A meeting of those who believe it would be a good idea to end Ottawa’s grain hauling targets could probably be held in a phone booth.
Few, if any, outside of Canadian National Railway and Canadian Pacific Railway have voiced any sort of support for allowing the two big rail companies to service the grain industry based on their own market requirements and schedules.
Last week, the three general farm organizations on the Prairies, Keystone Agricultural Producers in Manitoba, Agricultural Producers Association of Saskatchewan and the Alberta Federation of Agriculture, all called on the federal government to extend its one million tonne per week target at least until spring.
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Keeping the railways on track will require continued vigilance to ensure we do not see a repeat of last year’s fiasco. Farmers lost millions of dollars last winter when rail backlogs left them unable to ship a bumper crop to market.
This year’s crop is not as large, but with large carry-over stocks, the total crop supply is 95.6 million tonnes, the second largest ever.
However, simply extending the minimum haul requirements and fines of $100,000 for each time a railway fails to hit the target is not enough. That’s because the railways have understandably shipped most of the grain through their high volume east-west corridor as a way to meet the mandate.
Short-line railways are being left out and have not been receiving the rail cars they need. Some short lines report unfilled orders for rail cars going back to last spring.
It means they lost money last winter and this summer during a time of plenty, with a bumper crop to ship and more than enough to go around.
That can’t be allowed to continue. Given the lack of competition that already exists in rail transportation, farmers and grain companies should want to do all they can to keep these smaller niche players thriving.
As well, American buyers are voicing concerns about being unable to get their supplies, particularly oats. For many Canadian growers, these represent long-term, stable markets and we need to find a better way to service them.
The heavy crop and rail backlogs that are starting to pile up in the United States should also be on Ottawa’s radar, lest it create problems for Canadian growers this winter. Demand for additional rail cars and locomotives in the U.S. has potential to draw much-needed equipment south, should American operators start bidding up prices.
Farmers and grain handlers are right to point out that the rail transportation system needs to continue with enforceable performance standards and penalties. And as winter progresses, it will become more important to ensure that grain continues to move smoothly as the seasonal difficulties mount, such as the need to run shorter trains in cold weather, snow clearance delays and blocked tracks.
However, the crisis is now over and the sledgehammer style approach that was appropriate last spring must be re-evaluated. There are other aspects to the business that require a more deft touch.
The federal government now faces a new challenge.
We need new rules that will continue to hold the railroads accountable for timely, efficient service but that will also allow smaller operators and those serving specialty markets a fair share of the business.
A healthy transportation network must serve many interests. That is best achieved by providing options in choice of shipper and the flexibility to provide for all markets, not just those served via the high volume routes.
