The federal government’s long-awaited proposals for improving railway shipping of western grain were expected this week in proposed amendments to the Canada Transportation Act.
“An act to amend the Canada Transportation Act and other acts respecting transportation and to make related and consequential amendments to other acts,” was added to the House of Commons notice paper May 12, signalling introduction expected May 16. That’s when Transportation Minister Marc Garneau was to hold a news conference on “Transportation 2030: Canada’s strategic plan for the future of transportation in Canada.”
When Garneau announced amendments to the transportation act last November, he said the proposed legislation will establish reciprocal penalties between shippers and railways in service-level agreements, better define adequate and suitable rail service, improve access to the Canadian Transportation Agency (CTA) and improve the timeliness of CTA decisions. Garneau also said the government would “address the future of the maximum revenue entitlement and extended interswitching.”
Grain companies and farmers have long argued Canada’s two major railways have a virtual monopoly moving grain to export ports. In the absence of a competitive rail market the industry says legislation is needed.
Most grain companies and farm groups also want extended interswitching, introduced by the former Conservative government in 2014 as a temporary measure, made permanent. At that time extended interswitching distances went to 160 km from 30. Interswitching allows a railway to access traffic on the other railway’s line and is intended to stimulate railway competition.
Farm groups also want the maximum revenue entitlement (MRE) to continue, although most agree it could be improved.
Under the MRE the CTA calculates the total amount of annual revenue the railways can collect from shipping grain based on a formula that gives the railways a fair return.
Some farm organizations, including Keystone Agricultural Producers (KAP), also want the legislation to order the CTA to review railway costs for shipping grain. KAP president Dan Mazier said in a recent interview railway costs for shipping grain haven’t been measured since 1992 and don’t account for improved railway efficiency. As a result the railways are earning much more hauling grain than they would in a truly competitive market, according to a study commissioned by several Saskatchewan farm groups.