The federal government s recent appointment of former Alberta cabinet minister Jim Dinning to lead a Rail Service Review is good news, say grain-industry leaders.
Getting the appointment done and moving forward is huge, said Stephen Vandervalk, the Alberta-based president of the Grain Growers of Canada and vice-president of the Western Canadian Wheat Growers Association. For farmers in Alberta and all of Western Canada, rail freight is one of the most important things because we export so much of our product.
Dinning handled many portfolios including treasurer before leaving politics in 1997. He is currently board chair for the Western Financial Group, Liquor Stores NA Ltd., and Export Development Canada. He has a really good track record with budgets in Alberta in the past, said Vandervalk.
Equally importantly, Dinning understands the priorities of shippers, says Richard Phillips, executive director of the Grain Growers of Canada. Dinning comes from a province that exports a lot, so he understands that if you re going to have strong industry, you need reliable transportation.
Dinning s responsibility is to determine what a proper agreement should look like between a shipper and a railway. Over the next six months, he ll work with all parties to develop service agreements and a dispute-resolution process.
All sectors have complaints
At issue is the fact that the Canadian rail system is notoriously unreliable. Grain companies can wait for days before a train s scheduled arrival, but the railway pays no penalty. But if the cars aren t loaded in time, the shipper must pay a penalty.
While the two parties are wide apart on a solution, Phillips hopes Dinning will succeed in finding compromise.
There s a lot of incentive for all sides to come to agreement. Otherwise, we ll go to legislation, and no one wants that.
It isn t only agriculture that will benefit from an improved transportation system. According to Phillips, frustration spans all industries that utilize rail transport.
What we found out is that, when we told our horror stories, the fertilizer and the lumber guys had even worse stories than us. That s when we realized it s not just us, it s everyone.
Three years ago, several interests including the automobile, lumber, mining, propane and steel industries banded together to form the Canadian Rail Shippers Coalition.
Agriculture is strongly represented, with representatives from the Canadian Canola Growers Association, Canadian Fertilizer Institute, Grain Growers of Canada, Pulse Canada, Western Canadian Wheat Growers Association, and Western Grain Elevator Association.
Phillips said the grain industry itself is not big enough to take on the railways.
When you re just the grain sector lobbying by yourself, they can divide and conquer you. The attitude of the railways was that they could pick (each industry) off one by one, said Phillips. Together, our coalition represents about 90 per cent of freight revenue for CN and CP. We are tight and we stick together, and the government listens to us now.
After lobbying by the coalition, the federal government passed Bill C-8, which automatically started a Rail Service Review. Two years of hearings concluded last Christmas.
Some have criticized the coalition s choice to push for a service review rather than a cost review. Phillips agrees that rail-shipping rates, which have been fixed for more than a decade, are too high, pointing out that railways have made major efficiency gains over that time.
However, Phillips believes starting with a service review first is the right decision for agriculture. We had to make a choice: do we want to fight on costing or on service? On a costing review, you might save a little. But, on a service review, you ll save a lot. It s costing about $11 a tonne based on lost revenues right now, and that comes right from the producers pocket.
Minister of Transport Denis Lebel says he plans to table rail-service agreement legislation after Dinning completes the six-month facilitation process.