Government legislation giving rail shippers the right to demand government-imposed service agreements with carriers if commercial negotiations fail raced through Senate approval-in-principle last week on the way to approval this month.
After just two speeches, the Senate unanimously approved second reading of Bill C-52, the Fair Rail Freight Service Act.
This week, committee hearings begin with shippers and the railways expected to appear.
Liberal senator Terry Mercer from Nova Scotia indicated his party will support it and he recognized shipper support for rebalancing the current “one-sided” market relationship, but he said he wondered what the railways have to gain.
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“This legislation will require that the railways provide their customers with service level agreements that are enforceable and fair. However, what is in here to protect the railways?” he asked.
“What happens when a shipper fails to abide by its end of the agreement? If a shipper promises to fill 20 cars, for example, on Tuesday, what happens when they only have eight of those cars filled on Monday night?”
He said the delay “will affect the entire movement of other freight that is associated with that train that is coming by.”
Mercer said he will look for answers during committee hearings.
Alberta Conservative Senator Betty Unger sponsored the bill for the government and stressed the benefits for producers.
“Agriculture needs rail shipping,” she said. “In fact, Grain Growers of Canada estimates that we export some 35 million tonnes of grain annually and grain shippers spend approximately $1.4 billion on rail freight.”
Unger said a more reliable rail service system is key for the resource economy.
“No matter what their product is or how complex it is to transport to market, all shippers need clear, predictable and reliable rail service,” she argued.
“They need to know that their products will get to where they need to be and on time. That is why shippers want railways to ensure they get the rail service needed to deliver goods to their customers, as planned.”
The Senate agriculture committee is expected to wrap up hearings quickly so the bill can get reported back to the Senate next week for final approval into law by the time Parliament rises for its summer break before June 21.
