Prairie government leaders say the recent federal announcement to get more grain moving is a good first step.
However, they are waiting for promised legislation to find out how the situation could be prevented in the future.
In the short term, Canadian National Railway and Canadian Pacific Railway have four weeks to reach a level where they are shipping about 5,500 rail cars of grain per week each. Failure to comply could cost them $100,000 per day.
“It sounds substantial, but how substantial is it when we talk about the volume of grain being moved and when we talk about the $4 million per week demurrage costs?” said Manitoba agriculture minister Ron Kostyshyn. “Which is the worst of the two scenarios?”
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Manitoba has formed a special committee to look at that province’s place in the transportation system.
They will look at increasing movement to Churchill and Thunder Bay, as well as moving more grain south. Saskatchewan premier Brad Wall has also advocated moving more grain through the United States.
Kostyshyn said he is bothered by the mountains of oats sitting in Manitoba instead of moving to American millers.
“This should not be happening,” said the long-time grain farmer.
His Saskatchewan and Alberta counterparts, Lyle Stewart and Verlyn Olson, also said the current system does not work and must be fixed.
Stewart said the railways have the ability to move 5,500 grain cars each per week.
“I think what’s been lacking is the will to do it,” he said, adding the penalties could serve as encouragement.
However, Saskatchewan wants a promised new federal law to require the two railways to ship 13,000 cars per week rather than 11,000.
“The industry is confident that they can handle at least 13,000 and we think we ought to push things a little bit, that we have one shot at fixing this transportation mess and we better not fall short of the mark,” he said.
Although the Saskatchewan and Alberta governments have free-market philosophies, both agree that regulatory intervention is required because most farmers are served by only one line.
Olson noted that a reading of his province’s 1906 annual report on agriculture notes that the railways were taken to task for failing to move that year’s good harvest.
“These are longstanding issues and they are issues really of national interest,” he said.
Saskatchewan Liberal MP Ralph Goodale, a former agriculture minister, said the losses are about $5 billion and by the time the railways actually ramp up to 500,000 tonnes per week, spring road bans will be on and farmers won’t be able to haul.
“I’m just astounded that after this length of time and the accumulation of these losses that the government has come forward with such a weak-kneed position,” he said. “They must be terrified of the railways.”
Goodale said that even if a railway is fined every single day for the 90 day period authorized by the federal order in council, that only amounts to $9 million. That money goes to the government, not farmers.
The fine would be more meaningful if the government had required the railways to pay the demurrage at the West Coast, he said.
He also said the new legislation should define levels of service, include a way to measure them and include compensation for farmers.
Both he and NDP agriculture critic Malcolm Allen chided CP’s advertisements in national newspapers last week.
“The real gall of CP to run advertisements … suggesting that it’s everyone else’s fault but theirs,” Allen said. “This idea that we’re doing a great job. The truth is they’re not and it’s farmers that suffer at the end of the day.”
