How did we fall into another grain transportation fiasco with Canadian National Railway and Canadian Pacific Railway offering the same justification as they did in 2013-14 — weather and volume?
Farmers have been increasing production for some time, and it’s not as if cold Canadian winters should surprise.
This is an embarrassment to the rail companies — which obviously need legislative oversight to get things right — and to the Liberal government for allowing this to happen when the possibility for this kind of debacle was known.
When grain movement slowed following a bumper crop and bad weather in 2013-14, the then Conservative government passed an order in council mandating that CN and CP meet targets or face fines. That helped to clear the backlog, but delays cost the western Canadian economy $6.5 to $8 billion.
In May, the government introduced Bill C-49, the Transportation Modernization Act, an omnibus-style bill that amends 13 pieces of legislation, including how grain is moved. It also introduces an airline passenger bill of rights, among other things.
Most observers, including Saskatchewan Agriculture Minister Lyle Stewart and the Canadian Federation of Agriculture, support the legislation as a decent long-term solution because it allows smaller shippers access to major railways and permits financial penalties for failed service by railway companies.
Farm groups asked the government to separate grain movement into its own bill but the Liberals refused, which guaranteed the bill would be slowed down in the legislative process and wouldn’t meet its December target — and here we are.
In week 30 of the shipping season, rail companies moved only 32 percent of cars ordered, resulting in millions of dollars in grain left in storage bins and Saskatchewan Premier Scott Moe warning of a serious cash crunch for farmers who must pay bills and buy inputs for the growing season. Grain shipping by rail increased to 45 percent of cars ordered in week 31.
It took pleas from farmer organizations on March 1 to get things going. Some sought another order in council to force the rail companies to act.
On March 5, CN replaced chief executive officer Luc Jobin with interim CEO Jean-Jacques Ruest, who apologized for the company’s performance. Rail companies are planning to hire more staff and put more cars into action. CN will spend $250 million this year to build more track and increase yard capacity.
On March 6, Transport Minister Marc Garneau and Agriculture Minister Lawrence MacAulay sent a letter to Ruest and CP CEO Keith Creel demanding plans to address the grain backlog by March 15. On March 7 the Senate agriculture committee held an emergency meeting that concluded it should have another meeting on March 19.
On March 9, Public Safety Minister Ralph Goodale said no order in council would be issued until the government sees the rail companies’ response on March 15.
Former Conservative Agriculture Minister Gerry Ritz — who oversaw the 2014 crisis — had it about right when he urged the government to get an order in council ready, tell the rail companies it is so, and that an inadequate response on March 15 would result in immediate action.
Farm Credit Canada is prepared to work with farmers to help deal with the short-term cash crunch, and farmers are being urged to access Canada’s Advanced Payment program, which allows loans of up to $400,000. Bill C-49 is projected to pass by the end of March.
Given all this, there is room for optimism that the situation shouldn’t get much worse before it gets better.
Karen Briere, Bruce Dyck, Barb Glen, Brian MacLeod and Michael Raine collaborate in the writing of Western Producer editorials.