A federal bill aimed at improving Canada’s transportation systems and ensuring better rail service for shippers passed third reading in the House of Commons Wednesday and is off to the Senate.
If passed, the Transportation Modernization Act will provide greater certainty for western Canadian grain shippers that depend on Canadian railway companies to transport grain to export terminals or North American destinations.
Observers say a key component in the act are provisions that support the use of reciprocal financial penalties in service level agreements between shippers and railway companies.
Specifically, the act will put in place a process that supports the use of negotiated service contracts between shippers and railway companies and facilitates the use of monetary penalties to ensure that the terms of service agreements are being met.
The legislation, if passed, is also expected to expand the scope and function of the Canadian Transportation Agency, but it will not support the use of long-haul interswitching, a measure that western Canadian grain shippers have been requesting for several years.
Wade Sobkowich, executive director of the Western Grain Elevators Association, said the act contains a number of provisions that could benefit grain shippers.
“Overall, we think the bill will provide a better balance between shippers and railways and provide a better ability for rail shippers to get proper service contracts for the future movement of grain,” Sobkowich said.
“We think the reciprocal penalties provision. In and of itself, are a good enough reason … to get Bill C-49 passed as quickly as possible.”
Sobkowich said WGEA members, which include large Canadian grain-handling companies, are optimistic that the bill will receive royal assent before Christmas.