Government Places Mandated Minimums on Rail Service Through Order in Council

The siding at Lancer, Sask. Jim Hale, 2014

Agriculture minister Gerry Ritz and Transport Minister Lisa Raitt were in Winnipeg today to announce an order in council placing minimum service requirements on CN and CP railways. Each railway must move 5,500 cars or 500,000 MT of grain per week, beginning in 4 weeks’ time. Failure to do so will result in fines up to $100,000 per day.

The order in council is in effect for 90 days. Any fines levied and penalties paid would be payable to the Crown.

The government press release says:

Immediate measures require railways to deliver specific quantities of grain per week and to regularly report on volume carried

March, 7, 2014 – Ottawa – Transport Canada & Agriculture and Agri-Food Canada

Transport Minister Lisa Raitt and Agriculture Minister Gerry Ritz announced today concrete measures being taken by the Harper Government to move more grain through the transportation system and maintain Canada’s reputation as a supplier to world markets.

Minister Raitt announced an Order in Council (OIC) to take immediate effect, setting out minimum volumes of grain that Canadian National Railway Company and Canadian Pacific Railway Company are each required to move. The Order, under section 47(1) of the Canada Transportation Act, also requires the railways to report to the Minister of Transport on weekly shipments.

The railways will be required to increase the volumes carried each week, over a period of four weeks, to a combined target of 1,000,000 metric tonnes per week – more than doubling the volume currently being moved.

The Order creates direct legal obligations on railways and will result in penalties for non-compliance of up to $100,000 per day.

Agriculture Minister Gerry Ritz announced that the Government will introduce legislation when Parliament returns to establish measures to ensure Canada maintains a world-class logistics system that gets agricultural products to market more efficiently.

The Government continues to call on all parties in the grain supply chain to play constructive roles to ensure the timely movement of grain, and to continue working together on medium and long-term solutions.

 

Read more: A long-term outlook on easing the logistics burden

CP Rail released this statement:

 “Canadian Pacific is disappointed with this unfortunate order in council.  CP believes the actions of the federal government raise more questions than they answers and only focuses on the railways and not the entire supply chain.  CP’s position remains that moving grain from the farm to the port is a complex pipeline involving many parties and requires all participants of the Canadian grain handling and transportation system to work together, which requires a 24/7 commitment similar to the railways.
Despite an extraordinary crop size that was not forecasted by anyone and periods of extreme winter weather, our railway has continued to move record amounts of grain and despite this unfortunate order in council, Canadian Pacific is committed to matching the record volumes we moved in the fall, which will align with the order.  CP expects to transport 240,000 carloads of Canadian grain this crop year, a more than 20 per cent increase over last year’s record.”

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One Comment

Craig Shaw

Railways loose creditability by suggesting other parties are part of the problem. Grain companies make money on through put in their systems. Farmers are hauling in all weather conditions. Can railways honestly say they are behind on shipments of other commodities due to the weather. Contractual agreements in the grain industry still highly favour the railways. Excuses only show either bad management or no incentive to haul grain.

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