Where Is Rail Service Legislation?

Promised legislation to make Canada’s national railways more accountable to shippers wasn’t mentioned in either the federal throne speech or budget, Saskatchewan MP Ralph Goodale says.

“The fact they didn’t, raises a little bit of suspicion here that maybe they are playing a stalling game for the railways,” Goodale said.

Goodale, the deputy leader of the Liberal party, said he hopes the Conservatives haven’t forgotten their pre-election commitment. “I just want an unequivocal commitment that they are going to bring forward the necessary legislation,” he said. “I want it done before the end of this year and there’s absolutely no reason why that couldn’t happen very fast.”

Farmers and other rail users were jubilant March 18 when the federal government announced it would introduce legislation to give shippers the right to a service level agreement with the railways, including penalties for poor performance.


Goodale said when he asked the government about it last week, new Transport Minister Denis Lebel didn’t appear to understand the issue.

“The report (on rail service) was done in October, they published it in January, they committed to it in March and it’s now June so let’s get the show on the road or we’ll wait three years just standing around,” Goodale said.

The government started reviewing all railway service – not just for grain – in 2008. The panel it appointed made a number of recommendations to encourage the railways to develop commercial relationships with shippers, including the following four, which the government said it will implement:

Railways should provide 10 days’ advance notice of service changes.

Railways and stakeholders should negotiate service agreements.

A fair, timely and cost-effective commercial dispute resolution mechanism should be developed.

Supply chain performance should be monitored through enhanced bilateral performance reporting between shippers and railways, and through public performance reporting.

The panel recommended the government initiate a six-month facilitation process for shippers and the railways to develop service level agreements.

If agreements aren’t made, then the government can legislate them, the panel said.


The government said it will introduce a facilitation process to develop a template service agreement. However, shippers will have the right to an agreement, including an arbitration process to establish an agreement, should commercial negotiations fail.

“What we’re to do with the legislation is to have a backstop for making sure a negotiated settlement contract is actually achieved,” Bob Merrifield former minister of state for transport said in an interview March 18. “The hope is the bill is never even needed.”

Farmers and grain companies have long said they need such agreements to “re-balance” the dominant market power held by the railways. The railways have promised to improve, but shippers say legislation is necessary in case they don’t.

Greg Cherewyk, executive director of Pulse Canada says it’s important to maintain momentum on the proposed legislation.

“It’s very significant that the legislation spells out what the core elements shall be so they are part of the negotiation,” he said.


Transport Canada has indicated it will hire a facilitator this summer and that will mark the start of the six-month process to develop a template railway service level template, Cherewyk said last week.

Transport Canada was unavailable to comment by press time.

Getting the legislation in place quickly is even more important with the Canadian Wheat Board (CWB) scheduled to lose its marketing monopoly Aug. 1, 2012, he added. The CWB plays a major role in getting wheat and barley from country elevators to export position.

“You cannot look at the wheat board without looking at logistics,” Cherewyk said. “From our perspective that’s even more incentive to ensure that we maintain the momentum that we have on creating that predictable environment around rail freight because things are going to change dramatically across the entire system.” [email protected]


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withoutlooking atlogistics.”


About the author


Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.



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