By Karlene Skretting
Westwind Weekly News
Earlier this month, Canada’s two largest railways were fined a combined total of $150,000 for failing to transport the minimum required grain volumes last year. The fines were issued on Jan. 8 in Ottawa by Transport Minister Lisa Raitt for violations under the Fair Rail for Grain Farmers Act.
The substantial grain backlog was blamed on major miscommunications across the supply chain, poor rail service, a record crop and frigid temperatures across Western Canada last winter. The crisis led to severe cash flow problems and farmers who were worried about paying bills. International confidence in Canada’s grain market was rattled.
“Monetary penalties are an important tool for the government of Canada in enforcing the Order in Council. From the perspective of Grain Growers of Canada, the amount of the fine is less important than the enforcement of the regulations. It is absolutely imperative that producers have access to a reliable rail transport system that allows them to get their product to market in a timely fashion. Canada is a global leader in the production of high quality grain, and any delays caused by the railways damages our international reputation …” said Gary Stanford, President, Grain Growers of Canada.
The Grain Growers are dedicated to working with rail carriers to improve service level agreements and capacity to ensure that the delays we saw in 2013-2014 do not occur again.
The federal government introduced the Fair Rail for Grain Farmers Act in Parliament on March 26, 2014 to help the agri-business affected by the rail backlog, and mandated a minimum tonnage of grain be hauled each week.
The issue is of particular concern in the four western provinces, including northern B.C. because everything has to go out by rail since farmers are so far from the coast. Stanford added that 90 per cent of Western Canada’s grain is transported by rail.
Canadian National (CN) Railway will pay $100,000 for violations under the Act related to shipments for the weeks ofJuly 28 and Sept. 7.
Stanford explained that the fine money will be set aside and saved in a separate fund to be allocated to the agriculture sector at a later date, once government officials have deemed a cause worthy.
However, Canadian Pacific (CP) Railway, who was assessed a $50,000 penalty for the week of Sept. 7, is disputing the fine on the basis that the shortfall was a result of matters beyond its control.
The missed targets were the result of “broader supply chain issues, specifically the Labour Day holiday shutdown at the Port of Vancouver the week before,” said a Canadian Press statement.
“These events outside of CP’s control in the supply chain contributed to delays in the movement, loading and shipping of railcars on CP,” the company went on to say.
Both railways remain under federal orders to move 325,000 metric tonnes of grain each per week. Meanwhile, an in-depth review of the country’s rail system – headed by former Trade minister David Emerson – continues. A final report is expected sometime in 2015.
In the interim, Stanford is confident that there won’t be a repeat problem.
“I think there was a bigger crop in 2013 than anyone was planning on … While there may be better technology to contribute to increased yields, it is unlikely that weather and all the other variables will line up across the country to produce a bumper crop across all of Western Canada.”