This has been a very challenging winter for grain shipments, to say the least. Much of the finger pointing has been directed at the railways but should more of the blame fall to more than CN and CP? It’s clear operational performance must improve, but the railways have been operating in the environment that they are confined to.
All week I travelled across Canada for our TechTour Live shows, and I had a chance to talk to several farmers from all parts of the Prairies. Overall, farmers want a solution that is longer lasting than just the next three months. That they can agree on, but how we get that solution differs.
Should we be asking ourselves more about overall changes besides just bill C-49? From talking to industry C-49 is a start but doesn’t mean we have a long term solution.
— Shaun Haney (@shaunhaney) March 14, 2018
Many farmers are hoping that Bill C-49, the Transport Modernization Act, will provide relief to the grain backlog but it is by no means a silver bullet. In some cases, this is the kind of stop-gap measure that creates short term relief and helps the longer term issues but is by no means a total solution.
Improvements to the rest of the system have been happening and mean nothing if rail is weak
— Gerry Ritz (@GerryRitzxMP) March 14, 2018
Earlier this week we saw some of the other commodities, such as forestry and mining, warn the government that taking more immediate action favouring grain shipments would have have detrimental impact on other commodities that also use the railway to get to the coast. Pulse Canada was one of the signatories of that letter but they clarified their position quickly.
And the increased requirements of other export commodities as well. Sometimes we forget forestry and energy industry use railways too. Canada needs a plan.
— Shaun Haney (@shaunhaney) March 14, 2018
After sending out the above tweet I did have two farmers direct message me on Twitter recognizing that other commodities also deal with some of these same frustrations that agriculture does. One farmer said, “we need a rail transportation solution that works for everyone and not just agriculture.”
Some farmers are wondering if more drastic changes are needed because while this issue seems to come and go year-over-year, it does feel that we are repeatedly having this conversation over and over and over. How the railways operate is just one example of a bigger infrastructure issue that is impacting rural Canada on a daily basis.
One of the limits put on the railways is the revenue cap. Farmers have long lobbied to keep this in place but is that preventing the railways from serving farmers appropriately? What about removing the railway revenue cap?
Then if it works (note to self check spelling before hitting reply)
— Jeff Nielsen (@abfarmer1962) March 14, 2018
I’m not opposed to the railways making money but letting them price gouge because it’s a duopoly is not something AG can accept.
— Danny Ottenbreit (@o2farms_sk) March 14, 2018
In hearing from farmers, removing the revenue cap is an option they would consider but not as a lone solution. Just giving the railways more opportunity for profit margin will not enable grain to flow more smoothly to the coast.
Would additional oil pipeline capacity allow more allotment for grain?
When laying blame another big factor is the anti-pipeline movement. There’s very little oil that actually needs to be hauled by rail. All sorts of capacity would become available if pipelines were simply allowed to be built.
— R-Pen (@r_pen14) March 14, 2018
Clearly, adding pipeline capacity is not a simple answer as the provinces of Alberta and British Columbia battle to sway the opinion of voters and ask the federal government to take their side.
But is it time to talk about the need for more rail capacity through to the coast if we want to be considered a reliable consistent exporter? Russia and Brazil are investing heavily in transport infrastructure which is a major threat to Canada’s long term competitiveness. In a recent interview with RealAgriculture, Marlene Borsch brought up this very point. Borsch points out, “You look at increases in port capacity and inland rail capacity in Russia, it’s something like five-fold over the last fifteen years and they plan to increase it further,”
Whether it’s adding rail lines or pipeline, these are not quick fixes but should be a part of a longer-term infrastructure plan if Canada wants to continue to be considered a reliable exporter.
In my opinion, we have focused so much on establishing trade deals with very attractive markets around the world, but we have some logistical house-cleaning to do if our exporting commodity sectors are going to take full advantage of the trade opportunities.
What are your thoughts? We want to hear from you and get your insight into finding a long term solution for this recurring issue. Leave your comments below or email [email protected]