Ongoing assessment and better protection for small shippers are two ways to fix the grain transportation system.
Those are two of eight recommendations made by the Crop Logistics Working Group as part of a review of the Canada Transportation Act.
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The working group — composed of 18 groups representing growers, handlers and millers — said there’s no free market when it comes to shipping Prairie grain.
“Most shippers are served by only one carrier,” the report states. “This reality renders most shippers captive to one rail company and subject to pricing and service strategies that are characteristic of monopolistic behaviour.”
Agriculture Minister Gerry Ritz flew to Winnipeg to release the report and backed many of its recommendations.
“I think the biggest thing would be the data that railways aren’t sharing with shippers,” said Ritz. “They measure on what they supply when it comes to cars, not what the market is actually asking them to deliver. There is a double standard there — they say their commitment is to supplying the cars they’re going to supply, not what’s actually asked of them.”
“Our mandate was to establish a consensus position within the grain supply chain,” said Murdoch MacKay, commissioner of the Canadian Grain Commission and chair of the working group.
“I think the most important thing here is that all 18 organizations came together and have all agreed to the recommendations in the report… It’s a consensus.”
Ritz also backs the group’s call for a level playing field between shippers and producers.
There needs to be a “reciprocity of penalties,” he said, noting railways are able to charge producers $110 per car not filled on time.
“But there is no reciprocal penalty if they’re late delivering it or late picking it up,” he noted.
Ideally, that reciprocity would be enshrined in a service-level agreement between producers and companies.
“But we want to make sure that everybody has the ability to sign those, and if it takes regulation to make sure that CN or CP come to the table to negotiate with companies X, that’s something we’re prepared to do,” Ritz said.
The final report of the arms’-length review of the transportation act, led by former cabinet minister David Emerson, is expected this winter.
The report was the third and last mandate for the working group, which previously provided recommendations to the Rail Freight Service Review.
“Now it’s up to David Emerson and his group to see the value of what we’re recommending,” said MacKay.