The relationship between Canadian grain farmers and the rail transportation industry is one of historical dependence on a system that is accountable only to the shareholders of the two largest rail companies. As the majority of Canadian grain is shipped to market by rail, the reliability of the Canadian grain handling system is directly related to farmers’ competitiveness in domestic and global markets.

This dependency was highlighted in the record-breaking 2013 – 2014 crop year when severe weather, higher-than-anticipated crop yields and competition for access to rail transportation led to severe backlogs at the farm gate, elevators and finally at port. Farmers were unable to ship their product for months on end, resulting in large financial losses for many western Canadian farmers. This situation exacerbated the unbalanced relationship between agriculture shippers and the rail industry and led the federal government to introduce temporary measures including extended interswitching distances up to 160km in the prairie provinces and mandated grain volumes in the Fair Rail for Grain Farmers Act of 2014 (Bill C-30) which sunsetted August 1, 2017. The government also responded to the crisis by accelerating a full Review of the Canada Transportation Act.

It is our belief that farmers should be competitive in their own right, and that the grain handling industry should be balanced and fair for all parties, be they grain farmers, handlers or shipping companies.

The May 16, 2017 announcement of Bill C-49, the Transportation Modernization Act has put us on a path to more reliable and fair grain transportation system in Canada. It is imperative that the legislation is passed and put in place as soon as possible.

GGC would also like to see clarification on how the new Long-Haul Interswitching rules will work.

Positive measures in the Bill include:

  • Reciprocal financial penalties in arbitrated service level agreements and a clear definition of “adequate and suitable service”;
  • The maintenance of the Maximum Revenue Entitlement (MRE) with adjustment factors to allocate investments by railway;
  • Greater transparency in data sharing and more powers for the Canada Transportation Agency to collect data on grain movements, allowing
    them to intervene pro-actively in the event of system failure; and
  • Renewal of the Crop Logistics Working Group (CLWG).

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Farmer Feature

“As a grain farmer, I rely on an efficient and reliable rail service to deliver my product to markets all around the world. In 2013/2014 grain farmers saw just how vital this system is when we could not capitalize on high oat bids in the US because of shipping issues. As a result, some of our most reliable customers sourced product from other countries to meet their demands – and they continue to do so now. An unbalanced grain handling system puts me, and all farmers, at a competitive disadvantage and has a direct impact on my bottom line.”

–Art Enns, grain farmer, Morris, MB

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