By Tim Kalinowski
After another spring of railway grain transport gridlock, the Western Grain Elevator Association is adding its voice to other loud calls from throughout the agriculture industry for the federal government to swiftly pass Bill-C-49 as it returns to the Senate for ratification after recently being amended by Parliament.
“This bill is critical to our industry,” says WGEA executive director Wade Sobkowich. “We have been after some amendments to the legislation to rebalance the bargaining power between the shippers and railways.”
Key amendments would allow the federal government to appoint an arbitrator to settle disputes between rail companies and grain suppliers, and levy reciprocal penalties when terms of service are not met on either side. Such a mechanism would provide a much needed “legislative backstop” to balance an otherwise unbalanced commercial relationship, says Sobkowich.
“Commercial negotiations work when you have competition,” he says. “But there isn’t competition in the Canadian rail freight market. That becomes apparent when the railways refuse to agree to any balance in terms in service contracts, and the shippers have no option but just to capitulate because they have to ship product on that railway.”
Sobkowich says Long Haul Interswitching provisions of the bill also shows some promise in helping to create a slightly more competitive rail freight market in Canada.
“What it does is give shippers the ability to access the competing carrier,” he explains. “So if you are running an elevator that is planted in the middle of Saskatchewan on a CN line, and you are beholden to a monopoly, Long Haul Interswitching gives you the ability to apply to the (federal) agency for a decision.
“And then the agency comes in and says you are allowed to do a Long Haul Interswitch for a period of time at this particular interchange point with this particular railway, for this particular piece of business. The primary carrier, CN in this example, would then be obligated to bring those railcars in from, say CP, into your elevator.”
Sobkowich does not know if such an interswitch system will create the competition intended, or if the mechanism will work efficiently, but after years and years of going around with the railways on these issues, he feels it is high time to try something new.
“We are very interested in taking it out for a test drive,” he confirms. “We feel like we are spinning our wheels a lot here, and it has been a long road to get some legislation that can provide this balance we are talking about.
“Yes, you don’t know for sure how this long haul switching will work, we are in uncharted waters, or how well those reciprocal penalties will really work, but we think it is going to work. But we also know where we have come from, and we know we need to do something differently.”