Without reliable grain transport, trade deals won’t pay off

Farm Vote: A Trans-Pacific trade deal would be great, but better rail transport is needed, says Alberta Wheat

Canada needs to be part of the Trans-Pacific Partnership agreement, says the general manager of Alberta Wheat.

Tom Steve

Tom Steve
photo: Supplied

“We think it’s a critical issue for the Canadian wheat industry to maintain and enhance access to key wheat markets,” said Tom Steve. “If we look at the member countries of the TPP, those 12 countries represent over 65 per cent of Canada’s ag and food exports, amounting to about $42 billion.

“You can imagine the implications of us not being a party to that agreement, and the advantages to us of being a party to the agreement, in terms of greater access to and stronger relationships with some of our key trading partners.”

Once the deal is signed, the market access opportunities could be significant for Alberta’s wheat growers, he said. In Japan, for example, Steve expects there will be a reduction on import quotas for Canadian wheat, as well as decreased subsidization of domestic production.

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“There is a certain amount of wheat production in Japan that would in all likelihood fade away if this agreement is successfully concluded,” said Steve.

“That would provide a market in the neighbourhood of perhaps an additional million tonnes of Canadian wheat. Right now, we’re selling up to 1.5 to two million tonnes into Japan, and that’s a premium market.”

But trade and transport go hand in hand, he said, and Canada needs to continue to work on the holes in its rail transportation system.

“If we look back to the winter of 2013-14, there was a tender issued by Japan that Canada could not fulfil, so the tender went to the U.S.,” said Steve.

“That was an example of our system breaking down. We had the quality. We had the quantity. But we couldn’t get the product to market.”

In the wake of that crisis, the federal government began a Canadian Transportation Act review, seeking advice from groups like Alberta Wheat.

“Our key recommendation is the implementation of reciprocal penalties, where the shippers can actually extract penalties from the railways for not performing,” said Steve.

“That’s something that’s very difficult for them to achieve in the current regulatory environment.”

In the current system, he said, railways aren’t faced with “sufficient accountability” for any breakdowns in the system.

“Growers are accountable. The shippers are accountable. They’re actually penalized by the railways when they don’t fulfil their obligations to load trains. But the missing piece is that the railways aren’t fully accountable in the current system.”

While Steve can’t say whether reciprocal penalties will make the final cut in the updated act, expected to be released in December, he’s “optimistic that the voice of agriculture was well represented at the table.”

“This idea of railway accountability has been debated for decades,” he said.

“The circumstances we got into in the winter of 2013-14 have brought it to a head, where we finally need to ensure that we have a reliable transportation system.

“It’s definitely a priority.”

About the author

Reporter

Jennifer Blair

Jennifer Blair is a Red Deer-based reporter with a post-secondary education in professional writing and nearly 10 years of experience in corporate communications, policy development, and journalism. She's spent half of her career telling stories about an industry she loves for an audience she admires--the farmers who work every day to build a better agriculture industry in Alberta.

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