The organization representing major grain elevator companies in Western Canada says it believes both Canadian National Railway (CN) and Canadian Pacific Railway (CP) have failed to meet weekly grain shipping requirements for extended periods of time since the weekly minimum thresholds were implemented back in March.
The federal agriculture minister confirmed last week that the government is penalizing CN Rail for violating the Order in Council requiring the railway move just over 500,000 tonnes of grain per week.
“We had suspected for a number of months that neither CN nor CP were meeting their volume thresholds,” says Wade Sobkowich, executive director for the Western Grain Elevator Association in the interview below. “We don’t have good information though, so all we could do was take a look at what each of the grain companies were shipping on an individual basis and do some rough calculations to identify if the railways could possibly have been meeting the volume thresholds. We felt they couldn’t be.”
There’s been some confusion over the fine amount CN will have to pay, as the original mandate from the federal government back in March included penalties of up to $100,000 per day. In passing a second Order in Council on August 1st, the fines were quietly changed to $100,000 “per violation,” or per week.
“We need to identify whether the penalties are enough, regardless of what the legal interpretation is,” says Sobkowich. “We need to identify whether it’s enough to motivate behaviour and get the railways to comply with the order. The whole purpose of the financial consequences is to ensure there’s accountability.”
While high volume movement has been the focus after last year’s bumper crop, a wider range in quality with the 2015 crop will require a more detailed approach to logistics in the coming months.
“Whereas last year we had a large volume of a more homogenous crop, this year we have a smaller volume crop that has a wider span of specifications, so our logistics system is going to have to be more precise,” notes Sobkowich.
With more on grain movement, CN’s penalties and interswitching changes, here’s Wade Sobkowich’s conversation with Kelvin Heppner:
Click here to listen to the interview on Soundcloud.