The two biggest issues for the prairie grain sector right now are the dismal state of railway performance and the blockage of pulse crop sales to India. Blame for the rail issue rests squarely with the federal government. Not so regarding the situation with India.
Rail service has gone from subpar to disappointing to dismal, particularly on Canadian National Railway lines. For grain week 29, CN supplied only 17 percent of the hopper cars requested by shippers — an almost complete breakdown in service.
Canadian Pacific Railway’s numbers have also been dropping and are nothing to brag about, but at 66 percent, they’re in a different league. Combined, the two main railways provided only 38 percent of the cars requested.
Thank goodness for the weekly reports from the Ag Transport Coalition chronicling railway performance and the lack thereof. Without these credible numbers, it would be difficult to quantify the magnitude of the problem.
While CN has by far the worst performance, it has by far the more active public relations campaign to explain how it’s doing the best it can under the circumstances.
We’ve heard the excuses before: cold weather means shorter trains; snow in the mountains; more demand for movement than expected; and it takes time to bring more locomotives into the system and even longer to hire and train more workers.
All of that doesn’t explain how hopper car movement has been less than 60 percent of demand for four consecutive weeks with the latest two weeks being 34 and 17 percent.
The only slack the railways deserve is that the 2017 crop was certainly bigger than almost anyone expected. On the other hand, pulse crop sales have been dismal, so that has actually reduced the demand somewhat.
Why is the federal government to blame for the growing grain backlog? Because it has dithered and delayed Bill C-49, legislation that provides for reciprocal penalties, interswitching between railways and a clear definition of adequate and suitable railway service.
On top of that, it didn’t take the advice of farm groups and extend the interim legislation put in place during the last grain movement debacle in 2013-14. That bill allowed interswitching and also allowed the government to set prescribed grain movement targets.
Initially, there was only supposed to be a short gap between the ending of the interim legislation and the passage of Bill C-49. Instead, it’s been many months.
While Prime Minister Justin Trudeau’s government can legitimately be blamed for allowing this mess, it isn’t fair to blame it for not getting Indian tariffs removed from Canadian pulse crops.
Trudeau’s trip to India has been widely criticized for many reasons, but it was naive to think the tariff issue could be solved with simply a prime ministerial visit. With millions of small and struggling farmers and an election in the offing, India will reopen unfettered trade only when it suits it to do so.
The Indian tariffs do not violate any trade rules, and we don’t have a free-trade deal with the country.
It’s reasonable to continue the work to end the fumigation rules that act as a non-tariff trade barrier and unfairly target Canada, and Trudeau’s trip appears to have generated some progress.
Love him or hate him, you can really blame the PM for only one of the two big problems.
