New federal rail legislation is the first major step in building a sustainable and reliable rail transportation system, says the chair of the Alberta Wheat Commission.
But in the meantime, extending an order-in-council that penalizes the railways if they fail to move a million tonnes of grain a week is the best short-term fix, said Kent Erickson.
“We still need it in Alberta, Saskatchewan and Manitoba to clear (the backlog) out before we harvest what could probably be a bumper crop again this year in some areas,” said Erickson, who farms near Irma.
Erickson and Grain Growers of Canada president Gary Stanford, who farms at Magrath, travelled to Saskatoon earlier this month to witness — and applaud — an announcement by Agriculture Minister Gerry Ritz and Transport Minister Lisa Raitt. The two cabinet ministers announced the order-in-council on grain movement would be extended to Nov. 29.
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But they also provided details on regulations to accompany the Fair Rail for Grain Farmers Act, which became law earlier this year. Among the regulations are measures intended to give grain farmers better protection by enforcing additional accountability on grain companies in contracts, and to require CN Rail and CP Rail to provide more data on grain movement and to improve service agreements.
The legislation also sped up a review of the grain transportation system by the Canadian Transportation Agency. The review was set to begin sometime in the next two years, but has now gotten underway.
Erickson said he hopes the review will lead to the creation of reciprocal penalties. Elevators must pay a penalty if they don’t load cars within a specified time (24 hours for 100-car unit trains), but the railways face no consequences if they fail to deliver cars when promised.
“From our (the Alberta Wheat Commission) perspective, there should be a penalty that CN and CP gets charged for not bringing them on time,” said Erickson.
“If CN promises 500 cars a week to Cargill, it needs to bring 500 cars instead of 400 cars.”
Better protection on grain contracts is also key, and that means making them more clear and putting them in writing, he said.
“Right now, it’s mostly verbal,” said Erickson. “If you had it a (written) agreement, there would be more teeth in trying to get reciprocal payments and trying to get more accountability. What we’re looking for is more accountability and transparency in those agreements between grain handlers and the rail.”
Although the railways have decried Ottawa’s order to move more grain, it has had a positive effect on wheat basis in this province, he said.
“In Alberta, basis has gone down, which shows we still have end-users wanting our grain and we still have market for our grain.”
While he expects substantial improvements from the new rail legislation, Erickson said he understands why some farmers might be skeptical.
“History would say we’ve been here before. Bureaucracy and government hasn’t always been the most efficient in the past. We do have a number of initiatives that came through, like bringing the review up a year faster.”
And his and other organizations supporting Ottawa’s actions expect to see more progress, he said.
“The reciprocal penalties and the next step in this review really will tell whether the organizations that are supportive right now will continue to support the initiative. These two things are really important to get right.”