WINNIPEG – The federal government will soon level what has been, for too long, an uneven business arrangement between railways and shippers of grain in Canada, says agriculture minister Gerry Ritz.
At a news conference at a grain elevator northwest of Winnipeg today, Ritz and transport minister Rob Merrifield released the federal government’s response to the Rail Freight Service Review, a process initiated in 2008 to address concerns about rail service in Canada.
The government, Merrifield announced, will introduce legislation that gives shippers the right to a service agreement with a railway. The proposed legislation, Ritz said, will help offset the railways’ “duopoly” in Canada.
“This process, this legislation that we’re proposing, will make sure that the farmers and the shippers of farm products are listened to,” Ritz said, following the announcement. “Right now there’s no ability to keep people at the table, negotiating towards a commercial agreement…. This will make sure that this happens.”
In addition, the bill will include a fall back clause for cases where railways and shippers cannot agree to terms, Merrifield said.
“The proposed bill will provide the process to establish a service agreement in cases where commercial negotiations have not been successful.”
A requirement for a commercial arrangement between grain shippers and railways is welcome news, said Henri Ritchot, general manager of Paterson Global Foods’ elevator northwest of Winnipeg. At the moment, he said, railways have all the power and can issue financial penalties if elevators fail to meet loading deadlines. For instance, he noted, penalties can be as high as $90,000 if the elevator fails to load a 100-car train in a specified period of time.
“Hopefully the (elevator) companies can negotiate a penalty where if they (railways) don’t deliver, they have to owe us money…. So we’re not always the ones paying out when we miss our targets,” Ritchot said.
In a few weeks the federal government will appoint a facilitator, who will help develop a template service agreement and a dispute resolution process.
“We are going to be appointing a facilitator. A neutral, third-party person, who will work with the railways and shippers for a six-month period,” Merrifield said.
For more information on the Rail Freight Service Review, Transport Canada has posted the report and the government’s response on its website.
