A broad array of farm and grain industry groups says a railway costing review is a good idea, but they don’t agree on the priority it should be given.
And there are indications Ottawa is cool to the idea of conducting a review this year, fearing it may just be designed to put off changes to the transportation system.
“We met some resistance from (transport minister David) Collenette and (transport deputy minister Margaret) Bloodworth on this,” Saskatchewan Wheat Pool president Leroy Larsen said in a May 6 interview.
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“They wondered if this was just a delaying tactic. We clearly still have some work to do.”
Larsen was in Ottawa lobbying federal ministers to support the costing review proposal.
On April 29, a dozen organizations issued a joint press release calling on the government to initiate a costing review as a first step in grain transportation reform.
But in interviews last week, some of those groups differed on how to proceed with the costing analysis, which would be designed to figure out how much the railways are pocketing from efficiency improvements made since the last such review in 1992.
Officials with Sask Pool and Agricore Co-operative said a costing review should happen at the same time as the broader review, while representatives from the Canadian Wheat Board and National Farmers Union want it to take place first.
“We just want to emphasize that it should be part of the larger process and review that we want the industry and the stakeholders to get at as soon as possible,” Agricore president Charlie Swanson said in an interview.
Part of total package
Sask Pool executive vice-president Bruce Johnson, who also met with Collenette last week, said the government would probably resist a full-fledged costing analysis, but the issues of costs and productivity sharing could be included in an overall review.
“There may be shortcuts available,” he said. “What we want to get at is the way to establish the productivity gains as quickly as possible and find an agreeable basis for sharing them.”
CWB director Ian McCreary, chair of the wheat board’s transportation committee, said the wheat board would prefer that the costing review be done first.
“I guess the other process can begin, but it can’t get too far along until we get the information from the costing review, because it very much has to inform that process,” he said, adding it’s “inconceivable” that anyone would want to make changes that would lock in productivity gains captured by the railways over the last seven years.
“But if the discussions aren’t informed by the amount of railway windfall in the current environment, my expectation is the grain industry won’t ever find a way to get those windfalls back.”
United Grain Growers president Ted Allen said a costing review could provide useful information, but must not delay implementation of the Estey report.
Not too much weight
He added the results shouldn’t be used to set a new rate, but simply to establish a “benchmark” for discussions about sharing productivity gains.
“It would be useful to put pressure on the railways because there is legitimate concern about the lack of competition in that business,” he said.
Larsen said he stressed to politicians from all sides of the House of Commons that farmers will only accept government transportation changes if they see a benefit for them.
“We have to have some facts and figures for producers or this will not fly,” said Larsen.
