SASKATOON – Grain transportation would become a purely commercial operation by Jan. 1, 2000, under a proposal being circulated by Transport Canada.
The package of reforms being circulated among grain industry groups is designed to get government out of the business of transporting grain.
The proposals touch on virtually every aspect of the transportation system, from freight rates to car allocation to branch line protection.
“Department officials would like to treat grain like any other commodity and stop having special rules and regulations for it,” said John Dobson, a senior policy adviser in Transport Canada.
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A team of federal bureaucrats has been meeting with industry groups over the last few weeks to gather reaction to the reform package, put together by the department in late November.
“It’s a mixed response,” said Dobson. “Certainly some organizations support the thrust but we are running into some opposition.”
He said his group is seeking feedback from farm groups at this stage and emphasized no decisions have been made. A report will be given to the deputy transport minister, who will then present a list of recommendations to the ministers of transport and agriculture early in the New Year.
Among the proposals contained in the Nov. 29 discussion paper:
- Crow Benefit payments to the railway would cease on Aug. 1, 1995 or as soon as possible thereafter.
- Grain traffic would be put under the National Transportation Act instead of the Western Grain Transportation Act. Some special provisions, including maximum rates based on the 1995-96 WGTA rate scale, would remain in place until Dec. 31, 1999, but after that grain would move on a purely commercial basis.
- Restrictions on incentive rates would be lifted.
- Abandonment protection would be lifted from all branch lines. Crow Benefit money would be used to compensate affected farmers until 2000.
- Car allocation would be deregulated to “the maximum practical extent”. Beginning Aug. 1, 1995, the railways could put cars up for competitive bidding from grain shippers. Maximum freight rates would not apply.
- Funding for short line railways would end Aug. 1, 1995.
- The federal government would come up with a plan by March 31, 1995, to lease or dispose of its grain cars.
Dobson said the proposal to put grain under the NTA has generated the most opposition. While Transport Canada officials believe such a change would provide for more reliance on “commercial market signals” and get rid of the distortions that are caused by the regulated rate, he conceded a lot of people disagree.
Asked what effect such a proposal would have on farmers’ bottom lines, Dobson said that’s in dispute.
Those who favor putting grain under the NTA point to the fact that rates have declined for other bulk commodities since the 1987 act was brought in, he said.
“But others are concerned that there isn’t sufficient competition under the NTA and the railways would charge what the market would bear and that would have a negative impact on freight rates.”
