What a difference a week makes.
Just days after the federal government announced it would be levying fines against Canadian National Railway for failing to meet its minimum grain volume targets, transport minister Lisa Raitt was left trying to explain how the maximum penalty the railway could face had been quietly reduced from $100,000 per day to $100,000 per week.
Problem is, she couldn’t.
In a pointed exchange with NDP agriculture critic Malcolm Allen, who demanded to know in question period Sept. 24 why the government backed down against the railways, Raitt skirted the issue.
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“Mr. Speaker, the honourable member may have missed it, but in my opinion I would say this is the best agriculture minister (Gerry Ritz) that we have seen in this House,” Raitt said to thunderous applause from Conservative benches.
As for CN, she said, the company was in violation and action would be taken.
Sadly, Raitt’s non-answer is the closest thing to an honest response reporters managed to gather on this file last week. Neither minister, nor their offices, have yet to give an explanation for the change, despite re-peated questions on the issue.
IPolitics first broke the news of the reduced fines Sept. 22, after questions were directed to Raitt’s press secretary asking about the fine reduction. Her emailed response: the fines had always been set to $100,000 per week. There was a typo in the initial news release, she wrote.
However, those who have been following this issue for the past year know that isn’t true.
Under the initial order in council issued last March, the fines were clearly set at up to $100,000 per day, a figure Ritz would repeat at a joint news conference with Raitt in Ottawa March 26. It was at this news conference where the ministers announced the Fair Rail for Grain Farmers Act.
However, that emergency legislation quietly reduced the fines via a slight wording change from “for each day” to “per violation.” Given that the ongoing mandatory minimum grain volume orders are set out per week, the resulting interpretation, both ministers have now said, is that per violation means per week.
The change in legal language would go unnoticed by industry stakeholders, opposition MPs, and the media for more than seven months.
It’s worth mentioning that at no point did either Raitt or Ritz’s offices make an effort to correct the record, despite multiple media stories repeating the $100,000 a day penalty.
That in itself is of issue, particularly given how tight knit the agriculture world is. For instance, there are only two reporters in the entire parliamentary press gallery who have an interest in grain issues. It’s not that hard to get in touch with us, but I digress.
Correcting the record wasn’t that important, it seems, until the government found itself in the uncomfortable situation of having to levy fines against a railroad that averages $184 million in revenue a week, according to a letter that the Western Canadian Wheat Growers Association submitted to the House agriculture committee in April.
To get a sense of what the change in fines means, take a look at the math.
Considering that Raitt suspects CN missed three weeks of grain targets, the maximum penalty the railway could have faced in March is $2.1 million. Now, the maximum fine CN could face is $300,000.
That’s peanuts to a railroad, a point highlighted by several stakeholders in conversation last week.
Even more concerning, however, is the government’s role in the confusion. Despite the wording change being made in late March, parliamentary transcripts show Conservative MPs making reference to the daily penalties until at least April 7.
Meanwhile, a senior official for Transport Canada would stress during her appearance in front of the Senate agriculture committee May 13 that the fines were daily. Not only that, but she would also stress they were the stiffest penalties to be threatened under the Canada Transportation Act.
The reduction of the fines is no laughing matter.
There was serious debate in March over the initial fines of up to $100,000 a day. Several stakeholders, including the Saskatchewan government, the Western Grain Elevator Association and the Alberta Wheat Commission publicly mused whether even those fines were tough enough.
The Saskatchewan government would later suggest the fines be bumped to $250,000 per day, a suggestion that would later be brushed aside during committee hearings.
The government promised to stand up to the railroads. Given the developments this week, one has to wonder if all that tough talk was for naught.
