On November 3, Canadian Transport Minister Marc Garneau rolled out the government’s strategic plan for the future of transportation, titled
Transportation 2030. This plan encompasses all modes of transport in Canada, whether it be by air, car, or sea. Most importantly for canola farmers, though, it encompasses rail transportation.
Transportation 2030
On this front, there was positive momentum in Garneau’s speech introducing the
2030 plan. The following segment of the speech speaks to grain specifically:
I have met with many stakeholders over the last several months with respect to competition and the quality of our rail system – farmers, grain companies, forestry companies, mining companies, the chemical industry and, of course, the railways themselves. I can tell you that Canada has a world-class rail transportation system, but that does not mean it is perfect. It can be better.
Striking the balance is important, and we must move forward. As part of our 2030 plan, our government will introduce legislation in the spring of 2017 to advance a long-term agenda for a more transparent, balanced, and efficient rail system that reliably moves our goods to global markets. As part of this plan, we will :
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Establish the ability to apply reciprocal penalties between railway companies and their customers in their service level agreements,
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better define "adequate and suitable service",
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improve access and timelines for Canadian Transportation Agency decisions; and
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address the future of the Maximum Revenue Entitlement and extended interswitching.
Garneau’s plan includes many of the changes CCGA and other shippers in Western Canada have been asking for. The need for reciprocal penalties, a better definition of “adequate and suitable service”, and the future of interswitching have been pillars of CCGA’s
transportation priorities, and will help
improve the imbalance in market power between railways and shippers.
Now, with the calendar turned over to a new year, it’s about turning the plan into legislation. The government is expected to put forward a new Rail Bill in early 2017 in order to have it enacted prior to the 2017-18 crop year. What parts of this Rail Bill will achieve the end goals of Transportation 2030? That’s yet to be seen, but here’s what farmers should look for.
Will the new Rail Bill meet farmers’ needs?
This Government indicated it will amend the
Canada Transportation Act to establish the ability to have reciprocal, or two-way penalties (between shipper and railways) included in Arbitrated Service Agreements. They also said they will better define “adequate and suitable accommodation”. These changes provide real benefits to shippers and farmers. They also help correct a fundamental imbalance in the farmer-railway relationship.
What’s behind this imbalance? Grain producers, shippers and the industry have identified a lack of competition in the rail marketplace. This affects how grain and other commodities are transported in Canada, as increasing competition and accountability will help to improve railway service to grain shippers – which will ultimately be of benefit to farmers.
To combat this imbalance, the grain sector has been consistent in identifying solutions – such as the ones mentioned by Garneau above. In the past, though, while some policy and legislative initiatives made by previous governments have acknowledged the issue, there’s never been comprehensive reform to address the root cause.
More competition is needed, because farmers rely on rail transportation to get grain to port. The average distance Canadian-grown grains travel to reach a Canadian port is 1,520 km; rail is simply the only way to viably travel those distances. With that in mind, canola farmers need a comprehensive Rail Bill, one that delivers on government’s promise in
Transportation 2030, and modernizes the rail service farmers receive not only for now, but as we look to grow production into the future.