Bill 30, the Fair Rail for Grain Farmers Act, received its first reading in the House of Commons today. The act has a stated goal of getting the 2013 Prairie grain crop moving, according to a Government of Canada press release.
It’s estimated that between 14.2 and 20 billion dollars worth of crop is stuck in bins and elevators, hampered by lack of rail movement from as far back as November. As the weather warms, grain stored temporarily, on the ground or in bins, is at greater risk of spoilage — adding insult to injury for farmers unable to deliver to elevators in a timely manner, even if contracts were in place.
This new act has several aspects. One, the Canada Grains Act is being amended to confer new authority to the Canadian Grain Commission to arbitrate grain origination contracts between elevators and farmers, with penalties payable to farmers if contracts are not honoured.
The second key element provides Transport Canada the power to set up volume requirements for CN Rail and CP Rail, similar to power laid out in the March 7th Order in Council. This amendment simply states that volume requirements could be set in the future, should they be necessary, but does not spell out levels or time frames. It does mean that Transport Canada will be asking for and receiving more volume-related reporting throughout the year.
The third aspect confers regulatory power to extend the limits for inter-switching on the basis of region from 30 km to 160 km. Currently, elevators can mandate a competing railway to move cars to an inter-switch point (shorthaul) to be hauled by another railway for the long haul, IF that inter-switch point is within 30 km. Moving the available inter-switch point to within 160 km means that the number of elevators with access to both railways moves, effectively, from 14 elevators with multi service to 150 elevators within the service radius.
A senior government official said that the government is also accelerating the timeline for the mandatory review of the Rail Service Act and will be asking for more data points and reporting in the coming months for more timely and insightful information as to the state of Canada’s rail supply chain.