Government promises to stand firm against the country’s two largest railways are being scrutinized, again, after recent revelations that Canadian National Railway still hasn’t been fined for its alleged failure to meet federal grain targets.
In September, transport minister Lisa Raitt announced that fines were pending against CN rail after the company failed to meet three weeks worth of grain targets. The rail company, she repeatedly said, was in “violation” and would be fined.
More than a month later, however, the minister’s office says Transport Canada’s investigation into CN’s failure to meet federal orders is on-going.
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“The information is being assessed and following the assessment by the enforcement officer, a decision will be made on whether a notice of violation is to be issued and the amount of an administrative monetary penalty,” the minister’s press secretary, Jana Régimbal, said in an Oct. 29 email.
It’s worth noting Régimbal’s email opens the door to the possibility CN might not be fined at all, despite the fact CN has never denied the accusations it missed meeting federal grain movement targets.
Instead, the company has routinely insisted there simply wasn’t enough grain in the commercial system for them to move.
Those allegations have since been denied by agriculture minister Gerry Ritz, who told reporters during a teleconference from India Sept. 23 there was still lots of grain left to be moved.
“I’m not sure where CN is getting the idea there isn’t grain to handle,” Ritz said.
“The fines will be assessed, they will be levied and we expect CN to actually pick up their game,” he said.
The ongoing railway fine saga comes as both national railways remain under federal orders to move a minimum 536,250 tonnes of grain each per week.
Failure to do so risks fines of up to $100,000 per violation, which the government is now interpreting as per week, rather than the initial $100,000 per day fines it promised under the initial March 7 order in council. The fines are payable to the receiver general.
No fine amount has been set, but the general assumption in Ottawa is that should CN actually be fined, it would face the maximum penalty, or $300,000.
CN is expected to challenge any fine in court.
However, news of the missing CN fines also comes as the federal government muses about whether it should lift the mandatory grain volumes.
In a recent interview with Reuters, Ritz said it is unlikely the targets, which expire Nov. 29, will be renewed.
The minister’s office continues to insist no decision on the future of the targets has been made yet, but Ritz told Reuters there would have to be “a complete failure by the railways to move grain” to justify extending the minimums.
Removal of the targets would, predictably, be welcomed by the railways, which have accused the federal government of meddling in private business affairs.
Ending the targets would also likely be somewhat well received by mills in Eastern Canada and the United States, many of which still haven’t managed to replenish their stocks after last winter as the railways focus on high throughput export channels.
It’s not surprising Ottawa is contemplating ending the temporary targets, given initial estimates that peg this year’s crop as slightly above average:Â around 60 million tonnes compared to last year’s record 76 million tonnes.Â
Battle between Ottawa and the railways are not new territory. Tensions between the two groups have been mounting for years.
The railway lobby is a powerful group in this town, a point raised recently by NDP agriculture critic Malcolm Allen. The ongoing shifts in Ottawa’s stance against the railways, combined with recent back pedalling, could weaken the federal government’s ability to negotiate permanent solutions via the ongoing rail review, Allen warned.
“The railways are probably saying, ‘life is somewhat like normal. We’ll call the shots and they’ll dance to the tune that we play,’ ” he said. “That’s going to hurt farmers in the long run.”
The Conservatives have promised shippers that long-term solutions to transportation woes will come from the fast-tracked rail service review, set to be wrapped up this year.
The government’s credibility hinges on the results of that review. It promised to stand up against the railways. Now it’s time it actually did just that.
