PERDUE, Sask. – Freight rates on grain should drop by anywhere from $3.50 to $5 a tonne in the new crop year, says the head of the Canadian Wheat Board.
Board chair Ken Ritter said the total freight bill paid by prairie farmers should decline as a result of a railway revenue cap expected to be introduced by the federal government.
“Our view is you will see a reduction in your rates,” he told about 40 farmers attending a CWB district meeting March 13.
In an interview, Ritter said the board hasn’t received any definitive word from Ottawa regarding its plans for the revenue cap or any other aspect of transportation reform.
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“But discussions we’re having with the federal government indicate they’re amenable to a reduced freight rate of at least 12 percent and possibly as high as 18,” he said.
A reduction of $3.50 would result from capping railway revenues 12 percent below 1998 levels, as recommended in the Kroeger report.
A reduction of $5 would result from capping railway revenues 18 percent below 1998 levels, closer to the level recommended by the board, along with a coalition of some farm groups and provincial governments.
“We’re anticipating at least 12, that’s a minimum,” said Ritter.
While a revenue cap would result in a drop in the total system-wide freight bill, that won’t necessarily mean a drop in every farmer’s local rate.
Railways and elevator companies would have the freedom to charge different rates at different points for different kinds of movements, as long as total revenues stay within the cap.
Ritter said if Ottawa doesn’t announce its plans before the end of March, it will be difficult to implement changes for the new crop year beginning Aug. 1.
