Federal rail freight legislation clears Senate

(Dave Bedard photo)

Canada’s Senate has passed federal legislation that grain grower groups have hoped will help improve rail freight service for the sector this year.

Bill C-49, the Transportation Modernization Act, passed third reading in the Senate on Tuesday following a 41-31 vote to approve a message that the Senate “does not insist on its amendments” to the bill. The bill now goes for royal assent.

C-49 imposes data-reporting requirements on railways, sets up rules for long-haul interswitching between railways and allows shippers to seek “reciprocal” financial penalties in their service agreements with railways.

The bill also brings soybeans under the maximum revenue entitlement (MRE), a regulation which caps the annual Prairie grain freight revenue each of Canada’s big two railways is allowed to keep.

An omnibus package updating air and rail regulation, C-49 was introduced in the Commons in May last year by Transport Minister Marc Garneau and has been a political volleyball since March, when it passed the House of Commons but the Senate returned it with proposed amendments on March 29.

C-49 went back to the Senate earlier this month with the government’s agreement on certain changes supported by the ag sector, but not on other Senate amendments.

The Senate on May 10 again returned the bill with amendments to the Commons, which sent it back May 11 with a message that the Commons “respectfully disagrees” with two remaining amendments on which the Senate had insisted.

Federal Agriculture Minister Lawrence MacAulay tweeted on Tuesday that C-49’s passage in the Senate is “wonderful news for Canadian grain farmers and a great day for Canadian agriculture!”

C-49 “will improve the long-term competitiveness of the grain supply chain and it is welcome news that these measures will become law,” Jeff Nielsen, president of Grain Growers of Canada, said in a release Tuesday.

“We look forward to using these new tools during the next crop year and in the future to help prevent another grain backlog across the Prairies,” GGC vice-president Art Enns said in the same release.

The Canadian Federation of Agriculture in late April had warned that new rail legislation must be in place by Aug. 1 or “farmers risk another uncertain shipping season.”

Alberta’s wheat and barley commissions warned earlier this month that even when C-49 is passed, a lag time of several months remains before certain provisions can be enacted. “This process adds even greater risk of not having competitive measures in place prior to the new crop year.”

Several farmer groups in early March publicly pressed for quick passage of C-49, criticized Canada’s big two railways over “steadily deteriorating” levels of service during the winter months, and warned that the grain industry was going the right way for a repeat of the freight logjam of 2013-14.

“Once again railways are proving that they can’t be trusted to move our grain and proving why the grain industry needs tools to be able to hold the railways to account, or at least to be able to take our business to another railway,” GGC’s Nielsen said at that time.

Not all ag groups were on board with the idea of C-49 as a cure for grain shipping woes. The National Farmers Union in early March said the bill “weakens the railways’ common carrier obligations to the point it may become almost impossible to find that a railway is providing insufficient service.” — AGCanada.com Network

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