Ottawa is expected to unveil new legislation this week that will result in better rail service for the prairie grain industry.
Federal agriculture minister Gerry Ritz is expected to introduce a bill this week that will amend the Canada Grain Act and the Canada Transportation Act.
Sources in Ottawa say the bill, entitled An Act to Amend the Canada Grain Act and the Canada Transportation Act and to Provide for Other Measures, is likely to be introduced in Parliament tomorrow.
The bill appeared on a Parliamentary notice paper dated today.
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Shippers including Western Canadian grain companies have been calling on Ottawa to take steps that will force railway companies to provide more predictable and reliable rail service or face financial penalties.
Critics say the Fair Rail Freight Service Act, which gives shippers the right to negotiate service level contracts with the railways, has done little to improve rail service since it was passed last summer.
In interviews with the Western Producer earlier this year, officials with the Western Grain Elevators Association (WGEA) and the Coalition of Rail Shippers (CRS) said the Fair Rail Freight Service Act, also known as Bill C-52, has not been tested by shippers and has done little if anything to improve rail service for the grain industry.
WGEA executive director Wade Sobkowich said his organization, which represents major grain elevator companies in Western Canada, feels C-52 discourages shippers from negotiating service level agreements because railway companies are not inclined to negotiate agreements that would penalize them for poor performance.
If shippers and railway companies are unsuccessful in negotiating a service level agreement, the negotiations can be arbitrated by the Canadian Transportation Agency.
However, CTA arbitrators cannot rule on whether financial penalties should be included in an agreement.
“Our confidence in our ability to get a service level agreement with teeth is very low and one of the reasons for that is because we can’t negotiate penalties into a service level agreement,” Sobkowich told the Western Producer earlier this year.
“You can try to negotiate (penalties) with the railways but if you can’t it’s out of scope for the arbitrator…. As a result, our confidence in our ability to get something material at the end of the negotiating process is very low.”
The Coalition of Rail Shippers, which represents shipping groups that depend on rail transport, had proposed six amendments to Bill C-52 before it was passed into law on June 21, 2013.
“(The Fair Rail Freight Service Act) requires six main amendments to help bring about the balance in the commercial relationship that the government intended,” stated CRS chair Robert Ballantyne, prior to the bill’s passage.
“Without them, shippers will continue to find themselves without any material ability to obtain adequate levels of service.”
Visit http://bit.ly/ORJyk3 to view a complete list of the coalition’s proposed amendments to C-52, originally published in February 2013.
