The two railways and the five major prairie grain handling companies told MPs last week what they didn’t like about proposed changes to the grain transportation system.
Cargill Ltd., Agricore, United Grain Growers, Saskatchewan Wheat Pool and James Richardson International presented a joint brief to the House of Commons transport committee studying the legislation.
The grain companies praised the promise of lower grain freight rates, improved final-offer labor arbitration and Canadian Transportation Agency hearings into rail competitive access. But the companies were united in condemning the government decision to allow the wheat board to remain involved in car organization and allocation for the portion of its grain that is supposed to be shipped commercially – at least 25 percent in the next two years and 50 percent by 2003. Meanwhile the presidents of Canada’s two national railways suggested the governing Liberals are guilty of “political expediency” by arbitrarily transferring $178 million from railway revenues to farm income.
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They cast doubt on whether the full value of that money will make its way to farmers. And they suggested farmers may suffer in the end because railways and their investor-owners will be less willing to invest in grain transportation sector if it earns less than other sectors. In other complaints the grain companies said they need a system of arbitration to resolve disputes with the CWB.
“We’re dealing with a monopoly,” Agricore president Neil Silver said after appearing before the parliamentary committee. “That’s the nature of the Canadian grain business. We’re somewhat at ransom to that.”
The appearance of the five companies, which in the past have often been ideological enemies and are supposed to be commercial rivals, raised some political eyebrows.
Thunder Bay Liberal Stan Dromiski wondered if there really is grain industry competition, since they all sat together singing the same anti-wheat board script.
Brian Hayward, chief executive officer of the UGG, assured MPs that while grain company views are co-operating in writing the rules of the game, “once the puck is dropped, I want to take these guys into the boards as heavily as possible.”
The grain companies did disagree over the wheat board’s marketing role. UGG supports an end to the board monopoly while Sask Pool and Agricore continue to support its marketing role, while opposing its transportation role.
“That is not a commercial system,” said UGG president Ted Allen. The wheat board is not the primary operator of the grain handling system and does not have much direct investment in the system.
Sask Pool president Marvin Wiens said in an interview that wheat board involvement clutters the system.
“To have the wheat board involved in allocation at the country level won’t make it (efficiency) happen. Then we’ll have problems.”
The railway leaders also argued that there will be less efficiency in a hauling system that would bring them lower revenues and continued Canadian Wheat Board involvement in car allocation.
