The Farmer Rail Car Coalition found itself on the hot seat during last week’s grain industry meeting on the fate of the federal government’s fleet of hopper cars.
The Nov. 1 meeting, held behind closed doors in a downtown Winnipeg hotel, brought together representatives from more than 30 grain industry, transportation and government groups for what was billed by Transport Canada as a “technical briefing session” on the possible disposal of the cars.
Transport Canada officials said the government is considering three options for the roughly 12,400 hopper cars:
Read Also
Ag in Motion speaker highlights need for biosecurity on cattle operations
Ag in Motion highlights need for biosecurity on cattle farms. Government of Saskatchewan provides checklist on what you can do to make your cattle operation more biosecure.
- Sell them to the highest bidder through a yet-to-be-defined public auction system.
- Transfer them to the coalition for a nominal fee or perhaps through a lease-to-buy arrangement.
- Maintain the status quo, with the federal government retaining ownership of the cars and providing them at no cost to the railways for the movement of western Canadian grain.
Officials in the office of transport minister Jean Lapierre did not return phone calls.
News reports from Winnipeg indicated that Lapierre repeated earlier statements that he wants to make a recommendation to federal cabinet this fall.
At the meeting, the two national railways and the coalition each made presentations outlining their proposals for dealing with the cars and answered questions from the audience.
Canadian National Railway wants to buy roughly half the cars, Canadian Pacific Railway wants to negotiate a new leasing agreement with Ottawa but will make a bid if the cars are formally offered for sale, and the coalition wants to take over the cars for a nominal fee.
Based on interviews with a number of meeting participants, most of the discussion and questions focused on the coalition, which has campaigned publicly for years for the government to transfer the cars to a farmer-owned non-profit leasing company for a nominal fee.
“It was not necessarily what we would call the friendliest crowd, but that’s the way the meeting was set up,” said coalition president Sinclair Harrison.
The invitation list was dominated by organizations and companies that have publicly questioned the coalition proposal in recent weeks, he said.
Wade Sobkowich of the Western Grain Elevators Association is one of those critics. He said the coalition was grilled intensely because there are many unanswered questions about its proposal.
“Of the three options, it has the highest risk for producers and the industry as a whole,” he said.
“We agree with the coalition that there are problems with the grain handling and transportation system, but our view is their proposal only makes those problems worse.”
The issues discussed include the effect of a change in ownership on freight rates, the role of a new owner in apportioning cars among rail shippers, the relationship between a new owner and the railways, car replacement, possible impacts on system efficiency, trade implications and the governance and financial viability of new owners.
Sobkowich said the elevator association would prefer that the government retain ownership and negotiate a new service agreement with the railways.
Canadian Wheat Board director Ian McCreary said the meeting demonstrated that a number of stakeholders don’t like the coalition proposal because of their own commercial or political reasons.
“There is not any question that there is a group within the grain industry and the rail sector whose first preference is not to have farmers involved.”
McCreary said he hopes government officials recognize that the views expressed at the meeting were not a reflection of most views across Western Canada.
Cam Dahl, executive director of Grain Growers of Canada, rejected the idea that an organized effort is trying to derail the coalition proposal to keep farmers out of grain handling and transportation.
“A lot of groups, like GGC, the Saskatchewan Canola Growers Association and the Western Canadian Wheat Growers Association, all want an efficient system that delivers the right grain to the right place at the right time,” he said, and they are concerned that the coalition plan would not accomplish that.
While Sobkowich and Dahl complained that the coalition failed to answer all of the questions, Harrison said the coalition was in a difficult position.
He said his group was uneasy answering detailed questions about such things as its plans for lease arrangements because it might find itself negotiating a lease with the railways or the government, who were present in the room.
He said the coalition wants the decision to be based on a business analysis and not influenced by political lobbying.
“If it comes down to a question of who has the most money to pay lobbyists, we know who that’s going to be.”
