A delegation of Saskatchewan cabinet ministers was expected to meet with grain companies in Winnipeg Feb. 14, after deadlines for this issue, to seek solutions to the transportation backlog.
Premier Brad Wall said he was sending agriculture minister Lyle Stewart, economy minister Bill Boyd, highways and infrastructure minister Don McMorris, and Stewart’s lesgislative secretary, MLA Scott Moe, to meet with stakeholders, including the railways.
He said the delegation would encourage the grain companies to work on service contracts with the railways under the Fair Rail Freight Service Act.
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None of the major companies has negotiated an agreement with a major railway, although the legislation was passed last June.
Under the legislation, the railways must offer service level agreements if a grain company requests one. The Canadian Transportation Agency arbitrates if negotiations break down.
“One of the purposes for this visit is to encourage the grain companies, if they’re not satisfied with the service they’ve been getting from the railways, to actually test the legislation,” said Stewart.
“We’re not sure if it does work.”
The Western Grain Elevator Association said no service level agreements have been attempted because the act doesn’t give shippers the power to negotiate monetary penalties. As well, the arbitrator can’t rule on penalties.
The act does allow for a penalty of up to $100,000 for each violation of an arbitrated service agreement, but WGEA executive director Wade Sobkowich said that’s “peanuts” for a railway. Plus, it’s paid to the federal government rather than to the shipper.
He also said the service agreements are only good for one year, which would put shippers and railways in constant negotiations.
The legislation needs changes, he said.
Stewart said railways clearly need surge capacity to handle a bumper crop, and Sobkowich agreed. Shippers of other commodities are also complaining about rail service, Stewart said.
Sobkowich said filing a service complaint with the CTA is the only other way to obtain a financial penalty from a railway, but that can be done only after there has been damage.
Wall said the economy is suffering, and Canada risks its reputation as a supplier to emerging economies that want food and energy security.
He stopped short of saying grain should receive preferential treatment after harvest, but he said a case could be made for railways giving agricultural products more attention at certain times of the year.
“I think a lot of farmers are out there thinking to themselves and recounting many, many cold winters in the past when we’ve had maybe not a record harvest but a big one and we certainly haven’t seen this degree of backlog,” he said.
