The grain transportation system is performing rather well right now, but the push for reforms must continue. Otherwise, a repeat of the disaster from two years ago is inevitable.
Dec. 24 is the deadline for David Emerson to submit his report reviewing the Canada Transportation Act. The grain industry rep on Emerson’s review panel is Murad Al-Katib of AGT Foods. Emerson, Al-Katib and the other panel members have logged a tremendous number of hours meeting with all the stakeholders and poring over reams of submissions.
The Emerson report will go to transport minister Marc Garneau, who will have 30 House of Commons sitting days to review the report before tabling it. The report should be public in February or March.
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Grain sector participants were organized and cohesive in their recommendations to the panel. Other shippers echoed many of the same themes. Solid recommendations have been made to provide shippers with more leverage in dealing with the big railways.
The rail transportation malaise of 2013-14 was a huge impetus for change. Unfortunately, the momentum is in danger of being lost.
Even though a great deal of time and effort have been expended, and even though the Emerson report is expected to include many of the proposals suggested by shippers, transportation issues have faded from the spotlight.
The latest figures released by the Ag Transport Coalition show Canadian National Railway and Canadian Pacific Railway supplied 85 percent of the hopper cars ordered for delivery in the last reporting week.
The only problem area seems to be movement to the United States and Mexico and to Canadian domestic locations, where CP supplied only 26 percent of the cars ordered for the week.
Grain transportation is benefiting from the slowdown in the other resource sectors, notably oil and potash. Some also theorize that the big railways are on their best behaviour while the CTA review is underway.
For their part, the railways accept little if any of the blame for the chaos of two years ago, saying it was caused by an unusually harsh winter and a non-forecasted 50 percent increase in grain export volumes. If you believe the railways, they compete vigorously for business and always provide an efficient low-cost service to customers.
For most of the grain sector, competition between the two main railways is a myth. You can bet both railways are already lobbying the federal government in an effort to avoid any meaningful changes that might erode their market power.
Former agriculture minister Gerry Ritz was active on the transportation issue. Lawrence MacAuley, the new minister, is still trying to get his head around all the files in the agriculture portfolio, let alone transportation, which isn’t his core responsibility.
Garneau is still an unknown entity as transport minister, and there are many other aspects to transportation beyond freight movement in Western Canada.
Collapsing oil prices, a new international climate accord, Syrian refugees and a deteriorating fiscal climate means rail transportation reform isn’t going to attract mainstream headlines.
However, farm organizations need to stay involved as the CTA review process proceeds. Unresponsive rail service will come back to bite us if we don’t maintain pressure. The opportunity for meaningful change in rail transportation is rare. We need to watch for the release of the Emerson report and be prepared to impress the need for action upon the new government.
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Correction : In last week’s column, the SaskCanola levy on a per acre basis was incorrectly calculated. Rather than being an average of $1.35 per acre, it is only around 58 cents per acre.
