Farm organizations last week lined up in favour of federal Transport Minister Marc Garneau’s plan for legislation that will include reciprocal penalties between shippers and railways.
But with only a few months to develop the planned spring legislation, stakeholders are waiting to see if new measures will be in place in time for the next crop year.
The proposed new bill would also require resolutions to extend interswitching regulations, which allow smaller rail carriers to use a limited amount of a competing railway’s track, and deal with the maximum revenue entitlement (MRE).
Garneau announced his Transportation 2030 strategy in Montreal Nov. 3. The legislation will include a better definition of adequate service and improve access and timelines for Canada Transportation Act decisions, he said.
“We will continue to work with stakeholders to ensure there’s a proper balance in place — one that supports rail customers and delivers continued investments in the system,” Garneau said.
Saskatchewan agriculture minister Lyle Stewart said maintaining extended interswitching at 160 kilometres and retention of the MRE are critical to grain farmers.
Extended interswitching was one of the temporary measures introduced after the grain backlog of 2013-14.
“What they’ve announced today, albeit the devil can be in the details of the legislation, appears to be what the industry has asked for to prevent those kinds of problems from happening again,” Stewart said.
Stakeholders issued a flurry of statements immediately following the announcement.
Grain Growers of Canada vice-president Jeff Nielsen said that throughout consultations stakeholders stressed the need for a level playing field between shippers and railways.
“I urge the minister to ensure that the required legislation is passed and in place for the 2017-2018 crop year,” he said.
Rick White, chief executive officer of the Canadian Canola Growers Association, said reciprocal penalties would help modernize grain transportation. He said shippers have long been held to performance standards but railways have not.
“Incorporating reciprocal penalties into service level agreements has the potential to elevate the accountability in the supply chain to include the railways,” he said.
Canadian National Railway chief executive officer Luc Jobin said the railway is confident that the minister recognizes what the railways need, too.
“We need a supportive, predictable regulatory environment that encourages innovation and efficiency and takes an end-to-end view of the entire … supply chain,” he said in a written statement.
The Canadian Federation of Agriculture said the uncertainty surrounding the MRE is a concern.
The organization commended the government’s focus on service obligations but said updated MRE regulations are essential.
“Transportation costs represent a significant portion of western grain farmers’ expenses,” said president Ron Bonnett. “That’s why farm groups have been advocating for a full costing review, which would lead to an accurate and up-to-date MRE,” he said. “We are still waiting for the government to fulfill their promise to launch the costing review, as they had stated they would prior to the 2015 election.”
The bill will likely be introduced in March or April.
Garneau’s announcement also included a $10.1 billion investment in transportation infrastructure to improve trade corridors and promised to focus on information sharing “to support evidence-based decision making by government and all stakeholders.”
“We look forward to operating in an environment where evidence fuels the decision-making process,” said Pulse Canada president Lee Moats.