A federal plan requiring each of Canada’s major railway companies to carry a minimum of 500,000 tonnes of Western regulated grain per week is being applauded by farmers and grain industry organizations.
Federal transportation minister Lisa Raitt announced in Winnipeg March 7 that an order in council taking immediate effect will set out minimum volumes of grain that Canadian National Railway Company and Canadian Pacific Railway Company are each required to move.
Together, the railway companies will be required to move one million tonnes of grain per week, an amount equal to roughly 11,000 carloads.
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According to Raitt, the railway companies will have four weeks to ramp up deliveries to the minimum levels imposed by Ottawa.
Failure to meet the targets will result in fines as high as $100,000 per day.
The order will remain in effect for 90 days.
The Alberta Wheat Commission issued a news release shortly after Ottawa’s announcement, applauding Raitt and federal agriculture minister Gerry Ritz for taking an “unprecedented” action to get grain moving and provide relief to the western Canadian agriculture sector.
“Today’s announcement demonstrates that the government is committed to ensuring Canada remains a primary and reliable supplier of agriculture products, and recognizes the long-term, negative impact that poor rail service can have on Canada’s international reputation,” said AWC chair Kent Erickson.
“The rail backlog has resulted in significant costs to the agriculture industry, and AWC applauds the actions of the government for the immediate and long-term solutions that are being implemented.”
Greg Prone, chair of Cereals Canada’s board of directors, offered similar praise, suggesting Ottawa has recognized the seriousness of the current grain delivery backlog affecting the industry.
“The order in council issued today is unprecedented,” Porozni said.
“Restricted grain movement over the last six months has placed a significant economic strain on Western Canadian farmers. The announcement today will help get income flowing to producers again. This is not just good for farmers, it is good for Canada.”
Ritz said federal and provincial officials will continue to work with grain industry officials to ensure that long-term solutions are in place to address the grain transportation concerns of farmers and grain companies.”
Officials at CN and CP declined to comment immediately following the announcement, saying they were still reviewing the announcement.
The 5,500 car weekly minimums are in line with numbers contained in railway company service plans that were shared with grain companies last fall.
Actual deliveries of grain so far in the 2013-14 crop year are slightly higher than the five-year average but well below the levels of service that were promised by the railways last year.
