The long-anticipated report of the Canada Transportation Act Review, recently tabled in Parliament, falls short in several key areas, said Dan Mazier, president of Keystone Agricultural Producers.
The report recommends the Maximum Revenue Entitlement be phased out in seven years. It was put in place in 2000 to ensure the railways receive a fair rate of return for hauling grain, and at the same time to control any unjustified increases on that rate.
“I was on a sub-committee of the Crop Logistics Working Group, a national committee of stakeholders that developed a submission for the review, and we strongly recommended the MRE be maintained because it’s working just as it’s supposed to,” said Mazier.
“It’s based on a complicated formula, but the bottom line is railways are penalized if they charge more than allowed to ship our grain – and the money from the penalty goes into grains research.”
The report also recommends that the 160-kilometre inter-switching provision, created by Bill C-30 during the 2014 grain-shipping crisis, be phased out.
“This provision allows that CN and CP can use one another’s tracks for 160 kilometres, so that if one railway can’t get rail cars to an elevator or terminal for pick-up, the grain shipper can use the services of the other railway,” said Mazier.
“We’re disappointed the review panel did not listen closely enough to farmers when we stressed the need for these tools to help maintain railway accountability and support price competition – which can drastically impact our bottom lines, especially now as commodity prices continue to fall.”
On the positive side, Mazier said the report has met requests for protection for producers wanting to ship their own grain, and funding and support for groups wanting to purchase short lines no longer used by CN and CP.
“We had hoped it would go further and recommend short line operators be allowed more opportunities to haul grain on branch lines owned by the major railways, but this is a good start to encouraging the development of short line railways that can better serve producers’ needs.”
Producers also asked that the Canadian Transportation Agency receive more power over dispute resolution between shippers and railways, and that it get more support for drafting and mediating service contracts between shippers and the railways – and the report includes these recommendations.
“I understand Transport Minister Marc Garneau will be consulting with producers on this report, and we have already had a preliminary meeting with Agriculture Minister Lawrence MacAulay,” said Mazier.
“More work needs to be done to address the lack of competition in grain transportation. The report doesn’t address this at all, and this is the fundamental thing those in the grain industry believe lies at the heart of all of our problems.”
