Northern Alberta Conservative MP Brian Jean got an incomplete answer to a straightforward question.
Last week during House of Commons transport committee hearings on proposed shipper rights legislation, he asked the railways if they compensate farmers for costs incurred because of delays in getting grain cars to the elevator or to port.
“If there is a delay caused by the railroad, do you make it up to the farmer?” the parliamentary secretary to transport minister Lawrence Cannon asked Nov. 27.
Marc Shannon, senior counsel for Canadian Pacific Railway, said if it is a shipper with a contract that includes higher freight costs in return for railway guarantees of service, there would be compensation.
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He said the typical shipper is a large company like Viterra.
“If they select one of our products that does in fact contain commitments on car supply, car delivery, then yes, there will be payments if the railway fails in those commitments.”
Jean protested that the “little guy” shipper would not benefit from that but his time to ask questions was up.
Two days later, shippers were before the committee and Jean asked the question again, saying he didn’t really receive an answer from the railways.
This time, the executive director of the Western Grain Elevator Association was only too happy to answer. Late cars cost farmers and elevators through overtime, suspension of grain deliveries, terminal costs and port costs.
“You pay all these extra costs,” said Wade Sobkowich. “To add insult to injury, you’re paying demurrage because the cars were bunched at the terminal elevator and the railways do not pay any of those, do not compensate the shipper for any of those added costs.”
Jean said later he knew the answer that the railways were trying to avoid giving: “They avoided the answer and that doesn’t impress me.”
The appearance of the shippers’ coalition before the transport committee to support the government Bill C-8 provided a feast of complaints about railway service in Canada.
The legislation would end the requirement that shippers appealing to the Canadian Transportation Agency must first prove that if the agency did nothing to remedy the problem, it would cause them “substantial commercial harm.” It would also allow shippers to band in common cause to demand final offer arbitration in a dispute with a carrier and it would allow shippers to challenge extra, nonfreight rate charges that the railways impose.
The shippers said they support the legislation without amendment even though it leaves many of their individual grievances unaddressed.
They accused the railways of offering misleading evidence to MPs on many issues including the level of shipper dissatisfaction and the amount of revenue that the extra charges generate.
On Nov. 27, Canadian National lawyer Jean Patenaude had claimed most of his company’s customers are satisfied.
“I would have, I guess the politest way to say it is, a difference of opinion with Mr. Patenaude as to whether there are or aren’t service problems,” said Robert Ballantyne, chair of the Canadian Industrial Transportation Association.
Sobkowich from the grain elevators’ association said shippers compromised to find a common position because they wanted to ensure Parliament would act quickly to regulate railway power.
A failure by Parliament to pass the legislation would harm the grain industry, Sobkowich said.
“This will continue to result in lost grain sales domestically and internationally, lost revenues because grain will continue to be sold outside peak price periods, a large potential for significant vessel demurrage bills, lost confidence in Canada as a reliable supplier and higher costs to farmers.”
