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.

5 thoughts on “Gov’t of Canada Announces Fair Rail for Grain Farmers Act Aimed at “Getting Grain Moving”

  1. I am starting to wonder more strongly why we are not abolishing the rail revenue cap. We seem to be more interested in creating more legislation to solve our problems.

    1. Don’t you think we would still get bad service and be paying more for it? Until there’s more competition the railways need to be legislated.

    2. Did we get any better service when we gave away the crow rate. The railway admits that they know the grain will always be there for them to haul and they will get around to hauling it when they have the time and space and nothing is more pushing such ad containers which might get hauled by truck if they do not get to it right away. We would just be playing into there hands by giving them more money for bad service.

    3. I agree that mo’ legislation generally means mo’ problems, but until there is something better than a fundamentally flawed duopolistic system, there has to be a check.

  2. This country has 2 main rail lines. Many areas including the Peace are only serviced by 1 of the companies Normally I would feel competition will decide the rates but normally we have enough providers of service to create competition. I would not like to see any provider of service decide a rate for their product without a check in place to keep them honest. Turning them loose deciding their own rates would only ensure they are cheaper than trucking to port.

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