REGINA (Staff) – If the West isn’t best, the south will suffice.
That’s the message grain exporters, farm groups and the Canadian Wheat Board gave to an inquiry looking into west coast port labor issues.
“If labor problems at Canadian ports are not brought under control and Canadian ports are not able to be cost effective and reliable, we will witness product moving through U.S. ports,” said Dale Adolphe of XCAN Grain, a marketing company owned by the three prairie pools.
At the inquiry’s Winnipeg hearing, Canadian Wheat Board commissioner Richard Klassen said “the CWB’s first priority would be to work through the Canadian system, but it will not hesitate to redirect existing contracts or new businesses to U.S. destinations to alleviate congestion caused by labor-management difficulties.
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“It is no longer the case that west coast ports will get western Canadian farmers’ business regardless of their performance.”
Representatives of the Saskatchewan Association of Rural Municipalities, the wheat board’s advisory committee, the Western Canadian Wheat Growers and the Canadian Federation of Independent Business all told the commissioners that farmers would no longer put up with an export transportation system that costs them money and has damaged the reputation of Canada as a grain supplier.
Adolphe said Japanese buyers are encouraging canola production in the United States and Argentina because Canada has proven to be an unreliable shipper.
“Experience has taught them that being totally dependent on Canada is too risky,” he said.
Klassen said alienating Japanese buyers is costly, because a sale to Japan gets a higher premium than a sale elsewhere.
And Adolphe said just a few days of demurrage charges can wipe out a year of profits for a company such as XCAN.
Ron Gleim of SARM said “frustration with the whole system” could prompt Canadian producers to ship through the United States, something that could hurt the Canadian grain industry in general.
“They’ll probably end up making some decisions that probably aren’t the best economic decisions, but they’re going to make decisions that are going to affect the whole system,” he said.
American option a motivation
It wasn’t only farmer and grain industry groups that spoke about U.S. competition.
Grain Services Union general secretary Hugh Wagner said “the reality of competition from American ports is a very real motivation for all of us to find Canadian-made solutions.” But those solutions cannot be made solely at the expense of labor unions, he said.
For every million tonnes of Canadian grain that moves through American ports, about 300 Canadian port jobs will disappear, said Wagner. That’s why unions want to ensure Canada’s west coast ports stay the outlet of choice for prairie producers, he said.
Patti Smith, of SARM, said Saskatchewan producers want to use Canadian ports, but, “if it means it’s going to cost us 20 or 30 more dollars a tonne, that’s something we can’t afford. … We’re not going to move grain through the Canadian system just because it’s Canadian.”
