With an acrimonious environment in the grain handling industry and a federal election seemingly close by, the timing is interesting. Nevertheless, the words from Ottawa last week as it released the much anticipated rail freight service review were encouraging.
The federal government went further than the review panel report and promised to bring in legislation that will guarantee shippers’ rights to negotiate service agreements with railways. These agreements could include descriptions of railway obligations, communications, traffic volumes and dispute resolution.
The panel had suggested that the railways negotiate such service agreements with stakeholders but stopped short of recommending legislated changes.
Read Also
Man charged after assault at grain elevator
RCMP have charged a 51-year-old Weyburn man after an altercation at the Pioneer elevator at Corinne, Sask. July 22.
Other key recommendations the government said it plans to implement include:
• a six month process to negotiate with stakeholders a template for service agreements;
• a streamlined dispute resolution process;
• setting up a Commodity Supply Chain Table consisting of interested parties to address concerns with logistics and to develop performance standards;
• an analysis of the grain supply system to identify issues of concern and provide solutions.
After months of waiting for the report’s release, the government made the documents public at a time when the outcry over poor rail service, particularly on Canadian Pacific Railway lines, has reached a fever pitch.
The Western Grain Elevator Association, which had been sharply critical of CP’s performance this shipping season, supported the government’s plan to act quickly, but added the effectiveness of the legislation would not be known until the service agreements were in effect.
Across the agriculture industry, the reaction was similar. The Canadian Wheat Board, Western Canadian Wheat Growers Association, Keystone Agricultural Producers, Canadian Canola Growers, Canadian Fertilizer Institute, Pulse Canada, Canadian Special Crops Association and the Grain Growers of Canada all issued positive reactions.
But along with the support came words of caution. Each group tempered its enthusiasm warning that the government’s actions are only a first step. The effectiveness of the plan will depend on the details yet to come.
Both major railways were less warm to the report and the government response. Canadian National and CP singled out the proposed new regulations that would give shippers the right to negotiated service agreements. Added regulation, they said, will make the grain handling system less efficient and slow service. And, they said, the panel ignored recent improvements railways have made.
It is true that adding regulations into a complex system should not be taken lightly. However, the idea that added regulations automatically inject inefficiencies and added costs is overstatement.
In cases of public good, or in this case, a near monopoly situation, some government oversight is necessary to achieve a better balance of power between shippers and railways.
In the end, the success or failure of the new proposals will depend on ensuring that the new dispute resolution process has enough teeth to enforce service requirements.
Also key is quick action. The new six-month timeline should be adhered to given that the review has already gone on for more than two years.
As well, a full costing review of railway expenses and charges and the grain transportation system overall should be undertaken as soon as possible to ensure farmers have access to the most efficient and affordable system possible.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Joanne Paulson collaborate in the writing of Western Producer editorials.
