Paul Tellier says fingerpointing won’t solve Canada’s grain transportation problems, yet he placed clear blame on the Canadian Wheat Board last week.
“There is too much intervention and control by the wheat board in the grain transportation and handling system,” the president of CN Rail told a Regina business audience.
“We need a transportation system which is based on competitiveness and not on the pursuit of equity.”
Car allocation formulas for board grains are based on the railways’ historical market share. Tellier said that “provides equal delivery opportunities for farmers, but it does not promote market incentive to improve service or performance.”
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
He said the board adjusts to provide those equal opportunities, and all grain is treated equally, no matter what its value is, what the market is calling for, or the urgency of delivery.
“As a result of all these complex formulas and procedures, the system cannot respond quickly to changing market demands,” Tellier said. “And since no one is accountable, there is no penalty for non-performance or market opportunities missed.”
He said a system based on market forces would reflect the new realities of a changing world, more aggressive grain companies and the continuing move away from traditional crops.
“Grain should be treated like all other commodities under the Canada Transportation Act,” he said.
But Canadian Wheat Board spokesperson Deanna Allen said in a later phone interview grain movement can’t be so easily compared to other commodities.
“There should be an understanding there that grain is produced in a huge area, not just a couple of mines,” Allen said.
CWB aids railways
The board’s role in co-ordinating grain gathering and movement across the Prairies helps the railways, she said.
Tellier told reporters the board has played and can continue to play a useful role in marketing.
“Do we need the Canadian Wheat Board to get involved in the transportation business? The answer is no,” he said.
But Allen said the board has to answer to its customers and shareholders – western Canadian farmers.
“We believe that wheat is a commodity that has to be moved when the customers want it, not when the railways want to move it,” Allen said, adding that grain is currently called into the system depending on market forces and the railways should be interested in accommodating the board’s needs, as one of their customers.
Sinclair Harrison, president of the Saskatchewan Association of Rural Municipalities, said, on behalf of producers, his organization believes grain is food, and food should come first.
“Naturally all other products are very important also, but we feel preference should be given to food, and we were somewhat critical of the system last winter when perhaps other products were getting preference over food,” Harrison said.
Tellier said the goal of the upcoming review of the transportation system should be logistical efficiency to get “the right product, the right quantity, at the right place, at the right time, every time.”
His vision of a new system is one that, aside from operating on market forces, is accountable, transparent, and rewards and penalizes decisions.
He said railway rates would be public, based on competition and not dictated solely by distance.
