SASKATOON — Pressure is mounting on Ottawa to do something about inadequate grain transportation.
But there’s no consensus about what to do.
Several farm groups sent letters to federal cabinet ministers last week calling for immediate action to solve the rail car shortage that is cutting into sales, costing farmers money and damaging Canada’s relationship with important customers.
United Grain Growers and the Western Canadian Wheat Growers Association both want transport minister Doug Young to order an immediate, independent inquiry to come up with short-term solutions.
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“The transportation situation has deteriorated to the point where emergency measures are needed,” UGG president Ted Allen said in a March 30 letter to Young.
Not everyone agrees an inquiry is the answer.
The National Farmers Union wants the government to immediately impose financial penalties on the railways for failing to meet unload targets at Canadian ports as required by the Western Grain Transportation Act.
“They should exercise the power they already have,” said the NFU’s acting manager Stuart Thiesson. “Issue an ultimatum to the railways to either put up or else. We don’t need another bloody study.”
Saskatchewan Wheat Pool grain manager Gerry Liski said an inquiry is not needed because senior people in the industry are already working hard to come up with solutions.
“It’s being done by the right people, by the main players in the industry,” he said.
Both UGG and the wheat growers also want the transport minister to order the Grain Transportation Agency (GTA) to allow private grain shippers to add cars to the common grain fleet and gain additional car allocations as a reward.
A resolution to that effect was passed by the Senior Grain Transportation Committee several weeks ago, but the GTA decided the proposal needed more study. That led Allen to describe the agency as part of the current problem.
“It is unacceptable that any party which is able to help solve the problem should be actively discouraged by a regulatory system from doing so,” said the UGG president.
Again, not everyone agrees. Liski of Sask Pool said grain shippers with greater financial resources would be more likely to get cars, upsetting the equitable distribution of scarce rail resources. And if one company got cars and extra allocation, other companies could be forced to do the same against their better judgement, in order to maintain market share.
“If there are any lease cars available, the railways should lease them because that’s their responsibility,” he said.
Bruce McFadden, director of operations for the GTA, said the agency is also concerned that if some shippers are rewarded for bringing their own cars into the system, then those who already own cars — like the Canadian Wheat Board — could demand that their cars be dedicated to a specific type of grain movement.
Understand situation
He said the agency simply wants to make sure that everyone in the industry understands the possible implications of adopting the recommendation.
“If all the parties in the trade understand that and still want to go ahead, so be it,” said McFadden, adding the trade at this point appears to be split.
In their letter to Young, the wheat growers asked Ottawa to take two other specific actions as well:
- Change the act so demurrage can be charged against shippers who do not promptly return rail cars to the common fleet.
- Amend the act so rail cars destined to the U.S. do not go to Thunder Bay first in order to qualify for rate subsidies. Either deem the cars to have gone to the Lakehead or eliminate all subsidies on U.S.-bound shipments.
