The Canada Transportation Act (CTA) review is still 10 months away from completion, but already some things are becoming apparent.
Speaking at Keystone Agricultural Producers annual meeting in Winnipeg, Murad Al-Katib said that it’s clear that the federal government’s attempt to ensure smooth rail transportation has resulted in some new complications.
“The words ‘unintended consequences’ are in everybody’s vocabulary in Ottawa today, and the unintended consequence of the order-in-council is that the north-south movement has shut down,” said Al-Katib, who is the grain industry adviser for the CTA review.
Al-Katib is president and CEO of Saskatchewan-based Alliance Grain Traders, the world’s largest pulse-processing and -trading organization.
He said he’s been shocked to see vessels coming through the St. Lawrence Seaway to bring European oats to U.S. customers, as processors there struggle to import Canadian oats.
The minimum grain shipments mandated by the federal government have also caused some regional problems. Measuring success by the amount of grain delivered — or by velocity turns — means rail companies have less incentive to provide cars to locations farthest from ports. Al-Katib said Saskatchewan has been most affected by this issue.
“The question is, how do you balance it?” he told producers. “If there are going to be targets there has to be a debit and credit system.”
Reviews of the Transportation Act are mandated by law, but after the problems experienced during the 2013-14 winter, the federal government chose to begin this review one year ahead of schedule.
Lisa Raitt, minister of transport, made the announcement in Winnipeg last June.
“We need to create the right conditions for a system that has the capacity and flexibility to respond to global and domestic demands,” she said at the time.
To that end, the review is not only looking at how transportation and rail systems function in Canada, but also how those systems interact with systems in the United States and across North America, said Al-Katib.
Use producer cars, but…
“Connectivity between Canada and the U.S., and you know, north-south shipments are a part of our future, they need to be reliable, because that market will be every year, year after year,” he said.
Producers also need to do their part to make sure producer cars can be maintained as a viable part of the system.
“I heard it loud and clear… producer car loading is a fundamental right that all of you want maintained, you want it reliable and my response to you is, ‘OK, but don’t abuse it,’” said Al-Katib. “Don’t let the grain companies in the U.S. that don’t have assets use producer cars in a way to circumvent the system then, because that’s not fair… if producers aren’t vigilant in the way they use producer cars, then that window is likely not going to be as open.”
But the review isn’t about laying blame, he stressed. It’s about finding solutions and improving the way commodities are transported in Canada.
“I want accountability on all sides, I want collaboration, I want to stop the finger pointing and I really want to invent the railways to truly deploy capital into capacity that is delivered to the users, and I want them to make money for it, I’m a free enterpriser, that’s the way I was born,” said Al-Katib.
That doesn’t however, mean that producers and processors should stop their lobbying efforts. He noted that all the time and money farm groups like Keystone Agricultural Producers have spent developing transportation policy have been invaluable to the process and the review, helping to ensure they have good ideas on the table.
“It is paying off,” he said.