A Liberal government in Ottawa would take immediate steps to improve grain transportation in Western Canada, starting with a full rail costing review to examine railway operating costs and revenues derived from moving prairie grain.
Ralph Goodale, a senior member of the federal Liberal party, accused the federal Conservatives of making a “colossal mess” of Western Canada’s grain handling and transportation system, adding that railway tie-ups, logistical inefficiencies, historically wide basis levels and Ottawa’s failure to devise a better system for moving prairie grain have cost the country’s farmers $5 billion over the past two or three years.
That figure does not include lost market opportunities that emerged after the elimination of single-desk grain marketing but were never fully developed due to poor logistical co-ordination and limited rail capacity, he added.
The Conservative government “made a huge, colossal mess,” said Goodale, who visited The Western Producer’s editorial offices May 20.
“That system and the way it failed is a direct product of the way that Gerry Ritz and Stephen Harper set it up, designed it … and implemented it.”
Goodale, a former federal agriculture minister, said Liberal efforts to clean up the government’s mess would begin with a railway costing review, which he said would sit well with most farm groups in Western Canada.
The last time Ottawa conducted a full costing review was in 1992.
He also suggested that railway revenue caps or maximum revenue entitlements would likely be retained by a Liberal government unless the costing review produced a “startlingly” unexpected result.
“Before you have any discussion about the revenue cap, you’ve got to have a costing review to get the facts,” he said.
“That would be a very useful exercise to examine what’s happened with the (rail) efficiencies over time, who’s gained, who’s lost and how is the revenue being shared within the system…?”
“After 22 years, it’s probably a good time to update that arithmetic.”
Goodale also suggested that a Justin Trudeau government would consider the creation of a new agency, with government oversight, to manage grain logistics and ensure that resources within the grain handling and transportation system are being used efficiently.
“You need some way of quarterbacking the system because it is so complicated and the value chain so far has not, by the magic hand of the market, produced some kind of adequate quarterbacking.”
“That function previously was performed by the wheat board, (but) it’s not there any more, so what is the alternative?”
Observers say the creation of such an organization is already one of the ideas being discussed as part of a Canada Transportation Act review process being led by former federal politician David Emerson.
A federally appointed CTA review panel is expected to report to government with its recommendations before the end of the year.
Goodale said a Liberal government would define what constitutes adequate service to rail shippers, develop clear ways to measure railway performance and implement a system that ensures adequate service at a reasonable cost.
He did not rule out the use of legislation or regulations that include monetary penalties against railways in the event that they fail to meet their contractual obligations to shippers.
“A legislative result is not necessarily the best one but if that’s the only way you can get accountability into the system, then that is a recourse that you have to have available,” Goodale said.