CN Rail says it is moving ahead with a previously discussed plan to purchase 1,000 new grain hopper cars over the next two years following the passage of Bill C-49 in Parliament earlier this week.
“This substantial investment in higher capacity payload hopper cars, with up to 10 per cent more capacity than the older generation, demonstrates our commitment to safely, efficiently and reliably moving the steadily increasing Prairie grain crop for our customers,” says JJ Ruest, CN’s interim president and chief executive officer, in a statement.
“We clearly understand how important having an effective grain supply chain is to our nation’s reputation as a stable trade partner. With this week’s news of regulatory certainty, we can now make decisive long-term investments that will benefit the entire grain industry,” he continues.
Related: Bill C-49 gains final approval
The investment was contingent on changes to the per-tonne maximum revenue entitlement (MRE) or “revenue cap” for grain. C-49, which received royal assent on Wednesday, removes a disincentive that saw any benefit from an investment by one railway shared between both CN and competitor CP Rail.
“I am very pleased to hear that CN is using the positive conditions brought in by Bill C-49, the Transportation Modernization Act, to invest in new hopper cars. This decision will help grow the agricultural sector by ensuring farmers are able to reliably get their products to market,” says federal Agriculture Minister Lawrence MacAulay.
The new cars will be 55-foot eight-inch jumbo hopper cars with 5,431 cubic feet of capacity. They will be built by National Steel Car Ltd. in Hamilton.
CN’s Western Canadian grain fleet currently consists of around 12,000 owned, leased and private cars. The company says it will phase out older, lower-capacity cars from the CN-owned and leased fleet, which has an average age of more than 30 years.
Sean Finn, CN’s chief legal officer and executive vice-president, joined RealAg’s Kelvin Heppner on the phone from Montreal on Thursday to discuss the hopper car announcement: