New rail legislation keeps revenue cap, adds “long-haul interswitching”

Federal Transport Minister Marc Garneau introduced draft legislation on Tuesday that includes long-awaited changes to the rules governing grain transportation by rail.

Bill C-49 will, among other things, give shippers the right to seek reciprocal financial penalties in service agreements with railways, define “adequate and suitable” rail service, and implement new data reporting requirements for railways on rates, service and performance.

The bill would create a new “long-haul interswitching” mechanism for shippers to access service from a competing railway under certain conditions, up to a maximum of 1200km or 50 percent of the total distance which the traffic is to be moved by rail in Canada.

It appears railways would no longer be required to meet minimum weekly shipping volumes.

The legislative changes that apply to grain shipping were largely overshadowed in Garneau’s announcement, as the transport bill also contains new legislation pertaining to airline passenger rights and restrictions on international ownership of Canadian airlines.

Agriculture Minister Lawrence MacAulay, coinciding with the introduction of the legislation, announced the government is keeping the Crop Logistics Working Group for a fourth mandate as a forum for industry people to exchange views, identify challenges and opportunities and implement the government’s Transportation 2030 rail initiatives. AAFC will provide a co-chair for the working group.

MacAulay also committed to continuing the federal Grain Monitoring Program for another three years. The program, which was established in 2001, was implemented to provide information on Western Canadian grain handling and transportation in an independent, neutral, and timely manner.

“Together with the renewal of the Crop Logistics Working Group and on-going monitoring of the transportation system, these measures would ensure Canadian farmers can continue to get their products to markets around the world quickly and efficiently, generating growth for the Canadian economy, putting more money in the pockets of farmers, and strengthening the middle class,” said MacAulay.

Temporary measures aimed at keeping grain moving by rail implemented under the Conservative government’s Fair Rail for Grain Farmers Act during the grain backlog in 2013-14 are set to expire this August. It’s unlikely Garneau’s new legislation will be passed by then, as the House of Commons will rise for summer in June.

More to come.

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