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Editorial: A silver lining

No one would look at the ongoing struggle to move grain to port position this winter as a positive thing.

It’s been a long and exhausting grind for everyone involved from the farmer through to the railways.

Challenging weather met understaffed and underequipped railways and the result was poor service, scant grain movement and expensive demurrage.

Farmers, for their part, have complained of a cash flow crunch that comes at the most awkward of times — just as they’re starting to put in the crop.

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We won’t go so far as to say any of this is good news, but taking the long view, it could be argued that this temporary pain may prove eventually to be the catalyst for a lasting solution to these ongoing woes.

After all, it was just last summer that the railways were assuring anyone who would listen, including the Manitoba Co-operator, that it was a new day for grain transportation.

John Brooks, CP Rail’s senior vice-president, was typical of this new mood when he told reporter Allan Dawson that “… I think the bottom line is the industry and the supply chain as a whole has done a really good job over the last few years and we’re certainly, at CP, anxious to deliver another record year in (20)17-18.”

We’ll ignore the obvious irony of that statement, in hindsight, and accept that Brooks and other railway leaders were acting in good faith, and were in fact convinced that their plan involving greater collaboration and better communication with shippers was winning the day.

At the same time, however, other players in this ongoing drama were a bit more cautious. Wade Sobkowich, of the Western Grain Elevator Association, was typical of this. While conceding that gains had been made, he stubbornly resisted signalling the ‘all clear’ on behalf of the region’s grain handlers.

He told Dawson the real answers would come when the spotlight dimmed and the volume of other traffic, hammered by the commodity downturn, rebounded.

“We need some experience that we are operating in a new era before saying that we are,” he said.

It turns out the reality was closer to that scenario than the rosy picture the railways were promoting.

Temporary measures aimed at prodding the railways into action following the 2013-14 shipping debacle expired just as products such as crude oil and frac sand started moving again. By January of this year it was apparent there was going to be an ongoing problem.

The unexpected upside of this situation, of course, is the way it happened to coincide with the long and slow movement of the transportation modernization act through the legislative process.

Many in the agriculture sector privately fretted the railways might, during their lobbying efforts, point to recent successes as proof the situation was well in hand. The worry was they’d then translate that into having elements of the bill rolled back, including key protections such as extended interswitching, which spurs competition.

Instead the opposite has been true. A year ago, the industry was presented with proposed legislation that ticked most of the crucial boxes, but had room for improvement. It would appear this year’s shipping situation set the stage for gaining those enhancements.

As the situation worsened, the chorus from the grain sector grew louder and we saw calls for larger cash advance loans through commodity groups and agriculture lenders such as Farm Credit Canada promising relief for farmers, highlighting the problem.

Against that dramatic backdrop, Conservative senators proposed a raft of changes that turned a good-but-not-great legislative package into something that basically reflected agriculture’s wish list.

The key points of their proposal included giving the Canadian Transportation Agency the authority to initiate investigations itself without a shipper complaint, adding soybeans to the maximum revenue entitlement and tweaking the rules governing long-haul interswitching to make it “more accessible” to shippers.

The federal government took about a month to ponder these proposals, as the June 22 summer recess deadline grew nearer, and the collective blood pressure of the agriculture sector slowly began to rise.

Late last week, however, federal Transport Minister Marc Garneau finally accepted the proposal, clearing the way for third reading in the lower house.

This plus the formality of gaining royal assent are the lone hurdles remaining to this historic change to grain shipping.

The parliamentary agenda is jam packed this spring with other major legislative undertakings.

To keep this one firmly on the radar, it might be time for a quick email to your local representatives, thanking them for their efforts and reminding them it’s important to secure a lasting solution to this ongoing problem plaguing the grain sector.

About the author

Editor

Gord Gilmour

Gord Gilmour is Editor of the Manitoba Co-operator.

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