WINNIPEG – The Grain Transportation Agency has recommended that almost two of every 11 kilometres of rail branch line be abandoned by next year.
“Branch line rationalization has stalled in Western Canada,” GTA administrator Peter Thomson said in a letter to the government, released last week. “A policy decision is required before the industry begins to rationalize the system. …”
It suggests the government offer incentives to the railways and farmers to abandon lines as a way to reduce overall grain-hauling costs. The minimum would be 1,360 km, mainly in Saskatchewan, but would also include lines in other prairie provinces.
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Lines to be targeted first would be those grain-dependent ones capable of carrying no more than 220,000 pounds or that carry less than 500 tonnes of grain traffic per 1.6 km each year.
These lines are protected from abandonment until the end of the decade. The railways have been chafing to abandon them, suggesting it would shave tens of millions of dollars from system costs.
Farmers haul farther
Hauling distances would increase substantially for the farmers on those lines. The GTA has recommended that some of the savings be applied against the cost of alternate delivery methods.
Thomson said in letters to ministers released last week that political support for retaining high-cost lines in the interests of “equity” has waned during the past decade.
He said there is “general agreement” among grain companies that abandonment should be accelerated.
Pools want gradual approach
While Thomson did not identify them, officials say United Grain Growers and Western Canadian Wheat Growers Association lobbied for an almost wide-open abandonment process. The pools lobbied for “a more gradual abandonment process with a longer period of compensation.”
Thomson’s recommendations were included in a report on “grain system efficiencies” commissioned by the former Conservative government. Agriculture minister Ralph Goodale and transport minister Doug Young released the reports just before this week’s agriculture ministers’ meeting.
Along with proposals to change the method of paying out the Crow Benefit subsidy, the rail abandonment proposals are to be discussed among ministers.
Thomson said in the letter a payment-to-producers plan would increase system efficiency.
Among other controversial suggestions is that the Senior Grain Transportation Committee may have outlived its usefulness.
Thomson recommended the government make a quick decision on whether to continue to support Churchill as an export port.
And he suggested that with impending changes to the Western Grain Transportation Act, the railways probably should be freed of their obligation to hold producer meetings to be held accountable for their performance.
