The Canadian Federation of Agriculture (CFA) will continue to press its case with lawmakers for a comprehensive overhaul of the grain transportation system on Canada’s national railways, says CFA Vice President Norm Hall.
“The (national) review has been done, and it’s now a matter of getting the legislation in place. We were all looking at it from the 30,000 foot level and saying we need all of this done. Now that the government has said we are going to put it into legislation, we have to get down to the ground and make sure all our details are in place,” he says.
The biggest piece CFA wants included in that legislation is the continuance and enhancement of the Maximum Revenue Entitlement (MRE).
“The government has now said it’s going to maintain it, but we want to make sure of it. They said they were going to do some tweeking as well, and we want to make sure the tweeking is what we have been asking for.”
The Maximum Revenue Entitlement is a limit on the overall revenue that can be earned by the Canadian National Railway Company (CN) and the Canadian Pacific Railway Company (CP) for shipping regulated grain from origins within the Western Division or outside of Canada to specific export positions.
The second piece of the puzzle for the CFA, says Hall, is an increase in the current 30 km inter-switching limit to allow for more competition in grain shipping. This is the measure CN and CP have most strenuously objected to since a new 160 km inter-switching limit was first proposed in 2014. Right now only 14 elevators in western Canada allow farmers to move their grain free of charge to the competing railway to take advantage of a more competitive rate. A larger limit would allow more farmers to shop for a better rate from among the two national railroads, and potentially other American based railroads like Burlington Northern.
Hall expects the national railways to continue fighting this measure tooth and nail, but feels grain companies, farmers and other industries must be resolute in obtaining some kind inter-switching limit expansion under new transport legislation.
“The inter-switching needs to take place, and there are other industries looking at this and saying this shouldn’t just be for grain, we would like it for our industries too. And we (at the CFA) agree 100 per cent,” says Hall.
The CFA will also continue to push for reciprocal penalties on railway companies when they blow their delivery dates or car allocation promises.
Railways often charge its customers penalties for being unable to meet delivery obligations, Hall says it is past time for a little bit of tit for tat from those being poorly served by the rail carriers.
“We need reciprocal penalties,” insists Hall. “The railways are acting like there’s nobody higher than them; they can do whatever they want. They have been able to say, historically, here’s our service and you can take it or leave it. Reciprocal penalties should be able change all that.”
And lastly, Hall says the CFA is pushing for a complete, unbiased and objective costing review on Canada’s railway grain transportation system to ensure farmers are getting the best deal possible from the rail companies.
“Over the past 24 years, the railways have seized all of the efficiencies that have been gained. We just figure it’s time for some new math. Whether it works out in our favour or not, we’ll see. But let’s start working with some real numbers instead of numbers the railways are working with now.”
For more information on these and other grain transport issues visit the CFA website.