Urgent changes needed to renew grain transportation systems

Wheat field with grain elevators and rail cars in background

Farmers facing sudden cash-flow crunch due to rail backlog

Crop producers in Western Canada only get paid when they deliver their grain, but since late 2017 there haven’t been enough rail cars available to move their crops, due to a range of factors. This has led to a dire cash-flow situation for many Prairie farmers. CFA calls on parliamentarians to pass Bill C-49 with several important amendments, and introduce short-term measures to provide immediate support.

We are working hard to advocate for changes. Our executives have met with Cabinet ministers and other parliamentarians, given formal presentations at parliamentary committees, and submitted discussion papers as part of the government’s most recent consultation process.  CFA is also working through the government-supported Crop Logistics Working Group to monitor developments and provide recommendations for renewing transportation systems.

SEE ALSO: 

CFA recommendations:


Background

Quick Facts:

During the crop years 2013-14, an inability to transport grain to export markets in a timely fashion resulted in an estimated loss of $6.5 billion. In response to this crisis, the government passed emergency measures under Bill C-30, which helped to alleviate problems and introduced effective ways to improve competitiveness. Key among these was the expansion of the regulated interswitching limit to 160 kms from 30 kms, and the ability for shippers to be “directly compensated for any expenses” incurred if railways fail to meet level-of-service obligations under the Canada Transportation Act.

In July 2016, the federal government released the Canada Transportation Act Review, otherwise known as the Emerson report. Farmers were concerned as the report recommended several items that were a detriment to farmers, including:

Farmers are concerned that these recommendations will give an unfair advantage to the rail companies, as the vast majority of farmers only have access to one freight provider making them vulnerable to monopolistic practices.

Markets and demand for Canadian grain will continue to grow, especially in the pacific Rim. It is vital that we improve handling and logistics systems, and that we ensure infrastructure capacity is in place to meet these demands.

Read CFA’s issue brief on grain transportation (published April 2017).