The Farmer Rail Car Coalition’s dream of acquiring control of the fleet of aging federal grain hopper cars this summer was dealt a blow last week when one federal agency ended a decade of funding support.
The president of the coalition says he sees it as a sign that the Conservative government might not support the agreement-in-principle signed between the FRCC and the Liberals.
The government denies there is any political message in the decision.
On March 30, FRCC president Sinclair Harrison received a telephone call from a Western Economic Diversification Canada official informing him that the agency will no longer loan or grant money to be used to prepare submissions to Transport Canada.
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Harrison said it was a sharp setback, since the latest application for $200,000 was meant to fund a revised five-year financial plan and a start-up plan demanded by Transport Canada before the deal is completed.
“It came as a shock,” Harrison said. “I certainly believe this is related to the change in government because we have received funds for a decade and the government changes and suddenly the support stops. If this is an indication our option is not acceptable to them, they should quit beating around the bush and tell us.”
Western Diversification official David James, director-general of operations for Saskatchewan, denied this was a decision dictated by the new Conservative government or Saskatoon-area MP Carol Skelton, the new minister responsible for the agency.
“It has nothing to do with the change in government,” he said. “It was our decision as officials. We have been letting FRCC know for some years that we were uneasy about the length of our relationship. Typically, we support a project in the early stages and then they are able to support themselves. This had been going on for 10 years.”
Since the first $365,000 instalment in July 1996 when FRCC was formed to respond to a federal decision to sell its hopper car fleet, Western Diversification has advanced $1.35 million to the coalition to help it hire specialists to prepare a financial plan for government.
Almost $700,000 of that came in three instalments since October 2004. That was when the minority Paul Martin Liberal government was in power and pressure was on to close the file. FRCC supporters within the Liberal government pressed the case.
“We have been flagging this for several years and after 10 years, we think the coalition has had sufficient time to prepare its business plan,” said James. “We have supported them because we saw it as an economic initiative for the region. But it’s been 10 years and that’s a lot of public dollars.”
Harrison said 70 percent of the money is a repayable loan if the project gets off the ground and, by withdrawing funding and jeopardizing the project, the federal agency is putting in jeopardy the ability to repay almost $1 million.
He will ask FRCC members and provincial governments in Saskatchewan and Manitoba that have provided funding in the past to replace the cancelled federal support.
Harrison said he had written to Skelton, asking that the new government continue its support.
Liberal agriculture critic Wayne Easter, a strong FRCC supporter, said April 3 he did not think this was a decision ordered by the new government “because officials there would not knuckle under to political direction.”
But he said the Conservatives should support FRCC as the most farmer-friendly solution to the hopper car issue.
In Winnipeg, Western Canadian Wheat Growers’ Association executive director Blair Rutter said it looks like a welcome Conservative signal that the perceived federal bias toward the FRCC is ending. WCWGA was an original member of FRCC and later pulled out to become part of a rival last-minute railway-farm group bid.
