Transport Canada has levied $150,000 in fines against the country’s two major railways for failing to move enough grain.
The monetary penalties come after transport minister Lisa Raitt admitted in September that Canadian National Railway had missed several weeks of mandatory grain targets. At the time, Raitt told reporters CN had missed three weeks of targets. Canadian Pacific Railway was still in compliance, she said.
Now, Transport Canada officials say CN missed only two weeks of federal targets, while CP failed to move enough grain in one week.
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Both railways are now facing fines of $50,000 per violation totalling $150,000. It’s worth noting that the latest penalties are half the value of the maximum fines outlined under the Fair Rail for Grain Farmers Act, which stipulates fines can be up to $100,000 per violation.
Raitt and agriculture minister Gerry Ritz came under heavy political fire last fall after it was revealed that the maximum penalty that could be levied had been quietly reduced from $100,000 per day to $100,000 per violation, which both ministers now interpret as per week.
CN officials said in a statement the railroad will pay its $100,000 worth of penalties,but CP plans to appeal.
Word of the penalties triggered delight from industry groups, including Grain Growers of Canada executive director Bryan Rogers, who said in an interview with iPolitics that the fines were “good news” and sent a clear message to CN and CP that poor service will not be tolerated.
Still, controversy over the federal government’s toughness with the railroads is unlikely to dissipate any time soon, particularly given the current political climate.
Dealing with the railroads is unlikely to be a national election issue. Still, depending on the outcome of the ongoing federal rail review, mounting frustrations with CN and CP services in rural areas could bring fuel to the campaign fire.
With the NDP and the Liberals positioning themselves to try and win a few more seats in Western Canada — especially in Saskatchewan where seat redistribution has left several ridings up for grabs —hammering the Conservatives on their handling of 2014’s grain crisis should be expected.
The federal Conservatives promised to stand tough against the railroads, which farmers and other agricultural folk have been demanding continue at every industry conference this fall.
While the fines will likely be seen as a step in the right direction, industry shouldn’t pop the champagne just yet.
Federal promises to hold the railroads to account hinge largely on the outcome of the ongoing rail review, particularly when considering that neither railroad is facing the maximum penalty. If industry demands for mandatory service level agreements and a better definition of service are not delivered, government accountability on the file warrants serious pondering.
Several MPs, including Ritz, have said they have faith in David Emerson, the former Conservative trade minister now in charge of overseeing the review, to come up with a solution that will appease all.
Industry expectations remain high, given that this is the Conservatives’ third attempt at solving shippers’ lingering transportation problems. Failure to deliver, they say, is no longer an option.
Meanwhile, tensions between the federal government and the railroads remain strained. Friction between the two groups was bolstered recently when Ritz accused the railways of “overplaying their hand.”
The railway lobby has always been a powerful group in Ottawa, one that is used to getting its way, notably in election years. With the federal government ramping up for a national election, which is expected no later than Oct. 19, it is unclear whether that trend will continue.
For now, the latest word in Ottawa is “clean-up.”
The missing fines against the railways were a constant thorn in the government’s side last fall, with the opposition repeatedly raising the issue in question period alongside queries of Julian Fantino’s treatment of veterans and Canada’s unwillingness to accept more Syrian refugees.
Fantino has since been demoted to a junior cabinet position and the country’s immigration minister is expressing a willingness to welcome 10,000 more refugee claimants over three years.
Now, with the recent fines against the railroads, the “clean-up” pattern is almost impossible to ignore.
