AWC says delay with Bill C-49 could put grain transportation at risk


Source: Alberta Wheat Commission

The Alberta Wheat Commission (AWC) is concerned that grain transportation in Canada is being put at risk with the failure to pass Bill C-49, The Transportation Modernization Act, prior to Christmas. The delay in Senate approval of the legislation until the New Year could mean serious repercussions for farmers since they ultimately bear the cost of delayed shipments, and could also affect Canada’s reputation as a reliable supplier of grain.

AWC notes that passage of Bill C-49 is especially imperative in light of the poor rail service that shippers and farmers have been experiencing in Western Canada this year. For the past several weeks, car order fulfillment by CN Rail has averaged only 50 to 60 percent.

Bill C-49 contains provisions that will ensure long-term solutions to grain transportation issues that have challenged farmers for decades, including reciprocal penalties to hold railways to account for service failures.

“Grain farmers rely heavily on export markets,” said Kevin Auch, AWC Chair. “With delayed service, not only do we risk losing credibility with our global customers as we did during the backlog of 2013-14, but we also risk having fees associated with delayed shipments passed down to our already slim margins. With no provisions in place to hold the railways to account, farmers could be facing serious risk with moving this year’s harvest.”

“The current shipping delays have occurred during favourable weather and will likely worsen once the full impact of winter is experienced,” Auch added.

When Bill C-49 was introduced, AWC advocated for an extension of provisions under Bill C-30 The Fair Rail for Grain Farmers Act to ensure that mechanisms contained within that legislation could be utilized until Bill C-49 passes. Those measures, which expired on August 1, 2017, included shipper access to extended interswitching of up to 160 kms and minimum shipping volume requirements.

Once Bill C-49 passes, grain companies will have access to new long-haul interswitching measures and the ability to negotiate true reciprocal penalties within service level agreements. These mechanisms help to improve competition between the railways to ensure a more accountable and reliable rail transportation system.