May 19, 2017

Rail Bill promises long-term solutions for grain shipping in Canada

Concerns remain regarding the sunset of extended interswitching clause on August 1, 2017

May 19, 2017 (OTTAWA) – Grain Growers of Canada, the national voice of grain farmers, was pleased to see the May 16 introduction of Bill C-49, the Transportation Modernization Act. The Bill contains many of the proposals long advocated by the grain industry to correct imbalances and improve the reliability of the grain freight rail system.

“It is clear that farmer voices have been heard,” said Jeff Nielsen, GGC President. “Grain farmers have been vocal throughout the consultation that we need increased competitiveness and reliability in grain shipping. Many of the proposed legislative changes in the Act will go a long way to providing long-term remedies to inherent problems with the current system.”

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).

Uncertainty and questions remain with regards to the proposed “long-haul” interswitching provision. Unlike the current 160 km extended interswitching option, which sunsets on Aug. 1, 2017, there are conditions within the new provision which make the utility for grain shipping unclear. Nielsen met with Transport Minister Marc Garneau Thursday in Edmonton and expressed these concerns to the Minister directly. Since it was put in place in 2014, extended interswitching, or the ability for shipments to be transferred to another rail line to receive a more competitive rate and/or improved service, has proven to be a valuable tool in negotiating better terms and conditions for the shipment of grain by rail.

“Minister Garneau stated that with the Fair Rail for Grain Farmers Act provisions sunsetting August 1 and Bill C-49 not likely to receive Royal Assent until well into the new crop year, Transport Canada will be closely monitoring grain movement to ensure our crops get to export position efficiently,” continued Nielsen. “That being said, GGC is still seeking an extension of the current legislation, especially with regards to interswitching, until the new Act comes into effect.”

GGC appreciates the work done so far and will be working closely with both Ministers Garneau and MacAulay as well as Members of Parliament, to see the Transportation Modernization Act move smoothly through the legislative process.

The Grain Growers of Canada provides a strong national voice for over 50,000 active and successful grain, oilseed and pulse producers through its 12 provincial and regional grower groups. Our mission and mandate are to pursue a policy environment that maximizes global competitiveness and to influence federal policy on behalf of independent Canadian grain farmers and their associations.
Media Contact:
Lindsey Ehman, Public Affairs Manager
Grain Growers of Canada
(o): 613-233-9954 ext. 202
(c): 613-222-2726

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