World Grain - August 2016 - 50

FEATURE: CANADA STILL STRUGGLING FOR MARKET FREEDOM

penalties that could easily be written
into the Canada Transportation Act that
is now under review.
Ottawa reinserted itself into Western
Canada's wheat industry in the winter of
2013-14 when there was a particularly
harsh winter and a grain crop that was
40% bigger than the previous year's
crop waiting to be moved to export.
Even though the railways explained
that shorter grain trains were necessary
in Arctic temperatures due to a lack of
air pressure in brake systems and grain
movement was being impacted, Ottawa
passed an Order in Council imposing
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were unable to move 1 million tonnes
of crop per week to port. As well, it
increased railway interswitching limits
in Alberta, Saskatchewan and Manitoba
to increase competition from other
railways interested in moving grain.
Both railways complained bitterly and
publicly about the penalties and changes
to interswitching limits.
,IWKDWUHYLHZPDNHV¿QDQFLDOSHQDOties a permanent part of the industry,
Canadian farmers could once again
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handling and transportation network
encumbered with penalties and governPHQW LQWHUIHUHQFH UDWKHU WKDQ ¿QDQFLDO
incentives and collaboration.
During the winter of 2013-14, there
were reports that some grain terminals
had, in fact, over-ordered grain cars
to ensure they received enough cars
to move grain. If true, grain shippers
themselves were part of the problem
that led to penalties being imposed on
the railways.
At the time neither CN Rail nor CP
Rail chose to impose similar penalties
on elevators that ordered excess cars,
but there's no saying they may not in
the future.
Should this scenario unfold, it's clear
who would pay the costs of the penalties
and legal fees involved - Western
Canada's grain producers.
As Mark Hallman, director of
communications and public affairs for
CN Rail, said in a note to World Grain:
50

Crop production in Canada has been increasing in recent years, making grain transportation to the
country's export terminals all the more critical.

"CN is disappointed that the federal
government has decided to postpone
for one year the repeal of unnecessary
provisions of the Canada Transportation
Act that were enacted in 2014 by
Bill C-30. The provisions were never
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as recommended by the report on the
review of the Canada Transportation Act
led by David Emerson and which Minister
Garneau tabled on Feb. 25, 2016. CN hopes
the government will see the wisdom of
extinguishing the unnecessary provisions,
including minimum grain volume
mandates and extended interswitching, at
the end of the one-year extension. If not
rescinded, extended interswitching will
discourage railway investment in branch
line networks.
"CN believes it was wrong to impose
Bill C-30 on railways in the context
of an outsized 2013-14 grain crop
and extreme winter conditions totally
beyond the railways' control. Once
the cold weather of the period abated,
CN, as it promised Ottawa, bounced
back, posting a record performance that
continues to this day. CN transported
record volumes of Western Canadian

grain in the 2014-15 crop year -
over 5% greater than during the
record 100-year crop year of 201314. CN is proud of its grain-hauling
achievement, and the nation's
grain supply chain remains fully in
sync in all corridors.
"True supply chain collaboration and
a reliance on commercial incentives are
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in Canada. Burdensome regulations
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investments necessary to support
Canada's rail infrastructure."
It will be interesting to see whether
grain farmers will choose to listen to
Canada's two world-class railroads and
keep moving toward true economic
freedom and open borders between
Canada and the U.S.
Based in Vancouver, British Columbia, Canada,
Leo Quigley writes for a variety of national
and international publications specializing
in agriculture and transportation. He can be
reached at Quigley@dccnet.com.
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August 2016 / World Grain / www.World-Grain.com

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World Grain - August 2016

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