Saskatchewan presses for rail interswitching, revenue cap

Farm stakeholder groups and Prairie provincial agriculture ministers got their chance Thursday to bring their concerns about grain transportation by rail to the federal minister responsible.

Federal Transport Minister Marc Garneau and Agriculture Minister Lawrence MacAulay held a roundtable meeting with grain sector representatives Thursday in Saskatoon, and met also with the Prairies’ agriculture ministers.

The roundtable, the federal government said, “aimed to gather the views of the western agriculture sector on the Canada Transportation Act review and the development of a long-term agenda for transportation in Canada.”

Saskatchewan’s agriculture minister Lyle Stewart said he and his fellow ministers were “satisfied we were heard” in their meeting with Garneau, in which Stewart pressed for continued checks on Canada’s two major railways.

For one, Stewart called on the federal government to maintain or even expand the expanded interswitching range imposed by the previous Conservative government.

Interswitching rules commit one rail carrier to pick up cars from a shipper, then deliver them to another railway for the line haul. Where federal rules before 2014 allowed grain elevators and other shippers to use interswitching for only up to a 30-km radius, the previous government’s Bill C-30 extended the radius for those rights up to 160 km.

It’s estimated about 150 grain elevators on the Prairies are able to make use of interswitching with the 160-km radius, up from just 14 elevators previously. Some farm groups have pressed for the radius to be expanded even further, Stewart noted.

Stewart also called for the federally imposed maximum revenue entitlement (MRE), or revenue cap, to continue on the big two railways’ revenue from Prairie grain.

Saskatchewan’s producers, Stewart said in an interview, “don’t want that (MRE) arbitrarily removed,” though he said the MRE should be adjusted to allow the railways to re-invest in grain cars and related infrastructure.

If the MRE were to be adjusted in the railways’ favour, he added, there would have to be a “clearly communicated expectation” that the railways would invest those profits to “re-equip” for grain handling.

Level-of-service agreements with the railways also require them to maintain a certain level of technical capability, he added.

The province, he said, also wants to see a system of “reciprocal monetary penalties” shippers could impose on rail carriers for violating level-of-service agreements. However, he added, “shippers” should include not just mainline grain handlers but also smaller shippers and producer car loaders.

Also, he said, level-of-service agreements should cover not just export shipments to Canada’s major ports, but also deliveries to domestic processors within Canada and the U.S.

Stewart also said the province would like to see a formal procedure put in place for railways planning to close producer car loading sites.

Also, he called for a hard time limit for how long a major railway can idle a branch line without formally committing to discontinue its use, which in turn would allow a willing shortline operator to pick up the line before it falls into disrepair.

Stewart said the ministers impressed upon Garneau that up to 90 per cent of the region’s farm production is exported. “There’s only one way to get (grain) out of here, and that’s by rail.”

“We understand the scope and importance of the grain sector, and that a strong rail-based supply chain system is essential so all Canadian producers and shippers can remain competitive in domestic and international markets,” Garneau said in a release.

“The input received today will serve as valuable information as we prepare to address the future of transportation in Canada.”

“We felt that the meeting was a good first step in strengthening relationships between Transport Canada and farm groups,” Ron Bonnett, president of the Canadian Federation of Agriculture, said in a separate release after the roundtable meeting.

“Our views and concerns were made clear, and were echoed by a number of other western grain organizations also in attendance.” — AGCanada.com Network