Federal transport minster Denis Lebel heralded the implementation of the Fair Rail Freight Service Act as a breakthrough for commodity shippers dealing with unreliable rail carriers.
He said in late June that the legislation will “improve the predictability, clarity and reliability of rail freight service across Canada.”
Shippers were more cautious, generally praising the government for acting but uncertain that the legislation will force the railways to provide better service.
The proof will be in plotting the impact and reporting the results in 2015 when the Canadian Transportation Agency Act is reviewed and evidence can be presented about the practical impact of the new rules.
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During parliamentary hearings on the bill, shipper representatives called for stronger shipper protection and predicted that railway lawyers will use loopholes in the law to thwart service improvements through litigation.
The legislation requires railways to accept service level agreements imposed by the Canadian Transportation Agency if shippers are unable to reach a commercial deal. Penalties for failure to comply with service standards are fines of up to $100,000.
Shipper skepticism was evident.
Typical was a statement from Canadian Canola Growers’ Association general manager Rick White that passage of the bill into law is a milestone but does not guarantee improvement.
“We look forward to having the bill implemented to see exactly how the changes will be interpreted and applied and if any significant improvements in service result,” he said in a July 2 statement from Winnipeg.
“We will have to wait to see if these new tools really deliver what they are intended to do.”
He said a “third-party measurement” of performance and results will be necessary.
CCGA policy director Cheryl Mayer said in an interview the third-party assessment could be done by a commodity supply chain roundtable promised by agriculture minister Gerry Ritz or through a crop logistics group also promised by the minster.
“These groups should be able to produce information on how the bill has improved the situation or not,” she said.
Coalition of Rail Shippers’ president Bob Ballantyne said the group continues to have concerns about the effectiveness of the bill in practice.
“As the bill breaks new ground, there is no jurisprudence and little relevant experience on which to draw.”
He said the coalition made six specific proposals on how to strengthen the bill, all rejected by the Conservative government.
Like White, he argued it is key that the government set up industry-influenced monitoring groups to gauge the effects of the bill.
During Senate hearings in June, Liberal senator Terry Mercer also urged farm groups to keep the agriculture committee up-to-date on practical results of the legislation so it can be informed when the 2015 review is underway.
“It would be helpful so that when you come back and say, ‘I told you so,’ we will not be surprised,” Mercer said.
