in council.
“I think it’s fair to say that he burned up some of his political credibility,” said Stewart.
“That is much appreciated, but it didn’t solve the whole problem.”
Railways are servicing the main lines and sidings with long car spots, but there needs to be guaranteed service for all customers in all corridors, he said.
Stewart encouraged all farm groups to participate in the CTA review.
“I can’t say it’s a once in a lifetime opportunity for input from farm groups, but it’s a once in a long time opportunity,” he said in an interview.
Harper said the government will await the outcome of the review before taking further actions on grain transportation.