“Either we have adequate competition or, where we don’t have adequate competition… we need effective legislation to simulate this balance.”
– WADE SOBKOWICH
Farm groups, grain companies and railway shippers are pleased a federal government review of railway service has taken another step forward.
Rob Merrifield, minister of state for transport announced Sept. 23 the appointment of a three-member panel to conduct Phase II of the review, which began in the spring of 2008.
Walter Paszkowski, a former Alberta agriculture minister and farmer will chair the panel. The other panelists are David Edison and Bill LeGrow. Both were senior executives with Canadian National Railway, according to their biographies issued by the federal government. However, LeGrow ended his career with West Fraser Mills Ltd. and has “significant experience in both shipper and railway freight environments.”
Keystone Agricultural Producers’ (KAP) president Robert McLean said it’s about time a panel was picked.
“I think there’s a lot of frustration that this service review has taken as long as it has,” said McLean, who farms near Manitou.
“Hopefully this board will listen to all the groups out there and make some recommendations that will certainly help make the system more efficient, because that’s what we need.”
LISTEN TO FARMERS
KAP wants the panel to travel to hear from grain farmers directly.
During the first phase of the review, which includes looking at port and terminal operations and all railway traffic – not just grain – shipping data was collected between 2006 and 2008. The panel is to report to the government by the middle of next year.
McLean said the government must act quickly on the panel’s recommendations.
“Our turnaround time on rail cars has not changed, even with the consolidation of the grain-handling system,” he said.
While the Grain Growers (GGC) of Canada are pleased with “the quality of people appointed,” the National Farmers Union (NFU) is skeptical, fearing the panel will have a railway bias.
“From a farmer’s point of view, on the surface, I don’t know how you could construct a worse panel, unless you take off the one person who was not a top railway executive and put on somebody from CP,” NFU president Stewart Wells said.
Bob Ballantyne, president of the Coalition of Rail Shippers, said both sides should be satisfied with the panel.
Transportation consultant Tom Maville, who’s worked on numerous rail-shipper disputes, said the government “got it right” in its efforts to strike a review group that effectively represents the interests of the various industries affected.
The Canadian Wheat Board (CWB) is also pleased the review is moving forward. It continues to urge the federal government to review railway shipping costs, said CWB spokesperson Maureen Fitzhenry. The last one done in 1992 is used to set the maximum revenue the railways can earn from shipping grain annually.
According to a consultant’s report farmers are paying $100 million a year more to move grain than what was considered “fair and reasonable” under the defunct Western Grain Transportation Act, she said.
“A costing review would be quite succinct and would take a fraction of the time too,” Fitzhenry said. “Yes, absolutely, let’s do a service review, it’s a good thing, but we need that costing review too. Farmers don’t want to pay rates that are out of whack with reality longer than they need to.”
The Western Grain Elevator Association (WGEA) is counting on the panel to recommend, “rebalancing of accountability between the shipper and the railway,” said association executive director Wade Sobkowich.
“Either we have adequate competition or where we don’t have adequate competition… we need effective legislation to simulate this balance.”
Right now grain companies are penalized by the railways if they fail to load or unload cars during a certain period. But if the railways are late spotting cars or delivering them to port terminals they aren’t penalized, Sobkowich said.
The WGEA has complained about poor rail service in recent years, as have many farm groups. Several times the Canadian Transportation Agency, a quasi-judicial government-appointed tribunal, has ruled the railways failed to fulfil their level of service obligations required under legislation.
However, last crop year the railways moved grain at a near-record pace. It’s presumed a decrease in other railway traffic due to the recession was partly responsible. If so, it suggests poor rail service for grain could sometimes be due to a lack of capacity. But some grain shippers suspect they don’t get their fair share of the capacity. [email protected]