Grain shippers and farm groups in Western Canada are hoping to convince the rail freight rate service review panel to toughen up its report before the Nov. 8 deadline.
“It’s an interim report, and we’ll be pursuing changes over the next few weeks,” said Humphrey Banack, president of Alberta’s Wild Rose Agricultural Producers.
The 96-page interim report released Oct. 8 generally won praise for its analysis but criticism for its recommendations.
“We thought the analysis was pretty good, similar to what KAP and other farm groups have been saying for some time,” said Ian Wishart, who was then president of Keystone Agricultural Producers.
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“But the recommendations were a little weak.”
Banack shared that view.
“There’s not a lot of recommendation for change in the report,” he said. “It’s a lot of status quo.”
Blair Rutter, executive director of the Western Canadian Wheat Growers Association, said he was disappointed that the report failed to push harder for greater regulatory control of rail service.
“There are some positive elements in the report, but it falls short of addressing the key problems of the railways’ market power and the inability of shippers to hold them accountable for service,” he said.
“We need the backstop of regulatory remedies.”
The report, written by a three-member panel headed by former Alberta agriculture and transportation minister Walter Paszkowski, recommended that railways be given until 2013 to come up with commercial solutions with shippers to improve service.
If that doesn’t happen voluntarily, it added, then regulatory and/or legislative measures should be implemented to ensure it does. The measures should be prepared ahead of time to allow their immediate introduction if necessary.
The report was commissioned by the federal government in May 2007 in response to years of complaints from shippers about rail service. The panel was appointed in September 2009.
Doug Faller, policy manager for the Agricultural Producers Association of Saskatchewan, said the report confirms that there is no competition in the grain transportation industry.
“It clearly demonstrates an absence of market forces that would generate a balance of interests among stakeholders,” he said.
Given that absence, he added, the only alternative is to implement regulatory changes as soon as possible to simulate a competitive environment.
Canadian National Railway said it will provide a detailed response to the panel’s report before the Nov. 8 deadline.
In the meantime, it disagreed with panel recommendations, which it said don’t match the report’s analysis.
For example, it said the report found:
• solid performance by the railways on Canadian transit times and order fulfilment;
• no discrimination on a number of key service measures;
• no evidence of structural rail market service issues;
• an already robust regulatory framework in Canada.
“CN does not see how the Canadian government could agree to implement the panel’s recommendations for new, intrusive government regulation of the rail industry,” said Mark Hallman, the railway’s director of communications and public affairs.
He said CN has introduced scheduled grain service in Western Canada and has achieved a 90 percent success rate in delivering specified cars to specified elevators since the beginning of 2010, resulting in more consistent and reliable performance.
Canadian Pacific Railway could not be reached for comment.
All the farm groups said a full-costing review is needed to gain a complete picture of rail service.
